Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following: (i) any material intentional misrepresentation by any Credit Party in connection with the Loan; (ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor); (iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof; (iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents; (v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof; (vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2); (vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above); (viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents; (ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above); (x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents; (xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties); (xii) the incurrence of Indebtedness in violation of the Loan Documents; (xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos; (xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and (xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 4 contracts
Samples: Loan Agreement, Loan Agreement (Empire State Building Associates L.L.C.), Loan Agreement (Empire State Realty Trust, Inc.)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of an Event of Default, Lender to exercise any misappropriation of rights and remedies available to Lender as provided herein and in the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofother Loan Documents;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents collected in advance;
(vi) any failure act of arson by Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or Guarantor), of which any Credit Borrower Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)has knowledge;
(vii) intentional physical waste failure to pay Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property (but excluding any matter that arises by reason of lack of cash flow in accordance with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) terms and (vi) above)provisions hereof;
(viii) any removal or disposal of any portion failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property after an Event of Default same, in any manner prohibited by the Loan Documentseach case, as expressly provided herein;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof;
(x) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(xi) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xii) the failure to make any Condemnation Payment and/or any Balancing Payment, to permit on-site inspections of the Property and/or to provide the Required Financial Items, in each case, as and when required herein;
(xiii) Intentionally Omitted;
(xiv) the failure to make repairs, renewals or replacements (including, without limitation, structural and nonstructural, exterior and interior, ordinary and extraordinary, foreseen and unforeseen) to the Property or any portion thereof (including, without limitation, the Improvements now or at any time hereafter erected on the Property) as and when required pursuant to the terms of the Loan Documents or as and when necessary to maintain the Property in good and safe condition, in a rentable and tenantable state of repair and/or in the condition required pursuant to the terms of the Loan Documents; andand/or
(xv) any modifications, amendments, restatements and/or supplements made indemnity obligations of Lender to Bank under the Ground Lease, Sublease Restricted Account Agreement (other than those arising as a direct result of Lender’s gross negligence or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. willful misconduct).
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) the first full monthly payment of principal and interest under the Note is not paid when due; (ii) Borrower fails to comply with any provisions hereof relating to cash management or fails to appoint a new property manager upon the request of Lender, fails to cooperate with any New Manager or fails to comply with any limitations on instructing the property manager, each as required by and in accordance with, as applicable, the terms and provisions of, this Agreement, the Assignment of Management Agreement and the Security Instrument; (iii) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or any other Federal covenant contained in Article 5 or state bankruptcy Article 6 hereof is violated or insolvency lawbreached; (2iv) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the a Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueEvent occurs; or (7v) Sections 11.1 or 11.6 hereof are violated or breached in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablematerial respect.
Appears in 4 contracts
Samples: Loan Agreement (Independence Realty Trust, Inc), Loan Agreement (Independence Realty Trust, Inc), Loan Agreement (Independence Realty Trust, Inc)
Exculpation. Subject to the qualifications below and except Except as otherwise set forth in this Section 8.14 and Section 4.2 to the Guaranty and Environmental Indemnitycontrary, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the any Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Operating Lessee to perform and observe the Obligations obligations contained in the Note, this Agreement, the Note, any Mortgage or any of the other Loan Documents executed and delivered by any action Borrower or proceeding wherein a money judgment shall be sought against a Credit Party, Operating Lessee except that Agent Lender may pursue any power of sale, bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance performance, action for money judgment, or any other appropriate action or proceeding (including, without limitation, to enable Agent obtain a deficiency judgment) against any or all Borrowers, or Operating Lessee or any other Person solely for the purpose of enabling Lender to enforce and realize upon its interest under (a) any Collateral, and (b) any Rents to the Noteextent (x) received by any Borrower or any Manager (or any of their affiliates), this Agreementafter the occurrence of an Event of Default or (y) distributed to any Borrower, the Mortgage and the other Loan DocumentsOperating Lessee or any Manager, or in their respective shareholders, or partners or members, as applicable, or affiliates during or with respect to any period for which Lender did not receive the Property, full amounts it was entitled to receive as prepayments of the Loan pursuant to Section 2.6(b) (all Rents or covered by clauses (x) and (y) being hereinafter referred to as the “Recourse Distributions”) and (c)) any other collateral given to Agent and/or Lenders pursuant to Lender under the Loan DocumentsDocuments ((a), (b), and (c) collectively, the “Default Collateral”); provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerDefault Collateral. The provisions of this Section 8.14 shall not, however, (a) constitute a waiver, release impair the validity of the Indebtedness evidenced by the Loan Documents or impairment in any way affect or impair the Liens of any obligation evidenced Mortgage or secured by any of the other Loan DocumentsDocuments or the right of Lender to foreclose any Mortgage following an Event of Default; (b) impair the right of Agent or Lenders Lender to name any Credit Party Person as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Leaseany Mortgage; (c) affect the validity or enforceability of the Note, any guaranty Mortgage or indemnification agreement made in connection with the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement right of Lender to bring suit for and recover against any Person any damages, losses, expenses, liabilities or costs resulting from fraud, willful misrepresentation, waste of all or any portion of any Individual Property, or wrongful removal or disposal of all or any portion of any Individual Property by any Person in connection with this Agreement, the Assignment of LeasesNote, any Mortgage or the other Loan Documents; (f) impair the right of Lender to obtain the Recourse Distributions received by any Person; (g) impair the right of Lender to bring suit for and recover against any Person with respect to any misappropriation of security deposits or Rents collected more than one (1) month in advance; (h) impair the right of Lender to obtain Insurance Proceeds or Condemnation Proceeds due to Lender pursuant to any Mortgage; (i) impair the right of Lender to enforce the provisions of Sections 4.1(V) or 5.1(D) through 5.1(G), inclusive of this Agreement, Section 2.8 of each Mortgage or the Environmental Indemnity even after repayment in full by any Borrower of the Indebtedness; (j) prevent or in any way hinder Lender from exercising, or constitute a prohibition defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against Agent any or Lenders all of the Collateral securing the Note as provided in the Loan Documents; (k) impair the right of Lender to bring suit for and recover against any person with respect to any misapplication of any funds (including, without limitation, insurance proceeds and condemnation proceeds); (l) impair the right of Lender to xxx for, seek or demand a deficiency judgment against Borrower in order to fully realize any Person solely for the purpose of foreclosing on any security given by Borrower in connection with Collateral or any part thereof, or realizing upon the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; Default Collateral, or (gm) constitute a waiver of impair the right of Agent Lender to bring suit for and recover against any Person any damages, losses, expenses, liabilities or Lenders to enforce costs in the liability and obligation of event that Borrower or Guarantorany Operating Lessee shall take any action of any kind or nature whatsoever, either directly or indirectly to oppose, impede, obstruct, challenge, hinder, frustrate, enjoin or otherwise interfere with (A) Lender’s termination of any Operating Lease with any Operating Lessee, (B) Lender or the party acquiring any Individual Property following the occurrence of a foreclosure or deed in lieu thereof (in full substitution of the applicable Operating Lessee) being deemed the “Owner” under the Management Agreement, (C) the execution, delivery or effectiveness of a new Management Agreement directly between Lender or the party acquiring any Individual Property following a foreclosure or deed in lieu thereof and applicable Manager or (D) any payment or other transfer by money any Manager of funds which would otherwise be paid to any Operating Lessee under any Operating Lease directly to Lender or the party acquiring any Individual Property following the occurrence of a foreclosure or deed in lieu thereof, in each case after or as a result of any automatic termination of the applicable Operating Lease or of Lender exercising its right to terminate the Operating Lease, in each case pursuant to the applicable Subordination, Attornment and Security Agreement and this Agreement, or shall, either directly or indirectly, cause or permit any other person to take any action which, if taken by such Operating Lessee would constitute an event described in this Section 8.14(m); provided, however, that any deficiency judgment or otherwise, referred to in this Section 8.14(m) shall be enforceable only to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or of the Default Collateral. The preceding provisions of this Section 8.14 shall be inapplicable to any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
Person if (i) any material intentional misrepresentation petition for bankruptcy, reorganization or arrangement pursuant to federal or state law against any Borrower or Operating Lessee shall be filed by any Credit Party in connection with the Loan;
Borrower, Operating Lessee, or any Affiliate of any Borrower or Operating Lessee, (ii) the fraudulent acts if an involuntary bankruptcy or willful misconduct of other insolvency proceeding is commenced against any Credit PartyBorrower or Operating Lessee (by a party other than Lender) but only if such Borrower has consented or acquiesced to such proceeding or if Borrower, Guarantor Operating Lessee or Manager, if applicable (so long as Manager is an any Affiliate of any Credit Party Borrower or Guarantor);
Operating Lessee has acted in concert with, colluded or conspired with the party to cause the filing thereof or has consented to or acquiesced thereto, (iii) during a Trigger Period if any Borrower or during Operating Lessee shall institute any proceeding for the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate dissolution or liquidation of any Credit Party Borrower or Guarantor or any Affiliate thereof)Operating Lessee, any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of if any Borrower or Operating Lessee shall make an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, (v) if any Borrower or admitsOperating Lessee shall breach any representation, warranty or covenant in writing Section 4.1(C) (such that such breach was considered by a court as a factor in the court’s finding for a consolidation of the assets of a Borrower or Operating Lessee with the assets of another person or entity or as a result thereof Lender suffers any material damage, cost, liability or expense; provided, however, that in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance absence of an Event actual consolidation, recourse may be had against Borrower or Operating Lessee only to the extent of Default and acceleration losses for such breach), 4.1(V), 4.1(AA), 5.1(T) (such that such breach was considered by a court as a factor in the court’s finding for a consolidation of the Loan by assets of a Borrower or on behalf of the Agent and Lenders under or in connection Operating Lessee with the Guarantyassets of another person or entity or as a result thereof Lender suffers any material damage, Mortgagecost, Subordinationsliability or expense; provided, Negative Pledges however, that in the absence of an actual consolidation, recourse may be had against Borrower or any other Loan Document, any Credit Party, Operating Lessee only to the extent of losses for such breach) or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I5.1(X), (IIv) if any Borrower or Operating Lessee allows any Transfer to occur in violation of Section 6.1(B) hereof or otherwise fails to obtain Lender’s prior written consent to any Transfer to the extent any consent is required in the Loan Documents, (vi) any Borrower or Operating Lessee interferes with Lender’s exercise of any of its rights or remedies hereunder or (IIIvii) that the Subordinations if any Borrower or the Negative Pledges Operating Lessee breaches any representation or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablewarranty contained in Section 4.1(S).
Appears in 4 contracts
Samples: Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreements and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreements or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreements or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Ashford Keys Senior Operating Lessee as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreements and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment provisions contained in the Pledge Agreements; or (vi) impair the right of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan or Net Liquidation Proceeds After Debt Service to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any material fraud or intentional misrepresentation by Borrower, Mortgage Borrower, Operating Lessee, Ashford Keys Senior Operating Lessee, Guarantor or any Credit Party Affiliate of any of the foregoing in connection with the execution and the delivery of this Agreement, the Note, the Pledge Agreements, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period Remington’s or any Exculpated Party’s misapplication, misappropriation or conversion of Rents received by Mortgage Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication, misappropriation or conversion of tenant security deposits (including the failure of to deliver to Mortgage Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the Observatory Tenant, during extent not applied in accordance with the continuance applicable Leases prior to the occurrence of an Event of Default Default) or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Rents collected in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsadvance;
(v) the misapplication, misappropriation or conversion of (A) Insurance Proceeds or Awards by any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofExculpated Party;
(vi) any Borrower’s or Mortgage Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Insurance Premiums, Other Charges (provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender or Mortgage Lender pursuant to the terms hereof or the Mortgage Loan Agreement and Trade Payables being contested in accordance with Section 4.1.2neither Borrower nor Mortgage Borrower has made a claim against such escrowed amounts or otherwise taken action to restrict Lender or Mortgage Lender from applying such sums for the purpose of paying such items) or (B) there is insufficient cash flow from the operation of the Properties to pay such items), charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and cure periods specified herein;
(vii) intentional physical waste Borrower’s or Mortgage Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Individual Property by or on behalf of Borrower, Mortgage Borrower, Ashford Keys Senior Operating Lessee or Operating Lessee and not replaced with Personal Property of the Property (but excluding any matter that arises by reason same utility and of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)same or greater value;
(viii) material physical waste to any removal Individual Property caused by the intentional acts or disposal omissions of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property Exculpated Party when there is sufficient cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets operation of any Credit Party with the assets of another Person (other than the other Credit Parties)Individual Property to avoid such waste from occurring;
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 3 contracts
Samples: Senior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc), Senior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc), Senior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower Borrowers (or any holder of a Borrowers’ members, managers, partners shareholders, officers, directors or Affiliates, whether direct or indirect interest in ESBA or any supervisor of either party comprising indirect, collectively, the “Borrower or Controlling either party comprising Borrower Parties”) to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyeither Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the NoteNotes, this Agreement, the Mortgage and the other Loan Documents, or in any or all of the PropertyProperties, the Rents Rents, the Vacant Space Rent or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrowers or the Borrower Parties only to the extent of Borrower’s Borrowers’ or the Borrower Parties’ interest in the PropertyProperties, in the Rents, in the Cash Collateral Vacant Space Rent and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the NoteNotes, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against either Borrower or the Borrower Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the NoteNotes, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrowers as a party defendant defendants in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against Borrower Borrowers in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgage or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties; or (g) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrowers, by money judgment or otherwise, to the extent of any actual loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by either Borrowers or any Credit Party Guarantor in connection with the Loan, including by reason of any claim under RICO;
(ii) the fraudulent acts gross negligence or willful misconduct of either of the Borrowers, any Credit Guarantor, either of the Principals or any other Restricted Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party representation, warranty, covenant or Guarantor indemnification provision in the Environmental Indemnity, the Parking Easement or in the Mortgage concerning environmental laws, hazardous substances or asbestos and any Affiliate thereof), indemnification of Lender with respect thereto in any Credit Party, Guarantor or any Affiliate thereofLoan Document;
(iv) the failure wrongful removal or destruction by either Borrower or any Affiliate of either Borrower of any portion of the Observatory Tenant, during Properties after the continuance occurrence of an Event of Default or during a Trigger Periodany intentional physical waste of the Properties or any portion thereof by either Borrower or any Affiliate thereof, provided, however, that such physical waste shall exclude wear and tear to pay all Rent under the Observatory Lease into Properties or any portion thereof that occurs in the HSBC Collection Account in accordance with ordinary course of business of the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsProperties;
(v) any Legal Requirement (including RICO) mandating the misappropriation forfeiture by either Borrower of (A) any insurance proceeds paid by reason either of any loss, damage or destruction to the PropertyProperties, or (B) any Awards portion thereof, because of the conduct or other amounts received purported conduct of criminal activity by any Borrower or any Restricted Party in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereoftherewith;
(vi) any failure misrepresentation, miscertification or breach of warranty by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor either Borrower or any Affiliate thereof Guarantor with respect to use current Rents any representation, warranty or certification contained in this Agreement or any other Loan Document or in any document executed in connection therewith, pursuant to pay then current material operating expenses any of the Loan Documents or otherwise to induce Lender to make the Loan, or any advance thereof, or to release monies from any account held by Lender (including any reserve or escrow) or to take other action with respect to the Property Collateral (as defined in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2Mortgage);
(vii) intentional physical waste the misappropriation or conversion by or on behalf of either Borrower or any of its Affiliates of (A) any Insurance Proceeds, (B) any Condemnation Proceeds, (C) any Rents and/or Vacant Space Rent following an Event of Default, or (D) any Rents and/or Vacant Space Rent paid more than one (1) month in advance; provided such amounts are not applied to the payment of the Property (but excluding any matter that arises by reason Loan or the Operating Expenses of lack of cash flow with respect to the either Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal failure to pay charges for labor or disposal of materials or other charges that can create Liens on any portion of the Property after an Event Properties that are superior to the Lien of Default the Mortgage, unless such charges are being contested in any manner prohibited by the Loan Documentsaccordance herewith;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected by either Borrower or any Affiliate thereof with respect to the either Property or any part thereof which are not delivered to Agent Lender upon a foreclosure of the Property Properties or transfer any part thereof or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvx) if either Borrower fails to permit on-site inspections of the Properties or any modificationspart thereof, amendmentsfails to provide financial information specifically required by this Agreement or fails to appoint a new Manager upon the request of Lender, restatements and/or supplements made to each as required by, and in accordance with, the Ground Lease, Sublease terms and provisions of this Agreement or the Observatory Lease without Mortgage;
(xi) (A) if the consent of Agent and any termination Operating Partnership shall default under either of the Observatory Master Leases beyond any applicable notice and/or cure period contained therein, or (B) if either Master Lease shall have been amended or modified (except as specified in Section 3.1.21 hereof) without Lender’s prior written consent, or (C) if either Master Lease shall have been terminated, cancelled or surrendered without Lender’s prior written consent in violation of Section 5.2.13 hereof (except as specified in Section 3.1.21 hereof), or (D) if the Operating Partnership is the subject of a Bankruptcy Action, other than an involuntary Bankruptcy Action which is dismissed within ninety (90) days; or
(xii) (A) if there shall exist an event of default by Tower Borrower under the Parking Easement beyond any applicable notice and/or cure period contained therein, or (B) if the Parking Easement shall have been amended or modified in violation of Section 5.2.11 hereof) without Lender’s prior written consent, or (C) if the Parking Easement shall have been terminated, cancelled or surrendered (other than by the terms of the Parking Easement) without Lender’s prior written consent in violation of AgentSection 5.2.11 hereof. Notwithstanding anything to the contrary in this Agreement, the Note Notes or any of the other Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Mortgage or to require that all collateral shall continue to secure all of the Debt owing to Lenders Obligations in accordance with the Loan Documents, and (B) Borrowers shall be jointly and severally personally liable for the payment of the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity1) or Controlling either party comprising Borrower, in the event thatof: (1a) any Credit Party files either Borrower filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2b) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party either Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or law by any other Federal or state bankruptcy or insolvency law, Person in which any Credit Party or Guarantor either Borrower colludes with, with or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party either Borrower from any Person; (4c) any Credit Party files either Borrower filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5d) any Affiliate, officer, trustee, director, either Borrower consenting to or representative which Controls any Credit Party acquiescing in or Guarantor joins joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party either Borrower or any portion of the PropertyProperties; or (6e) any Credit Party makes a general either Borrower making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (2) if the first Monthly Interest Payment is truenot paid when due; (3) if either Borrower fails to maintain its status as a Special Purpose Entity as required by and in accordance with the terms of this Agreement and there is a substantive consolidation of either Borrower with any other Person; (4) if either Borrower fails to obtain Lender’s prior consent to any Indebtedness or voluntary Lien encumbering the Properties or any part thereof as required by this Agreement or the Mortgage; or (75) in connection with if either Borrower fails to obtain Lender’s prior consent to any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan Transfer as required by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations this Agreement or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableMortgage.
Appears in 3 contracts
Samples: Loan Agreement (MPG Office Trust, Inc.), Loan Agreement (MPG Office Trust, Inc.), Loan Agreement (Maguire Properties Inc)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument, the Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower, any other Borrower Party or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower, any other Borrower Party or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument, the Pledge Agreement and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Collateral, the Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower and any other Borrower Party only to the extent of Borrower’s and any other Borrower Party’s interest in the Property, in the RentsCollateral, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument, the Pledge Agreement and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower, any other Borrower Party or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument, the Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name Borrower or any Credit other Borrower Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of Security Instrument or the Operating Lease and Observatory LeasePledge Agreement; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Environmental Indemnity and in the Guaranty) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower or any other Borrower Party in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or the Pledge Agreement or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Collateral or the Property (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any fraud or intentional material intentional misrepresentation by any Credit Borrower Party or any of their respective Affiliates in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or Guarantor)any of their respective Affiliates in connection with the Loan or any Individual Property;
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt in which any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or Guarantor their respective Affiliates files or raises a defense that intentionally interferes with Lender exercising any Affiliate thereof)rights and remedies available to Lender as provided in under this Agreement and the other Loan Documents only to the extent a court of competent jurisdiction, any Credit Partyin a final non-appealable decision, Guarantor or any Affiliate thereoffinds the applicable defenses were not raised in good faith by Borrower;
(iv) intentional physical waste to any Individual Property caused by the failure intentional acts or intentional omissions by any Borrower Party or any of their respective Affiliates (provided that the foregoing is not the result of the Observatory Tenantinsufficiency of cash flow from the Properties to prevent such intentional omissions, during and if there is any insufficiency of cash flow, such insufficiency is not a result of misappropriation of Rents by any Borrower Party and/or the continuance removal or disposal of any portion of the property by any Borrower Party or any of their respective Affiliates after an Event event of Default default other than in the ordinary course of owning and managing the Properties or during a Trigger Period, to pay all Rent under otherwise in violation of this Agreement and the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the other Loan Documents);
(v) the misappropriation by any Borrower Party or any of their respective Affiliates of (A) any insurance proceeds paid by reason of any loss, damage (including BI Proceeds or destruction Casualty Proceeds) with respect to the PropertyProperties, or (B) any Awards or other amounts received in connection with the any Condemnation of all or a any portion of any Individual Property, or (C) any Rents (provided that, in each case there shall be no liability under this subsection to the Property extent that the turnover of such funds is prohibited by Manager, if any applicable (so long as Manager is an Affiliate of any Credit Party law or Guarantor or any Affiliate thereofcourt order), any Credit Party or Guarantor or any Affiliate thereof;
(vi) Borrower’s failure to pay (or cause to be paid) real property taxes, Ground Rent or other charges due in connection with the Properties that results in liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Individual Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions of this Agreement and the other Loan Documents (other than if such failure is caused by the acts of a Tenant) to the extent that (i) any such liens are not bonded over or discharged in accordance with this Agreement and the other Loan Documents and (ii) the Properties generated sufficient revenue in the immediately preceding six (6) month period to pay the same and Borrower failed to apply such revenue to such real property taxes or other charges, unless such charges are the subject of a bona fide dispute in which Borrower is contesting the amount or validity thereof in accordance with the terms of this Agreement and the other Loan Documents (provided, however, that there shall be no personal liability under this subsection solely for the failure to pay real property taxes or Ground Rent if (a) sufficient sums had been reserved hereunder for the express purpose of paying the real property taxes, Ground Rent or charges in question and Lender failed to pay same, and (b) Lender’s access to such sums was not restricted or constrained by any action taken by or on behalf of any Borrower Party in any manner);
(vii) intentional physical waste Borrower’s failure to pay Insurance Premiums or the amount of any deductible following a Casualty, Condemnation or other insurance claim, to maintain the Property Policies in full force and effect, in each case, as expressly provided herein (but excluding any matter provided, however, that arises by reason of lack of cash flow with respect to there shall be no personal liability under this subsection for the Property, except aforementioned failures to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described that, in clauses (iii)each case, (iv)A) the Properties generated insufficient revenue in the immediately preceding six (6) month period to pay the Insurance Premiums in question or (B)(i) sufficient sums had been reserved hereunder for the express purpose of paying the Insurance Premiums in question and Lender failed to pay same, (v) and (viii) aboveLender’s access to such sums was not restricted or constrained by any action taken by or on behalf any Borrower Party in any manner);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected by any Borrower Party or any of their respective Affiliates in connection with respect to the Property Properties which are not delivered to Agent Lender upon request upon a foreclosure of the Property or transfer action in lieu thereof, thereof except to the extent such amounts have been previously applied by Borrower in accordance with this Agreement and the other Loan Documents, the existing leases or in accordance with a court order (provided that, in each case there shall be no liability under this subsection to the extent that the failure to turn over such funds is prohibited by any such security deposits were applied applicable law or court order);
(ix) the seizure or forfeiture of any Individual Property resulting from criminal wrongdoing by any Borrower Party or any of their respective Affiliates;
(x) breach or violation by any Borrower Party or any of their respective Affiliates of any of the material terms of Sections 11.1, 11.2, 11.6, 11.8 and/or 11.9 of the Loan Agreement;
(xi) any liability or obligation pursuant to any purchase and sale agreement entered into by a Borrower for the sale by Borrower of a Previously-Owned Property or any other liability or obligation otherwise related to a Previously-Owned Property;
(xii) failure to comply with the terms and provisions of Article 15 hereof;
(xiii) any amendment or modification of the Ground Lease in violation of the terms hereof or any cancellation, expiration or termination (for any reason whatsoever) of the Ground Lease, or the surrender of the leasehold estate thereunder in violation of the terms hereof;
(xiv) without limiting Section 13.1(b)(B)(ii) below, any voluntary debt, lien or transfer of any Individual Property or the Collateral in violation of the Loan Documents (other than liens being contested in good faith in accordance with the terms and conditions provisions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereofthis Agreement); andand/or
(xv) without limiting Section 13.1(b)(B)(i) below, any modificationsbreach of violation by Borrower, amendmentsPledgor, restatements Additional Obligor and/or supplements made to the Ground Leaseany SPE Component Entity of Article 5 hereof, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. other than immaterial breaches which are promptly cured by Borrower.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event thatof: (i) any breach or violation by Borrower, Pledgor, Additional Obligor or any SPE Component Entity of Article 5 hereof, as a result of which, a court orders the substantive consolidation of Borrower, Pledgor, Additional Obligor or any SPE Component Entity with one or more constituent owner(s) of Borrower, Pledgor, Additional Obligor and/or SPE Component Entity (any such person or entity, a “Bankrupt Person”) and which court cites such breach or violation as a material factor in ordering the substantive consolidation of the assets and liabilities of Borrower, Pledgor, Additional Obligor and/or SPE Component Entity with the assets and liabilities of the Bankrupt Person; (ii) any violation or breach of Article 6 hereof caused by (1) any Credit Party files a voluntary petition under transfer of the Bankruptcy Code Collateral or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes fee simple title to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party all or any portion of the Property; Property (6other than with Lender’s prior written consent or as expressly permitted by this Agreement or the other Loan Documents) or (2) any Credit Party makes a general assignment for sale or pledge of the benefit of creditors, or admits, in writing or ownership interests in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) Restricted Party in connection with any enforcement action or exercise or assertion violation of any right or remedy upon the continuance of an Event of Default and acceleration terms of the Loan by or on behalf of Documents, which, in the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate case of any Credit Party sale or Guarantorpledge described in this clause (2) remains uncured for a period of ten (I10) seeks days following Borrower’s obtaining knowledge of such violation (or Borrower’s receipt of notice from Lender of such violation); (iii) a defense, judicial intervention or injunctive or other equitable relief of any kindBankruptcy Event with occurs, or (IIiv) assertsthe incurrence of any voluntary debt secured by all or any portion of any Individual Property or other Collateral or any direct or indirect interests in Borrower, or causes a third party to assertexcept Indebtedness and liens (including, liens being contested in a pleading filed good faith in connection accordance with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination terms and provisions of the Sublease or Observatory Lease are void, voidable or unenforceablethis Agreement) expressly permitted pursuant to this Agreement.
Appears in 3 contracts
Samples: Loan Agreement (Retail Value Inc.), Loan Agreement (Retail Value Inc.), Loan Agreement (DDR Corp)
Exculpation. Subject Notwithstanding anything in this Note or the Loan Documents to the contrary, but subject to the qualifications below hereinbelow set forth, Xxxxxx agrees that:
(a) Borrower shall be liable upon the indebtedness evidenced hereby and except as set forth for the other obligations arising under the Loan Documents to the full extent (but only to the extent) of the security therefor, the same being all properties (whether real or personal), rights, estates and interests now or at any time hereafter securing the payment of this Note and/or the other obligations of Borrower under the Loan Documents (collectively, the “Property”);
(b) if a default occurs in the Guaranty timely and Environmental Indemnityproper payment of all or any part of such indebtedness evidenced hereby or in the timely and proper performance of the other obligations of Borrower under the Loan Documents, neither Agent nor Lenders any judicial proceedings brought by Lender against Borrower shall enforce be limited to the preservation, enforcement and foreclosure, or any thereof, of the liens, security titles, estates, assignments, rights and security interests now or at any time hereafter securing the payment of this Note and/or the other obligations of Borrower under the Loan Documents, and no attachment, execution or other writ of process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the Property, except with respect to the liability and obligation of described below in this section; and
(c) in the Borrower or any holder event of a direct foreclosure of such liens, security titles, estates, assignments, rights or indirect interest in ESBA or any supervisor security interests securing the payment of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or Note and/or the other obligations of Borrower under the Loan Documents by Documents, no judgment for any action or proceeding wherein a money judgment deficiency upon the indebtedness evidenced hereby shall be sought or obtained by Lender against a Credit PartyBorrower, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant with respect to the Loan Documentsliability described below in this Section; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to notwithstanding the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The foregoing provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the fullest extent of any losspermitted by law, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees Borrower shall be fully and costs reasonably incurred) arising out of or in connection with the following:
personally liable and subject to legal action (i) for proceeds paid under any material intentional misrepresentation by any Credit Party in connection with the Loan;
insurance policies (ii) the fraudulent acts or willful misconduct paid as a result of any Credit Party, Guarantor other claim or Manager, if applicable (so long as Manager is an Affiliate cause of action against any Credit Party person or Guarantor);
(iiientity) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any lossdamage, damage loss or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, to the Operating Lease or full extent of such proceeds not previously delivered to Lender, but which, under the Observatory Lease in violation terms of the Loan Documents;
, should have been delivered to Lender, (xiii) subject for proceeds or awards resulting from the condemnation or other taking in lieu of condemnation of all or any portion of the Property, to the provisions full extent of Section 8.3(a)(v)such proceeds or awards not previously delivered to Lender, but which, under the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation terms of the Loan Documents;
, should have been delivered to Lender, (xiiiiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any for all tenant security deposits, advance deposits or other refundable deposits paid to or held by Borrower or any other deposits collected person or entity in connection with respect to leases of all or any portion of the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms of the applicable lease or other agreement, (iv) for rent and conditions other payments received from tenants under leases of all or any portion of the Property paid more than one (1) month in advance, (v) for rents, issues, profits and revenues of all or any portion of the Property received or applicable to a period after the occurrence of any Event of Default hereunder or under the Loan Documents or any event which, with notice or the passage of time, or both, would constitute an Event of Default, hereunder or under the Loan Documents which are not either applied to the ordinary and necessary expenses of owning and operating the Property or paid to Lender, (vi) for waste committed on the Property, damage to the Property as a result of the intentional misconduct or gross negligence of Borrower or any of its principals, officers, general partners or members, any guarantor, any indemnitor, or any agent or employee of any such person, or any removal of all or any portion of the Property in violation of the terms of the Loan Documents, to the full extent of the losses or damages incurred by Lender on account of such occurrence, (vii) for failure to pay any valid taxes, assessments, mechanic’s liens, materialmen’s liens or other liens which could create liens on any portion of the Property which would be superior to the lien or security title of the Security Instrument or the other Loan Documents, to the full extent of the amount claimed by any such lien claimant except, with respect to any such taxes or assessments, to the extent that funds have been deposited with Lender pursuant to the terms of the Security Instrument specifically for the applicable taxes or assessments and not applied by Lender to pay such taxes and assessments, (viii) for all obligations and indemnities of Borrower under the Loan Documents relating to Hazardous Substances (as defined in the Security Instrument) or radon or compliance with Environmental Laws (as defined in the Security Instrument) and regulations to the full extent of any losses or damages (including those resulting from diminution in value of any Property) incurred by Lender and/or any of its affiliates as a result of the existence of such Hazardous Substances or radon or failure to comply with such Environmental Laws or regulations, or (ix) for fraud, intentional misrepresentation, failure to disclose a material fact, any untrue statement of a material fact or omission to state a material fact in the written materials and/or information provided to Lender or any of its affiliates by or on behalf of Borrower or any of its affiliates, principals, officers, general partners or members, any guarantor, any indemnitor or any agent, employee or other person authorized or apparently authorized to make statements, representations or disclosures on behalf of Borrower, any affiliate, principal, officer, general partner or member of Borrower, any guarantor or any indemnitor, to the full extent of any losses, damages and expenses of Lender and/or any of its affiliates on account thereof. References herein to particular sections of the Loan Documents shall be deemed references to such sections as affected by other provisions of the Loan Documents relating thereto. Nothing contained in this Section shall (1) be deemed to be a release or impairment of the indebtedness evidenced by this Note or the other obligations of Borrower under the Loan Documents or the lien of the Loan Documents upon the Property, or (2) preclude Lender from foreclosing the Loan Documents in case of any default or from enforcing any of the other rights of Lender except as stated in this Section, or (3) limit or impair in any way whatsoever (A) the Indemnity and Guaranty Agreement (the “Indemnity Agreement”) or (B) the Environmental Indemnity Agreement (the “Environmental Indemnity Agreement”), each of even date herewith executed and delivered in connection with the indebtedness evidenced by this Note or release, relieve, reduce, waive or impair in any way whatsoever, any obligation of any party to the Indemnity Agreement or the Environmental Indemnity Agreement. Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in this Section 2.6 SHALL BECOME NULL AND VOID and shall be of no further force and effect in the event of (i) a default by Borrower, Indemnitor (as defined in the Security Instrument) or any general partner, manager or managing member of Borrower of any of the Leases prior to the occurrence covenants set forth in Section 2.9 or Section 2.29 of the Event Security Instrument, or (ii) if the Property or any part thereof shall become an asset in (A) a voluntary bankruptcy or insolvency proceeding of Default that gave rise to such foreclosure Borrower or transfer Indemnitor, or (B) an involuntary bankruptcy or insolvency proceeding of Borrower or Indemnitor in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to which the Ground Lease, Sublease Borrower or the Observatory Lease without the consent Indemnitor colludes with creditors in such bankruptcy or insolvency proceeding and which is not dismissed within sixty (60) days of Agent and any termination of the Observatory Lease without the consent of Agentfiling. Notwithstanding anything to the contrary in this AgreementNote, the Note Security Instrument or any of the other Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness evidenced hereby or secured by the Security Instrument or any of the other Loan Documents or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Note, the Security Instrument and the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 3 contracts
Samples: Promissory Note (NNN Healthcare/Office REIT, Inc.), Promissory Note (NNN Healthcare/Office REIT, Inc.), Promissory Note (NNN Healthcare/Office REIT, Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental IndemnityNo Manager, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder Officer, Member, Affiliate of a Member, any of their respective direct or indirect interest in ESBA officers, directors, equityholders, employees or managers or any supervisor liquidating trustee or fiduciary of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein Company (each a money judgment “Covered Person”) shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate liable to the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance Company or any other appropriate action Member under any theory of law, including tort, contract or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable otherwise (INCLUDING A COVERED PERSON’S OWN NEGLIGENCE OR GROSS NEGLIGENCE) for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises claim incurred by reason of lack of cash flow with respect to the Property, except to the extent that any act or omission by such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described Covered Person in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion good faith on behalf of the Property after an Event Company and in a manner reasonably believed to be within the scope of Default in any manner prohibited authority conferred on such Covered Person by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note including any such loss, damage or any claim attributable to errors in judgment, negligence or gross negligence or other fault of the Loan Documentssuch Covered Person, (A) neither Agent nor Lenders except that a Covered Person shall be deemed to have waived liable for any right which Agent and/or Lenders may have under Section 506(a)such loss, 506(b), 1111(b) damage or any other provisions claim incurred by reason of the Bankruptcy Code to file a claim for the full amount Culpable Acts of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt such Covered Person. A Covered Person shall be fully recourse protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, Company by any Person as to matters the Covered Person reasonably believes are within such other Person under the Bankruptcy Code Person’s professional or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection expert competence and who has been selected with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan reasonable care by or on behalf of the Agent Company, including information, opinions, reports or statements as to the value and Lenders under or in connection with amount of the Guarantyassets, Mortgageliabilities, Subordinationsprofits, Negative Pledges losses or any other Loan Documentfacts pertinent to the existence and amount of assets from which distributions to Members might properly be paid. IN NO EVENT WILL A COVERED PERSON BE LIABLE TO THE COMPANY OR ANY MEMBER FOR CONSEQUENTIAL, any Credit PartyINDIRECT, or ManagerINCIDENTAL, if applicable SPECIAL, PUNITIVE, OR ANY OTHER NON-DIRECT DAMAGES INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR FUTURE REVENUES, COST OF CAPITAL, LOSS OF BUSINESS REPUTATION OR OPPORTUNITY OR ANY CLAIM OR DEMAND AGAINST THE COMPANY BY ANY OTHER PARTY DUE TO ANY CAUSE WHATSOEVER (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defenseINCLUDING, judicial intervention or injunctive or other equitable relief of any kindWITHOUT LIMITATION, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (ITHE COVERED PERSON’S OWN NEGLIGENCE OR GROSS NEGLIGENCE), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableEVEN IF A COVERED PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Appears in 3 contracts
Samples: Limited Liability Company Agreement (Darling Ingredients Inc.), Limited Liability Company Agreement (Darling Ingredients Inc.), Limited Liability Company Agreement (Mascoma Corp)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreements and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreements or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreements or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Ashford Keys Junior Operating Lessee as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreements and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment provisions contained in the Pledge Agreements; or (vi) impair the right of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan or Net Liquidation Proceeds After Debt Service to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any material fraud or intentional misrepresentation by Borrower, Mortgage Borrower, Senior Mezzanine Borrower, Operating Lessee, Ashford Keys Senior Operating Lessee, Ashford Keys Junior Operating Lessee, Guarantor or any Credit Party Affiliate of any of the foregoing in connection with the execution and the delivery of this Agreement, the Note, the Pledge Agreements, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period Remington’s or any Exculpated Party’s misapplication, misappropriation or conversion of Rents received by Mortgage Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication, misappropriation or conversion of tenant security deposits (including the failure of to deliver to Mortgage Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the Observatory Tenant, during extent not applied in accordance with the continuance applicable Leases prior to the occurrence of an Event of Default Default) or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Rents collected in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsadvance;
(v) the misapplication, misappropriation or conversion of (A) any insurance proceeds paid by reason of any loss, damage Insurance Proceeds or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)Exculpated Party;
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 3 contracts
Samples: Junior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc), Junior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc), Junior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, the Environmental Indemnity, Section 13.5 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower or Borrower Principal if necessary to obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, Borrower and Borrower Principal shall be personally liable to Lender on a joint and several basis for Losses due to:
(i) fraud or intentional misrepresentation by Borrower, Borrower Principal or any other Affiliate of Borrower or Borrower Principal in order connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to fully realize on any security given by Borrower Lender in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver either at the time of the right closing of Agent the Loan or Lenders to enforce during the liability and obligation term of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any lossBorrower’s failure to pay Taxes and Other Charges, damage or destruction in each case to the Property, or (B) any Awards or other amounts received in connection with extent that the Condemnation of all or a portion net operating cash flow of the Property by Manager, if applicable is sufficient therefor (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate except to the extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and there exists no impediment to Lender’s utilization thereof), and in each case beyond any Credit Party or Guarantor or any Affiliate thereofapplicable notice and cure periods specified herein;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party to return or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to reimburse Lender for all Personal Property taken from the Property in by or on behalf of Borrower and not replaced with Personal Property of the ordinary course same utility and of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)the same or greater value;
(vii) any act of intentional physical waste of the Property (but excluding or arson by Borrower, any matter that arises principal, Affiliate, member or general partner thereof or by reason of lack of cash flow with respect to the PropertyBorrower Principal, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii)any principal, (iv)Affiliate, (v) and (vi) above)member or general partner thereof;
(viii) Borrower’s failure following any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by to deliver to Lender upon demand all Rents and books and records relating to the Loan Documents;Property; or
(ix) any Credit Party’s failure change made to obtain Agentthe Policies without Lender’s prior consent written consent.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability against Borrower and Borrower Principal as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower and Borrower Principal jointly and severally in the event of (i) a default by Borrower or Borrower Principal of any Transferof the covenants set forth in Article 6, as applicableprovided, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’showever, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion breach by Borrower of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those covenants set forth in Section 4.2.19 hereof if Article 6 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a new or revised substantive non-consolidation opinion, in form and substance and from counsel reasonably satisfactory to Lender in accordance with the Rating Agency standards for the same, to the effect that such failure leads does not negate/impair the opinion previously delivered to Lender, and (y) the Debt shall be recourse to Borrower Principal in connection with a consolidation default under such Article 6 covenants only if Borrower Principal itself breaches, or causes or permits Borrower to breach, such covenants, (ii) a default by Borrower or Borrower Principal under any of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure prohibitions on transfers of the Property or transfer direct or indirect interest of Borrower set forth in lieu thereof, Article 7 hereof (except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of as may be expressly permitted under the Loan Documents), provided that the Debt shall be recourse to Borrower Principal in connection with a default of such Article 7 prohibitions only if Borrower Principal itself breaches, or causes or permits Borrower to breach, such prohibitions, or (iii) if (A) neither Agent nor Lenders a voluntary bankruptcy or insolvency proceeding is commenced by Borrower, (provided that the Debt shall be recourse to Borrower Principal in connection with a voluntary bankruptcy or insolvency proceeding of Borrower only if Borrower Principal commences or causes or permits Borrower to commence such a voluntary proceeding) or (B) an involuntary bankruptcy or insolvency proceeding is commenced against Borrower which is not dismissed within ninety (90) days of filing (provided, however, that Borrower and Borrower Principal shall not have recourse liability hereunder in connection with any involuntary bankruptcy or insolvency proceeding unless such involuntary proceeding is solicited, procured, consented to or acquiesced in by Borrower, any Affiliate of Borrower or Borrower Principal in bad faith collusion with an intent to circumvent the prohibition on recourse liability against the Borrower or Borrower Principal set forth herein).
(d) Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan Documents.
(e) Notwithstanding any provisions of this Article 15 to the contrary, and (B) the Debt in no event shall be fully recourse Borrower’s failure to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, pay Operating Expenses in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there cash flow is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability insufficient to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion expenses be considered an act of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablewaste.
Appears in 3 contracts
Samples: Loan Agreement (Maguire Properties Inc), Loan Agreement (Maguire Properties Inc), Loan Agreement (Maguire Properties Inc)
Exculpation. Subject (a) Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications below below, Lendxx xxx Borrower agree that:
(i) Borrower shall be liable upon the Debt and except as for the other obligations arising under the Loan Documents to the full extent (but only to the extent) of the security therefor; provided, however, that in the event (A) of fraud, willful misconduct or material misrepresentation by Borrower, its general partners, if any, its members, if any, its principals, its affiliates, its agents or its employees or by any Guarantor or any Indemnitor in connection with the loan evidenced by this Note, (B) of Borrower's breach or default under Sections 4.3 or 8.2 of the Security Instrument, or (C) the Property or any part thereof becomes an asset in a voluntary bankruptcy or insolvency proceeding, the limitation on recourse set forth in this Subsection 10(a) will be null and void and completely inapplicable, and this Note shall be with full recourse to Borrower.
(ii) If a default occurs in the Guaranty timely and Environmental Indemnityproper payment of all or any part of the Debt, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this AgreementSecurity Instrument, the Mortgage Other Loan Documents and the other Loan Documents, or interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by the Security Instrument and the Other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest Borrxxxx'x xnterest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender. Lendxx, and Lenders, by xx accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not xxx not, except as otherwise herein provided, sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Other Loan Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. Security Instrument.
(iii) The provisions of this Section Subsection 10(a) shall not, however, not (aA) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Other Loan DocumentsDocuments or the Security Instrument; (bB) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (cC) affect the validity or enforceability of any guaranty indemnity, guaranty, master lease or indemnification agreement similar instrument made in connection with this Note, the Security Instrument, or the Other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (dD) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (eE) impair the enforcement of the Assignment of Leasesexecuted in connection herewith; (fF) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Article 11 of the Security Instrument; or Lenders (G) impair the right of Lender to seek obtain a deficiency judgment or judgment on this Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with insurance proceeds or condemnation awards to which Lendxx xxxld otherwise be entitled under the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies Security Instrument; provided, however, Lender shall only enforce such judgment against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent insurance proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;condemnation awards.
(iv) Notwithstanding the failure provisions of this Article to the Observatory Tenantcontrary, during Borrower shall be personally liable to Lender for the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of Losses it incurs due to: (A) any insurance proceeds paid by reason the misapplication or misappropriation of any loss, damage or destruction to the Property, or Rents; (B) any Awards the misapplication or other amounts received in connection with the Condemnation misappropriation of insurance proceeds or condemnation awards; (C) Borrower's failure to return or to reimburse Lender for all or a portion of Personal Property taken from the Property by Manageror on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value; (D) any act of actual waste or arson by Borrower, if applicable (so long as Manager is an Affiliate of any Credit Party principal, affiliate, general partner or Guarantor member thereof or by any Indemnitor or any Affiliate thereof)Guarantor; (E) any fees or commissions paid by Borrower to any principal, affiliate, general partner or member of Borrower, any Credit Party or Guarantor Indemnitor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the terms of this Note, the Security Instrument or the Other Loan Documents;
; (xiF) subject Borrower's failure to comply with the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation 11.2 of the assets Security Instrument; or (G) any breach of any Credit Party with the assets of another Person (other than the other Credit Parties);Environmental Indemnity.
(xiib) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt Debt, owing to Lenders Lender in accordance with this Note, the Security Instrument and the Other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Promissory Note (First Union Real Estate Equity & Mortgage Investments), Promissory Note (First Union Real Estate Equity & Mortgage Investments)
Exculpation. Subject None of the Agents, the Collateral Agent or the Arranger nor any of their respective directors, officers, employees or Agents shall be liable to any Term Loan Lender for any action taken or omitted to be taken by it under this Agreement or any other Term Loan Document, or in connection herewith or therewith, except for its own wilful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the qualifications below and effectiveness, enforceability, sufficiency, validity or due execution of this Agreement or any other Term Loan Document, nor for the creation, perfection or priority of any Liens purported to be created by any of the Term Loan Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by the Borrower of its obligations hereunder or under any other Term Loan Document. Any such inquiry which may be made by any Agent or Collateral Agent shall not obligate it to make any further inquiry or to take any action. No Agent or the Collateral Agent shall have any duties or responsibilities except as those specifically set forth in the Guaranty this Agreement and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents and shall not by reason of the relationship established herein be a trustee or fiduciary of any action other Agent, the Collateral Agent or proceeding wherein a money judgment any Lender. Unless it specifically agrees to do so in writing, no Agent or the Collateral Agent shall be sought against a Credit Partyobligated to initiate, except that Agent may bring a foreclosure actionconduct or supervise any litigation or collection proceedings, terminate the Ground Leasewhether in bankruptcy or otherwise, Operating Lease and Observatory Lease, bring an action for specific performance any work-out or post-default negotiations or take any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documentssimilar actions; provided, however, that, except as specifically provided hereinat the written request of the Required Term Loan Lenders, any judgment in any such action or proceeding the Administrative Agent shall be enforceable obligated to foreclose upon or set off against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other cash collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding deposited with it under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; clause (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested Section 3.1.2 in accordance with Section 4.1.2);4.9. Each Agent and the Collateral Agent shall be entitled to rely:
(viia) intentional physical waste of the Property upon any certification, notice or other communication (but excluding including any matter that arises thereof by reason of lack of cash flow with respect telephone, telex, telegram or cable) believed by it to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) be genuine and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) correct and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) been signed or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan sent by or on behalf of the Agent proper Person or Persons; and Lenders under or (b) upon advice and statements of legal counsel, independent accountants and other experts selected by it in connection with good faith. As to the Guaranty, Mortgage, Subordinations, Negative Pledges matters not expressly provided for by this Agreement or any other Term Loan Document, any Credit Partyeach Agent and Collateral Agent shall in all cases be fully protected in acting, or Managerin refraining from acting, if applicable (if hereunder in accordance with instructions signed by the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Required Term Loan Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions ; and such instructions of the Sublease Required Term Loan Lenders and any action taken or Observatory Lease are void, voidable or unenforceablefailure to act pursuant thereto shall be binding on all of the Term Loan Lenders.
Appears in 2 contracts
Samples: Term Loan Agreement (Specialty Foods Acquisition Corp), Term Loan Agreement (Specialty Foods Corp)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral (or any portion thereof) or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not xxx forsue xxx, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment of LeasesPledge Agreement; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Collateral (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonable out-of-pocket Loss incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredincurred but in all events excluding consequential, punitive and special damages (except to the extent Lender is actually liable for such damages)) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period material physical waste to any Individual Property arising from the intentional acts or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate omissions of any Credit Borrower Party or Guarantor or any Affiliate thereof(it being acknowledged that omissions to perform acts for which sufficient cash flow is not available from the Properties shall not be deemed an intentional omission for purposes of this clause (iii), any Credit Party, Guarantor or any Affiliate thereof);
(iv) the failure removal or disposal by any Borrower Party or any of the Observatory Tenant, during the continuance its respective Affiliates of any portion of any Individual Property after an Event of Default unless such portion of any Individual Property so removed or during a Trigger Period, so disposed of is replaced with property of equal utility and value or such removal or disposal was otherwise permitted pursuant to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents terms and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsconditions hereof;
(v) the misappropriation misapplication or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Propertyany Individual Property (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party or Guarantor or Rents paid more than one month in advance and/or (E) any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofNet Liquidation Proceeds After Debt Service;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Individual Property in accordance with the ordinary course of business terms and provisions hereof; provided, however, Borrower shall have no liability under this subsection (except with respect to vi) if (A) such Taxes, Other Charges and Trade Payables charges for labor or materials or other charges that can create liens are being contested in accordance with Section 4.1.2);
the terms and conditions hereof or (viiB) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of sufficient cash flow with respect is not available from the Properties to the Propertypay such amounts; provided, except that, in no instance shall Borrower be released from any liability pursuant to this clause (vi) to the extent that (1) such lack insufficiency of cash flow arises from the intentional misappropriation or conversion of revenue with respect to Rent by any Borrower Party or (2) Borrower or Mortgage Borrower incurred such charges after the Property as described in clauses (iii), (iv), (v) occurrence and (vi) above);
(viii) any removal or disposal during the continuance of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any TransferDefault, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect charges were (I) necessary to protect against imminent danger to the health or safety of any Tenant or any Person at or in the immediate vicinity of any Individual Property as described in clauses (iii)or to prevent any imminent defect, damage or harm to any Individual Property, (iv), II) contracted for prior to such Event of Default or (vIII) and (vi) above)consented to in writing by Lender;
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the Property any Collateral or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) the breach or violation by Borrower, Mezzanine A Borrower, Mezzanine B Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity of any representation, warranty or covenant contained in Article 5 hereof;
(ix) the failure by Borrower to (A) permit (or cause Mortgage Borrower, Mezzanine A Borrower or Mezzanine B Borrower to permit) on-site inspections of any Individual Property, (B) provide any financial information regarding hereunder and/or pursuant to the other Loan Documents and/or (C) appoint (or cause Mortgage Borrower to appoint) a Qualified Manager pursuant to a Qualified Management Agreement upon the request of Lender which failure constitutes an Event of Default;
(x) a breach of Section 11.1 and/or Section 11.2 hereof, which breach continues for three (3) Business Days after notice from Lender;
(xi) any modificationsmaterial amendment, amendmentsmaterial modification or voluntary termination of any Ground Lease by any Borrower, restatements and/or supplements made Mezzanine A Borrower, Mezzanine B Borrower or any Mortgage Borrower without Lender’s consent other than as expressly permitted pursuant to the Ground Leaseterms hereof;
(xii) the termination or suspension of any Health Care License arising in connection with any grossly negligent or willful material violation of any Health Care Requirement or otherwise by Borrower, Sublease Mezzanine A Borrower, Mezzanine B Borrower or Mortgage Borrower or any voluntary termination or rejection of any such Health Care License by Borrower, Mezzanine A Borrower, Mezzanine B Borrower or Mortgage Borrower, in each instance, which termination, suspension or rejection constitutes an Event of Default;
(xiii) any violation of Article 6 hereof not otherwise covered pursuant to clauses (b)(iv) and (b)(v) immediately below, provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or the Observatory Lease without holder of any Mezzanine Loan shall not be a Sale or Pledge in violation of Article 6 hereof; or
(xiv) the consent incurrence by Mortgage Borrower of Agent and any termination voluntary indebtedness prohibited by the Mortgage Loan Agreement or by Mezzanine A Borrower of any voluntary indebtedness prohibited by the Observatory Lease without Mezzanine A Loan Agreement or by Mezzanine B Borrower of any voluntary indebtedness prohibited by the consent of Agent. Mezzanine B Loan Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) a Bankruptcy Event occurs, (ii) the first full monthly payment of principal (if any) and interest under the Note is not paid when due; (iii) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or any other Federal covenant contained in Article 5 is violated or state bankruptcy breached and such breach or insolvency law; (2) an Affiliate, officer, trustee, directorviolation results in, or representative which Controlsis a substantial factor in, directly or indirectlya substantive consolidation of Borrower, Mezzanine A Borrower, Mezzanine B Borrower, Mortgage Borrower and/or any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by Applicable SPE Component Entity with any other Person under the Bankruptcy Code in a bankruptcy or similar proceedings; (iv) if Borrower, Mortgage Borrower, Mezzanine A Borrower, Mezzanine B Borrower and/or any Applicable SPE Component Entity fails to obtain Lender’s prior written consent to (A) any voluntary indebtedness or (B) voluntary monetary lien encumbering any Individual Property or any Applicable Collateral to the extent such lien required Lender’s consent under this Agreement or the other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueLoan Documents; or (7v) if Borrower, Mezzanine A Borrower, Mezzanine B Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity fails to obtain Lender’s prior written consent to any voluntary transfer of any material portion of any Individual Property or any Applicable Collateral or to any voluntary act that causes a change in connection with the ownership of Borrower, Mezzanine A Borrower, Mezzanine B Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity to the extent such ownership change required Lender’s consent under this Agreement; provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or exercise or assertion the holder of any right Mezzanine Loan shall not be a Sale or remedy upon the continuance Pledge in violation of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under Article 6 hereof. Notwithstanding any provision contained herein or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, no direct or indirect shareholder, partner, member, principal, affiliate, employee, officer, director, agent or representative of Borrower (each, a “Related Party”) (other than (a) Guarantor in accordance with the Guaranty and the Environmental Indemnity and (b) any Credit Party, or Manager, if applicable (if the Manager that is an Affiliate of Borrower in accordance with any Credit Party or GuarantorLoan Document to which such Manager may be a party) shall have any personal liability for, nor be joined as a party to any action with respect to (Ii) seeks a defense, judicial intervention or injunctive or other equitable relief the payment of any kindsum of money which is or may be payable hereunder or under any other Loan Documents, including, but not limited to, the repayment of the Loan or (IIii) assertsthe performance or discharge of any covenants, obligations or causes a third party undertakings of Guarantor or any Related Party with respect thereto. In addition to assertthe foregoing, anything contained herein or in the other Loan Documents notwithstanding, in a pleading filed no event will the assets of any Related Party (other than Guarantor in connection accordance with a judicial proceeding the Guaranty and the Environmental Indemnity) be available to satisfy any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each obligation of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableBorrower hereunder.
Appears in 2 contracts
Samples: Mezzanine Loan Agreement (NorthStar Healthcare Income, Inc.), Mezzanine Loan Agreement (Northstar Realty Finance Corp.)
Exculpation. Subject to Neither the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this AgreementAgent, the Mortgage Banks nor the applicable Issuing Bank, nor any of their respective officers, directors, employees, attorneys and agents shall have any liability or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or responsibility by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingissuance or transfer of any Letter of Credit by the applicable Issuing Bank or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding clause (m)), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse the applicable Issuing Bank from liability to the Company to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Company to the extent permitted by applicable Law) suffered by the Company that are caused solely by the applicable Issuing Bank’s gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that:
(i) any material intentional misrepresentation by any Credit Party The Issuing Banks may accept documents that appear on their face to be in connection substantial compliance with the Loanterms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit;
(ii) The Issuing Banks shall have the fraudulent acts or willful misconduct right, in their sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate such Letter of any Credit Party or Guarantor);Credit; and
(iii) during This sentence shall establish the standard of care to be exercised by the Issuing Banks when determining whether drafts and other documents presented under a Trigger Period or during the continuance Letter of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance comply with the Loan Documents terms thereof (and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any lossparties hereto hereby waive, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack permitted by applicable Law, any standard of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply care inconsistent with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Partiesforegoing);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Credit Agreement (Empire Resources Inc /New/), Credit Agreement (Empire Resources Inc /New/)
Exculpation. Subject to the qualifications below and except Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to pay, perform and and/or observe the Obligations obligations contained herein, in the Note, this Agreement, the Mortgage or in the other Loan Documents by any action or proceeding against Borrower wherein a money judgment shall be sought against a Credit PartyBorrower, the members/parties of Borrower or Borrower Principal or its respective members, partners, shareholders, officers, or directors (the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding against Borrower to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in Sections 15.1(b) and (c) xxx for, seek or demand any deficiency judgment against Borrower the Exculpated Parties in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty or indemnification agreement indemnity (including, without limitation, those contained in Section 12.6 and Article 14 of this Agreement) made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment against Borrower in order or other judgment on the Note against Borrower if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent the Insurance Proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableAwards.
Appears in 2 contracts
Samples: Loan Agreement (Sun Communities Inc), Loan Agreement (Sun Communities Inc)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instruments or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instruments by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instruments, the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Security Instruments and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instruments, agrees that it shall not not, except as otherwise provided herein or in the Security Instruments, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instruments or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instruments, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases and rents provisions contained in the Security Instruments; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instruments or Lenders Sections 4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on (A) preserve or enforce its rights and remedies against any security given by Individual Property or (B) obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instruments; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the Losses it incurs due to: (i) fraud or intentional misrepresentation in connection with the execution and the delivery of this Agreement, the Note, the Security Instrument, or the other Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securityDocuments; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts occurrence of a Default or willful misconduct Event of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
Default; (iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the Security Deposits or Rents by Manager, if applicable collected more than thirty (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
30) days in advance; (iv) Borrower’s misapplication or the failure misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
Awards; (v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that sums sufficient to pay such lack of cash flow arises from the misappropriation of revenue amounts have been deposited in escrow with respect Lender pursuant to the Property as described in clauses (iiiterms of hereof), (iv), (v) and charges for labor or materials or other charges that can create Liens on the Properties; (vi) above);
Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Properties by or on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value; (vii) any act of intentional waste or arson by Borrower, Principal, or any Affiliate thereof or by Indemnitor or Guarantor; (viii) any removal fees or disposal commissions paid by Borrower to Principal or any Affiliate of any portion Borrower or Principal, Indemnitor, or Guarantor in violation of the Property after an Event terms of Default in any manner prohibited by this Agreement, the Note, the Security Instruments or the other Loan Documents;
; (ix) any Credit PartyBorrower’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by comply with the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack provisions of cash flow arises from the misappropriation Sections 4.1.39 and 5.1.19 of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
this Agreement; (x) a voluntary Lien remains an encumbrance on all material misrepresentation contained in any Required Out-Parcel Officer’s Certificate; or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject any unpaid Madison Property Option Shortfall Amount due pursuant to Section 2.5.5 hereof; provided, however, that in no event shall Guarantor be obligated for any Madison Property Option Shortfall Amount in excess of ten percent (10%) of the provisions original principal amount of Section 8.3(a)(v)the Loan.
(c) Notwithstanding the foregoing, the failure by any Credit Party agreement of Lender not to comply with pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect (i) in the material single purpose entity requirements event of a default under Section 4.1.35 of this Agreement including those set forth in Section 4.2.19 hereof if such that such failure leads to was considered by a court as a factor in the court’s finding for a consolidation of the assets of any Credit Party Borrower with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision Person; provided, however, that in the Environmental Indemnity Agreement concerning environmental lawsabsence of an actual consolidation, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except recourse may be had against Borrower only to the extent any such security deposits were applied in accordance of Losses actually incurred by Lender for Borrower’s failure to comply with the terms provisions of Section 4.1.35; (ii) in the event of any Borrower’s willful failure to provide a report or information required under Section 5.1.10, but a failure to provide such reports or information shall not be deemed willful if such failure is the result of good faith error and conditions is cured within ten (10) Business Days after notice is delivered to Borrower, provided, however, that if (x) Borrower is prevented by an unaffiliated third party (including but not limited to the Operating Tenants) from delivering such information, and (y) Borrower uses reasonable efforts to obtain such information, then such failure shall not be deemed willful so long as Borrower continuously endeavors in good faith to obtain the required financial reports and information and delivers same to Lender as soon as it becomes available to Borrower; (iii) in the event of a Transfer other than as expressly permitted pursuant to Section 5.2.10(c) hereof; (iv) in the event of a default under Section 5.2.10(d) hereof; (v) if any Individual Property or any part thereof shall become an asset in (A) a voluntary bankruptcy or insolvency proceeding or (B) an involuntary bankruptcy or insolvency proceeding commenced by Guarantor, Indemnitor or any Affiliate of any of the Leases prior foregoing and Borrower fails to use its commercially reasonable efforts to obtain a dismissal of such proceedings; or (vi) in the occurrence of the Event of Default event that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, Borrower (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; Person or (3B) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes .
(d) Nothing herein shall be deemed to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion waiver of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders which Lender may have under or in connection with the GuarantySection 506(a), Mortgage506(b), Subordinations, Negative Pledges 1111(b) or any other Loan Document, any Credit Party, or Manager, if applicable (if provision of the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks Bankruptcy Code to file a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security claim for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions full amount of the Sublease indebtedness secured by the Security Instruments or Observatory Lease are voidto require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, voidable or unenforceablethe Note, the Security Instruments and the other Loan Documents.
Appears in 2 contracts
Samples: Loan Agreement (Spirit Finance Corp), Loan Agreement (Spirit Finance Corp)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral (or any portion thereof) or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not xxx forsue xxx, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment of LeasesPledge Agreement; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Collateral (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonable out-of-pocket Loss incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredincurred but in all events excluding consequential, punitive and special damages (except to the extent Lender is actually liable for such damages)) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period material physical waste to any Individual Property arising from the intentional acts or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate omissions of any Credit Borrower Party or Guarantor or any Affiliate thereof(it being acknowledged that omissions to perform acts for which sufficient cash flow is not available from the Properties shall not be deemed an intentional omission for purposes of this clause (iii), any Credit Party, Guarantor or any Affiliate thereof);
(iv) the failure removal or disposal by any Borrower Party or any of the Observatory Tenant, during the continuance its respective Affiliates of any portion of any Individual Property after an Event of Default unless such portion of any Individual Property so removed or during a Trigger Period, so disposed of is replaced with property of equal utility and value or such removal or disposal was otherwise permitted pursuant to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents terms and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsconditions hereof;
(v) the misappropriation misapplication or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Propertyany Individual Property (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party or Guarantor or Rents paid more than one month in advance and/or (E) any Affiliate thereofNet Liquidation Proceeds After Debt Service), any Credit Party or Guarantor or any Affiliate thereof;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Individual Property in accordance with the ordinary course of business terms and provisions hereof; provided, however, Borrower shall have no liability under this subsection (except with respect to vi) if (A) such Taxes, Other Charges and Trade Payables charges for labor or materials or other charges that can create liens are being contested in accordance with Section 4.1.2);
the terms and conditions hereof or (viiB) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of sufficient cash flow with respect is not available from the Properties to the Propertypay such amounts; provided, except that, in no instance shall Borrower be released from any liability pursuant to this clause (vi) to the extent that (1) such lack insufficiency of cash flow arises from the intentional misappropriation or conversion of revenue with respect to Rent by any Borrower Party or (2) Borrower or Mortgage Borrower incurred such charges after the Property as described in clauses (iii), (iv), (v) occurrence and (vi) above);
(viii) any removal or disposal during the continuance of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any TransferDefault, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect charges were (I) necessary to protect against imminent danger to the health or safety of any Tenant or any Person at or in the immediate vicinity of any Individual Property as described in clauses (iii)or to prevent any imminent defect, damage or harm to any Individual Property, (iv), II) contracted for prior to such Event of Default or (vIII) and (vi) above)consented to in writing by Lender;
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the Property any Collateral or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) the breach or violation by Borrower, Mortgage Borrower and/or any SPE Component Entity (as defined herein and in the Mortgage Loan Agreement) of any representation, warranty or covenant contained in Article 5 hereof;
(ix) the failure by Borrower to (A) permit (or cause Mortgage Borrower to permit) on-site inspections of any Individual Property, (B) provide any financial information regarding hereunder and/or pursuant to the other Loan Documents and/or (C) appoint (or cause Mortgage Borrower to appoint) a Qualified Manager pursuant to a Qualified Management Agreement upon the request of Lender which failure constitutes an Event of Default;
(x) a breach of Section 11.1 and/or Section 11.2 hereof, which breach continues for three (3) Business Days after notice from Lender;
(xi) any modificationsmaterial amendment, amendments, restatements and/or supplements made material modification or voluntary termination of any Ground Lease by any Borrower or any Mortgage Borrower without Lender’s consent other than as expressly permitted pursuant to the Ground Leaseterms hereof;
(xii) the termination or suspension of any Health Care License arising in connection with any grossly negligent or willful material violation of any Health Care Requirement or otherwise by Borrower or Mortgage Borrower or any voluntary termination or rejection of any such Health Care License by Borrower or Mortgage Borrower, Sublease in each instance, which termination, suspension or rejection constitutes an Event of Default;
(xiii) any violation of Article 6 hereof not otherwise covered pursuant to clauses (b)(iv) and (b)(v) immediately below, provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or the Observatory Lease without holder of any Mezzanine Loan shall not be a Sale or Pledge in violation of Article 6 hereof; or
(xiv) the consent incurrence by Mortgage Borrower of Agent and any termination of voluntary indebtedness prohibited by the Observatory Lease without the consent of Agent. Mortgage Loan Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) a Bankruptcy Event occurs, (ii) the first full monthly payment of principal (if any) and interest under the Note is not paid when due; (iii) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or any other Federal covenant contained in Article 5 is violated or state bankruptcy breached and such breach or insolvency law; (2) an Affiliate, officer, trustee, directorviolation results in, or representative which Controlsis a substantial factor in, directly or indirectlya substantive consolidation of Borrower, Mortgage Borrower and/or any Credit Party or Guarantor files or any Credit Party or Guarantor joins SPE Component Entity (as defined herein and in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3Mortgage Loan Agreement) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by with any other Person under in a bankruptcy or similar proceedings; (iv) if Borrower, Mortgage Borrower and/or any SPE Component Entity (as defined herein and in the Bankruptcy Code Mortgage Loan Agreement) fails to obtain Lender’s prior written consent to (A) any voluntary indebtedness or (B) voluntary monetary lien encumbering any Individual Property or any Collateral to the extent such lien required Lender’s consent under this Agreement or the other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueLoan Documents; or (7v) if Borrower, Mortgage Borrower and/or any SPE Component Entity (as defined herein and in connection with the Mortgage Loan Agreement) fails to obtain Lender’s prior written consent to any voluntary transfer of any material portion of any Individual Property or any Collateral or to any voluntary act that causes a change in the ownership of Borrower, Mortgage Borrower and/or any SPE Component Entity (as defined herein and in the Mortgage Loan Agreement) to the extent such ownership change required Lender’s consent under this Agreement; provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or exercise or assertion the holder of any right Mezzanine Loan shall not be a Sale or remedy upon the continuance Pledge in violation of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under Article 6 hereof. Notwithstanding any provision contained herein or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, no direct or indirect shareholder, partner, member, principal, affiliate, employee, officer, director, agent or representative of Borrower (each, a “Related Party”) (other than (a) Guarantor in accordance with the Guaranty and the Environmental Indemnity and (b) any Credit Party, or Manager, if applicable (if the Manager that is an Affiliate of Borrower in accordance with any Credit Party or GuarantorLoan Document to which such Manager may be a party) shall have any personal liability for, nor be joined as a party to any action with respect to (Ii) seeks a defense, judicial intervention or injunctive or other equitable relief the payment of any kindsum of money which is or may be payable hereunder or under any other Loan Documents, including, but not limited to, the repayment of the Loan or (IIii) assertsthe performance or discharge of any covenants, obligations or causes a third party undertakings of Guarantor or any Related Party with respect thereto. In addition to assertthe foregoing, anything contained herein or in the other Loan Documents notwithstanding, in a pleading filed no event will the assets of any Related Party (other than Guarantor in connection accordance with a judicial proceeding the Guaranty and the Environmental Indemnity) be available to satisfy any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each obligation of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableBorrower hereunder.
Appears in 2 contracts
Samples: Mezzanine Loan Agreement (Northstar Realty Finance Corp.), Mezzanine Loan Agreement (NorthStar Healthcare Income, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgages and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s 's or Borrower Principal's interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgages or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgages; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Section 12.6, Section 13.5 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgages and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgages; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses actually sustained as a result of:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgages, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document prepared by or on behalf of Borrower, Operating Lessee or any Affiliate of either of them and furnished to Lender at the time of the 103 closing of the Loan or during the term of the Loan; provided, however, neither Borrower nor Borrower Principal shall have any liability pursuant to this Section 15.1(b)(i) to the extent any such certificate, report, financial statement or other instrument or document was prepared by or on behalf of Operating Lessee or Manager or was prepared by or on behalf of Borrower in good faith reliance on such information provided by Operating Lessee or Manager;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower's misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) Borrower's failure to pay Taxes, Other Charges (except to the misappropriation extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and there exists no impediment to Lender's utilization thereof), charges for labor or materials or other charges incurred in connection with work performed at any Individual Property that can create Liens on any Individual Property beyond any applicable notice and cure periods specified herein, but, in each case, only to the extent the Properties generated sufficient Net Operating Income to pay the same when due;
(vi) Intentionally Omitted;
(vii) any act of actual waste or arson by Borrower, any principal, Affiliate, member or general partner thereof or by Borrower Principal, any principal, Affiliate, member or general partner thereof;
(viii) a default by Borrower, Borrower Principal or any SPE Component Entity (if any) of any of the material covenants set forth in Article 6;
(ix) Borrower's failure during the existence of any Event of Default and upon the written request of Lender, to deliver (a) all Rents and (b) all books and records relating to the Properties to the extent the same are in Borrower's possession and control; or
(x) the filing by any Person within ten (10) days (or on the next Business Day if the 10th day falls on a day the appropriate Court is closed) of the entry of an order by the United States Bankruptcy Court authorizing and approving the sale of the Properties to Borrower of any notice of appeal from or motion for reconsideration of such order.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower and Borrower Principal in the event of (i) a default by Borrower, Borrower Principal or any SPE Component Entity (if any) of any of the covenants set forth in Article 7 hereof, or (ii) if the any Individual Property or any part thereof shall become an asset in (A) any insurance proceeds paid by reason a voluntary bankruptcy or insolvency proceeding of any loss, damage or destruction to the PropertyBorrower, or (B) an involuntary bankruptcy or insolvency proceeding of Borrower (and Borrower or Borrower Principal has joined with, colluded in or failed to object to any Awards such involuntary bankruptcy proceeding or other amounts received in connection with the Condemnation insolvency proceeding) which is not dismissed within ninety (90) days of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;filing.
(vid) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Mortgages or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Mortgages or the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Loan Agreement (Corporate Property Associates 15 Inc), Loan Agreement (Corporate Property Associates 16 Global Inc)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation None of the Borrower Debtors, the Reorganized Debtors, the Creditors' Committee, the Claims Resolution Committee, the Indenture Trustees, or the Prepetition Secured Lenders, nor any of their respective present or former members, officers, directors, employees, advisors, or attorneys shall have or incur any liability to any holder of a direct Claim or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Notean Interest, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action party in interest, or proceeding any of their respective agents, employees, representatives, financial advisors, attorneys, or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Case, formulating, negotiating or implementing the Modified Plan, the solicitation of acceptances of the Modified Plan, the pursuit of confirmation of the Modified Plan, the confirmation of the Modified Plan, the consummation of the Modified Plan, or the administration of the Modified Plan or the property to enable Agent to enforce and realize upon its interest be distributed under the NoteModified Plan, this Agreementexcept for their gross negligence or willful misconduct, and in all respects shall be entitled to reasonably rely upon the Mortgage advice of counsel with respect to their duties and responsibilities under the other Loan Documents, or in Modified Plan. Section 12.11(b) of the Property, the Rents or any other collateral given to Agent and/or Lenders Modified Plan is hereby stricken. Reorganized ICG shall indemnify each Person exculpated pursuant to Section 12.11 of the Loan Documents; providedModified Plan against, howeverhold each such Person harmless from, that, except as specifically provided hereinand reimburse each such Person for, any judgment and all losses, costs, expenses (including attorneys' fees and expenses), liabilities and damages sustained by such Person arising from any liability described in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions Section 12.11 of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerModified Plan. The provisions of this Section Such exculpation and limitation on liability shall not, however, (a) constitute a waiverlimit, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes withabridge, or otherwise assists such Personaffect the rights, if any, of the Reorganized Debtors to enforce, sue on, settle, or solicits or causes compromise the Litigation Claims retained purxxxnt to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion Sections 5.8 and 5.9 of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableModified Plan.
Appears in 2 contracts
Samples: Note and Warrant Purchase Agreement (Icg Communications Inc /De/), Credit Agreement (Icg Communications Inc /De/)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Borrowers to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyany Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral Collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against any Borrower only to the extent of such Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersCollateral, and LendersLender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against any Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 8.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; or (e) impair the enforcement of the Assignment of Leases; (fd) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against any Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgage or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of AgentCollateral. Notwithstanding anything to the contrary in this AgreementAgreement or any other Loan Document, the Note no present or future Constituent Member in any Borrower, nor any present or future shareholder, officer, director, employee, trustee, beneficiary, advisor, member, partner, principal, participant or agent of or in any Borrower or of or in any Person that is or becomes a Constituent Member in any Borrower, shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions amendment or amendments to any of the Bankruptcy Code to file a claim for the full amount of the Debt foregoing made at any time or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documentstimes, heretofore or hereafter, and (B) the Debt shall be fully recourse to BorrowerLender on behalf of itself and its successors and assigns, but not to hereby waives any holder of a direct or indirect interest in ESBA or and all such personal liability. In addition, Lender, for itself and its successors and assigns, acknowledges and agrees that neither Borrowers, nor any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising BorrowerConstituent Member, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or nor any other Federal or state bankruptcy or insolvency law; (2) an Affiliateparty, officer, trustee, director, or representative which Controlsis assuming any personal liability, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with any agreement, lease, instrument, claim or right constituting a part of the GuarantyCollateral or to which the Collateral is now or hereafter subject, Mortgageexcept as may be expressly set forth therein. For purposes of this Agreement and each of the other Loan Documents, Subordinations, Negative Pledges neither the negative capital account of any Constituent Member in any Borrower nor any obligation of any Constituent Member in any Borrower to restore a negative capital account or to contribute or loan capital to any Borrower or to any other Constituent Member in any Borrower shall at any time be deemed to be the property or an asset of such Borrower (or any such other Loan Document, Constituent Member) and neither Lender nor any Credit Party, of its successors or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) assigns shall have any right in connection to collect, enforce or proceed against any Constituent Member with respect to any security for the Loansuch negative capital account or obligation to restore, in each of (I), (II) contribute or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableloan.
Appears in 2 contracts
Samples: Second Mortgage Loan Agreement, Second Mortgage Loan Agreement (Bref Hr, LLC)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Administrative Agent nor Lenders shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Administrative Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Administrative Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Administrative Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersAdministrative Agent, and LendersAdministrative Agent, by accepting the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Administrative Agent or Lenders to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination any of the Operating Lease and Observatory LeaseMortgages; (c) affect the validity or enforceability of any guaranty the Guaranty or indemnification agreement made in connection with the Loan Environmental Indemnity or any of the rights and remedies of Administrative Agent or Lenders thereunder; (d) impair the right of Administrative Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment collateral assignment of Leasesleases and rents contained in the Mortgage; (f) constitute a prohibition against Administrative Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with each of the Loan Mortgages or to commence any other appropriate action or proceeding in order for Administrative Agent or Lenders to exercise its remedies against such securityall of the Properties; or (g) constitute a waiver of the right of Administrative Agent or Lenders to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any actual loss, damage, cost, expense, liability, claim or other obligation to the extent actually incurred by Administrative Agent and/or any Lender and Lenders (including reasonable attorneys’ fees fees, costs and costs expenses reasonably incurred) arising out of or in connection with the following:
(i) any material intentional fraud or materially and willful misrepresentation by Borrower or any Credit Party SPE Constituent Entity or any of their respective Affiliates in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of Borrower or any Credit Party, Guarantor SPE Constituent Entity or Manager, if applicable (so long as Manager is an Affiliate any of any Credit Party their respective Affiliates which results in physical damage or Guarantor)waste to the Property;
(iii) during a Trigger Period the removal or disposal of any portion of any Individual Property during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure misappropriation or conversion by Borrower, any SPE Constituent Entity, Guarantor or any of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation their respective Affiliates of (A) any insurance proceeds paid by reason of any lossCasualty or proceeds of the PLL Policy, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with a Condemnation, (C) any Rents during the Condemnation continuance of all an Event of Default, or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of D) any Credit Party or Guarantor or any Affiliate thereofRents paid more than one (1) month in advance;
(v) (intentionally omitted), any Credit Party or Guarantor or any Affiliate thereof;
(vi) a material breach by Borrower or any SPE Constituent Entity or material failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor Borrower or any Affiliate thereof SPE Constituent Entity to use current Rents to pay then current material operating expenses comply with respect to the Property covenants set forth in the ordinary course of business Section 5.1.29(a) or (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)b) hereof;
(vii) intentional physical waste of the if Borrower voluntarily encumbers any Individual Property by any Lien securing indebtedness for borrowed money (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (vother than a Permitted Encumbrance) and (vi) above);without Unanimous Lender’s prior written consent; or
(viii) if Borrower, any removal SPE Constituent Entity, Guarantor or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure respective Affiliate fails to obtain AgentUnanimous Lender’s prior written consent to any Transfer, as applicable, as Transfer of an Individual Property or any direct or indirect interest therein in any case in which such consent is required by the Mortgage or Article VIII to be obtained pursuant to Section 5.2.10 hereof (except with respect to provided, however, that a mechanic’s, tax, judgment Transfer by reason of a foreclosure (or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (vdeed-in-lieu or assignment deed-in-lieu thereof) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all by Administrative Agent or any portion Lender (or its designee) of the Property, collateral for the Operating Lease or the Observatory Lease Loan shall not be deemed a Transfer in violation of the Loan Documents;Section 5.2.10 hereof).
(xib) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Administrative Agent nor Lenders shall not be deemed to have waived any right which Administrative Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Mortgages or to require that all collateral shall continue to secure all of the Debt owing to Lenders and all amounts due to Administrative Agent in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: of:
(1i) Borrower or any Credit Party files SPE Constituent Entity filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCode; (2ii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against Borrower or any Credit Party SPE Constituent Entity under the Bankruptcy Code in which Borrower, any SPE Constituent Entity, Guarantor or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for Affiliate of Guarantor colludes with any involuntary petition against Borrower or any Credit Party or SPE Constituent Entity from any Person; (3iii) there is the filing of an involuntary petition against Borrower, any Credit Party under the Bankruptcy Code SPE Constituent Entity, Guarantor or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Affiliate of Guarantor colludes with, filing an answer consenting to or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code Code; or (iv) Borrower, any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party SPE Constituent Entity or Guarantor joins consenting to or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges SPE Constituent Entity or any other Loan Document, any Credit Party, Individual Property (or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (Iportion thereof), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Loan Agreement (Excel Trust, L.P.), Loan Agreement (Excel Trust, L.P.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower Borrowers (or any holder of a Borrowers’ members, managers partners shareholders, officers, directors or Affiliates, whether direct or indirect interest in ESBA or any supervisor of either party comprising indirect, collectively, the “Borrower or Controlling either party comprising Borrower Parties”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreements or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyeither Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreements and the other Loan Documents, or in any or all of the Property, the Rents Collateral or any other collateral given to Agent and/or Lenders Lender pursuant to the Pledge Agreements and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrowers or the Borrower Parties only to the extent of Borrower’s Borrowers’ or the Borrower Parties’ interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreements, and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against either Borrower or the Borrower Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Pledge Agreements, or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrowers as a party defendant defendants in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against Borrower Borrowers in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreements or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties; or (ge) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrowers, by money judgment or otherwise, to the extent of any actual loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.97
Appears in 2 contracts
Samples: Loan Agreement (MPG Office Trust, Inc.), Loan Agreement (MPG Office Trust, Inc.)
Exculpation. Subject to the qualifications below below, the Debt and except as set forth in the Guaranty Other Obligations shall be non-recourse to Borrower, Guarantor and Environmental Indemnity, neither Agent nor Lenders their respective Affiliates and Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, Guarantor and their respective Affiliates except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance of non-monetary obligations or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against Borrower or its Affiliates in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 9.3 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination any of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of the Guaranty or any other guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiverreceiver with respect to the Property; (e) impair the enforcement of any of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan or Mortgage to the extent necessary to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securityall of the Property; or (g) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any actual loss, damage, cost, expense, liability, claim or other obligation actually incurred by Agent and/or any Lender but excluding consequential, special or punitive damages (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(ia) any material fraud or intentional misrepresentation by any Credit Party Borrower, Operating Lessee or Guarantor in connection with the Loan;
(iib) willful misconduct of Borrower or Operating Lessee;
(c) damage to the fraudulent acts Property as a result of the gross negligence or willful misconduct of any Credit PartyBorrower, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Operating Lessee or Guarantor);
(iiid) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party representation, warranty, covenant or Guarantor or indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, hazardous substances and asbestos and any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofindemnification of Lender with respect thereto;
(ive) the failure removal or disposal of any material portion of the Observatory Tenant, Property by Borrower or Operating Lessee upon and during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with violation of the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAgreement;
(vf) the misappropriation or conversion by Borrower or Operating Lessee of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction Casualty to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property Property, (C) any Rents following an Event of Default, or (D) any Rents or other amounts which should have been deposited in the Lockbox Account but were diverted therefrom by ManagerBorrower, if applicable (so long as Manager is an Affiliate of any Credit Party Operating Lessee or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofGuarantor;
(vig) any failure by Managerof Borrower, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents Operating Lessee to pay then current material operating expenses with respect Taxes or other charges which give rise to Liens on the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that Gross Income from Operations after payment of Debt Service was insufficient to pay such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal Taxes or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereofcharges; and
(xvh) the failure of Borrower or Operating Lessee to obtain Lender’s prior written consent to any Indebtedness voluntarily incurred by Borrower or the voluntary grant or creating of any Lien (other than Permitted Encumbrances) encumbering the Property, or the failure of Borrower to obtain Lender’s prior written consent to any voluntary Transfer in each case as may be required by the Loan Agreement; and
(i) any modificationsmaterial interference or material resistance (including, amendmentswithout limitation, restatements and/or supplements made any action reasonably likely to the Ground Leasecause a material delay to Lender) by Borrower, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this AgreementOperating Lessee, the Note Guarantor or any of their respective Affiliates, agents, employees, members, partners, directors or officers, with Lender’s exercise of any and all of its rights and remedies under the Loan Documents, at law or in equity (A) neither Agent nor Lenders provided that defending any demand for payment solely on the grounds that the demanded amount had already been paid and not returned or otherwise disgorged, shall not trigger liability under this clause (i)). Borrower shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim liable for the full entire amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: of:
(1i) any Credit Party files Borrower filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; ;
(2ii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing by any Person other than Lender of an involuntary petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, law in which any Credit Party or Guarantor Borrower colludes with, or otherwise assists with such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party Borrower from any Person; ;
(4iii) any Credit Party files Borrower filing an answer consenting to or joining in any involuntary petition filed against it, by any Person other Person than Lender under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes law unless the opposition of Borrower to be solicited petitioning creditors for any such involuntary petition from would violate any Person; Rule 11 of the Federal Rules of Civil Procedure, Rule 9011 of the Federal Rules of Bankruptcy Procedure or any other similar state law;
(5iv) any Affiliate, officer, trustee, director, Borrower consenting to or representative which Controls any Credit Party or Guarantor joins joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; ;
(6v) any Credit Party makes a general Borrower making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless the opposition of Borrower to such admission is true; or (7) in connection with involuntary petition would violate any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration Rule 11 of the Loan by or on behalf Federal Rules of Civil Procedure, Rule 9011 of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges Federal Rules of Bankruptcy Procedure or any other Loan Document, any Credit Party, or Manager, if applicable similar state law; and
(if vi) Borrower violating the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination Single Purpose Entity provisions of the Sublease or Observatory Lease are void, voidable or unenforceableits organizational documents.
Appears in 2 contracts
Samples: Loan Agreement (Innkeepers Usa Trust/Fl), Loan Agreement (Innkeepers Usa Trust/Fl)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, Note or this Agreement, the Mortgage or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any general or limited partner or member of Borrower (hereafter collectively referred to as the "Exculpated Parties"), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this AgreementSecurity Instrument, the Mortgage Other Security Documents, and the other Loan Documents, or interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Security Instrument and the Loan Other Security Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower the Exculpated Parties only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Xxxxxx, by accepting the NoteNote and this Security Instrument, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower the Exculpated Parties in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, the Other Security Documents or this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerSecurity Instrument. The provisions of this Section paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan DocumentsNote, the Other Security Documents or this Security Instrument; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Leasethis Security Instrument; (ciii) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan Note, this Security Instrument, or any of the rights and remedies of Agent or Lenders thereunderOther Security Documents; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of LeasesLeases and Rents executed in connection herewith; (fvi) constitute a prohibition against Agent impair the right of Lender to bring suit with respect to fraud or Lenders to seek a deficiency judgment against Borrower in order to fully realize on intentional misrepresentation by the Exculpated Parties or any security given by Borrower other person or entity in connection with the Loan Note, this Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securitythe Other Security Documents; or (gvii) constitute a waiver of impair the right of Agent or Lenders Lender to enforce obtain the liability Rents received, and obligation not applied to the operating expenses of Borrower or Guarantorthe Property, by money judgment or otherwise, to any of the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with Exculpated Parties after the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance occurrence of an Event of Default, any misappropriation ; (viii) impair the right of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, Lender to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses bring suit with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the Exculpated Parties' misappropriation of revenue with respect to the Property as described tenant security deposits or Rents collected in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
advance; (ix) any Credit Party’s failure impair the right of Lender to obtain Agent’s prior consent insurance proceeds or condemnation awards due to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
Lender under this Security Instrument; (x) a voluntary Lien remains an encumbrance on all impair the right of Lender to enforce the provisions of sub-paragraphs 36(g) through 36 (k), inclusive and paragraphs 34 and 35 of this Security Instrument against the Borrower (excluding any general or any portion of the Property, the Operating Lease limited partner or the Observatory Lease in violation of the Loan Documents;
member thereof); or (xi) subject impair the right of Lender to recover any part of the provisions Debt from the Borrower (excluding the general and limited partners and members of Section 8.3(a)(vBorrower), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) following the breach of any indemnification provision covenant contained in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits paragraph 9 or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable55 hereof.
Appears in 2 contracts
Samples: Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents (Investors First Staged Equity L P), Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents (Investors First Staged Equity L P)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any guaranty or indemnification agreement indemnity made in connection with the Loan (including, without limitation, indemnities set forth in Article 11 hereof, Section 9.2 hereof, in the Guaranty and in the Environmental Indemnity) or any of the rights and remedies of Agent or Lenders thereunderLender thereunder in accordance with the terms thereof; (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiverreceiver or to enforce its rights and remedies provided in Articles 7 and 8 hereof; (e5) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs expenses reasonably incurred) arising out of or in connection with the following:
(i) any material intentional fraud or misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt filed by any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate Borrower Party or any other action of any Credit Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or Guarantor otherwise interferes with or frustrates the efforts of Lender to exercise any Affiliate thereof)rights and remedies available to Lender as provided herein and in the other Loan Documents that is found by a court of competent jurisdiction to be frivolous, any Credit Partybrought in bad faith, Guarantor wholly without merit or any Affiliate thereofwholly without basis in fact or law;
(iv) material physical waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is an Affiliate of C) any Credit Party Rents, (D) any Tenant security deposits or Guarantor other Rents collected in advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party Reserve Funds and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereofat the direction of) Borrower);
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property (except, in the case of Taxes, to the extent that (x) the revenue from the Property is insufficient to pay such amounts or (y) amounts sufficient to pay such Taxes have been deposited with Lender hereunder in the ordinary course Tax Account and Lender does not apply the same in payment thereof in violation of business (except with respect to Taxes, Other Charges the terms and Trade Payables being contested in accordance with Section 4.1.2conditions of the Loan Documents);
(vii) intentional physical waste of the Property failure to pay Insurance Premiums (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises (x) the revenue from the misappropriation Property is insufficient to pay such amounts or (y) amounts sufficient to pay such Insurance Premiums have been deposited with Lender hereunder in the Insurance Account and Lender does not apply the same in payment thereof in violation of revenue with respect to the Property as described in clauses (iiiterms and conditions of the Loan Documents), (iv)to maintain the Policies in full force and effect and/or to provide Lender evidence of the same, (v) and (vi) above)in each case, as expressly provided herein;
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvix) any modifications, amendments, restatements tax on the making and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination recording of the Observatory Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(x) any forfeiture or seizure of the Property (or any portion thereof and/or interest therein) resulting from a violation or breach of any applicable law;
(xi) any violation or breach of any representation, warranty or covenant contained in Sections 3.24 or 4.23 hereof or Exhibit C attached hereto;
(xii) any violation or breach by or on behalf of any Borrower Party of any exclusivity (or similar) provision in any Major Lease without that permits or could permit the consent Tenant thereunder the right to terminate such Major Lease or axxxx rent thereunder;
(xiii) the failure to purchase or replace (as applicable) any Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement (as applicable), in each case, as and when required by the terms hereof; and/or
(xiv) any violation or breach of Agentthe Property Document Provisions and/or any Property Document Event. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) the first Monthly Debt Service Payment is not paid when due; (ii) any Credit Party files representation, warranty or covenant contained in Sections 3.24 or 4.23 hereof or Exhibit C attached hereto is violated or breached, and (A) a voluntary petition under court of competent jurisdiction orders a substantive consolidation of Borrower or TRS Lessee based, in whole or in part, on such violation or breach or (B) the Bankruptcy Code Property or any other Federal portion thereof or state interest therein becomes an asset in a bankruptcy or insolvency lawproceeding as a result of (in whole or in part) or due to (in whole or in part) such violation or breach; (2iii) an Affiliateany representation, officerwarranty or covenant contained in Article 6 hereof is violated or breached; (iv) a Bankruptcy Event occurs; (v) any of the provisions of the TIC Agreement or the TRS Lease are amended, trusteemodified, directorcancelled, terminated, surrendered, withdrawn or representative which Controlswaived without Lender’s prior written consent; (vi) any Borrower or any of their members, directly partners, principals or indirectly, any Credit Party or Guarantor agents files or commences any Credit Party action or Guarantor joins in proceeding to partition the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Property or any portion of thereof or any action to compel the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is truesale thereof; or (7vii)(A) in connection with the Franchise Agreement (or any enforcement action replacement thereto) is modified, terminated or exercise cancelled without the prior written consent of Lender, or assertion of the Franchise Agreement otherwise expires for any right or remedy upon reason during the continuance of an Event of Default and acceleration term of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty(including, Mortgagewithout limitation, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (IIupon its scheduled expiration date) or (IIIB) that the Subordinations Borrower accepts a surrender or the Negative Pledges or the subordination provisions modification of the Sublease Franchise Agreement (or Observatory Lease are void, voidable or unenforceableany replacement thereto) without the prior written consent of Lender.
Appears in 2 contracts
Samples: Loan Agreement (Medalist Diversified REIT, Inc.), Loan Agreement (Medalist Diversified REIT, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instruments or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instruments by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instruments, the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Security Instruments and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instruments, agrees that it shall not not, except as otherwise provided herein or in the Security Instruments, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instruments or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instruments, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instruments or Lenders Sections 4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on (A) preserve or enforce its rights and remedies against any security given by Individual Property or (B) obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instruments; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the Losses it incurs due to: (i) fraud or intentional misrepresentation in connection with the execution and the delivery of this Agreement, the Note, the Security Instrument, or the other Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securityDocuments; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts occurrence of a Default or willful misconduct Event of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
Default; (iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the Security Deposits or Rents by Manager, if applicable collected more than thirty (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
30) days in advance; (iv) Borrower’s misapplication or the failure misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
Awards; (v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that sums sufficient to pay such lack of cash flow arises from the misappropriation of revenue amounts have been deposited in escrow with respect Lender pursuant to the Property as described in clauses (iiiterms of Section 7.2 hereof), (iv), (v) and charges for labor or materials or other charges that can create Liens on the Properties; (vi) above);
Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Properties by or on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value; (vii) any act of intentional waste or arson by Borrower, Principal, or any Affiliate thereof or by Guarantor; (viii) any removal fees or disposal commissions paid by Borrower to Principal or any Affiliate of any portion Borrower or Principal or Guarantor in violation of the Property terms of this Agreement, the Note, the Security Instruments or the other Loan Documents; (ix) Borrower impeding Lender’s exercise of its remedies after an Event of Default in any manner prohibited by the Loan Documents;
Default; (ixx) any Credit PartyBorrower’s failure to obtain Agentcomply with the provisions of Sections 4.1.39 and 5.1.19 of this Agreement; (xi) Borrower’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII Principal’s default under Section 4.1.35 hereof (except with respect to excluding a mechanic’s, tax, judgment default under clauses (h) or similar Lien arising from insufficient Property cash flow except (q) to the extent that such lack of default arises solely from insufficient cash flow arises flows from the misappropriation Property); or (xii) the termination or cancellation of revenue with respect the Xxxxxxx Ground Lease for any reason or under any circumstances whatsoever.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect (i) in the Property as described in clauses (iii)event of Borrower’s default under Section 5.2.10 hereof or Article 7 of the Security Instruments, (iv), ii) if any Individual Property or any part thereof shall become an asset in (v) and (vi) above);
(xA) a voluntary Lien remains bankruptcy or insolvency proceeding or (B) an encumbrance on all involuntary bankruptcy or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure insolvency proceeding commenced by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xiiLender) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor Borrower colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party Borrower from any Person; , or (4iii) if the first Monthly Debt Service Payment Amount is not paid when due.
(d) Nothing herein shall be deemed to be a waiver of any Credit Party files an answer joining in any involuntary petition filed against itright which Lender may have under Section 506(a), by 506(b), 1111(b) or any other Person under provision of the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application file a claim for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion full amount of the Property; (6) any Credit Party makes a general assignment for indebtedness secured by the benefit of creditors, Security Instruments or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration require that all collateral shall continue to secure all of the Loan by or on behalf of indebtedness owing to Lender in accordance with this Agreement, the Agent Note, the Security Instruments and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableDocuments.
Appears in 2 contracts
Samples: Loan Agreement (KBS Real Estate Investment Trust, Inc.), Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA Borrower Principal or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower SPE Component Entity, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal or any SPE Component Entity, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s or Borrower Principal’s collective interest in the Property, in the RentsOperating Leases, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx not, except as otherwise provided in this Section 15.01, sxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal or any SPE Component Entity in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.01 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty or indemnification agreement made indemnity contained in connection with the Loan or any of the rights Articles XIII and remedies of Agent or Lenders thereunderXIV; (div) impair Lender’s right to enforce its remedies under the Environmental Indemnity and the Exceptions to Non-Recourse Guaranty; (v) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (evi) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvii) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower, Operating Lessee or Borrower in order Principal if necessary to fully realize on obtain any security given Insurance Proceeds or Awards to which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards actually collected or received by Borrower.
(b) Notwithstanding the provisions of this Section 15.01 to the contrary, Borrower shall be personally liable to Lender for Losses due to (but only to the extent such Losses were caused by):
(i) fraud or intentional or willful material misrepresentation by Borrower, Borrower Principal or any other Affiliate or agent of Borrower, any New Mezzanine Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver during the term of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts Borrower’s or willful misconduct of any Credit Party, Guarantor Affiliate’s misapplication or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents received by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Borrower and not applied or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account paid in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation requirements of the Loan Documents;
(xiiii) subject to the provisions Borrower’s or any Affiliate’s misapplication or misappropriation of Section 8.3(a)(v), the failure by any Credit Party to comply tenant security deposits or Rents collected in advance and not applied in accordance with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation terms of the Loan Documents;
(xiiiiv) the breach misapplication or the misappropriation of Insurance Proceeds or Awards by Borrower or any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestosNew Mezzanine Borrower;
(xivv) any security depositsBorrower’s willful refusal to pay Taxes, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, Other Charges (except to the extent any that sums sufficient to pay such security deposits were applied amounts have been deposited in accordance escrow with Lender pursuant to the terms hereof and conditions there exists no impediment to Lender’s utilization thereof), charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and cure periods specified herein;
(vi) any act of intentional waste or arson by Borrower, any New Mezzanine Borrower, any principal, Affiliate, agent, member or general partner thereof or by Borrower Principal, any principal, Affiliate, agent, member or general partner thereof;
(vii) Borrower’s willful misconduct; or
(viii) Borrower’s, any New Mezzanine Borrower’s or any Affiliate’s, failure following any Event of Default to deliver to Lender upon demand all Rents received and books and records relating to any Individual Property.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt immediately shall become fully recourse to Borrower and Borrower Principal, on a joint and several basis in the event (i) of a breach by Borrower or any SPE Component Entity of any of the Leases prior covenants set forth in Article VI hereof (other than Sections 6.01(a)(xv) and (xviii)), to the occurrence of the Event of Default extent that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, breach is (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, material and (B) is not cured within fifteen (15) days of the Debt shall be fully recourse earlier to occur of notice from Lender or Borrower’s knowledge of such breach, but not to any holder (ii) of a direct or indirect interest breach of any of the covenants set forth in ESBA Article VII hereof, (iii) any Individual Property or any party supervising either party comprising Borrower (other than as provided part thereof shall become an asset in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; proceeding of Borrower, (2iv) an Borrower, Borrower Principal or any Affiliate, officer, trustee, director, or representative which Controlscontrols, directly or indirectly, any Credit Party Borrower or Guarantor files Borrower Principal files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3v) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vi) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party controls Borrower consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; any Individual Property or (6vii) Borrower or Borrower Principal or any Credit Party makes a general assignment for the benefit of creditors, agent or admits, in writing or Affiliate thereof interferes in any legal proceedingway with Lender’s pursuit of any remedies, its insolvency or inability including any actions taken consistent with the commencement of foreclosure proceedings, following an Event of Default.
(d) Nothing herein shall be deemed to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion be a waiver of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders which Lender may have under or in connection with the GuarantySection 506(a), Mortgage506(b), Subordinations, Negative Pledges 1111(b) or any other Loan Document, any Credit Party, or Manager, if applicable (if provision of the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks U.S. Bankruptcy Code to file a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security claim for the Loanfull amount of the indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, in each of (I)the Note, (II) or (III) that the Subordinations Mortgage or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableother Loan Documents.
Appears in 2 contracts
Samples: Loan Agreement (Bon Ton Stores Inc), Loan Agreement (Bon Ton Stores Inc)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instruments or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of Guarantor (with respect to the Loan Documents to which Guarantor is a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower party) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instruments by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower and/or Guarantor, as applicable, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instruments, the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Security Instruments and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instruments, agrees that it shall not not, except as otherwise provided herein, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 9.4 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instruments or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (ciii) affect the validity or enforceability of any indemnity (including the Environmental Indemnity), guaranty (including the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instruments, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment Assignments of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instruments or Lenders Sections 4.1.10, 4.1.30, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on any security given by Borrower in connection with the Loan (A) preserve or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise enforce its rights and remedies against such security; any Individual Property or (gB) constitute a waiver obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the right of Agent or Lenders to Security Instruments; provided however, Lender shall only enforce the liability and obligation of Borrower or Guarantor, by money such judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of Section 9.4(a) above to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower shall be personally liable to Lender (including reasonable attorneys’ fees and costs reasonably incurred) for the Losses it incurs arising out of or in connection with the following:
(i) any material a Loan Party’s fraud, willful misconduct, intentional misrepresentation by any Credit Party or failure to disclose a material fact in connection with the execution and the delivery of this Agreement, the Note, the Security Instruments, or the other Loan Documents or otherwise in connection with the Loan;
(ii) the fraudulent acts a Loan Party’s misapplication or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of Security Deposits, Rents (including failure to deposit Rents into the Rents by ManagerLockbox Account), if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, other amounts due to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with Lender pursuant to the Loan Documents;
(viii) a Loan Party’s misapplication or the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage Insurance Proceeds or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xiiv) subject a Loan Party’s failure to pay any Other Charges (including charges for labor or materials) (to the provisions extent such Other Charges are not being contested in accordance with the terms of this Agreement) that can create a Lien on the Property beyond any applicable notice and cure periods specified herein, provided that such failure is not due to insolvency or insufficient funds from the operation of such Property;
(v) failure to maintain insurance as required pursuant to the Loan Documents or pay Insurance Premiums or Taxes that can create Liens on the Property beyond any applicable notice and cure periods specified herein (to the extent not contested by Borrower in accordance with the terms of this Agreement), except to the extent that (A) there is insufficient net cash flow from the Properties, or (B) there is sufficient net cash flow from the Properties and Lender applies such amounts to the Debt or for other uses, or (C) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms of Section 8.3(a)(v)7.2 hereof;
(vi) a Loan Party’s removal of and failure to return or to reimburse Lender for all Personal Property taken by such Loan Party from any Individual Property in violation of the Loan Documents by or on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value;
(vii) any act of intentional physical waste or arson of an Individual Property by a Loan Party;
(viii) any fees or commissions paid by Borrower to Principal, if any, Guarantor or any Affiliate of Borrower in violation of the terms of this Agreement, the Note, the Security Instruments or the other Loan Documents;
(ix) Borrower’s failure by any Credit Party to comply with the material single purpose entity requirements provisions of this Agreement including those set forth Sections 5.1.8 (after five (5) Business Days after Borrower’s receipt of written notice of such failure) or 5.1.19 hereof;
(x) criminal acts of a Loan Party resulting in Section 4.2.19 hereof if such failure leads to a consolidation of the assets seizure or forfeiture of any Credit Party with Individual Property;
(xi) the assets wrongful destruction of another Person (other than or damage to any portion of any Individual Property caused by the other Credit Parties)willful misconduct or gross negligence of a Loan Party;
(xii) without the incurrence prior written consent of Indebtedness in violation of Lender as required pursuant to the Loan Documents, Borrower entering into any amendment, modification or termination of any Lease;
(xiii) the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity Agreement or in the Loan Documents concerning environmental laws, Environmental Laws and Hazardous Substances and asbestosany indemnification of Lender with respect thereto in any Loan Document;
(xiv) Borrower’s failure to pay all transfer and recording taxes due to any security deposits, advance deposits or any other deposits collected with respect to Governmental Authority in the Property which are not delivered to Agent upon event of a foreclosure of the Property or transfer any Individual Property, deed in lieu thereofor other transfer of any Individual Property to Lender or Lender’s designee, except solely to the extent any such security deposits were applied in accordance with there is sufficient revenue from the terms and conditions of any of the Leases prior Properties made available to the occurrence of Borrower to pay the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andsame;
(xv) [intentionally omitted];
(xvi) Borrower’s failure to comply with the provisions of Section 9.2 hereof, after receiving written notice of such failure, which specifically provides reasonable details of such failure, and such failure continues for ten (10) Business Days thereafter;
(xvii) Borrower’s failure to reimburse Lender for any modificationscosts and expenses, amendmentsincluding reasonable attorneys fees, restatements and/or supplements made in each case arising from or related to Lender’s enforcement of its rights and remedies under the Loan Documents after the occurrence of an Event of Default;
(xviii) any Pre-Existing Liability;
(xix) a Loan Party’s gross negligence or willful misconduct; or
(xx) any Losses due to a breach of Section 4.1.36 hereof, to the Ground Leaseextent not covered by Section 9.4(c)(i) below.
(c) Notwithstanding the foregoing, Sublease the agreement of Lender not to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower immediately in the event that:
(i) Borrower defaults under any of Sections 4.1.36, 5.2.10 or the Observatory Lease without the consent of Agent and any termination 5.2.11 hereof or Article 7 of the Observatory Lease without Security Instruments, or in the event of Principal’s default under Section 4.1.36 hereof, provided that any default by Borrower or Principal, if any, under Section 4.1.36 shall have resulted in a substantive consolidation of Borrower with another Person;
(ii) a Bankruptcy Event occurs;
(iii) Borrower fails to obtain Lender’s prior written consent of Agent. Notwithstanding anything to any subordinate financing for borrowed money and such prior written consent is required pursuant to the contrary Loan Documents;
(iv) a Loan Party’s interference with Lender’s exercise of remedies provided under the Loan Documents after Lender has delivered written notice of acceleration of the Loan, unless any such action was in this Agreement, the Note pursuit of a good faith claim upon which such Loan Party ultimately prevailed; or
(v) Borrower or any of its Affiliates contests or opposes any motion made by Lender to obtain relief from the Loan Documentsautomatic stay or seek to reinstate the automatic stay following the occurrence of a Bankruptcy Event.
(d) Notwithstanding anything herein to the contrary, Borrower acknowledges that, pursuant to the Guaranty, to the extent Borrower fails to pay any wind/named storm and earthquake insurance deductible in an amount equal to the positive difference between (A) neither Agent nor Lenders 5% of the total insured value of any Property for which such insurance claim is made and (B) $250,000, Guarantor shall have the obligation to pay such amount.
(e) Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Security Instruments or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Security Instruments and the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Loan Agreement (Cole Credit Property Trust II Inc), Loan Agreement (Spirit Realty Capital, Inc.)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents and Profits, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of BorrowerXxxxxxxx’s interest in the Property, in the Rents, in the Cash Collateral Rents and Profits and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of or any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (div) impair the right of Agent or Lenders Xxxxxx to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity 156506983 Instrument; or (fvi) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; the Property.
(b) Nothing contained herein shall in any manner or (g) constitute a waiver of way release, affect or impair the right of Agent Lender to recover, and Xxxxxxxx shall be fully and personally liable and subject to legal action, for any Losses incurred or Lenders to enforce the liability and obligation of Borrower or Guarantor, suffered by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by Borrower, any Credit Party SPE Component Entity, Principal or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Principal or Guarantor in connection with the Loan or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor)the Property;
(iii) during a Trigger Period or during material physical waste of the continuance Property of an Event of DefaultBorrower, any misappropriation of the Rents by ManagerSPE Component Entity, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit PartyPrincipal, Guarantor or any Affiliate thereofAffiliated Manager but only to the extent there exists sufficient cash flow from the Property to avoid such waste;
(iv) the failure removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default Default, unless any personal property that is removed or during a Trigger Period, disposed of is replaced with personal property of the same utility and the same or greater value; but only to pay all Rent under the Observatory Lease into extent that net cash flow available to Borrower from the HSBC Collection Account in accordance with operations of the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsProperty is sufficient to prevent removal or disposal;
(v) the misappropriation misappropriation, misapplication or conversion by Borrower, any SPE Component Entity, Principal or Guarantor of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents and Profits following an Affiliate Event of Default, or (D) any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofrents paid more than one month in advance;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Impositions, charges for labor or materials or other charges that can create liens on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions hereof (but only to the extent there exists sufficient cash flow from the Property to do so, provided Borrower shall have provided Lender written notice of such insufficiency of cash flow in advance of the due date for such expenses), and except in the case of Impositions to the extent that amounts sufficient to pay such Impositions have been deposited with Xxxxxx hereunder in the Tax and Insurance Reserve Account and Xxxxxx does not apply the same in payment thereof in violation of the terms and conditions of the Loan Documents);
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter that arises by reason only to the extent there exists sufficient cash flow from the Property to do so, provided Borrower shall have provided Lender written notice of lack such insufficiency of cash flow with respect to in advance of the Property, except to the extent that due date for such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iiiexpenses), (iv), (v) and (vi) above);
(viii) any removal or disposal except in the case of any portion of Insurance Premiums which have been deposited with Lender hereunder in the Property after an Event of Default Tax and Insurance Reserve Account and Lender does not apply the same in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease payment thereof in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation terms and conditions of the Loan Documents;); 156506983
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivviii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvix) any modificationstax on the making and/or recording of the Security Instrument, amendmentsthe Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Xxxxxx’s exercise of its remedies under the Loan Documents), restatements and/or supplements made but excluding any income, franchise or other similar taxes;
(x) Borrower fails to comply with any Cash Management Provisions or fails to appoint a new property manager upon the request of Xxxxxx or fails to comply with any limitations on instructing the property manager, each as required by and in accordance with, as applicable, the terms and provisions of, this Agreement and the other Loan Documents;
(xi) WHLR-Nashville Commons, LLC, WHLR-Xxxxxxxx Center, LLC, or WHLR-Riverbridge Shopping Center, LLC’s prior ownership of the Prior Owned Property, including, but not limited to, any environmental liabilities;
(xii) if any representation, warranty, covenant or other provision contained in Section 3.19, Section 3.6, Section 4.13 or Section 4.21 is violated or breached;
(xiii) if Borrower, Guarantor or any Affiliate of Borrower or Guarantor contests, impedes, delays or opposes the exercise by Lender of any enforcement actions, remedies or other rights it has under or in connection with this Agreement or the other Loan Documents; provided that neither Borrower nor Guarantor shall be liable to the Ground Leaseextent of any applicable loss, Sublease damage, cost, expense, liability, claim or other obligation arising solely from a defense of Borrower, Guarantor or any Affiliate of Borrower or Guarantor raised in good faith; or
(xiv) Xxxxxxxx’s failure to satisfy the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. obligations set forth in Section 4.12(e) hereof.
(c) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, ,
(Ai) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Security Instrument or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and and
(Bii) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower :
(other than as provided in the Guaranty and Environmental IndemnityA) or Controlling either party comprising Borrower, in the event thatof: (1) Borrower, any Credit Party files SPE Component Entity, or any Person that Controls Borrower (“Principal”) filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against Borrower, any Credit Party SPE Component Entity, or Principal under the 156506983 Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, law in which Borrower, any Credit Party SPE Component Entity, Principal or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower, any Credit Party SPE Component Entity, or Principal from any Person; (43) Borrower, any Credit Party files SPE Component Entity, or Principal filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (4) Borrower, any SPE Component Entity, or solicits Principal consenting to or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, acquiescing in or representative which Controls any Credit Party or Guarantor joins joining in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any Credit Party SPE Component Entity, or Principal or any portion of the Property; or (65) Borrower, any Credit Party makes a general SPE Component Entity, or Principal making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless due;
(B) if any representation, warranty, covenant or other provision contained in Section 3.19 or Section 4.21 is violated or breached and such admission violation or breach is true; or (7) cited by a court as a material factor in connection the substantive consolidation of Borrower with any enforcement action or exercise or assertion of Person; or
(C) if any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guarantyrepresentation, Mortgagewarranty, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive covenant or other equitable relief of any kind, provision contained in Section 7.1 hereof is violated or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablebreached.
Appears in 2 contracts
Samples: Loan Agreement (Wheeler Real Estate Investment Trust, Inc.), Loan Agreement (Wheeler Real Estate Investment Trust, Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Borrower, or against any SPC Party, any Mezzanine Borrower, any Guarantor, any Affiliates of the foregoing or any of their respective direct or indirect principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees or agents (each, exclusive of the Borrower, an “Other Exculpated Party”), except that Agent (1) any Other Exculpated Party that is party to any Loan Document or any other separate written guaranty, indemnity or other agreement given by such Other Exculpated Party in connection with the Loan (including, without limitation, the Assignment of Management Agreement and the Qualified Preferred Equity Recognition Agreement or any other Loan Document to which such Other Exculpated Party is a party) shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Other Exculpated Party thereunder, and (2) Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the PropertyProperties, the Rents Gross Revenue, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Gross Revenue and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 10.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of any of the Loan Documents or any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) impair the enforcement of the Environmental Indemnity; (g) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgage or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against the Properties; (i) waive or impair the liability of any Other Exculpated Party under any Loan Document or any other separate written guaranty, indemnity or other agreement to which such securityOther Exculpated Party is a party (including, without limitation, the Assignment of Management Agreement and the Qualified Preferred Equity Recognition Agreement or any other Loan Document to which such Other Exculpated Party is a party); or (gi) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any actual loss, damage, cost, out-of-pocket cost or expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable outside attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:following (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) any material fraud or intentional misrepresentation committed by Borrower, any Credit Party Guarantor or any Affiliate of Borrower or any Guarantor in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during intentional failure to disclose a Trigger Period or during the continuance of an Event of Defaultmaterial fact known to Borrower, any misappropriation of the Rents by ManagerGuarantor, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor of Borrower or any Affiliate thereof;
(iv) Guarantor in connection with the failure origination of the Observatory Tenant, during Loan that if disclosed would be reasonably expected to have had a material adverse effect on the continuance of an Event of Default or during a Trigger Period, Lender’s determination to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with provide the Loan Documents in the amount and Net Observatory Deck Revenue under on the Observatory Lease directly into the JP Collection Account terms set forth in accordance with the Loan Documents;
(iii) [reserved];
(iv) wrongful removal of personal property from the Properties during an Event of Default by Borrower or on behalf of Borrower by any Guarantor or any Affiliate of Borrower or any Guarantor, unless replaced with personal property of substantially the same or greater utility and of the same or greater value;
(v) any intentional physical Waste at any Individual Property committed by Borrower or on behalf of Borrower by any Guarantor or any Affiliate of Borrower or any Guarantor;
(vi) the misappropriation by Borrower or on behalf of Borrower by any Guarantor or any Affiliate of Borrower or any Guarantor of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction Casualty to the any Individual Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the any Individual Property by Manager, if applicable and (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(viC) any failure by Manager, if applicable Gross Revenues after (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(viithat results in) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default Default, in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfereach case, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xivii) subject failure to obtain and maintain the fully paid for Policies in accordance with Section 5.1.1 to the provisions extent that adequate funds were available to Borrower from the income of the Properties for the payment of the premiums thereof;
(viii) any breach of any provision of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements 4.4 or Schedule V of this Agreement including those set forth (other than with respect to clause (d) of Schedule V (with respect to trade payables only), clause (f) of Schedule V, clause (j) of Schedule V, clause (o) of Schedule V (with respect to trade payables only), clause (v) of Schedule V and clause (w) of Schedule V) that does not result in Section 4.2.19 hereof if such failure leads to a the substantive consolidation of the assets and liabilities of Borrower with any Credit Party with the assets of another other Person (other than another Individual Borrower or the other Credit Parties)Liquor Subsidiary) as a result of such breach;
(xiiix) any and all Divested Property Liabilities; and/or
(x) the incurrence modification of Indebtedness in violation of any Ground Lease if such modification is prohibited under this Agreement or under any Mortgage and such modification has a material adverse effect on the related Individual Property or the leasehold interest therein (including the value or operation thereof) or Lender’s ability to exercise its rights and remedies under the Loan Documents;.
(xiiii) Borrower fails to obtain Lender’s prior consent to any financing for borrowed money secured by any Individual Property, or any voluntary conveyance of a mortgage, deed of trust, security deed, security agreement or similar grant by Borrower of a voluntary Lien upon any Individual Property, or any voluntary granting of a security interest in, voluntary pledge of or other voluntary Lien upon any direct or indirect equity interest in any Individual Borrower, any SPC Party or any Mezzanine Borrower, in each case, as security for any obligations or liabilities that is not permitted under the breach Loan Documents (excluding, for the avoidance of doubt, the security interests, pledges or Liens granted under the Loan Documents or Mezzanine Loan Documents securing the Loan or any Mezzanine Loan); (ii) Borrower fails to obtain Lender’s prior consent to (a) any voluntary transfer of any indemnification provision in Individual Property that is not permitted under the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
Loan Documents or (xivb) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or voluntary transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA Borrower that results in a change of control of Borrower that is not permitted under the Loan Documents (specifically excluding from this clause (ii), (x) any transfer of the direct ownership interests in any Individual Borrower, any SPC Party, or any party supervising either party comprising Mezzanine Borrower to any Mezzanine Lender or its designee as result of any foreclosure upon such ownership interests (other than as provided or transfer-in-lieu of foreclosure of the ownership interests that are the collateral for the applicable Mezzanine Loan), consummated in accordance with the Guaranty applicable Mezzanine Loan Documents and Environmental Indemnity(y) or Controlling either party comprising any Qualified Preferred Equity Vehicle Change of Control consummated in accordance with Section 7.2(k) hereof); (iii) Borrower, in the event that: (1) any Credit Party SPC Party, and/or any Mezzanine Borrower, files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, subject to a maximum aggregate liability equal to the BK Cap; (2iv) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against Borrower, any Credit Party SPC Party, and/or any Mezzanine Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawlaw by any other Person in which Borrower, any SPC Party, and/or any Mezzanine Borrower colludes with or otherwise assists such Person, and/or Borrower, any SPC Party, and/or any Mezzanine Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower, any Credit SPC Party or from and/or any Mezzanine Borrower by any Person, subject to a maximum aggregate liability equal to the BK Cap; (3v) there is the filing of an involuntary petition against Borrower, any Credit SPC Party under the Bankruptcy Code or and/or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Mezzanine Borrower files an answer consenting to, or joining in in, any involuntary petition filed against it, it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes subject to be solicited petitioning creditors for any involuntary petition from any Persona maximum aggregate liability equal to the BK Cap; (5vi) Borrower or any Mezzanine Borrower or any Affiliate, officer, trustee, director, director or representative which Controls any Credit Party controls Borrower or Guarantor such Mezzanine Borrower, as the case may be, consents to, or joins in in, an application for the appointment of a custodian, receiver, trustee, trustee or examiner for any Credit Party or Borrower and/or any portion of any Individual Property, or such Mezzanine Borrower, as the Propertycase may be, subject to a maximum aggregate liability equal to the BK Cap; (6vii) Borrower, any Credit SPC Party and/or any Mezzanine Borrower makes a general an assignment for the benefit of creditors, creditors or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is truedue, subject to a maximum aggregate liability equal to the BK Cap; or (7viii) Borrower fails to comply with the provisions of Section 4.4 or Schedule V of this Agreement (other than those relating to solvency or adequacy of capital or adequacy of cash flow), and such failure results in an order of substantive consolidation of one (1) or more of the Individual Borrowers with any other Person (other than another Individual Borrower or the Liquor Subsidiary) in connection with any enforcement action a bankruptcy or exercise or assertion of any right or remedy upon similar proceeding under the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges Bankruptcy Code or any other Loan Documentfederal or state bankruptcy or insolvency law, any Credit Party, or Manager, if applicable (if subject to a maximum liability equal to the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableBK Cap.
Appears in 2 contracts
Samples: Loan Agreement (W2007 Grace Acquisition I Inc), Loan Agreement (American Realty Capital Hospitality Trust, Inc.)
Exculpation. Subject to the qualifications below and except Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to pay, perform and and/or observe the Obligations obligations contained herein, in the Note, this Agreement, the Mortgage or in the other Loan Documents by any action or proceeding against Borrower wherein a money judgment shall be sought against a Credit PartyBorrower, the members/partners of Borrower or Borrower Principal or its respective members or partners, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding against Borrower to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in Section 15.1(b) and (c), xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty or indemnification agreement indemnity (including, without limitation, those contained in Section 12.6, Section 13.5 and Article 14 of this Agreement), made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment against Borrower in order or other judgment on the Note against Borrower if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent the Insurance Proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableAwards.
Appears in 2 contracts
Samples: Loan Agreement (Sun Communities Inc), Loan Agreement (Sun Communities Inc)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyProperties (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instruments and in any other Loan Documents; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instruments or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonable out-of-pocket Loss incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredincurred but in all events excluding consequential, punitive and special damages (except to the extent Lender is actually liable for such damages)) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period material physical waste to any Individual Property arising from the intentional acts or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate omissions of any Credit Borrower Party or Guarantor or any Affiliate thereof(it being acknowledged that omissions to perform acts for which sufficient cash flow is not available from the Properties shall not be deemed an intentional omission for purposes of this clause (iii), any Credit Party, Guarantor or any Affiliate thereof);
(iv) the failure removal or disposal by any Borrower Party or any of the Observatory Tenant, during the continuance its respective Affiliates of any portion of any Individual Property after an Event of Default unless such portion of any Individual Property so removed or during a Trigger Period, so disposed of is replaced with property of equal utility and value or such removal or disposal was otherwise permitted pursuant to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents terms and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsconditions hereof;
(v) the misappropriation misapplication or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Propertyany Individual Property (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default and/or (D) any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents paid more than one month in advance;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Individual Property in accordance with the ordinary course of business terms and provisions hereof; provided, however, Borrower shall have no liability under this subsection (except with respect to vi) if (A) such Taxes, Other Charges and Trade Payables charges for labor or materials or other charges that can create liens are being contested in accordance with Section 4.1.2);
the terms and conditions hereof or (viiB) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of sufficient cash flow with respect is not available from the Properties to the Propertypay such amounts; provided, except that, in no instance shall Borrower be released from any liability pursuant to this clause (vi) to the extent that (1) such lack insufficiency of cash flow arises from the intentional misappropriation or conversion of revenue with respect to Rent by any Borrower Party or (2) Borrower incurred such charges after the Property as described in clauses (iii), (iv), (v) occurrence and (vi) above);
(viii) any removal or disposal during the continuance of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any TransferDefault, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect charges were (I) necessary to protect against imminent danger to the health or safety of any Tenant or any Person at or in the immediate vicinity of any Individual Property as described in clauses (iii)or to prevent any imminent defect, damage or harm to any Individual Property, (iv), II) contracted for prior to such Event of Default or (vIII) and (vi) above)consented to in writing by Lender;
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the any Individual Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) the breach or violation by Borrower and/or any SPE Component Entity of any representation, warranty or covenant contained in Article 5 hereof;
(ix) the failure by Borrower to (A) permit on-site inspections of any Individual Property, (B) provide any financial information regarding hereunder and/or pursuant to the other Loan Documents and/or (C) appoint a Qualified Manager pursuant to a Qualified Management Agreement upon the request of Lender which failure constitutes an Event of Default;
(x) a breach of Section 11.1 and/or Section 11.2 hereof, which breach continues for three (3) Business Days after notice from Lender;
(xi) any modificationsmaterial amendment, amendments, restatements and/or supplements made material modification or voluntary termination of any Ground Lease by any Borrower without Lender’s consent other than as expressly permitted pursuant to the Ground Leaseterms hereof;
(xii) the termination or suspension of any Health Care License arising in connection with any grossly negligent or willful material violation of any Health Care Requirement or otherwise by Borrower or any voluntary termination or rejection of any such Health Care License by Borrower, Sublease in each instance, which termination, suspension or rejection constitutes an Event of Default; or
(xiii) any violation of Article 6 hereof not otherwise covered pursuant to clauses (b)(iv) and (b)(v) immediately below, provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender or the Observatory Lease without the consent holder of Agent and any termination Mezzanine Loan shall not be a Sale or Pledge in violation of the Observatory Lease without the consent of Agent. Article 6 hereof.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) a Bankruptcy Event occurs, (ii) the first full monthly payment of principal (if any) and interest under the Note is not paid when due; (iii) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or any other Federal covenant contained in Article 5 is violated or state bankruptcy breached and such breach or insolvency law; (2) an Affiliate, officer, trustee, directorviolation results in, or representative which Controlsis a substantial factor in, directly or indirectly, a substantive consolidation of Borrower and/or any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by SPE Component Entity with any other Person under the Bankruptcy Code or any other Federal or state in a bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Personsimilar proceedings; (5iv) if Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to (A) any Affiliate, officer, trustee, director, voluntary indebtedness or representative which Controls (B) voluntary monetary lien encumbering any Credit Party Individual Property to the extent such lien required Lender’s consent under this Agreement or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueother Loan Documents; or (7v) if Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any voluntary transfer of any material portion of any Individual Property or to any voluntary act that causes a change in connection with the ownership of Borrower and/or any SPE Component Entity to the extent such ownership change required Lender’s consent under this Agreement; provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender or exercise or assertion the holder of any right Mezzanine Loan shall not be a Sale or remedy upon the continuance Pledge in violation of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under Article 6 hereof. Notwithstanding any provision contained herein or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, no direct or indirect shareholder, partner, member, principal, affiliate, employee, officer, director, agent or representative of Borrower (each, a “Related Party”) (other than (a) Guarantor in accordance with the Guaranty and the Environmental Indemnity and (b) any Credit Party, or Manager, if applicable (if the Manager that is an Affiliate of Borrower in accordance with any Credit Party or GuarantorLoan Document to which such Manager may be a party) shall have any personal liability for, nor be joined as a party to any action with respect to (Ii) seeks a defense, judicial intervention or injunctive or other equitable relief the payment of any kindsum of money which is or may be payable hereunder or under any other Loan Documents, including, but not limited to, the repayment of the Loan or (IIii) assertsthe performance or discharge of any covenants, obligations or causes a third party undertakings of Guarantor or any Related Party with respect thereto. In addition to assertthe foregoing, anything contained herein or in the other Loan Documents notwithstanding, in a pleading filed no event will the assets of any Related Party (other than Guarantor in connection accordance with a judicial proceeding the Guaranty and the Environmental Indemnity) be available to satisfy any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each obligation of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableBorrower hereunder.
Appears in 2 contracts
Samples: Loan Agreement (Northstar Realty Finance Corp.), Loan Agreement (NorthStar Healthcare Income, Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders (i) Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyany of the members of Borrower or any direct or indirect partner, shareholder, member, manager, owner, officer, director, trustee or employee in or of Borrower (collectively, the "Exculpated Parties") or Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, (ii) except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower or any Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms Documents and provisions (iii) none of the Sublease as Exculpated Parties shall have any personal liability in any respect for the same is amended, modified Loan or supplemented after the date hereof with obligations of Borrower contained in the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerLoan Documents. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of or any guaranty or indemnification agreement made in connection with the Loan (including, without limitation, the Guaranty) or any of the rights and remedies of Agent Lender thereunder, or Lenders thereunderbe taken to prevent recourse against any guarantor (including, without limitation, Metropolitan) under any guaranty made in connection with the Loan (including, without limitation, the Guaranty); (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgage or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ ' fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation by Borrower or any Credit Party guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor)Borrower;
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party representation, warranty, covenant or Guarantor indemnification provision in the Environmental Indemnity or in the Mortgage concerning environmental laws, hazardous substances and asbestos and any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofindemnification of Lender with respect thereto in either document;
(iv) the failure removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default without replacing the same with an item or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsitems of comparable value;
(v) the misappropriation misapplication or conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable or (so long as Manager is C) any Rents following an Affiliate Event of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofDefault;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter charges for labor or materials or other charges that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance can create liens on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof;
(viii) Borrower's indemnification of Lender set forth in Section 9.2 hereof;
(ix) failure to maintain Borrower's status as a single purpose entity; and
(xvx) any modifications, amendments, restatements and/or supplements made failure to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination permit on-site inspections of the Observatory Lease without the consent of Agent. Notwithstanding anything Property, failure to the contrary in this Agreement, the Note provide financial information or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed failure to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file appoint a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders new Manager in accordance with the Loan Documentsterms of this Agreement upon the request of Lender after an Event of Default, each as required by, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes accordance with, or otherwise assists the terms and provisions of, this Agreement and the Mortgage, if such Person, or solicits or causes to be solicited petitioning creditors condition shall continue for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; five (5) Business Days after notice thereof.
(i) Borrower fails to obtain Lender's prior written consent to any Affiliate, officer, trustee, director, subordinate financing or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of other voluntary lien encumbering the Property; or
(6ii) Borrower fails to obtain Lender's prior written consent to any Credit Party makes a general assignment for the benefit of creditorsassignment, transfer, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration conveyance of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges Property or any other Loan Document, any Credit Party, interest therein as required by the Mortgage or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablethis Agreement.
Appears in 2 contracts
Samples: Loan Agreement (Reckson Operating Partnership Lp), Loan Agreement (Reckson Associates Realty Corp)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt filed by any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate Borrower Party or any other action of any Credit Borrower Party exercised in bad faith that delays, opposes, impedes, obstructs, hinders, enjoins or Guarantor otherwise interferes with or frustrates the efforts of Lender to exercise any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofrights and remedies available to Lender as provided herein and in the other Loan Documents;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property by (or on behalf of) any Borrower Party after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party Reserve Funds and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereofat the direction of) Borrower);
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions hereof , in each case, to the extent there existed sufficient cash flow from the Property to do so (provided, however, that there shall be no personal liability under this subsection (vi) solely for the failure to pay Taxes if (A) sufficient sums had been reserved hereunder for the express purpose of paying the Taxes in question and Lender failed to pay same, (B) Lender’s access to such sums was not restricted or constrained in any manner and (C) no Event of Default was continuing);
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter provided, however, that arises by reason of lack of cash flow with respect to there shall be no personal liability under this subsection (vii) for the Property, except aforementioned failures to the extent that such lack that, in each case, (A) each applicable failure is itself a failure to pay Insurance Premiums or is solely as a result of a failure to pay Insurance Premiums and (B)(1) there existed insufficient cash flow arises from the misappropriation Property to pay Insurance Premiums or (2)(I) sufficient sums had been reserved hereunder for the express purpose of revenue with respect paying the Insurance Premiums in question and Lender failed to the Property as described in clauses (iii)pay same, (iv), (vII) Lender’s access to such sums was not restricted or constrained in any manner and (viIII) aboveno Event of Default was continuing);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(ix) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(x) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure to make any REMIC Payment and/or any True Up Payment, to permit on-site inspections of the Property (or any portion thereof) and/or to provide the Required Financial Items, in each case, as and when required herein;
(xii) any violation or breach of the Property Document Provisions and/or any Property Document Event;
(xiii) the failure to purchase or replace (as applicable) any Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement (as applicable), in each case, as and when required by the terms hereof;
(xiv) any indemnity obligations of Lender to Bank under the Restricted Account Agreement;
(xv) the failure of Borrower to appoint a New Manager upon the request of Lender and/or the failure of Borrower to comply with any modificationslimitations on instructing the Manager, amendmentseach as required by and in accordance with, restatements and/or supplements made to as applicable, the Ground Leaseterms and provisions of, Sublease this Agreement, the Assignment of Management Agreement and the Security Instrument;
(xvi) any violation or the Observatory Lease without the consent breach of Agent and any termination representation, warranty or covenant contained in Article 5 hereof;
(xvii) any exercise of the Observatory Lease Restricted Account Change Right;
(xviii) any failure to (a) obtain, maintain, and/or have in place a current certificate of occupancy at the Property that complies with all Legal Requirements, (b) update any certificate of occupancy or obtain any new certificate of occupancy at any time as required by Legal Requirements, and/or (c) to operate the Property in a manner consistent with the certificate of occupancy that is in place at the Property (including, without limitation, any failure to operate the consent Property in accordance with the specified uses listed on the then current certificate of Agent. occupancy).
(xix) any violation or breach of the Cash Management Provisions; and/or (xx) any claims to divest, subordinate or extinguish the lien of the Security Instrument (including, without limitation, any such claims resulting from any breach or other failure to comply with Section 22 of the New York Lien Law).
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental IndemnityI) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party files representation, warranty or covenant contained in Article 5 or Article 6 hereof is violated or breached (provided, that, with respect to any such violation or breach of Article 5 hereof, such violation or breach is evidenced by a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawcourt, in which a proceeding with respect to Creditors Rights Laws involving any Credit Party one or Guarantor colludes with, or otherwise assists more Constituent Owner(s) of Borrower and/or SPE Component Entity (any such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any a “Bankrupt Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it”), by any other Person under ordering the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion substantive consolidation of the Propertyassets and liabilities of Borrower and/or SPE Component Entity with the assets and liabilities of any Bankrupt Person on the basis of, among other things, such violation or breach) or (ii) a Bankruptcy Event occurs; and (6II) any Credit Party makes a general assignment for all events (without limitation of the benefit of creditorsforegoing) in the Recourse Amount (provided, or admitsthat, in writing (A) the recourse liability under this subsection (II) shall not exceed an amount equal to the Stipulated Recourse Amount and (B) notwithstanding anything to the contrary contained herein or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, no portion of the sums applied or deemed applied (by the terms hereof, under applicable Legal Requirements or otherwise), from time to time, in reduction of the Debt from any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or source shall be deemed to have been applied to reduce Borrower’s recourse liability under this subsection (II) asserts, or causes a third party until such time as the entire outstanding amount of the Debt shall have been indefeasibly reduced (by cash payment actually received by Lender) to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or an amount equal to the Lenders, or (III) any right in connection with any security Recourse Amount). For purposes of clarification and for the Loanavoidance of doubt, the recourse carveouts in each of (ISection 13.1(a) above and this Section 13.1(b) shall not be deemed to be mutually exclusive or otherwise limit one another; without limiting the foregoing, if a particular event, condition, circumstance or occurrence would trigger recourse liability both under Section 13.1(a) above and this Section 13.1(b), recourse liability shall apply under all of such Sections (II) or (III) that as and to the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableextent provided in such Sections).
Appears in 2 contracts
Samples: Loan Agreement (Clipper Realty Inc.), Loan Agreement (Clipper Realty Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower (or any holder of a direct Borrower’s members, managers, partners, shareholders, officers, directors or indirect interest in ESBA Affiliates, whether director or any supervisor of either party comprising indirect, collectively, the “Borrower or Controlling either party comprising Borrower Parties”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, agrees for itself and its successors and assigns that it and its successors and assigns shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of LeasesPledge Agreement; (f) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Collateral; or (g) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or Guarantorunder the terms of this Agreement, by money judgment or otherwise, to the extent of any actual out of pocket loss, damage, cost, expense, liability, claim or other obligation suffered or incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i1) fraud or material misrepresentation or failure to disclose a material fact by Borrower or any material intentional misrepresentation by any Credit Party of the Borrower Parties in connection with the Loan;
(ii2) the fraudulent acts gross negligence or willful misconduct of Borrower or any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor)the Borrower Parties;
(iii3) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party representation, warranty, covenant or Guarantor indemnification provision in this Agreement or the Environmental Indemnity concerning environmental laws, hazardous substances and asbestos and any Affiliate thereof), indemnification of Lender with respect thereto in any Credit Party, Guarantor or any Affiliate thereofof such documents;
(iv4) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional willful physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of sufficient cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)is available to prevent such waste;
(viii5) any the removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan DocumentsDefault;
(ix6) the misappropriation or conversion by or on behalf of Borrower of (A) any Credit Party’s failure to obtain Agent’s prior consent to insurance proceeds paid by reason of any Transferloss or damage, as applicable, as required by the Mortgage or Article VIII hereof (except B) any Award received in connection with respect to a mechanic’s, tax, judgment condemnation or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises proceeding, (C) any Rents or other revenues derived from the misappropriation Property following an Event of revenue with respect to the Property as described Default or (D) any Rents paid more than one (1) month in clauses (iii), (iv), (v) and (vi) above)advance following an Event of Default;
(x7) a voluntary Lien remains an encumbrance on all if Borrower or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject other entity that is required to the provisions of Section 8.3(a)(v), the failure by any Credit Party be a Single-Purpose Entity fails to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to SPE Covenants or maintain its status as a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);Single-Purpose Entity; or
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of 8) if any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (Transfer occurs other than as provided in the Guaranty and Environmental Indemnitypermitted by this Agreement.
(a) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files Borrower filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2b) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawlaw by any other Person in which Borrower or any of the Borrower Parties colludes with or otherwise assists such Person, or solicits soliciting or causes causing to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3c) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, of the Borrower Parties filing an answer consenting to or otherwise assists such Person, acquiescing in or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5d) Borrower or any Affiliate, officer, trustee, director, of the Borrower Parties consenting to or representative which Controls any Credit Party acquiescing in or Guarantor joins joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or all or any portion of the Property; (6e) Borrower or any Credit Party makes a general of the Borrower Parties making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is truedue; or (7ii) if Borrower or any Borrower Party, or any Affiliate of Borrower or Affiliate of any Borrower Party, in connection with any enforcement judicial or quasi-judicial case, action or exercise proceeding directly or assertion indirectly contests the validity or enforceability of the Loan Documents or directly or indirectly contests or intentionally hinders, delays or obstructs the pursuit of any right rights or remedy upon remedies by Lender (including the continuance commencement and/or prosecution of a foreclosure action after an Event of Default Default. The provisions of this Article 10 shall survive the expiration and acceleration termination of this Agreement and the repayment of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableIndebtedness.
Appears in 2 contracts
Samples: Mezzanine Loan Documents (Strategic Storage Trust VI, Inc.), Mezzanine Loan Agreement (Strategic Storage Trust VI, Inc.)
Exculpation. Subject (a) Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications below below, Xxxxxx and except as Borrower agree that:
(i) Borrower shall be liable upon the Debt and for the other obligations arising under the Loan Documents to the full extent (but only to the extent) of Borrower’s interest in the Property; provided, however, that in the event (A) of fraud, willful misconduct or material misrepresentation by Borrower, its general partners, if any, its members, if any, its principals, if any, or by any Guarantor in connection with the loan evidenced by this Note, (B) of a breach or default under Section 4.3 or Article 8 of the Security Instrument, or (C) the Property or any part thereof becomes an asset in a voluntary bankruptcy or insolvency proceeding, the limitation on recourse set forth in the Guaranty this Subsection 10(a) will be null and Environmental Indemnityvoid and completely inapplicable, neither Agent nor Lenders and this Note shall be with full recourse to Borrower.
(ii) If an Event of Default occurs and is continuing, Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, Security Instrument or any of the Mortgage Other Loan Documents and the other Loan Documents, or interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to for which a lien or security interest has been granted in favor of Lender under the Security Instrument and the Other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of BorrowerXxxxxxxx’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting for which a lien or security interest has been granted in favor of Lender under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents. Xxxxxx, by accepting this Note and the Security Instrument, agrees that it shall not xxx not, except as otherwise herein provided (and only to the extent herein provided), sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Other Loan Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. Security Instrument.
(iii) The provisions of this Section Subsection 10(a) shall not, however, not (aA) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Other Loan DocumentsDocuments or the Security Instrument; (bB) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (cC) affect the validity or enforceability of any guaranty indemnity, guaranty, master lease or indemnification agreement similar instrument made in connection with this Note, the Security Instrument, or the Other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (dD) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (eE) impair the enforcement of the Assignment of Leasesexecuted in connection herewith; (fF) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Article 11 of the Security Instrument; or Lenders (G) impair the right of Lender to seek obtain a deficiency judgment or judgment on this Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with insurance proceeds or condemnation awards to which Xxxxxx would otherwise be entitled under the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies Security Instrument; provided, however, Lender shall only enforce such judgment against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent insurance proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;condemnation awards.
(iv) Notwithstanding the failure provisions of this Article to the Observatory Tenantcontrary, during Borrower shall be personally liable to Lender for the continuance of an Event of Default or during a Trigger Period, to pay all Rent Losses (as defined under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(vGuaranty) the misappropriation of Lender incurs due to: (A) any insurance proceeds paid the misapplication or misappropriation of Rents by reason of any loss, damage Borrower or destruction to the Property, or Guarantor; (B) any Awards the misapplication or other amounts received in connection with the Condemnation misappropriation of insurance proceeds or condemnation awards by Borrower or Guarantor; (C) Borrower’s failure to return or to reimburse Lender for all or a portion of Personal Property taken from the Property by Manageror on behalf of Borrower and not replaced with Personal Property of substantially the same utility and of substantially the same or greater value; (D) any act of intentional waste or arson by Xxxxxxxx, if applicable any principal, general partner or member thereof or by any Guarantor; (so long as Manager is an Affiliate E) any fees or commissions paid by Borrower to any principal, affiliate, general partner or member of any Credit Party or Guarantor Borrower or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the terms of this Note, the Security Instrument or the Other Loan Documents;
; (xiF) subject to the provisions of Section 8.3(a)(v), the Borrower’s failure by any Credit Party to comply with the material single purpose entity requirements environmental indemnification provisions of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation Article 11 of the assets Security Instrument; or (G) any breach of any Credit Party with the assets of another Person (other than the other Credit Parties);Environmental Indemnity.
(xiib) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt Debt, owing to Lenders Lender in accordance with this Note, the Security Instrument and the Other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Loan Agreement (Inland American Real Estate Trust, Inc.), Loan Agreement (Inland American Real Estate Trust, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instrument or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instrument, the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Security Instrument and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not not, except as otherwise provided herein or in the Security Instrument, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instrument or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instrument, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instrument or Lenders Sections 4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on (A) preserve or enforce its rights and remedies against the Property or (B) obtain any security given by Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instrument; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the Losses it incurs due to: (i) fraud or intentional misrepresentation in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver execution and the delivery of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note Note, the Security Instrument, or any of the other Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.;
Appears in 2 contracts
Samples: Loan Agreement (Meristar Hospitality Operating Partnership Lp), Loan Agreement (Meristar Hospitality Corp)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instruments or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instruments by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instruments, the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Security Instruments and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instruments, agrees that it shall not not, except as otherwise provided herein or in the Security Instruments, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instruments or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instruments, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instruments or Lenders Sections 4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on (A) preserve or enforce its rights and remedies against any security given by Individual Property or (B) obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instruments; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the Losses it incurs due to: (i) fraud or intentional misrepresentation in connection with the execution and the delivery of this Agreement, the Note, the Security Instrument, or the other Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securityDocuments; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) Borrower’s misappropriation or intentional misapplication of Rents received by Borrower after the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or occurrence and during the continuance of an Event of Default, any ; (iii) Borrower’s misappropriation or intentional misapplication of the security deposits or Rents by Manager, if applicable collected more than thirty (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
30) days in advance; (iv) the failure Borrower’s misappropriation or intentional misapplication of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
Awards; (v) the misappropriation of Borrower’s failure to pay Taxes, Other Charges (A) any insurance proceeds paid by reason of any loss, damage or destruction except to the Propertyextent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms of Section 7.2 hereof), and charges for labor or (B) any Awards materials or other amounts received in connection with charges that can create Liens on the Condemnation of all or a portion Properties (except to the extent that there is insufficient cash flow from the operation of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereofProperty), any Credit Party or Guarantor or any Affiliate thereof;
; (vi) Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any failure Properties by Manager, if applicable or on behalf of Borrower (so long as Manager other than Personal Property that is an Affiliate of any Credit Party obsolete or Guarantor), any Credit Party removed or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property disposed in the ordinary course of business (except of owning and operating the Property) and not replaced with respect to Taxes, Other Charges Personal Property of the same utility and Trade Payables being contested in accordance with Section 4.1.2);
of the same or greater value; (vii) any act of intentional physical waste of the Property (but excluding or arson by Borrower, Principal, or any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
Affiliate thereof or Guarantor; (viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
[intentionally deleted]; (ix) any Credit PartyBorrower’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except comply with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v5.1.10 hereof (provided Borrower shall have an additional ten (10) days after written notice of such failure to deliver the required financial statements or reports pursuant to Section 5.1.10 hereof before recourse is sought), the ; (x) Borrower’s failure by any Credit Party to comply with the material single purpose entity requirements provisions of Sections 4.1.39 or 5.1.19 of this Agreement including those Agreement; (xi) Borrower’s or Principal’s default under Section 4.1.35 hereof; or (xii) Operating Tenant’s or Principal’s (as defined in the Subordination and Attornment Agreement) default under Section 11 of the Subordination and Attornment Agreement.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect (i) in the event of Borrower’s default under Section 4.2.19 5.2.10 hereof if such failure leads to a consolidation or Article 7 of the assets of Security Instruments, (ii) if any Credit Party with the assets of another Individual Property or any part thereof shall become an asset in (A) a voluntary bankruptcy or insolvency proceeding or (B) an involuntary bankruptcy or insolvency proceeding commenced by any Person (other than the other Credit Parties);Lender) and Borrower fails to use its commercially reasonable efforts to obtain a dismissal of such proceedings.
(xiid) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Security Instruments or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Security Instruments and the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 2 contracts
Samples: Loan Agreement (Meristar Hospitality Corp), Loan Agreement (Meristar Hospitality Operating Partnership Lp)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of an Event of Default, Lender to exercise any misappropriation of rights and remedies available to Lender as provided herein and in the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofother Loan Documents;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents collected in advance;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions hereof (other than, in each case, due solely to the insufficiency of cash flow generated by the Property and made available to Borrower);
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter that arises by reason of lack other than, in each case, due solely to the insufficiency of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to generated by the Property as described in clauses (iii), (iv), (v) and (vi) abovemade available to Borrower);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(ix) [intentionally omitted];
(x) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure to make any Condemnation Payment or to permit on-site inspections of the Property, in each case, as and when required herein;
(xii) [intentionally omitted];
(xiii) the failure to comply with any provisions hereof relating to cash management as required by and in accordance with, as applicable, the terms and provisions of, this Agreement, the Assignment of Management Agreement and the Security Instrument;
(xiv) [intentionally omitted];
(xv) the failure of Borrower to appoint a new property manager upon the request of Lender or failure of Borrower to comply with any modificationslimitations on instructing the property manager, amendmentseach as required by and in accordance with, restatements and/or supplements made as applicable, the terms and provisions of, this Agreement, the Assignment of Management Agreement, if any, and the Security Instrument; and/or
(xvi) the failure of Borrower to establish the Restricted Account or to pay, or make deposits, to the Ground LeaseRestricted Account, Sublease or the Observatory Lease without the consent in each case as are required under Article 9 of Agent and this Agreement, provided, however, in connection therewith Borrower shall not be required to perform any termination of the Observatory Lease without the consent of Agent. action beyond Borrower’s reasonable control.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) the first full monthly payment of principal and interest under the Note is not paid when due; (ii) [intentionally omitted]; (iii) any Credit Party files a voluntary petition under representation, warranty or covenant contained in Article 5 or Article 6 hereof is violated or breached; provided, however: with respect to any breach or violation of Article 5, the Bankruptcy Code Debt shall not be fully recourse to Borrower if: (A) such breach or any other Federal or state bankruptcy or insolvency law; violation was immaterial and non- recurring, (2B) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits Borrower corrects (or causes to be solicited petitioning creditors corrected) such breach or violation within ten (10) Business Days following written notice from Lender, and (C) if requested by Lender upon its reasonable determination that such breach or violation might be considered by a court as a factor in the court’s finding for any involuntary petition against any Credit Party or from any Person; (3) there is a consolidation of the filing assets of an involuntary petition against any Credit Party under Borrower with the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such assets of another Person, Borrower delivers to Lender within seven (7) days of notice from Lender opinions of counsel, which counsel and opinions shall be satisfactory in form and substance to Lender and the Rating Agencies, to the effect that such breach or solicits violation shall not negate/impair the opinions contained in the Non-Consolidation Opinion (or causes alternatively, deliver to be solicited petitioning creditors for any involuntary petition against any Credit Party Lender a new Non-Consolidation Opinion from any Person; (4) any Credit Party files an answer joining counsel, satisfactory to Lender and the Rating Agencies, opining that the effect of such failure would not result in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueconsolidation); or (7iv) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an a Bankruptcy Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableoccurs.
Appears in 2 contracts
Samples: Loan Agreement (Clipper Realty Inc.), Loan Agreement (Clipper Realty Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower Borrowers (or any holder of a Borrowers’ members, managers partners shareholders, officers, directors or Affiliates, whether direct or indirect interest in ESBA or any supervisor of either party comprising indirect, collectively, the “Borrower or Controlling either party comprising Borrower Parties”) to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreements or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyeither Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreements and the other Loan Documents, or in any or all of the Property, the Rents Collateral or any other collateral given to Agent and/or Lenders Lender pursuant to the Pledge Agreements and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrowers or the Borrower Parties only to the extent of Borrower’s Borrowers’ or the Borrower Parties’ interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreements, and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against either Borrower or the Borrower Parties in any such action or proceeding under under, or by reason of or under of, or in connection with with, the Note, this Agreement, the Mortgage Pledge Agreements, or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrowers as a party defendant defendants in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against Borrower Borrowers in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreements or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties; or (ge) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrowers, by money judgment or otherwise, to the extent of any actual loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by either of the Borrowers or either Mortgage Borrowers or any Credit Party Guarantor in connection with the Loan, including by reason of any claim under RICO;
(ii) the fraudulent acts gross negligence or willful misconduct of either of the Mortgage Borrowers, either of the Borrowers, any Credit Guarantor, Principal or any other Restricted Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party representation, warranty, covenant or Guarantor indemnification provision in the Environmental Indemnity concerning environmental laws, hazardous substances or asbestos and any Affiliate thereof), indemnification of Lender with respect thereto in any Credit Party, Guarantor or any Affiliate thereofLoan Document;
(iv) the failure wrongful removal or destruction by either of the Observatory TenantMortgage Borrowers, during either of the continuance Borrowers or any Affiliate of either of the Mortgage Borrowers or Borrowers of any portion of the Properties after the occurrence of an Event of Default or during a Trigger Periodany intentional physical waste of the Properties or any portion thereof by either Borrower, either Mortgage Borrower or any Affiliate of any of them, provided, however, that such physical waste shall exclude wear and tear to pay all Rent under the Observatory Lease into Properties or any portion thereof that occurs in the HSBC Collection Account in accordance with ordinary course of business of the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsProperties;
(v) any Legal Requirement (including RICO) mandating the misappropriation of (A) any insurance proceeds paid forfeiture by reason either Borrower or either Mortgage Borrower of any loss, damage Property or destruction to the PropertyCollateral, or (B) any Awards portion thereof, because of the conduct or other amounts received purported conduct of criminal activity by any Borrower, any Mortgage Borrower, or any Restricted Party in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereoftherewith;
(vi) any failure misrepresentation, miscertification or breach of warranty by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor either Borrower or any Affiliate thereof Guarantor with respect to use current Rents any representation, warranty or certification contained in this Agreement or any other Loan Document or in any document executed in connection therewith, pursuant to pay then current material operating expenses any of the Loan Documents or otherwise to induce Lender to make the Loan, or any advance thereof, or to release monies from any account held by Lender (including any reserve or escrow) or to take other action with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)Collateral;
(vii) intentional physical waste the misappropriation or conversion by or on behalf of either Borrower, either Mortgage Borrower, or any of their respective Affiliates of (A) any Insurance Proceeds, (B) any Condemnation Proceeds, (C) any Rents and/or Vacant Space Rent following an Event of Default, (D) any Rents and/or Vacant Space Rent paid more than one (1) month in advance, (E) Net Liquidation Proceeds After Debt Service or (F) any distribution or other payments made in connection with all or any part of the Property (but excluding any matter that arises by reason of lack of cash flow with respect Collateral; provided such amounts are not applied to the payment of the Loan or the Operating Expenses of either Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal failure to pay charges for labor or disposal of materials or other charges that can create Liens on any portion of the Property after an Event Properties that are superior to the Lien of Default the Mortgage, unless such charges are being contested in any manner prohibited by the Loan Documentsaccordance herewith;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected by either Borrower, either Mortgage Borrower, or any Affiliate thereof with respect to the either Property or any part thereof which are not delivered to Agent Mortgage Lender upon a foreclosure of the Property Properties or transfer any part thereof or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvx) any modificationsbreach of any representation, amendmentswarranty or covenant contained in Section 3 of the Pledge Agreements;
(xi) if either Borrower or Mortgage Borrower fails to permit on-site inspections of the Properties or any part thereof, restatements and/or supplements made fails to provide financial information specifically required by this Agreement or fails to appoint a new Manager upon the Ground Leaserequest of Lender, Sublease each as required by, and in accordance with, the terms and provisions of this Agreement or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the other Loan Documents, ;
(A) neither Agent nor Lenders if the Operating Partnership shall be deemed to have waived any right which Agent and/or Lenders may have default under Section 506(a), 506(b), 1111(b) or any other provisions either of the Bankruptcy Code to file a claim for the full amount of the Debt Master Leases beyond any applicable notice and/or cure period contained therein, or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) if either Master Lease shall have been amended or modified (except as specified in Section 3.1.21 hereof) without Lender’s prior written consent, or (C) if either Master Lease shall have been terminated, cancelled or surrendered without Lender’s prior written consent in violation of Section 5.2.12 or Section 5.2.13 hereof (except as specified in Section 3.1.21 hereof), or (D) if the Debt shall be fully recourse to Borrower, but not to any holder Operating Partnership is the subject of a direct Bankruptcy Action, other than an involuntary Bankruptcy Action which is dismissed within ninety (90) days; or
(xiii) (A) if there shall exist an event of default by Tower Mortgage Borrower under the Parking Easement beyond any applicable notice and/or cure period contained therein, or indirect interest (B) if the Parking Easement shall have been amended or modified in ESBA violation of Section 5.2.11 hereof) without Lender’s prior written consent, or any party supervising either party comprising Borrower (C) if the Parking Easement shall have been terminated, cancelled or surrendered (other than as provided by the terms of the Parking Easement) without Lender’s prior written consent in the Guaranty and Environmental Indemnityviolation of Section 5.2.11 hereof.
(a) either Borrower or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files Mortgage Borrower filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2b) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party either Borrower or either Mortgage Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or law by any other Federal or state bankruptcy or insolvency law, Person in which any Credit Party either Borrower or Guarantor either Mortgage Borrower colludes with, with or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party either Borrower or either Mortgage Borrower from any Person; (4c) any Credit Party files either Borrower or Mortgage Borrower filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5d) any Affiliate, officer, trustee, director, either Borrower or representative which Controls any Credit Party Mortgage Borrower consenting to or Guarantor joins acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party either Borrower, either Mortgage Borrower, or any portion of the PropertyProperties. or the Collateral; or (6e) any Credit Party makes a general either Borrower or Mortgage Borrower making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (2) if the first Monthly Interest Payment is truenot paid when due; (3) if either Borrower or either Mortgage Borrower fails to maintain its status as a Special Purpose Entity as required by and in accordance with the terms of this Agreement and there is a substantive consolidation of either Borrower or either Mortgage Borrower with any other Person; (4) if either Borrower fails to obtain Lender’s prior consent to any Indebtedness or voluntary Lien encumbering the Properties or the Collateral or any part thereof as required by this Agreement or the other Loan Documents; or (75) in connection with if either Borrower fails to obtain Lender’s prior consent to any enforcement action Transfer as required by this Agreement or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableDocuments.
Appears in 2 contracts
Samples: Loan Agreement (MPG Office Trust, Inc.), Loan Agreement (MPG Office Trust, Inc.)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Collateral (or any portion thereof) or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not xxx sue for, seek xxek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment of LeasesPledge Agreement; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Collateral (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation reasonable out-of-pocket Loss incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredincurred but in all events excluding consequential, punitive and special damages (except to the extent Lender is actually liable for such damages)) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period material physical waste to any Individual Property arising from the intentional acts or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate omissions of any Credit Borrower Party or Guarantor or any Affiliate thereof(it being acknowledged that omissions to perform acts for which sufficient cash flow is not available from the Properties shall not be deemed an intentional omission for purposes of this clause (iii), any Credit Party, Guarantor or any Affiliate thereof);
(iv) the failure removal or disposal by any Borrower Party or any of the Observatory Tenant, during the continuance its respective Affiliates of any portion of any Individual Property after an Event of Default unless such portion of any Individual Property so removed or during a Trigger Period, so disposed of is replaced with property of equal utility and value or such removal or disposal was otherwise permitted pursuant to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents terms and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsconditions hereof;
(v) the misappropriation misapplication or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Propertyany Individual Property (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party or Guarantor or Rents paid more than one month in advance and/or (E) any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofNet Liquidation Proceeds After Debt Service;
(vi) failure to pay Taxes, charges for labor or materials or other charges that can create liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Individual Property in accordance with the ordinary course of business terms and provisions hereof; provided, however, Borrower shall have no liability under this subsection (except with respect to vi) if (A) such Taxes, Other Charges and Trade Payables charges for labor or materials or other charges that can create liens are being contested in accordance with Section 4.1.2);
the terms and conditions hereof or (viiB) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of sufficient cash flow with respect is not available from the Properties to the Propertypay such amounts; provided, except that, in no instance shall Borrower be released from any liability pursuant to this clause (vi) to the extent that (1) such lack insufficiency of cash flow arises from the intentional misappropriation or conversion of revenue with respect to Rent by any Borrower Party or (2) Borrower or Mortgage Borrower incurred such charges after the Property as described in clauses (iii), (iv), (v) occurrence and (vi) above);
(viii) any removal or disposal during the continuance of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any TransferDefault, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect charges were (I) necessary to protect against imminent danger to the health or safety of any Tenant or any Person at or in the immediate vicinity of any Individual Property as described in clauses (iii)or to prevent any imminent defect, damage or harm to any Individual Property, (iv), II) contracted for prior to such Event of Default or (vIII) and (vi) above)consented to in writing by Lender;
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the Property any Collateral or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) the breach or violation by Borrower, Mezzanine A Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity of any representation, warranty or covenant contained in Article 5 hereof;
(ix) the failure by Borrower to (A) permit (or cause Mortgage Borrower or Mezzanine A Borrower to permit) on-site inspections of any Individual Property, (B) provide any financial information regarding hereunder and/or pursuant to the other Loan Documents and/or (C) appoint (or cause Mortgage Borrower to appoint) a Qualified Manager pursuant to a Qualified Management Agreement upon the request of Lender which failure constitutes an Event of Default;
(x) a breach of Section 11.1 and/or Section 11.2 hereof, which breach continues for three (3) Business Days after notice from Lender;
(xi) any modificationsmaterial amendment, amendmentsmaterial modification or voluntary termination of any Ground Lease by any Borrower, restatements and/or supplements made Mezzanine A Borrower or any Mortgage Borrower without Lender’s consent other than as expressly permitted pursuant to the Ground Leaseterms hereof;
(xii) the termination or suspension of any Health Care License arising in connection with any grossly negligent or willful material violation of any Health Care Requirement or otherwise by Borrower, Sublease Mezzanine A Borrower or Mortgage Borrower or any voluntary termination or rejection of any such Health Care License by Borrower, Mezzanine A Borrower or Mortgage Borrower, in each instance, which termination, suspension or rejection constitutes an Event of Default;
(xiii) any violation of Article 6 hereof not otherwise covered pursuant to clauses (b)(iv) and (b)(v) immediately below, provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or the Observatory Lease without holder of any Mezzanine Loan shall not be a Sale or Pledge in violation of Article 6 hereof; or
(xiv) the consent incurrence by Mortgage Borrower of Agent and any termination voluntary indebtedness prohibited by the Mortgage Loan Agreement or by Mezzanine A Borrower of any voluntary indebtedness prohibited by the Observatory Lease without the consent of Agent. Mezzanine A Loan Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) a Bankruptcy Event occurs, (ii) the first full monthly payment of principal (if any) and interest under the Note is not paid when due; (iii) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or any other Federal covenant contained in Article 5 is violated or state bankruptcy breached and such breach or insolvency law; (2) an Affiliate, officer, trustee, directorviolation results in, or representative which Controlsis a substantial factor in, directly or indirectlya substantive consolidation of Borrower, Mezzanine A Borrower, Mortgage Borrower and/or any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by Applicable SPE Component Entity with any other Person under the Bankruptcy Code in a bankruptcy or similar proceedings; (iv) if Borrower, Mortgage Borrower, Mezzanine A Borrower and/or any Applicable SPE Component Entity fails to obtain Lender’s prior written consent to (A) any voluntary indebtedness or (B) voluntary monetary lien encumbering any Individual Property or any Applicable Collateral to the extent such lien required Lender’s consent under this Agreement or the other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueLoan Documents; or (7v) if Borrower, Mezzanine A Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity fails to obtain Lender’s prior written consent to any voluntary transfer of any material portion of any Individual Property or any Applicable Collateral or to any voluntary act that causes a change in connection with the ownership of Borrower, Mezzanine A Borrower, Mortgage Borrower and/or any Applicable SPE Component Entity to the extent such ownership change required Lender’s consent under this Agreement; provided, however, for the avoidance of doubt, a Sale or Pledge resulting from the consummation of an enforcement action by Lender, Mortgage Lender or exercise or assertion the holder of any right Mezzanine Loan shall not be a Sale or remedy upon the continuance Pledge in violation of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under Article 6 hereof. Notwithstanding any provision contained herein or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, no direct or indirect shareholder, partner, member, principal, affiliate, employee, officer, director, agent or representative of Borrower (each, a “Related Party”) (other than (a) Guarantor in accordance with the Guaranty and the Environmental Indemnity and (b) any Credit Party, or Manager, if applicable (if the Manager that is an Affiliate of Borrower in accordance with any Credit Party or GuarantorLoan Document to which such Manager may be a party) shall have any personal liability for, nor be joined as a party to any action with respect to (Ii) seeks a defense, judicial intervention or injunctive or other equitable relief the payment of any kindsum of money which is or may be payable hereunder or under any other Loan Documents, including, but not limited to, the repayment of the Loan or (IIii) assertsthe performance or discharge of any covenants, obligations or causes a third party undertakings of Guarantor or any Related Party with respect thereto. In addition to assertthe foregoing, anything contained herein or in the other Loan Documents notwithstanding, in a pleading filed no event will the assets of any Related Party (other than Guarantor in connection accordance with a judicial proceeding the Guaranty and the Environmental Indemnity) be available to satisfy any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each obligation of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableBorrower hereunder.
Appears in 2 contracts
Samples: Mezzanine Loan Agreement (Northstar Realty Finance Corp.), Mezzanine Loan Agreement (NorthStar Healthcare Income, Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation None of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this AgreementAgents, the Mortgage Collateral Agent or the other Loan Documents by Arranger nor any of their respective directors, officers, employees or Agents shall be liable to any Revolving Credit Lender for any action taken or proceeding wherein a money judgment shall omitted to be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance taken by it under this Agreement or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan DocumentsRevolving Credit Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the Propertyeffectiveness, the Rents enforceability, sufficiency, validity or due execution of this Agreement or any other collateral given to Agent and/or Lenders pursuant to Revolving Credit Document, nor for the Loan Documents; providedcreation, howeverattachment, that, except as specifically provided herein, any judgment in any such action perfection or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment priority of any obligation evidenced or secured Liens purported to be created by any of the Loan Revolving Credit Documents; (b) impair , or the right validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by the Revolving Credit Borrowers of their obligations hereunder or under any other Revolving Credit Document. Any such inquiry which may be made by any Agent or Lenders the Collateral Agent shall not obligate it to name make any further inquiry or to take any action. No Agent or the Collateral Agent shall have any duties or responsibilities except those specifically set forth in this Agreement and the other Revolving Credit Party as a party defendant in any action or suit for foreclosure Documents and sale under the Mortgage and termination shall not by reason of the Operating Lease and Observatory Leaserelationship established herein be a trustee of fiduciary of any other Agent, the Collateral Agent or any Lender. Unless it specifically agrees to do so in writing, no Agent shall be obligated to initiate, conduct or supervise any litigation or collection proceedings, whether in bankruptcy or otherwise, any work-out or post-default negotiations or take any other similar actions; provided, that, at the written request of the Required Revolving Credit Lenders, the Administrative Agent shall be obligated to foreclose upon or set off against the cash collateral deposited with it under clause (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested Section 3.1 in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of 5.9. Each Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Collateral Agent nor Lenders shall be deemed entitled to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.rely:
Appears in 2 contracts
Samples: Revolving Credit Agreement (Specialty Foods Acquisition Corp), Revolving Credit Agreement (Specialty Foods Corp)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided in the Guaranty and Environmental Indemnitythis Section 15.1, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower or Guarantor, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower, Guarantor or any Affiliate of Borrower or Guarantor or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (1) and (2) above, the "Exculpated Parties"), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower leases provisions contained in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securityMortgage; or (gvi) constitute a waiver of impair the right of Agent Lender to obtain a judgment on the Note against Borrower if and to the extent necessary for the sole purpose of permitting Lender to obtain any Insurance Proceeds or Lenders Awards to which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce the liability and obligation of Borrower or Guarantor, by money such judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses to the extent actually incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any fraud or material intentional misrepresentation by any Credit an Exculpated Party in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any Exculpated Party's misapplication or misappropriation of Rents received by Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party's misapplication or misappropriation of tenant security deposits (including the failure of the Observatory Tenant, during the continuance of an Event of Default to deliver to Lender tenant security deposits upon foreclosure or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer deed in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the applicable Leases prior to the occurrence of the an Event of Default that gave rise to such foreclosure Default) or transfer Rents collected in lieu thereof; andadvance;
(xvv) the misapplication or the misappropriation of Insurance Proceeds or Awards by any modificationsExculpated Party;
(vi) Borrower's failure to pay Property Taxes, amendmentsInsurance Premiums, restatements and/or supplements made Other Charges or charges for labor or materials or other charges that can create liens on the Property beyond any applicable notice and cure periods specified herein (provided that there shall be no liability hereunder to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, extent that (A) neither Agent nor Lenders shall be deemed sums sufficient to pay such amounts have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of been deposited in escrow with Lender pursuant to the Bankruptcy Code to file terms hereof and Borrower has not made a claim against such escrowed amounts or otherwise taken action to restrict Lender from applying such sums for the full amount purpose of the Debt paying such items or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is insufficient cash flow from the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion operation of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability Property to pay its debts as they become due unless such admission is true; items);
(vii) Borrower's failure to return or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon to reimburse Lender for all Personal Property taken from the continuance of an Event of Default and acceleration of the Loan Property by or on behalf of Borrower and not replaced with Personal Property of the Agent same utility and Lenders under of the same or in connection with greater value;
(viii) material physical waste to the Guaranty, Mortgage, Subordinations, Negative Pledges Property caused by the intentional acts or omissions of any Exculpated Party when there is sufficient cash flow from the operation of the Property to avoid such waste from occurring;
(ix) Borrower's failure during the continuance of any Event of Default to (A) deliver to Lender upon demand all Rents received by Borrower or any other Loan Document, Manager and books and records relating to the Property or (B) comply with all written notices and instructions of Lender delivered pursuant to the terms of the any Credit Party, assignment and subordination of management agreement and consent of manager or Manager, if applicable similar agreement;
(if the Manager is an Affiliate x) Borrower's assertion or raising of any Credit Party defense to a proceeding instituted by Lender (whether judicial or Guarantorotherwise) for the foreclosure of the Mortgage following an Event of Default caused by Borrower's failure to timely pay the Monthly Payment Amount or the Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be without merit or brought in bad faith;
(Ixi) seeks a defense, judicial intervention or injunctive or other equitable relief Breach by Borrower of any kindrepresentation, warranty or (II) assertscovenant set forth in Section 4.41, or causes a third party to assertSection 5.24, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (IISection 10.1(a) or Section 10.2(a) hereof;
(IIIxii) that the Subordinations breach of any representation, warranty or the Negative Pledges covenant of Borrower with respect to itself or the subordination provisions any SPE Component Entity set forth in Article 6 hereof; or
(xiii) The existence or exercise of the Sublease or Observatory Lease are voidrights of others to that portion of the Property used as the tube of the Detroit-Windsor Tunnel, voidable or unenforceableexpressly including those rights to maintain the tube of the Detroit-Windsor Tunnel as set forth in that certain Warranty Deed dated October 28, 1977 and recorded in Liber 19923 at Page 406 of the Xxxxx County, Michigan Registry of Deeds.
Appears in 2 contracts
Samples: Loan Agreement (MVP REIT, Inc.), Loan Agreement (MVP REIT II, Inc.)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or Sponsor or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Leaseany Security Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the any Assignment of Leases; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on the security granted by any security given by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securityany Individual Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance Debt filed by any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of an Event Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents and such litigation or proceeding is not withdrawn, ceased or terminated by such Borrower Party within ten (10) Business Days after written notice to withdraw, cease or terminate such litigation or proceeding, which notice shall specifically reference clause (iii) of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereofthis Section 13.1(a), any Credit Party, Guarantor unless the Borrower Party is the prevailing party in such litigation or any Affiliate thereoflegal proceeding in which case there shall be no liability under this clause (iii);
(iv) waste to any Individual Property caused by the failure intentional acts or intentional omissions of any Borrower Party and/or the Observatory Tenant, during the continuance removal or disposal of any portion of any Individual Property after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the any Individual Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents collected in advance;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect Taxes and/or failure to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested pay Insurance Premiums in accordance with Section 4.1.2);
the terms and provisions hereof (vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that sums sufficient to pay such lack of cash flow arises from the misappropriation of revenue amounts have been deposited in escrow with respect Lender pursuant to the Property as described in clauses (iiiterms hereof and there exists no legal impediment to Lender’s utilization thereof), (iv), (v) charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except cure periods specified herein to the extent that such lack of cash flow arises from the misappropriation of Properties generated sufficient revenue with respect for the immediately preceding twelve (12) month period to pay the Property as described in clauses (iii), (iv), (v) and (vi) above)same;
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the such Individual Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) any modificationstax on the making and/or recording of any Security Instrument, amendmentsthe Note or any of the other Loan Documents (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), restatements and/or supplements made but excluding any income, franchise or other similar taxes;
(ix) the seizure or forfeiture of any Individual Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(x) failure to pay any deductible required under any Policy;
(xi) in the event any insurance coverage required hereunder is self-insured, failure to pay any amounts that otherwise would have been paid in the event that such insurance coverage was not self-insured but instead covered under a Policy;
(xii) intentionally omitted;
(xiii) Section 3.34 or Section 4.22 hereof is violated or breached or a Property Document Event occurs; and/or
(xiv) the failure to make any True Up Payment (but only to the Ground Lease, Sublease or extent that the Observatory Lease without Property generated net operating income for the consent of Agent and any termination of immediately preceding twelve (12) month period sufficient to pay the Observatory Lease without the consent of Agent. same).
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) the first full monthly payment of principal and interest under the Note is not paid when due; (ii) Borrower fails to comply with any provisions hereof relating to cash management, each as required by and in accordance with the terms and provisions of this Agreement; (iii) any Credit Party representation, warranty or covenant contained in Article 5 or Article 6 hereof is violated or breached; (iv) Borrower files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (2v) an Affiliate, officer, trustee, directorany Borrower Party files, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3vi) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person, other than with respect to any such petition filed by Lender; (5vii) any Affiliate, officer, trustee, director, Borrower Party consents to or representative which Controls any Credit Party acquiesces in or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property, other than with respect to an action commenced by Lender concerning the Property; (6viii) any Credit Party Borrower makes a general an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless due, (ix) Section 11.1 or Section 11.6 is breached (and such admission is truebreach continues for five (5) Business Days after written notice of such breach which specifically references this Section 13.1); or (7x) in connection the event any Borrower shall bring an action for partition with respect to any enforcement action Borrower’s ownership interest in any Individual Property or exercise or assertion of to compel any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablesale thereof.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital Trust III, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx not, except as otherwise provided in this Section 15.1, sxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (subject to the limitations set forth herein) (including, without limitation, those contained in Section 12.6 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory TenantInsurance Proceeds or Awards by Borrower or Borrower Principal or any principal, during the continuance of an Event of Default Affiliate, member or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsgeneral partner thereof;
(v) Borrower’s failure to pay Taxes, Other Charges (except to the misappropriation of extent that (A) any insurance proceeds paid by reason of any loss, damage or destruction sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the Property, terms hereof and there exists no impediment to Lender’s utilization thereof or (B) any Awards there is insufficient cash flow from the operation of the Property), charges for labor or materials or other amounts received in connection with the Condemnation of all or a portion of charges that can create liens on the Property by Manager, if beyond any applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofnotice and cure periods specified herein;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party to return or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to reimburse Lender for all Personal Property taken from the Property in by or on behalf of Borrower and not replaced with Personal Property of the ordinary course same utility and of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)the same or greater value;
(vii) intentional physical any act of actual waste of the Property (but excluding or arson by Borrower, any matter that arises principal, Affiliate, member or general partner thereof or by reason of lack of cash flow with respect to the PropertyBorrower Principal, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii)any principal, (iv)Affiliate, (v) and (vi) above)member or general partner thereof;
(viii) Borrower’s failure following any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by to deliver to Lender upon demand all Rents and books and records relating to the Loan DocumentsProperty;
(ix) any Credit PartyBorrower’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage gross negligence or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)willful misconduct;
(x) a voluntary Lien remains an encumbrance on all Borrower’s failure to protect or enforce its rights under the Tenant Letter of Credit or to deliver to the Lender the proceeds from or any portion payments on the Tenant Letter of the Property, the Operating Lease or the Observatory Lease Credit in violation of the Loan Documentsaccordance with Section 9.10 hereof;
(xi) subject Borrower’s failure to provide the provisions Lender with an acceptable letter of credit in the amount of $400,000.00 that satisfies the Lender’s Letter of Credit Requirements or cash in the amount of $400,000.00 as required by Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)9.2;
(xii) Borrower’s failure to provide the incurrence Lender with an acceptable letter of Indebtedness credit in violation the amount of $650,000.00 that satisfies the Loan Documents;Lender’s Letter of Credit Requirements in the amount of $650,000.00 to the extent and as required by Section 9.3(e); or
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure failure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any balance of the Leases prior AFL Leasing Reserve Account to be at least $650,000.00 by the occurrence of the Event of Default that gave rise to such foreclosure expiration or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any early termination of the Observatory Lease without AFL Lease.
(c) Notwithstanding the consent of Agent. Notwithstanding anything to the contrary in this Agreementforegoing, the Note or any agreement of the Loan Documents, Lender not to pursue recourse liability as set forth in subsection (Aa) neither Agent nor Lenders above SHALL BECOME NULL AND VOID and shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, no further force and (B) effect and the Debt shall be fully recourse to Borrower, but not to any holder of Borrower and Borrower Principal on a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty joint and Environmental Indemnity) or Controlling either party comprising Borrower, several basis in the event that: (1i) of a breach by Borrower, Borrower Principal or any Credit Party files SPE Component Entity (if any) of any of the covenants set forth in Article 6 hereof, to the extent that such breach is (A) material and (B) is not cured within fifteen (15) days of the earlier to occur of notice from Lender or Borrower’s knowledge of such breach, (ii) of a breach of any of the covenants set forth in Article 7 hereof, (iii) the Property or any part thereof shall become an asset in a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawproceeding of Borrower; (2iv) an Borrower, Borrower Principal or any Affiliate, officer, trustee, director, or representative which Controlscontrols, directly or indirectly, any Credit Party Borrower or Guarantor files Borrower Principal files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3v) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; or (5vi) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party controls Borrower consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; .
(6d) any Credit Party makes Nothing herein shall be deemed to be a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion waiver of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders which Lender may have under or in connection with the GuarantySection 506(a), Mortgage506(b), Subordinations, Negative Pledges 1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan DocumentDocuments.
(e) Subject to the terms of Section 12.6, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate upon payment in full of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each Borrower Principal shall be relieved of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableits obligations under this Article 15.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any officer, director, shareholder, partner, member, principal, employee of Borrower or any direct or indirect owner of Borrower (provided that the foregoing shall not limit in any manner, the liability of any Guarantor), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 9.3 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of any guaranty guaranty, indemnity or indemnification similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument and any other Loan Documents; or (fvi) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on the security granted by the Security Instrument (if required by applicable law and provided such deficiency judgment is not enforced personally against Borrower or any security given by officer, director, shareholder, partner, member, principal, employee of Borrower in connection with or any direct or indirect owner of Borrower (excluding Guarantor under the Loan Guaranty and Environmental Indemnity, as applicable)) or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; the Property (or any portion thereof).
(gb) constitute a waiver of Nothing contained herein shall in any manner or way release, affect or impair the right of Agent or Lenders Lender to enforce the liability recover from Borrower, and obligation of Borrower or Guarantorshall be fully and personally liable and subject to legal action, by money judgment or otherwise, to the extent of for any actual out-of-pocket loss, damage, cost, expense, liabilitydamage, claim or other obligation incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredexpenses and other collection and litigation expenses, but excluding consequential, punitive, special, indirect and exemplary damages or diminutions in value) incurred or suffered by Lender arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Party Borrower or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Borrower or Guarantor);
(iii) during arson or any intentional material physical waste of the Property, provided, however, that if Borrower does not have sufficient cash flow on a Trigger Period current basis to prevent waste, any waste shall not be deemed intentional and Borrower shall have no liability under this clause (iii);
(iv) the removal or disposal of any portion of the Property by Borrower during the continuance of an Event of Default, any misappropriation unless such removed or disposed portion of the Rents by Manager, if applicable (so long as Manager Property is an Affiliate subsequently replaced with property of any Credit Party equal or Guarantor greater utility or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsvalue;
(v) the misappropriation misappropriation, misapplication or conversion by Borrower or Guarantor, or any Affiliate of the foregoing, of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property by Managerduring the continuance of an Event of Default, if applicable (so long as Manager is C) any Rents or other Property income or collateral proceeds, or (D) any Rents paid more than one month in advance (including security deposits) during the continuance of an Affiliate Event of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofDefault;
(vi) any following the occurrence and during the continuance of an Event of Default, the failure by Managerto either apply rents or other Property income, if applicable (so long as Manager is an Affiliate collected after such Event of any Credit Party or Guarantor)Default, any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the ordinary, customary, and necessary expenses of operating the Property in or, upon demand, to deliver such rents or other Property income to Lender (or otherwise to the ordinary course of business (except with respect to TaxesClearing Account or Cash Management Account, Other Charges and Trade Payables being contested in accordance with Section 4.1.2as required by this Agreement);
(vii) intentional physical waste of the Property (but excluding any matter failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of can create Liens on any portion of the Property after (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default in any manner prohibited by Default, has received all Rents from the Loan Documents;
(ix) any Credit Party’s failure Property applicable to obtain Agent’s prior consent the period for which such insurance, taxes or other items are due, and thereafter fails to any Transfermake such payments), as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property it being acknowledged that if Borrower does not have sufficient cash flow except on a current basis to maintain insurance or to pay taxes and assessments or to pay charges for labor or materials or other charges or judgments (unless such charges were incurred following the extent occurrence and during the continuance of an Event of Default) that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance create Liens on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
Borrower shall have no liability under this clause (xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Partiesvii);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivviii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were (A) applied or returned to Tenants in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereofthereof or (B) previously delivered to Lender to be applied to repay the Loan;
(ix) any voluntary Liens, other than Permitted Encumbrances and Liens described in Sections 9.3(b)(vii) or 9.3(c)(B) hereof;
(x) any failure by Borrower to comply with any of the representations, warranties or covenants set forth in Sections 4.1.37 or 5.1.19 hereof;
(xi) the Violations; andprovided, however, that there shall be no liability pursuant to this clause (xi) with respect to a particular Violation at an Individual Property from and after the date that Borrower has cured such Violation and delivered to Lender an update to the applicable zoning report verifying such Violation has been cured;
(xii) [intentionally omitted];
(xiii) any failure by Borrower to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof to the extent such failure is not expressly covered by the full recourse event set forth in Section 9.3(c)(D) below;
(xiv) Borrower fails to obtain Lenxxx’x prior written consent to any Transfer that is not a Full Recourse Transfer, to the extent required pursuant to the terms of the Loan Documents;
(xv) any modifications[intentionally omitted];
(xvi) Borrower’s failure to comply with the provisions of Sections 5.1.9 hereof;
(xvii) criminal acts of Borrower or Guarantor, amendmentsor executives of Borrower or Guarantor, restatements and/or supplements made to resulting in the Ground Leaseseizure, Sublease forfeiture or the Observatory Lease without the consent of Agent and any termination loss of the Observatory Lease without Property;
(xviii) Borxxxxx, xcting in bad faith, fails to cooperate in transferring any licenses or permits requested by Lender in connection with any foreclosure of the consent Property, deed in lieu or other transfer of Agent. the Property to Lender or Lenxxx’x designee; or
(xix) if Guarantor, Borrower or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Note, the Security Instruments or any other Loan Document, (a) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any defense against Lender or any right in connection with any security for the Loan and (b) the court in any such action or proceeding determines that Guarantor’s, Borrower’s or such Affiliate’s defense or request for judicial intervention (1) was made by Guarantor, Borrower or such Affiliate with the intent to hinder, delay or otherwise interfere with Lender’s exercise of its remedies (whether at law or granted under the Loan Documents), or (2) was made in bad faith by Guarantor, Borrower or such Affiliate.
(c) Notwithstanding anything to the contrary in this Agreement, the Note or any of the other Loan Documents, Borrower shall be personally liable for the Debt if (A) Borrower fails to obtain Lenxxx’x prior written consent (to the extent such consent is required pursuant to the terms of the Loan Documents) to any Transfer (other than a Transfer approved by Lender or a Transfer in connection with Lender’s enforcement of its rights and remedies)
(1) that results in a change in Control over Borrower or (2) of any of the Property by deed, bill of sale, installment sales agreement or ground lease (excluding any lease to a Tenant in the ordinary course of business) (a “Full Recourse Transfer”); (B) except for any Permitted Encumbrances and Permitted Indebtedness, Borrower fails to obtain Lenxxx’x prior written consent to any Indebtedness or voluntary mortgage, deed of trust, collateral assignment or similar voluntary Lien (including a PXXX Xxxx) encumbering the Property; provided, however, in no event shall a mechanic’s or materialman’s Lien encumbering the Property apply to this clause (B); (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, which failure is cited as a factor in the substantive consolidation of Borrower with any other entity in connection with any proceeding under the Bankruptcy Code; (E) Borxxxxx xxmits, in any legal proceeding (other than Borrower admitting or making any truthful statement that it has been advised by counsel is required to be admitted or made under applicable laws, regulations or court orders), its insolvency or inability to pay its debts as they become due, provided that neither Agent Borrower nor Lenders Guarantor shall have liability under this clause (E) in connection with the delivery of financial statements or any other filing required to be delivered pursuant to a subpoena or any order entered in a bankruptcy proceeding or required under applicable law in connection with any such petition made by any Person which is not an Affiliate of Borrower; or (F) Borrower files, or consents in writing to, or acquiesces in, a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower or Guarantor colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any party (provided, however, that the failure to defend such an involuntary petition where no meritorious defense exists shall not be deemed “assisting” for purposes hereof).
(d) Nothing herein shall be deemed to have waived constitute a waiver by Lender of any right which Agent and/or Lenders Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing Debt.
(e) Notwithstanding anything to Lenders the contrary contained herein or in accordance with any of the other Loan Documents, Borrower shall not have any liability pursuant to this Section 9.3 if a court of competent jurisdiction issues a final non-appealable judgement that any acts or omissions creating liability hereunder were caused by the fraud, bad faith, willful misconduct or gross negligence of Lender or Servicer.
(f) Notwithstanding anything to the contrary contained in the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in with respect to the Guarantor under the Guaranty and the Environmental Indemnity, neither Guarantor, nor any officer, director, shareholder, partner, member, principal, employee of, shall have any personal liability for, nor be joined as a party to, any action with respect to (i) the payment of any sum which is or may be payable under this Agreement or the Loan Documents, or (ii) the performance or discharge of any covenants, obligations or undertakings of Borrower. In addition to the foregoing, in no event will the assets of any officer, director, shareholder, partner, member, principal, employee of Borrower or Guarantor be available to satisfy any obligation of Guarantor thereunder.
(g) Notwithstanding the foregoing provisions of this Section 9.3 or anything to the contrary in this Agreement or the other Loan Documents, (i) Guarantor shall have no liability under Sections 9.3(b)(ix), (xiii), or (xiv) or Controlling either party comprising BorrowerSection 9.3(c) for Permitted Equipment Financing or Permitted Trade Payables that constituted Permitted Equipment Financing or Permitted Trade Payables when incurred but, due to insufficient cash flow at the Property, subsequently breaches the definition of Permitted Equipment Financing or Permitted Trade Payables by being outstanding for longer than any time period specified in such definitions, or by exceeding the event that: one percent (1%) or two percent (2%) cap, as applicable, specified in such definitions, and (ii) Guarantor shall have no liability under any Credit Party files of the Loan Documents with respect to liabilities or obligations arising from events, acts, omissions, facts or circumstances first occurring from and after the date that Lender (or any Affiliate, designee, agent, nominee, successor to or assignee of Lender) takes title to the Property or the ownership interests in Borrower pursuant to a voluntary petition foreclosure, deed-in-lieu of foreclosure, assignment-in-lieu of foreclosure, other exercise of remedies under the Bankruptcy Code Loan Documents or any other Federal or state bankruptcy or insolvency law; (2) an Affiliatemeans, officer, trustee, director, or representative and which Controls, directly or indirectly, any Credit Party or do not arise as a result of the acts of Guarantor files or any Credit Party Affiliate thereof; provided, however, that Guarantor’s liability shall be automatically reinstated upon any such foreclosure or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code conveyance being set aside, rescinded or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableinvalidated.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders (a) Optionee agrees that it shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Optionor to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents Agreement by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except Optionor Exculpated Party (as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lendershereinafter defined), and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx sue for, seek or demand any deficiency money judgment against Borrower any direct or indirect member, manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionor, or any such action director, officer, agent, attorney, employee or proceeding trustee of any of the foregoing (each, an “Optionor Exculpated Party” and, collectively, the “Optionor Exculpated Parties”) under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 21(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced of Optionor hereunder; or secured by any of the Loan Documents; (bii) impair the right of Agent or Lenders Optionee to name any Credit Party Optionor as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; this Agreement.
(cb) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to Optionor agrees that it shall not enforce the liability and obligation of Borrower Optionee to perform and observe the obligations contained in this Agreement by any action or Guarantorproceeding against any Optionee Exculpated Party (as hereinafter defined), by and shall not sue for, seek or demand any money judgment against any direct or otherwiseindirect member, to the extent manager, shareholder, partner, beneficiary or other owner of beneficial ownership interests in Optionee, or any director, officer, agent, attorney, employee or trustee of any lossof the foregoing (each, damagean “Optionee Exculpated Party” and, costcollectively, expense, liability, claim the “Optionee Exculpated Parties”) under or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out reason of or in connection with the following:
this Agreement. The provisions of this Section 21(b) shall not, however, (i) constitute a waiver, release or impairment of any material intentional misrepresentation by any Credit Party in connection with the Loan;
obligation of Optionee hereunder; or (ii) impair the fraudulent acts right of Optionor to name Optionee as a party defendant in any action or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);suit under this Agreement.
(iiic) during a Trigger Period or during The provisions of this Section 21 shall survive the continuance of an Event of DefaultClosing, any misappropriation the expiration of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) Option Period and the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements termination of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Mta Project Documents
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s 's or Borrower Principal's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx not, except as otherwise provided in this Section 15.1, sue for, seek or demand any deficiency judgment against Borrower or Xxrrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, the Environmental Indemnity, Section 13.5 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower's misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) Borrower's failure to pay Taxes, Other Charges (except to the misappropriation extent that sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and there exists no impediment to Lender's utilization thereof), charges for labor or materials or other charges that can create liens on the Property beyond any applicable notice and cure periods specified herein;
(vi) Borrower's failure to return or to reimburse Lender for all Personal Property taken from the Property by or on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value;
(vii) any act of intentional waste or arson by Borrower, any principal, Affiliate, member or general partner thereof or by Borrower Principal, any principal, Affiliate, member or general partner thereof;
(viii) Borrower's failure following any Event of Default to deliver to Lender upon demand all Rents and books and records relating to the Property; or
(ix) Borrower's gross negligence or willful misconduct.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability against Borrower and Borrower Principal as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower and Borrower Principal jointly and severally in the event of (i) a default by Borrower, Borrower Principal of any of the covenants set forth in Article 6, provided, however, that a breach by Borrower of the covenants set forth in Article 6 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a new or revised substantive non-consolidation opinion, in form and substance and from counsel reasonably satisfactory to Lender in accordance with the Rating Agency standards for the same, to the effect that such failure does not negate/impair the opinion previously delivered to Lender, (ii) a default by Borrower, Borrower Principal or of any of the covenants set forth in Article 7 hereof, or (iii) if (A) any insurance proceeds paid a voluntary bankruptcy or insolvency proceeding is commenced by reason of any loss, damage or destruction to the PropertyBorrower, or (B) any Awards an involuntary bankruptcy or other amounts received insolvency proceeding is commenced against Borrower which is not dismissed within ninety (90) days of filing (provided, however, that Borrower and Borrower Principal shall not have recourse liability hereunder in connection with the Condemnation of all any involuntary bankruptcy or a portion of the Property insolvency proceeding unless such involuntary proceeding is solicited, procured, consented to or acquiesced in by ManagerBorrower, if applicable (so long as Manager is an any Affiliate of any Credit Party Borrower or Guarantor Borrower Principal in bad faith collusion with an intent to circumvent the prohibition on recourse liability against the Borrower or any Affiliate thereofBorrower Principal set forth herein), any Credit Party or Guarantor or any Affiliate thereof;.
(vid) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan Documents.
(e) Notwithstanding any provisions of this Article 15 to the contrary, and (B) the Debt in no event shall be fully recourse Borrower's failure to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided pay Operating Expenses in the Guaranty and Environmental Indemnityevent cash flow is insufficient to pay such expenses be considered an act of waste.
(f) or Controlling either party comprising BorrowerNotwithstanding any other provision hereof, in the event that: (1) any Credit Party files that of a voluntary petition foreclosure under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2pledge agreement(s) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, executed by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or Senior Mezzanine Borrower and/or Junior Mezzanine Borrower in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Senior Mezzanine Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Junior Mezzanine Loan, and the subsequent transfer of interests in each Borrower to Senior Mezzanine Lender or Junior Mezzanine Lender, Borrower Principal shall be released from its liabilities under this Article 15 with respect to any matters arising from events occurring subsequent to the date of (I)such transfer, (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions as of the Sublease or Observatory Lease are void, voidable or unenforceableeffective date of such transfer of interests in Borrower.
Appears in 1 contract
Exculpation. Subject (a) Notwithstanding any provision in this Agreement and the other Loan Documents to the contrary, but subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor with respect to its obligations under the Guaranty and the Environmental Indemnity Agreement) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided hereinin this Section 13.1, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Sections 12.2 and 12.3 hereof, Section 11.2 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d4) impair the right of Agent or Lenders Lender to obtain seek the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) intentionally omitted; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower if necessary in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation or any intentional failure to disclose a material fact by Borrower, any Credit SPE Component Entity, Guarantor, Sponsor, or any Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Guarantor Guarantor, Sponsor, or Managerany Borrower Party in connection with the Loan or the commission of a criminal act by Borrower, if applicable (so long as Manager is an Affiliate any SPE Component Entity, Guarantor, Sponsor or any Borrower Party which results in any seizure or forfeiture of the Property, or any Credit Party portion thereof, or Guarantor)Borrower’s interest therein;
(iii) during a Trigger Period material physical waste to the Property caused by the intentional acts or during intentional omissions of Borrower, any SPE Component Entity, Guarantor, Sponsor, or any Borrower Party (including, without limitation, any arson or abandonment of the continuance Property) and/or the removal or disposal of any portion of the Property after an Event of DefaultDefault by Borrower, any misappropriation SPE Component Entity, Guarantor, Sponsor or any Borrower Party, unless any personal property that is removed or disposed of is replaced with personal property of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party same utility and the same or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofgreater value;
(iv) the failure of the Observatory Tenantmisapplication, during the continuance of an Event of Default misappropriation or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(viC) any failure by Manager, if applicable Rents or (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viiiD) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any Tenant security deposits, advance deposits or any other deposits Rents collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereofadvance, except to the extent any such security deposits were applied in accordance with applicable Leases;
(v) failure to pay any Taxes or Other Charges, charges for labor or materials or any other charges that can create liens on any portion of the Property to the extent that the net excess cash flow from the Property is sufficient to pay such amounts (other than (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed or charges for labor or materials or any other charges that can create liens on any portion of the Property that are contested strictly in accordance with the terms and conditions of the Loan Documents);
(vi) failure to maintain insurance as required by this Agreement to the extent that the net excess cash flow from the Property is sufficient to pay the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Insurance Reserve Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance Premiums);
(vii) the breach of any of representation, warranty, covenant or indemnification provision in the Leases prior to Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances;
(viii) any fees or commissions paid by Borrower after the occurrence of the any Event of Default that gave rise to such foreclosure or transfer Guarantor, Sponsor and/or any Affiliate of Borrower, Guarantor and/or Sponsor in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination violation of the Observatory Lease without terms of the consent of Agent. Notwithstanding anything to the contrary in Note, this Agreement, the Note Security Instrument or any of the other Loan Documents;
(ix) Borrower’s breach of, or failure to comply with, the representations, warranties and covenants contained in Sections 11.2, 12.2 and 12.3 hereof;
(Ax) neither Agent nor Lenders shall be deemed Borrower fails to have waived any right which Agent and/or Lenders may have under Section 506(a)appoint a new property manager upon the request of Lender as required by, 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders and in accordance with the terms and provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents, and ;
(B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1xi) any Credit Party files a voluntary petition under the Bankruptcy Code representation, warranty or covenant contained in Article 5 hereof is violated or breached; provided, however, that any other Federal such breach or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection violation with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.respect to
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Borrowers to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrowers or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrowers (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrowers only to the extent of such Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower Borrowers or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party each Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against each Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against each Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or Guarantoreach Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to the qualifications below Buyer agrees that it does not have and except as set forth in the Guaranty and Environmental Indemnitywill not have any claims or causes of action against any disclosed or undisclosed officer, neither Agent nor Lenders shall enforce the liability and obligation director, employee, trustee, property manager, shareholder, partner, principal, parent, subsidiary or other affiliate of the Borrower Seller, including, without limitation, Xxxxx, Xxxxx Real Estate Funds, Inc., or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Noteofficer, this Agreementdirector, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyemployee, except that Agent may bring a foreclosure actiontrustee, terminate the Ground Leaseshareholder, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documentspartner, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in principal of any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Propertyparent, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans subsidiary or other Obligations of Borrower. The provisions of this Section shall notaffiliate (collectively, however“Seller’s Affiliates”), (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with this Agreement or the following:
transactions contemplated hereby (i) including, without limitation, under any material documents executed pursuant hereto), except in the event of fraud or any intentional misrepresentation by of such party. Buyer agrees to look solely to Individual Sellers and their assets for the satisfaction of any Credit Party liability or obligation arising under this Agreement, the transactions contemplated hereby or the documents executed pursuant hereto, or for the performance of any of the covenants, warranties or other agreements contained herein or therein, and, except in the event of fraud or any intentional misrepresentation of such party, further agrees not to xxx or otherwise seek to enforce any personal obligation against any of Seller’s Affiliates with respect to any matters arising out of or in connection with this Agreement, the Loan;
(ii) transactions contemplated hereby or the fraudulent acts or willful misconduct documents executed pursuant hereto. Without limiting the generality of the foregoing provisions of this Section 13(o), Buyer hereby unconditionally and irrevocably waives any and all claims and causes of action of any Credit Party, Guarantor nature whatsoever it may now or Manager, if applicable hereafter have against Seller’s Affiliates (so long as Manager is an Affiliate except for a claim or cause of any Credit Party action for fraud or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereofintentional misrepresentation against such party), and hereby unconditionally and irrevocably releases and discharges Seller’s Affiliates from any Credit Party, Guarantor and all liability whatsoever which may now or any Affiliate thereof;
hereafter accrue in favor of Buyer against Seller’s Affiliates (iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that relating to fraud or any intentional misrepresentation by such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iiiparty), (iv), (v) and (vi) above);
(viii) any removal in connection with or disposal arising out of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note transactions contemplated hereby or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other documents executed pursuant hereto. The provisions of this Section 13(o) shall survive the Bankruptcy Code to file a claim for termination of this Agreement and the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableClosing.
Appears in 1 contract
Samples: Real Estate Purchase and Sale Agreement (Cole Corporate Income Trust, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgages and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgages or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Operating Lessee as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgages; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgages and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgages; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any material fraud or intentional misrepresentation by Borrower, Operating Lessee, Guarantor or any Credit Party Affiliate of any of the foregoing in connection with the execution and the delivery of this Agreement, the Note, the Mortgages, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period Remington’s or any Exculpated Party’s misapplication, misappropriation or conversion of Rents received by Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication, misappropriation or conversion of tenant security deposits (including the failure of to deliver to Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the Observatory Tenant, during extent not applied in accordance with the continuance applicable Leases prior to the occurrence of an Event of Default Default) or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Rents collected in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsadvance;
(v) the misapplication, misappropriation or conversion of (A) Insurance Proceeds or Awards by any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofExculpated Party;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Insurance Premiums, Other Charges (provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and Trade Payables being contested in accordance with Section 4.1.2Borrower has not made a claim against such escrowed amounts or otherwise taken action to restrict Lender from applying such sums for the purpose of paying such items) or (B) there is insufficient cash flow from the operation of the Properties to pay such items), charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and cure periods specified herein;
(vii) intentional physical waste Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Individual Property by or on behalf of Borrower or Operating Lessee and not replaced with Personal Property of the Property (but excluding any matter that arises by reason same utility and of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)same or greater value;
(viii) material physical waste to any removal Individual Property caused by the intentional acts or disposal omissions of any portion Exculpated Party when there is sufficient cash flow from the operation of the any Individual Property after an Event of Default in any manner prohibited by the Loan Documentsto avoid such waste from occurring;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)intentionally omitted;
(x) Borrower’s assertion or raising of any defense to a voluntary Lien remains an encumbrance on all proceeding instituted by Lender (whether judicial or any portion otherwise) for the foreclosure of the Property, Mortgages following an Event of Default caused by Borrower’s failure to timely pay the Operating Lease Monthly Payment Amount or the Observatory Lease Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be without merit or brought in violation of the Loan Documentsbad faith;
(xi) subject Borrower’s failure to the provisions of Section 8.3(a)(v), the failure by any Credit Party pay to comply Lender each PIP Required Deposit in accordance with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)terms hereof;
(xii) the incurrence breach of Indebtedness any representation, warranty or covenant of (i) any Borrower with respect to itself or any SPE Component Entity set forth in violation Article 6 hereof (other than Section 6.1(a)(xv) and (xviii)) or (ii) any Operating Lessee with respect to itself or any Operating Lessee Principal as set forth in Paragraph 15 of the Loan DocumentsOperating Lease Subordination Agreement (other than Paragraph 15(h) and (q) thereof);
(xiii) with respect to the breach Individual Property commonly referred to as the Marriott Xxxxxxx Hills, any amounts paid by Lender to the related Manager or Franchisor, as applicable, in respect of any indemnification provision unreimbursed or unamortized key money in connection with the Environmental Indemnity termination by Borrower or Operating Lessee of such Manager or Franchisor under the related Management Agreement concerning environmental lawsor Franchise Agreement, Hazardous Substances and asbestos;as the case may be; or
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Individual Property which are not delivered commonly referred to Agent upon a foreclosure of the Property or transfer in lieu thereofas One Ocean, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to following the occurrence of the Event of Default that gave rise to such foreclosure a Casualty or transfer in lieu thereof; and
Condemnation, any shortfall (xvwhich shortfall shall be reasonably determined by Lender) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, between (A) neither Agent nor Lenders shall be deemed the sum of any Net Proceeds and any insurance proceeds referred to have waived any right which Agent and/or Lenders may have under in Section 506(a), 506(b), 1111(b8.1(a)(iii) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Allocated Loan Amount of such Individual Property, but only solely due to the fact, if applicable, that the complete Restoration of such Individual Property is not permitted by applicable law due to any legal nonconforming status of such Individual Property.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower in the event (i) of a breach by Borrower, but not to any holder of a direct or indirect interest in ESBA SPE Component Entity, Operating Lessee or any party supervising either party comprising Borrower Operating Lessee Principal of any of the covenants set forth in Article 6 hereof or Paragraph 15 of the Operating Lease Subordination Agreement, as applicable, that is cited as a factor in a court’s decision that results in a substantive consolidation (other than as provided a substantive consolidation petitioned for or joined in by Lender) of Borrower or Operating Lessee with any other Person (excluding another Borrower or Operating Lessee) in a proceeding under any Creditors’ Rights Laws, (ii) Borrower or Operating Lessee incurs any voluntary secured Indebtedness other than the Debt and Permitted Debt (excluding Indebtedness relating to trade payables incurred in the Guaranty and Environmental Indemnityordinary course of business, mechanic’s or other similar liens, such as statutory liens, judgment liens or lis pendens) without the prior written consent of Lender or Controlling either party comprising Borrowerexcept as expressly permitted in this Agreement, in (iii) of the event that: occurrence of a Prohibited Transfer (1excluding a mortgage foreclosure or deed-in-lieu of foreclosure); (iv) any Credit Party files a voluntary petition under the Bankruptcy Code Properties or any other Federal or state part thereof shall become an asset in a bankruptcy or insolvency law; proceeding initiated by Borrower or Operating Lessee, (2v) an Borrower, Operating Lessee, Guarantor or any Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party Borrower, Operating Lessee or Guarantor files files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower or Operating Lessee under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors or colludes with petitioning creditors for the filing of any involuntary petition against any Credit Party Borrower or Operating Lessee from any PersonPerson under any Creditors Rights Laws; (3vi) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Operating Lessee files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vii) other than with the written consent of Lender, any Affiliate, officer, trustee, director, or representative which Controls any Credit Party Borrower or Guarantor Operating Lessee consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower, Operating Lessee or any portion of the PropertyProperties; (6viii) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; [intentionally omitted] or (7ix) in connection with any enforcement action or exercise or assertion [intentionally omitted].
(d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or remedy upon any other provision of the continuance U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Mortgages or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Mortgages or the other Loan Documents.
(e) Notwithstanding anything to the contrary in this Section 15.1, (i) Borrower and Guarantor shall have no liability under this Section 15.1 to the extent such liability solely arises (1) as a result of any exercise of remedies, foreclosure, deed-in-lieu of foreclosure or assignment-in-lieu of foreclosure by Lender, Senior Mezzanine Lender or Junior Mezzanine Lender, (2) as a result of an Event act or omission of Default and acceleration (A) Lender or a third-party purchaser following Lender or such third-party taking title to the Properties pursuant to a foreclosure, deed-in-lieu of foreclosure or otherwise or (B) a court appointed receiver after such receiver takes control of the Loan by or on behalf day-to-day operations of the Agent Properties or (3) as a result of an act or omission of Senior Mezzanine Lender, Junior Mezzanine Lender, a third-party purchaser or any Affiliate or subsidiary of any of the foregoing following a foreclosure or an assignment-in-lieu of foreclosure of the Senior Mezzanine Loan or the Junior Mezzanine Loan; unless in each case, such act or omission was caused by Borrower, Guarantor or any of their respective Affiliates (but only prior to such Exculpated Party becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any purchaser at any foreclosure of the Mortgage Loan, the Senior Mezzanine Loan or the Junior Mezzanine Loan) or such acts or omissions are the proximate result of acts, events, conditions, or circumstances that existed prior to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, whether or not discovered prior or subsequent to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, provided, however, Borrower and Lenders Guarantor will bear the burden of proof to show that an event triggering liability of Borrower or Guarantor under this Section 15.1 first occurred after such foreclosure, deed in lieu of foreclosure or assignment in connection with lieu of foreclosure, was not the proximate result of events that first occurred prior to such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure and was not caused by any Exculpated Party (but only prior to such Exculpated Party becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any purchaser at any foreclosure of the Mortgage Loan, the Senior Mezzanine Loan or the Junior Mezzanine Loan) or their respective Affiliates; (ii) Borrower and Guarantor shall have no liability under Section 15.1(b) to the extent such liability solely arises after (1) Lender or a third-party has taken title to the Properties pursuant to a foreclosure, deed-in-lieu of foreclosure or otherwise or (2) a court appointed receiver has taken control of the day-to-day operations of the Properties; and (iii) no Operating Lessee shall have any liability under this Section 15.1, the Guaranty, Mortgageor the Environmental Indemnity, Subordinations, Negative Pledges except to the extent that such liability arises as a result of any act or any other Loan Document, any Credit Party, or Manager, if applicable omission of such Operating Lessee (if the Manager is but only prior to such Operating Lessee becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief purchaser at any foreclosure of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Mortgage Loan, in each of (Ithe Senior Mezzanine Loan or the Junior Mezzanine Loan), provided, however, such Operating Lessee will bear the burden of proof to show that an event triggering liability of Operating Lessee under this Section 15.1 was not caused by Operating Lessee (II) but only prior to such Operating Lessee becoming an Affiliate of Lender, Senior Mezzanine Lender or (III) that Junior Mezzanine Lender or any purchaser at any foreclosure of the Subordinations Mortgage Loan, the Senior Mezzanine Loan or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableJunior Mezzanine Loan).
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower{12282340:5} 114 Xxxxxxxx’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any guaranty or indemnification agreement indemnity made in connection with the Loan (including, without limitation, indemnities set forth in Article 11 hereof, Section 9.2 hereof, in the Guaranty and in the Environmental Indemnity) or any of the rights and remedies of Agent or Lenders Lender thereunder; (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiverreceiver or to enforce its rights and remedies provided in Articles 7 and 8 hereof; (e5) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by the Security Instrument (provided, that, such deficiency judgment will only be enforceable against Borrower to the extent of its interest in connection with the Loan Property) or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss actually incurred by Agent and/or any Lender Xxxxxx (including reasonable attorneys’ fees and costs expenses reasonably incurred) arising out of or in connection with the following:
: (i) any material intentional fraud or willful misrepresentation by any Credit Borrower Party in connection with the Loan;
; (ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
; (iii) during any litigation or other legal proceeding related to the Debt filed by any Borrower Party or any other action of any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents unless a Trigger Period court of competent jurisdiction finds that such action is not frivolous, not brought in bad faith, not wholly without merit, and not wholly without basis in fact or during law; (iv) material physical waste to the continuance Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Property after an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
; (v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is an Affiliate of C) any Credit Party Rents, (D) any Tenant security deposits or Guarantor Rents collected in {12282340:5} 115 advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party amounts deposited in the Accounts and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereof;
at the direction of) Borrower); (vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste charges for labor or materials or other charges that can create liens on any portion of the Property (but excluding any matter that arises by reason except, in the case of lack of cash flow with respect Taxes, to the Propertyextent that (x) the revenue from the Property is insufficient to pay such amounts or (y) amounts sufficient to pay such Taxes have been deposited with Lender hereunder or with Senior Lender under the Senior Loan Agreement and, in either case, allocated for the payment of such Taxes, and Lender or Senior Lender, as applicable, does not apply the same in payment thereof in violation of the Senior Loan Agreement); (vii) failure to pay Insurance Premiums (except to the extent that such lack of cash flow arises (x) the revenue from the misappropriation Property is insufficient to pay such amounts or (y) amounts sufficient to pay such Insurance Premiums have been deposited with Lender hereunder or with Senior Lender under the Senior Loan Agreement and, in either case, allocated for the payment of revenue with respect to the Property as described in clauses (iii)such Insurance Premiums, (iv), (v) and (vi) above);
(viii) any removal Lender or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any TransferSenior Lender, as applicable, as required by does not apply the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described same in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease payment thereof in violation of the Senior Loan Documents;
(xi) subject Agreement, to maintain the provisions of Section 8.3(a)(v), the failure by any Credit Party Policies in full force and effect and/or to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation provide Lender evidence of the assets of any Credit Party with the assets of another Person same, in each case, as expressly provided herein; (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivviii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of Lender or Senior Lender in accordance with the Property or transfer in lieu thereofSenior Loan Documents, as applicable, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default or a Senior Loan Event of Default that gave rise to the requirement that such foreclosure or transfer in lieu thereofdeposits be delivered; and
(xvix) any modifications, amendments, restatements tax on the making and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination recording of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this AgreementSecurity Instrument, the Note or any of the other Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) Documents or the Senior Loan Documents or any other provisions transfer or similar taxes (whether due upon the making of the Bankruptcy Code to file a claim for the full amount same or upon Lender’s exercise of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with its remedies under the Loan Documents, and (B) the Debt shall be fully recourse to Borrower), but not to excluding any holder income, franchise or other similar taxes; (x) any forfeiture or seizure of a direct or indirect interest in ESBA the Property (or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnityportion thereof and/or interest therein) resulting from a violation or Controlling either party comprising Borrower, in the event that: (1) breach of any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency applicable law; (2xi) an Affiliateany violation or breach of any representation, officer, trustee, director, warranty or representative which Controls, directly covenant contained in Sections 3.24 or indirectly, any Credit Party 4.23 hereof or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any PersonExhibit C attached hereto; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4xii) any Credit Party files an answer joining violation or breach of any representation, warranty or covenant contained in any involuntary petition filed against it, by any Article 6 hereof other Person under than the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment occurrence of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.Prohibited Transfer;
Appears in 1 contract
Samples: Junior Loan Agreement (Silver Star Properties Reit, Inc)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Xxxxxx’s right to enforce said rights and remedies against Xxxxxxxx and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt filed by any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate Borrower Party or any other action of any Credit Borrower Party exercised in bad faith that delays, opposes, impedes, obstructs, hinders, enjoins or Guarantor otherwise interferes with or frustrates the efforts of Lender to exercise any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofrights and remedies available to Lender as provided herein and in the other Loan Documents;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property by (or on behalf of) any Borrower Party after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party Reserve Funds and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereofat the direction of) Borrower);
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions hereof , in each case, to the extent there existed sufficient cash flow from the Property to do so (provided, however, that there shall be no personal liability under this subsection (vi) solely for the failure to pay Taxes if (A) sufficient sums had been reserved hereunder for the express purpose of paying the Taxes in question and Lender failed to pay same, (B) Xxxxxx’s access to such sums was not restricted or constrained in any manner and (C) no Event of Default was continuing);
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter provided, however, that arises by reason of lack of cash flow with respect to there shall be no personal liability under this subsection (vii) for the Property, except aforementioned failures to the extent that such lack that, in each case, (A) each applicable failure is itself a failure to pay Insurance Premiums or is solely as a result of a failure to pay Insurance Premiums and (B)(1) there existed insufficient cash flow arises from the misappropriation Property to pay Insurance Premiums or (2)(I) sufficient sums had been reserved hereunder for the express purpose of revenue with respect paying the Insurance Premiums in question and Lender failed to the Property as described in clauses (iii)pay same, (iv), (vII) Lender’s access to such sums was not restricted or constrained in any manner and (viIII) aboveno Event of Default was continuing);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(ix) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Xxxxxx’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(x) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure to make any REMIC Payment and/or any True Up Payment, to permit on-site inspections of the Property (or any portion thereof) and/or to provide the Required Financial Items, in each case, as and when required herein;
(xii) any violation or breach of the Property Document Provisions and/or any Property Document Event;
(xiii) any Claimed Water Leaks (including, without limitation, any Losses incurred due to any remedial action taken by any tenant in connection with the Claimed Water Leaks);
(xiv) any indemnity obligations of Lender to Bank under the Restricted Account
(xv) the failure of Borrower to appoint a New Manager upon the request of Xxxxxx and/or the failure of Borrower to comply with any modificationslimitations on instructing the Manager, amendmentseach as required by and in accordance with, restatements as applicable, the terms and provisions of, this Agreement, the Assignment of Management Agreement and the Security Instrument;
(xvi) any violation or breach of any representation, warranty or covenant contained in Article 5 hereof;
(xvii) any failure of a PCO to be in place at the Property and/or supplements made any breach of Section 4.25 hereof;
(xviii) any failure to (a) obtain, maintain, and/or have in place a current certificate of occupancy at the Ground LeaseProperty that complies with all Legal Requirements, Sublease (b) update any certificate of occupancy or obtain any new certificate of occupancy at any time as required by Legal Requirements, and/or (c) to operate the Observatory Lease Property in a manner consistent with the certificate of occupancy that is in place at the Property (including, without limitation, any failure to operate the consent Property in accordance with the specified uses listed on the then current certificate of Agent and occupancy).
(xix) any termination violation or breach of the Observatory Lease Cash Management Provisions; and/or
(xx) any claims to divest, subordinate or extinguish the lien of the Security Instrument (including, without limitation, any such claims resulting from any breach or other failure to comply with Section 22 of the consent of Agent. New York Lien Law).
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party files representation, warranty or covenant contained in Article 5 or Article 6 hereof is violated or breached (provided, that, with respect to any such violation or breach of Article 5 hereof, such violation or breach is evidenced by a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawcourt, in which a proceeding with respect to Creditors Rights Laws involving any Credit Party one or Guarantor colludes with, or otherwise assists more Constituent Owner(s) of Borrower and/or SPE Component Entity (any such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any a “Bankrupt Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it”), by any other Person under ordering the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion substantive consolidation of the Property; assets and liabilities of Borrower and/or SPE Component Entity with the assets and liabilities of any Bankrupt Person on the basis of, among other things, such violation or breach) or (6ii) any Credit Party makes a general assignment for Bankruptcy Event occurs.
(c) Borrower hereby personally guarantees (without the benefit of creditors, or admits, the exculpation provisions provided in writing or in any legal proceeding, its insolvency or inability to pay its debts Section 13.1 hereof) payment (as they become due unless such admission is true; or (7and when due) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by obligations set forth in Section 8.9(a)(i) hereof (including, without limitation, payment (as and when due) of each Renewal Tenant Reserve Monthly Deposit and any Renewal Tenant Reserve True Up). For purposes of clarification and for the avoidance of doubt, the recourse carveouts in Section 13.1(a) above and this Section 13.1(b) shall not be deemed to be mutually exclusive or on behalf of otherwise limit one another; without limiting the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Managerforegoing, if applicable (if the Manager is an Affiliate of any Credit Party a particular event, condition, circumstance or Guarantoroccurrence would trigger recourse liability both under Section 13.1(a) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (Iabove and this Section 13.1(b), recourse liability shall apply under all of such Sections (II) or (III) that as and to the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableextent provided in such Sections).
Appears in 1 contract
Samples: Loan Agreement (Clipper Realty Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Section 12.6, Section 13.5 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards. Confidential Treatment Requested by BANA XXXX-Xxxx-00170
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction Borrower’s failure to pay real estate taxes with respect to the Property; provided, that Borrower and Borrower Principal shall not be personally liable under this Section 15.1(b)(v) to the extent there is insufficient income from the Property to pay such real estate taxes or to the extent such real estate taxes accrue after the date (i) a receiver has been appointed for the Property, (ii) Lender obtains control of the cash flow from the Property to the exclusion of Borrower pursuant to Article 10 hereof or otherwise, or (Biii) any Awards or other amounts received escrowing for real estate taxes has commenced and is continuing in connection accordance with the Condemnation provisions of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofthis Agreement;
(vi) any failure act of intentional waste or arson by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor)Borrower, any Credit Party principal, Affiliate, member or Guarantor general partner thereof or by Borrower Principal, any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxesprincipal, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)Affiliate, member or general partner thereof;
(vii) intentional physical waste Borrower’s failure following any Event of the Property (but excluding any matter that arises by reason of lack of cash flow with respect Default to deliver to Lender upon demand all Rents and books and records relating to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);; or
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;Borrower’s willful misconduct.
(ixc) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by Notwithstanding the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Propertyforegoing, the Operating Lease or the Observatory Lease in violation agreement of the Loan Documents;
(xi) subject Lender not to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those pursue recourse liability as set forth in Section 4.2.19 hereof if such failure leads subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision Borrower and Borrower Principal jointly and severally in the Environmental Indemnity Agreement concerning environmental lawsevent of (i) a default by Borrower, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits Borrower Principal or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions SPE Component Entity (if any) of any of the Leases prior covenants set forth in Article 6 or Article 7 hereof, or (ii) if the Property or any part thereof shall become an asset in a Voluntary Bankruptcy Proceeding; provided, however, that (I) a breach by Borrower or any SPE Component Entity of the covenants set forth in Article 6 hereof shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a new or revised substantive non-consolidation opinion, in form and substance and from counsel reasonably satisfactory to Lender in accordance Confidential Treatment Requested by BANA XXXX-Xxxx-00171 with the Rating Agency standards for the same, to the occurrence effect that such failure does not negate/impair the opinion previously delivered to Lender; or (II) a breach of the Event covenants set forth in Article 7 hereof (other than by virtue of Default a Specified Article 7 Breach) shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender confirmation from each Rating Agency that gave rise such breach and its cure will not result in a downgrade, withdrawal or qualification of the initial, or if higher, then current ratings issued in connection with a Securitization, or if a Securitization has not occurred, any ratings to such foreclosure or transfer be assigned in lieu thereof; andconnection with a Securitization.
(xvd) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b111l(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Loan Agreement (Sothebys)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreement or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (ciii) affect the validity or enforceability of any indemnity (including, without limitation, those contained in Section 12.6, Section 13.5 and Article 14 of this Agreement), guaranty or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreement and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) [reserved]; (v) [reserved]; or (vi) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Mortgage Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower, Mortgage Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Pledge Agreement, any of the other Loan Documents or the Mortgage Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower’s, Mortgage Borrower’s or Mortgage SPE Component Entity’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower’s, Mortgage Borrower’s or during the continuance of an Event of Default, any Mortgage SPE Component Entity misapplication or misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) Borrower’s or Mortgage Borrower’s misapplication or the misappropriation of (A) Net Liquidation After Debt Service or any insurance proceeds paid by reason distributions or other payments made in respect of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion part of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofthe Collateral;
(vi) any failure by Manager, if applicable (so long as Manager is Borrower’s making a distribution to its equity owners after the occurrence of an Affiliate Event of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)Default;
(vii) intentional physical waste of the Property Borrower’s or Mortgage Borrower’s failure to pay Taxes, Other Charges (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except (a) to the extent that sums sufficient to pay such lack of cash flow arises from the misappropriation of revenue amounts have been deposited in escrow with respect Lender pursuant to the terms hereof and there exists no impediment to Lender’s utilization thereof or (b) to the extent the Net Operating Income of each respective Property as described in clauses (iiiencumbered by a Mortgage was insufficient to permit payment of the same by Borrower), (iv), (v) charges for labor or materials or other charges that can create liens on the Property beyond any applicable notice and (vi) above)cure periods specified herein;
(viii) any removal Borrower’s failure to return or disposal to reimburse Lender for all Personal Property taken from the Properties by or on behalf of any portion Borrower or Mortgage Borrower and not replaced with Personal Property of the Property after an Event same utility and of Default in any manner prohibited by the Loan Documentssame or greater value;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to act of actual waste or arson by Borrower, Mortgage Borrower, Mortgage SPE Component Entity, any Transferprincipal, as applicableAffiliate, as required member or general partner thereof or by the Mortgage Borrower Principal, any principal, Affiliate, member or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)general partner thereof;
(x) a voluntary Lien remains an encumbrance on Borrower’s, Mortgage Borrower’s or Mortgage SPE Component Entity’s failure following any Event of Default to deliver to Lender upon demand all or any portion of Rents and books and records relating to the Property, the Operating Lease or the Observatory Lease in violation of the Loan DocumentsProperties;
(xi) subject to the provisions of Section 8.3(a)(v)Borrower’s, the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)Mortgage Borrower’s or Mortgage SPE Component Entity’s gross negligence or willful misconduct;
(xii) the incurrence payment of Indebtedness any recording taxes, mortgage taxes or documentary stamp taxes or other charges required in connection with any Mortgage or the other Loan Documents, whenever due, together with any fines, interest, penalties or similar charges resulting from the non-payment thereof;
(xiii) any fees or commissions paid by Borrower to Mortgage SPE Component Entity or any Affiliate of Borrower, Mortgage SPE Component Entity or Borrower Principal, in violation of the terms of this Agreement, the Note, the Pledge Agreement or the other Loan Documents;
(xiiixiv) Borrower’s failure to comply with the provisions of Sections 12.1 and 12.2 of this Agreement; or
(xv) the breach Ground Lease being modified, cancelled or terminated by Borrower without the prior written consent of any indemnification provision Lender.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall become fully recourse to Borrower and Borrower Principal, jointly and severally, in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
event (xivi) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon of a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions breach of any of the Leases prior to provisions set forth in Article 6, except the occurrence extent that such breach was inadvertent, immaterial and is promptly cured, (ii) of the Event a breach of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documentscovenants set forth in Article 7 hereof, (iii) any Individual Property or any part thereof shall become an asset in (A) neither Agent nor Lenders a voluntary bankruptcy or insolvency proceeding of Borrower, Mortgage Borrower, Mortgage SPE Component Entity, or Borrower Principal, or (B) an involuntary bankruptcy or insolvency proceeding of Borrower, Mortgage Borrower, Mortgage SPE Component Entity, or Borrower Principal in connection with which Borrower, Mortgage Borrower, Mortgage SPE Component Entity, Borrower Principal, SPE Component Entity or any Affiliate of any of the foregoing has or have colluded in any way with the creditors commencing or filing such proceeding or (iv) if Borrower, Mortgage Borrower, Mortgage SPE Component Entity or any Affiliate of Borrower wrongfully interferes in any way with Lender’s pursuit of the remedies set forth in the Loan Documents following an Event of Default.
(d) Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Pledge Agreement or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Pledge Agreement or the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation or any failure to disclose a material fact by Borrower, any Credit SPE Component Entity, Guarantor, or any Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or Guarantor)the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor or any Borrower Party which results in any seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein;
(iii) during a Trigger Period material physical waste to the Property caused by the intentional acts or during the continuance intentional omissions of an Event of DefaultBorrower, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit PartySPE Component Entity, Guarantor or any Affiliate thereofBorrower Party (including, without limitation, any arson or abandonment of the Property) and/or the removal or disposal of any portion of the Property after an Event of Default by Borrower, any SPE Component Entity, Guarantor or any Borrower Party;
(iv) the failure of the Observatory Tenantmisapplication, during the continuance of an Event of Default misappropriation or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor Rents collected more than one (1) month in advance;
(v) failure to pay any Taxes or Other Charges, charges for labor or materials or any Affiliate thereofother charges that can create liens on any portion of the Property to the extent that the revenue from the Property is sufficient to pay such amounts (other than (x) amounts deposited with Lender as Tax Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure to maintain insurance as required by Manager, if applicable (so long as Manager this Agreement to the extent that the revenue from the Property is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents sufficient to pay then current material operating expenses the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with respect Lender as Insurance Reserve Funds for Insurance Premiums to the Property in the ordinary course be paid to maintain such insurance where Lender elects not to apply such funds toward payment of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2such Insurance Premiums);
(vii) intentional physical waste the breach of any representation, warranty, covenant or indemnification provision in the Property (but excluding any matter that arises by reason of lack of cash flow with respect to Environmental Indemnity, this Agreement or in the PropertySecurity Instrument, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii)each case, (iv), (v) concerning Environmental Laws and (vi) above)Hazardous Substances;
(viii) any removal fees or disposal commissions paid by Borrower after the occurrence of any portion of the Property after an Event of Default to Guarantor and/or any Affiliate of Borrower and/or Guarantor in any manner prohibited by violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;
(ix) any Credit PartyBorrower’s breach of, or failure to obtain Agent’s prior consent to any Transfercomply with, as applicablethe representations, as required by warranties and covenants contained in Article 15 of this Agreement and/or the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack provisions of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) Sections 11.2 and (vi) above)12.3 hereof;
(x) Borrower fails to appoint a voluntary Lien remains an encumbrance on all or any portion new property manager upon the request of the PropertyLender, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v)each as required by, the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents; and/or
(xi) Borrower’s breach of or failure to comply with any of the Leases prior representation, warranty or covenant contained in Article 5 hereof, provided, however, that Borrower shall only be liable to Lender to the occurrence extent any such breach or failure with respect to Article 5 was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach or failure and fails to deliver to Lender a New Non-Consolidation Opinion to the Event of Default effect that gave rise such failure does not negate/impair the opinion previously delivered to such foreclosure or transfer in lieu thereof; andLender.
(xvxii) Borrower fails to perform the Environmental Work as and when required pursuant to Section 8.9 hereof.
(xiii) any modifications, amendments, restatements and/or supplements made litigation or other legal proceeding related to the Ground LeaseDebt filed by Borrower, Sublease any SPE Component Entity, Guarantor or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the Observatory Lease without efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the consent of Agent and any termination of the Observatory Lease without the consent of Agentother Loan Documents. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) if any Credit Party Prohibited Transfer occurs in violation of Article 6 hereof; (ii) Borrower or any SPE Component Entity files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (2iii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files Borrower or any Credit Party SPE Component Entity files, or Guarantor joins in the filing of of, an involuntary petition against Borrower or any Credit Party SPE Component Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any Credit Party or SPE Component Entity from any Person; (3iv) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party SPE Component Entity files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person (other than an involuntary petition filed by Lender) under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5v) any Affiliate, officer, trustee, director, or representative which Controls Borrower or any Credit Party SPE Component Entity consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, receiver or examiner similar arrangement under any Applicable Laws (other than an application for any Credit Party the appointment of a receiver sought by Lender); (vi) Borrower or any portion of the Property; (6) any Credit Party SPE Component Entity makes a general an assignment for the benefit of creditors, creditors or admits, in writing or admits in any legal proceeding, proceeding its insolvency or inability to pay its debts as they become due unless (other than an admission in a legal proceeding commenced by Lender in which Borrower or SPE Component Entity is making a truthful statement upon the advice of counsel which is required to be made in such admission legal proceeding); (vii) there is true; substantive consolidation of Borrower or any SPE Component Entity (7or any Restricted Party) with any other Person in connection with any enforcement action federal or exercise state bankruptcy proceeding involving the Guarantor or assertion any of its Affiliates (including, without limitation, as a result or any breach or violation by Borrower of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by representations, warranties or on behalf of the Agent and Lenders under covenants contained in Article 5 hereof); or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges (viii) Borrower or any other Loan Document, SPE Component Entity (or any Credit Restricted Party, ) contests or Manager, if applicable (if opposes any motion made by Lender to obtain relief from the Manager is an Affiliate automatic stay or seeks to reinstate the automatic stay in the event of any Credit Party federal or Guarantor) (I) seeks a defense, judicial intervention state bankruptcy or injunctive insolvency proceeding involving the Guarantor or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableits Affiliates.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreements and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreements and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreements or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreements or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Ashford Keys Senior Operating Lessee as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreements and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment provisions contained in the Pledge Agreements; or (vi) impair the right of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan or Net Liquidation Proceeds After Debt Service to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any material fraud or intentional misrepresentation by Borrower, Mortgage Borrower, Operating Lessee, Ashford Keys Senior Operating Lessee, Guarantor or any Credit Party Affiliate of any of the foregoing in connection with the execution and the delivery of this Agreement, the Note, the Pledge Agreements, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period Remington’s or any Exculpated Party’s misapplication, misappropriation or conversion of Rents received by Mortgage Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication, misappropriation or conversion of tenant security deposits (including the failure to deliver to Mortgage Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the extent not applied in accordance with the applicable Leases prior to the occurrence of an Event of Default) or Rents collected in advance;
(v) the misapplication, misappropriation or conversion of Insurance Proceeds or Awards by any Exculpated Party;
(vi) Borrower’s or Mortgage Borrower’s failure to pay Property Taxes, Insurance Premiums, Other Charges (provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender or Mortgage Lender pursuant to the terms hereof or the Mortgage Loan Agreement and neither Borrower nor Mortgage Borrower has made a claim against such escrowed amounts or otherwise taken action to restrict Lender or Mortgage Lender from applying such sums for the purpose of paying such items) or (B) there is insufficient cash flow from the operation of the Observatory TenantProperties to pay such items), charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and cure periods specified herein;
(vii) Borrower’s or Mortgage Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Individual Property by or on behalf of Borrower, Mortgage Borrower, Ashford Keys Senior Operating Lessee or Operating Lessee and not replaced with Personal Property of the same utility and of the same or greater value;
(viii) material physical waste to any Individual Property caused by the intentional acts or omissions of any Exculpated Party when there is sufficient cash flow from the operation of any Individual Property to avoid such waste from occurring;
(ix) intentionally omitted;
(x) Borrower’s or Mortgage Borrower’s assertion or raising of any defense to a proceeding instituted by Lender (whether judicial or otherwise) for the foreclosure of the Pledge Agreements or the Collateral following an Event of Default caused by Borrower’s failure to timely pay the Monthly Payment Amount or the Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be without merit or brought in bad faith;
(xi) Borrower’s failure to cause Mortgage Borrower to pay to Mortgage Lender each PIP Required Deposit (as defined in the Mortgage Loan Agreement) in accordance with the terms hereof or the Mortgage Loan Agreement;
(xii) the breach of any representation, warranty or covenant of (i) Borrower with respect to itself or any SPE Component Entity set forth in Article 6 hereof (other than Section 6.1(a)(xv) and (xviii)) or (ii) any Ashford Keys Senior Operating Lessee with respect to itself or any Ashford Keys Senior Operating Lessee Principal as set forth in Paragraph 14 of the Senior Mezzanine Operating Lease Agreement (other than Paragraph 14(h) and (q) thereof);
(xiii) Borrower’s or Mortgage Borrower’s misappropriation or conversion of Net Liquidation Proceeds After Debt Service or any distributions or other payments with respect thereto in violation of this Agreement;
(xiv) Borrower or Ashford Keys Senior Operating Lessee making a distribution to its direct or indirect legal or beneficial owners after the occurrence and during the continuance of an Event of Default in violation of this Agreement or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the other Loan Documents;; or
(vxv) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect Individual Properties commonly referred to Taxesas Residence Inn Dallas Plano and Courtyard Oakland Airport, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to following the occurrence of the Event of Default that gave rise to such foreclosure a Casualty or transfer in lieu thereof; and
Condemnation, any shortfall (xvwhich shortfall shall be reasonably determined by Lender) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, between (A) neither Agent nor Lenders shall be deemed the sum of any Net Proceeds and any insurance proceeds referred to have waived any right which Agent and/or Lenders may have under in Section 506(a), 506(b), 1111(b8.1(a)(iii) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Mortgage Loan Documents, Agreement and (B) the Allocated Loan Amount of such Individual Property, but only solely due to the fact, if applicable, that the complete Restoration of such Individual Property is not permitted by applicable law due to any legal nonconforming status of such Individual Property.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower, but not to any holder Borrower in the event (i) of a direct breach by any Recourse Entity of any of the covenants set forth in Article 6 hereof or indirect interest Paragraph 14 of the Senior Mezzanine Operating Lease Agreement, that is cited as a factor in ESBA or any party supervising either party comprising Borrower a court’s decision that results in a substantive consolidation (other than a substantive consolidation petitioned for or joined in by Lender) of any Recourse Entity with any other Person (excluding another Borrower or Ashford Keys Senior Operating Lessee) in a proceeding under any Creditors’ Rights Laws, (ii) Borrower or Ashford Keys Senior Operating Lessee incurs any voluntary secured Indebtedness other than the Debt and Permitted Debt (as provided defined in this Agreement and the Mortgage Loan Agreement) without the prior written consent of Lender or except as expressly permitted in this Agreement or the Mortgage Loan Agreement, (iii) Mortgage Borrower or Operating Lessee incurs any Indebtedness other than the Debt and Permitted Debt (as defined in the Guaranty and Environmental IndemnityMortgage Loan Agreement) (excluding Indebtedness relating to trade payables incurred in the ordinary course of business, mechanic’s or other similar liens, such as statutory liens, judgment liens or lis pendens) without the prior written consent of Mortgage Lender or except as expressly permitted in the Mortgage Loan Agreement, (iv) of the occurrence of a Prohibited Transfer (provided, however, Borrower’s liability pursuant to this Section 15.1(c)(iv) resulting from a Prohibited Transfer under Section 7.2(b)(vii) or Controlling either party comprising BorrowerSection 7.2(b)(viii) shall be limited to the Release Price attributable to the applicable Individual Property), excluding a foreclosure or deed in lieu of the event that: Properties, a foreclosure of the Collateral or assignment-in-lieu of the Collateral, (1v) any Credit Party files a voluntary petition under the Bankruptcy Code Properties or the Collateral or any other Federal or state part thereof shall become an asset in a bankruptcy or insolvency law; (2) an proceeding initiated by any Recourse Entity, Guarantor or any Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party Recourse Entity or Guarantor files files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against any Credit Party Recourse Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors or colludes with petitioning creditors for the filing of any involuntary petition against any Credit Party or Recourse Entity from any PersonPerson under any Creditors Rights Laws; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4vi) any Credit Party Recourse Entity files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vii) other than with the written consent of Lender, any Affiliate, officer, trustee, director, or representative which Controls any Credit Party Recourse Entity consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Recourse Entity or any portion of the PropertyProperties or the Collateral; (6viii) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; [intentionally omitted] or (7ix) in connection with any enforcement action or exercise or assertion [intentionally omitted].
(d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or remedy upon any other provision of the continuance U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Pledge Agreements or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Pledge Agreements or the other Loan Documents.
(e) Notwithstanding anything to the contrary in this Section 15.1, (i) Borrower and Guarantor shall have no liability under this Section 15.1 to the extent such liability solely arises (1) as a result of any exercise of remedies, foreclosure, deed-in-lieu of foreclosure or assignment-in-lieu of foreclosure by Lender or Mortgage Lender, (2) as a result of an Event act or omission of Default and acceleration Lender or a third-party purchaser or any Affiliate or subsidiary of any of the foregoing (including Mortgage Borrower) following Lender or such third-party taking title to the Collateral pursuant to a foreclosure, assignment-in-lieu of foreclosure or otherwise with respect to the Collateral, (3) [intentionally omitted], or (4) as a result of an act or an omission of the Mortgage Lender or a third party purchaser or any Affiliate thereof following a foreclosure, deed-in-lieu of foreclosure or otherwise with respect to the Properties; unless in each case, such act or omission was caused by Borrower, Guarantor or any of their respective Affiliates (but only prior to such Exculpated Party becoming an Affiliate of Lender or Mortgage Lender or any purchaser at any foreclosure of the Loan or the Mortgage Loan) or such acts or omissions are the proximate result of acts, events, conditions, or circumstances that existed prior to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, whether or not discovered prior or subsequent to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, provided, however, Borrower and Guarantor will bear the burden of proof to show that an event triggering liability of Borrower or Guarantor under this Section 15.1 first occurred after such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, was not the proximate result of events that first occurred prior to such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure and was not caused by any Exculpated Party (but only prior to such Exculpated Party becoming an Affiliate of Lender or on behalf Mortgage Lender or any purchaser at any foreclosure of the Agent Loan or the Mortgage Loan) or their respective Affiliates; (ii) Borrower and Lenders Guarantor shall have no liability under Section 15.1(b) to the extent such liability solely arises after (A) Lender or in connection with a third-party has taken title to the Collateral pursuant to a foreclosure, assignment-in-lieu of foreclosure or otherwise; (B) [intentionally omitted], or (C) Mortgage Lender or a third party has taken title to the Properties pursuant to a foreclosure, deed-in-lieu of foreclosure or otherwise; and (iii) no Operating Lessee shall have any liability under this Section 15.1, the Guaranty, Mortgageor the Environmental Indemnity, Subordinations, Negative Pledges except to the extent that such liability arises as a result of any act or any other Loan Document, any Credit Party, or Manager, if applicable omission of such Operating Lessee (if the Manager is but only prior to such Operating Lessee becoming an Affiliate of Lender, Mortgage Lender or any Credit Party purchaser at any foreclosure of the Loan or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Mortgage Loan, in each of (I), provided, however, such Operating Lessee will bear the burden of proof to show that an event triggering liability of Operating Lessee under this Section 15.1 was not caused by Operating Lessee (II) but only prior to such Operating Lessee becoming an Affiliate of Lender, Mortgage Lender or (III) that any purchaser at any foreclosure of the Subordinations Loan or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableMortgage Loan).
Appears in 1 contract
Samples: Senior Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt filed by any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate Borrower Party or any other action of any Credit Borrower Party exercised in bad faith that delays, opposes, impedes, obstructs, hinders, enjoins or Guarantor otherwise interferes with or frustrates the efforts of Lender to exercise any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofrights and remedies available to Lender as provided herein and in the other Loan Documents;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property by (or on behalf of) any Borrower Party after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party Reserve Funds and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereofat the direction of) Borrower);
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2the terms and provisions hereof , in each case, to the extent there existed sufficient cash flow from the Property to do so (provided, however, that there shall be no personal liability under this subsection (vi) solely for the failure to pay Taxes if (A) sufficient sums had been reserved hereunder for the express purpose of paying the Taxes in question and Lender failed to pay same, (B) Lender’s access to such sums was not restricted or constrained in any manner and (C) no Event of Default was continuing);
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter provided, however, that arises by reason of lack of cash flow with respect to there shall be no personal liability under this subsection (vii) for the Property, except aforementioned failures to the extent that such lack that, in each case, (A) each applicable failure is itself a failure to pay Insurance Premiums or is solely as a result of a failure to pay Insurance Premiums and (B)(1) there existed insufficient cash flow arises from the misappropriation Property to pay Insurance Premiums or (2)(I) sufficient sums had been reserved hereunder for the express purpose of revenue with respect paying the Insurance Premiums in question and Lender failed to the Property as described in clauses (iii)pay same, (iv), (vII) Lender’s access to such sums was not restricted or constrained in any manner and (viIII) aboveno Event of Default was continuing);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(ix) any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents or any transfer or similar taxes (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(x) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by any Borrower Party;
(xi) the failure to make any REMIC Payment and/or any True Up Payment, to permit on-site inspections of the Property (or any portion thereof) and/or to provide the Required Financial Items, in each case, as and when required herein;
(xii) any violation or breach of the Property Document Provisions and/or any Property Document Event;
(xiii) [intentionally omitted];
(xiv) any indemnity obligations of Lender to Bank under the Restricted Account Agreement;
(xv) the failure of Borrower to appoint a New Manager upon the request of Lender and/or the failure of Borrower to comply with any modificationslimitations on instructing the Manager, amendmentseach as required by and in accordance with, restatements as applicable, the terms and provisions of, this Agreement, the Assignment of Management Agreement and the Security Instrument;
(xvi) any violation or breach of any representation, warranty or covenant contained in Article 5 hereof;
(xvii) [intentionally omitted];
(xviii) any failure to (a) obtain, maintain, and/or supplements made have in place a current certificate of occupancy at the Property that complies with all Legal Requirements, (b) update any certificate of occupancy or obtain any new certificate of occupancy at any time as required by Legal Requirements, and/or (c) to operate the Ground LeaseProperty in a manner consistent with the certificate of occupancy that is in place at the Property (including, Sublease without limitation, any failure to operate the Property in accordance with the specified uses listed on the then current certificate of occupancy).
(xix) any violation or the Observatory Lease without the consent of Agent and any termination breach of the Observatory Lease Cash Management Provisions; and/or
(xx) any claims to divest, subordinate or extinguish the lien of the Security Instrument (including, without limitation, any such claims resulting from any breach or other failure to comply with Section 22 of the consent of Agent. New York Lien Law).
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party files representation, warranty or covenant contained in Article 5 or Article 6 hereof is violated or breached (provided, that, with respect to any such violation or breach of Article 5 hereof, such violation or breach is evidenced by a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawcourt, in which a proceeding with respect to Creditors Rights Laws involving any Credit Party one or Guarantor colludes with, or otherwise assists more Constituent Owner(s) of Borrower and/or SPE Component Entity (any such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any a “Bankrupt Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it”), by any other Person under ordering the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion substantive consolidation of the Property; assets and liabilities of Borrower and/or SPE Component Entity with the assets and liabilities of any Bankrupt Person on the basis of, among other things, such violation or breach) or (6ii) any Credit Party makes a general assignment for Bankruptcy Event occurs.
(c) Borrower hereby personally guarantees (without the benefit of creditors, or admits, the exculpation provisions provided in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7Section 13.1 hereof) in connection with any enforcement action or exercise or assertion payment of any right or remedy upon the continuance of an Event of Default and acceleration each of the Loan by following obligations of Borrower: (x) the obligation to make a Gap Rent True-Up Deposit as set forth in Section 8.8(a) hereof and (y) the obligation to make a Guaranteed Reserve Deposit as set forth in Section 4.24(c) hereof. For purposes of clarification and for the avoidance of doubt, the recourse carveouts in Section 13.1(a) above and this Section 13.1(b) shall not be deemed to be mutually exclusive or on behalf of otherwise limit one another; without limiting the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Managerforegoing, if applicable (if the Manager is an Affiliate of any Credit Party a particular event, condition, circumstance or Guarantoroccurrence would trigger recourse liability both under Section 13.1(a) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (Iabove and this Section 13.1(b), recourse liability shall apply under all of such Sections (II) or (III) that as and to the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableextent provided in such Sections).
Appears in 1 contract
Samples: Loan Agreement (Clipper Realty Inc.)
Exculpation. 120 0123905.0782082 4863-1270-3898v11
(a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Xxxxxx shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any officer, director, shareholder, partner, member, principal, employee of Borrower or any direct or indirect owner of Borrower (provided that the foregoing shall not limit in any manner, the liability of any Guarantor), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, agrees that it shall not xxx sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 9.3 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of any guaranty guaranty, indemnity or indemnification similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of any assignment of leases contained in the Assignment of LeasesSecurity Instrument and any other Loan Documents; or (fvi) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on the security granted by the Security Instrument (if required by applicable law and provided such deficiency judgment is not enforced personally against Borrower or any security given by officer, director, shareholder, partner, member, principal, employee of Borrower in connection with or any direct or indirect owner of Borrower (excluding Guarantor under the Loan Guaranty and Environmental Indemnity, as applicable)) or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; the Property (or any portion thereof).
(gb) constitute a waiver of Nothing contained herein shall in any manner or way release, affect or impair the right of Agent or Lenders Lender to enforce the liability recover from Borrower, and obligation of Borrower or Guarantorshall be fully and personally liable and subject to legal action, by money judgment or otherwise, to the extent of for any actual out-of-pocket loss, damage, cost, expense, liabilitydamage, claim or other obligation incurred by Agent and/or any Lender (including reasonable out-of-pocket attorneys’ fees and costs reasonably incurredexpenses and other collection and litigation expenses, but excluding consequential, punitive, special, indirect and exemplary damages or diminutions in value) incurred or suffered by Lender arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Party Borrower or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Borrower or Guarantor);
(iii) during arson or any intentional material physical waste of the Property, provided, however, that if Borrower does not have sufficient cash flow on a Trigger Period current basis to prevent waste, any waste shall not be deemed intentional and Borrower shall have no liability under this clause (iii);
(iv) the removal or disposal of any portion of the Property by Borrower during the continuance of an Event of Default, any misappropriation unless such removed or disposed portion of the Rents by Manager, if applicable (so long as Manager Property is an Affiliate subsequently replaced with property of any Credit Party equal or Guarantor greater utility or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;value; 121 0123905.0782082 4863-1270-3898v11
(v) the misappropriation misappropriation, misapplication or conversion by Borrower or Guarantor, or any Affiliate of the foregoing, of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property by Managerduring the continuance of an Event of Default, if applicable (so long as Manager is C) any Rents or other Property income or collateral proceeds, or (D) any Rents paid more than one month in advance (including security deposits) during the continuance of an Affiliate Event of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofDefault;
(vi) any following the occurrence and during the continuance of an Event of Default, the failure by Managerto either apply rents or other Property income, if applicable (so long as Manager is an Affiliate collected after such Event of any Credit Party or Guarantor)Default, any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the ordinary, customary, and necessary expenses of operating the Property in or, upon demand, to deliver such rents or other Property income to Lender (or otherwise to the ordinary course of business (except with respect to TaxesClearing Account or Cash Management Account, Other Charges and Trade Payables being contested in accordance with Section 4.1.2as required by this Agreement);
(vii) intentional physical waste of the Property (but excluding any matter failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of can create Liens on any portion of the Property after (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default in any manner prohibited by Default, has received all Rents from the Loan Documents;
(ix) any Credit Party’s failure Property applicable to obtain Agent’s prior consent the period for which such insurance, taxes or other items are due, and thereafter fails to any Transfermake such payments), as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property it being acknowledged that if Borrower does not have sufficient cash flow except on a current basis to maintain insurance or to pay taxes and assessments or to pay charges for labor or materials or other charges or judgments (unless such charges were incurred following the extent occurrence and during the continuance of an Event of Default) that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance create Liens on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
Borrower shall have no liability under this clause (xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Partiesvii);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivviii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were (A) applied or returned to Tenants in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; andthereof or (B) previously delivered to Lender to be applied to repay the Loan;
(ix) any voluntary Liens, other than Permitted Encumbrances and Liens described in Sections 9.3(b)(vii) or 9.3(c)(B) hereof;
(x) any failure by Borrower to comply with any of the representations, warranties or covenants set forth in Sections 4.1.37 or 5.1.19 hereof;
(xi) [intentionally omitted];
(xii) [intentionally omitted];
(xiii) any failure by Borrower to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof to the extent such failure is not expressly covered by the full recourse event set forth in Section 9.3(c)(D) below;
(xiv) Borrower fails to obtain Xxxxxx’s prior written consent to any Transfer that is not a Full Recourse Transfer, to the extent required pursuant to the terms of the Loan Documents;
(xv) [intentionally omitted];
(xvi) Xxxxxxxx’s failure to comply with the provisions of Sections 5.1.9 hereof; 122 0123905.0782082 4863-1270-3898v11
(xvii) criminal acts of Borrower or Guarantor, or executives of Borrower or Guarantor, resulting in the seizure, forfeiture or loss of the Property;
(xviii) Xxxxxxxx, acting in bad faith, fails to cooperate in transferring any modificationslicenses or permits requested by Lender in connection with any foreclosure of the Property, amendmentsdeed in lieu or other transfer of the Property to Lender or Xxxxxx’s designee;
(xix) if Guarantor, restatements and/or supplements Borrower or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Note, the Security Instruments or any other Loan Document, (a) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any defense against Lender or any right in connection with any security for the Loan and (b) the court in any such action or proceeding determines that Guarantor’s, Borrower’s or such Affiliate’s defense or request for judicial intervention (1) was made by Guarantor, Borrower or such Affiliate with the intent to hinder, delay or otherwise interfere with Lender’s exercise of its remedies (whether at law or granted under the Ground LeaseLoan Documents), Sublease or the Observatory Lease without the consent of Agent and (2) was made in bad faith by Guarantor, Borrower or such Affiliate;
(xx) if there shall be any (A) termination of the Observatory Lease Condominium Documents without Lender’s prior written consent, or (B) amendment or modification to the Condominium Documents without Lender’s prior written consent that materially and adversely affects Borrower’s ability to perform its obligations under the Loan Documents or Xxxxxx’s security and rights hereunder; or
(xxi) Borrower’s failure to purchase (or cause the Association to purchase) the Additional Association Insurance. Notwithstanding the foregoing, there shall be no liability under this clause (xxi) (and this clause (xxi) shall be deemed to have been intentionally omitted) following Borrower’s (or the Association’s) purchase of Agentthe Additional Association Insurance and the delivery of Evidence of Commercial Property Insurance (XXXXX 28) evidencing the same to Lender. 123 0123905.0782082 4863-1270-3898v11
(c) Notwithstanding anything to the contrary in this Agreement, the Note or any of the other Loan Documents, Borrower shall be personally liable for the Debt if (A) Borrower fails to obtain Xxxxxx’s prior written consent (to the extent such consent is required pursuant to the terms of the Loan Documents) to any Transfer (other than a Transfer approved by Lender or a Transfer in connection with Lender’s enforcement of its rights and remedies)
(1) that results in a change in Control over Borrower or (2) of any of the Property by deed, bill of sale, installment sales agreement or ground lease (excluding any lease to a Tenant in the ordinary course of business) (a “Full Recourse Transfer”); (B) except for any Permitted Encumbrances and Permitted Indebtedness, Borrower fails to obtain Xxxxxx’s prior written consent to any Indebtedness or voluntary mortgage, deed of trust, collateral assignment or similar voluntary Lien (including a XXXX Xxxx) encumbering the Property; provided, however, in no event shall a mechanic’s or materialman’s Lien encumbering the Property apply to this clause (B); (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, which failure is cited as a factor in the substantive consolidation of Borrower with any other entity in connection with any proceeding under the Bankruptcy Code; (E) Borrower admits, in any legal proceeding (other than Borrower admitting or making any truthful statement that it has been advised by counsel is required to be admitted or made under applicable laws, regulations or court orders), its insolvency or inability to pay its debts as they become due, provided that neither Agent Borrower nor Lenders Guarantor shall have liability under this clause (E) in connection with the delivery of financial statements or any other filing required to be delivered pursuant to a subpoena or any order entered in a bankruptcy proceeding or required under applicable law in connection with any such petition made by any Person which is not an Affiliate of Borrower; or (F) Borrower files, or consents in writing to, or acquiesces in, a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower or Guarantor colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any party (provided, however, that the failure to defend such an involuntary petition where no meritorious defense exists shall not be deemed “assisting” for purposes hereof).
(d) Nothing herein shall be deemed to have waived constitute a waiver by Lender of any right which Agent and/or Lenders Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing Debt.
(e) Notwithstanding anything to Lenders the contrary contained herein or in accordance with any of the other Loan Documents, Borrower shall not have any liability pursuant to this Section 9.3 if a court of competent jurisdiction issues a final non-appealable judgement that any acts or omissions creating liability hereunder were caused by the fraud, bad faith, willful misconduct or gross negligence of Lender or Servicer.
(f) Notwithstanding anything to the contrary contained in the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in with respect to the Guarantor under the Guaranty and the Environmental Indemnity, neither Guarantor, nor any officer, director, shareholder, partner, member, principal, employee of, shall have any personal liability for, nor be joined as a party to, any action with respect to (i) the payment of any sum which is or may be payable under this Agreement or the Loan Documents, or (ii) the performance or discharge of any covenants, obligations or undertakings of Borrower. In addition to the foregoing, in no event will the assets of any officer, director, shareholder, partner, member, principal, employee of Borrower or Guarantor be available to satisfy any obligation of Guarantor thereunder. 124 0123905.0782082 4863-1270-3898v11
(g) Notwithstanding the foregoing provisions of this Section 9.3 or anything to the contrary in this Agreement or the other Loan Documents, (i) Guarantor shall have no liability under Sections 9.3(b)(ix), (xiii), or (xiv) or Controlling either party comprising BorrowerSection 9.3(c) for Permitted Equipment Financing or Permitted Trade Payables that constituted Permitted Equipment Financing or Permitted Trade Payables when incurred but, due to insufficient cash flow at the Property, subsequently breaches the definition of Permitted Equipment Financing or Permitted Trade Payables by being outstanding for longer than any time period specified in such definitions, or by exceeding the event that: one percent (1%) or two percent (2%) cap, as applicable, specified in such definitions, and (ii) Guarantor shall have no liability under any Credit Party files of the Loan Documents with respect to liabilities or obligations arising from events, acts, omissions, facts or circumstances first occurring from and after the date that Lender (or any Affiliate, designee, agent, nominee, successor to or assignee of Lender) takes title to the Property or the ownership interests in Borrower pursuant to a voluntary petition foreclosure, deed-in-lieu of foreclosure, assignment-in-lieu of foreclosure, other exercise of remedies under the Bankruptcy Code Loan Documents or any other Federal or state bankruptcy or insolvency law; (2) an Affiliatemeans, officer, trustee, director, or representative and which Controls, directly or indirectly, any Credit Party or do not arise as a result of the acts of Guarantor files or any Credit Party Affiliate thereof; provided, however, that Guarantor’s liability shall be automatically reinstated upon any such foreclosure or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code conveyance being set aside, rescinded or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableinvalidated.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except Except as set forth otherwise specifically provided in the Guaranty Plan, no Exculpated Party shall have or incur liability for, and Environmental Indemnityeach Exculpated Party is hereby released and exculpated from, neither Agent nor Lenders shall enforce any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the liability and obligation Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, Filing, or termination of the Borrower Restructuring Support Agreement and related prepetition transactions, the Disclosure Statement, the Plan, the Transaction Agreements, or any holder of a direct Restructuring Transaction, contract, instrument, release or indirect interest in ESBA other agreement or document (including providing any supervisor of either party comprising Borrower legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or Controlling either party comprising Borrower to perform and observe other agreement contemplated by the Obligations contained in the Note, this Agreement, the Mortgage Plan or the other Loan Documents reliance by any action Exculpated Party on the Plan or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance Confirmation Order in lieu of such legal opinion) created or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or entered into in connection with the NoteDisclosure Statement, this the Plan, the Restructuring Support Agreement, the Mortgage Transaction Agreements, or the other Loan Documents; providedDIP Facility, furtherthe Filing of the Chapter 11 Cases, thatthe pursuit of Confirmation, subject the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Securities pursuant to the terms Plan, or the distribution of property under the Plan, the Transaction Agreements, or any other related agreement, except for claims related to any act or omission that is determined in a final order to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and provisions responsibilities pursuant to the Plan. The Exculpated Parties have, and upon completion of the Sublease Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of, and distribution of, consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. The debt and related obligations evidenced by the documents set forth below shall be referred to as the same is “Other Secured Debt” and the secured parties thereunder the “Other Secured Lenders”: Loan and Security Agreement, dated as of February 12, 2010, as amended, restated, modified, supplemented or replaced from time to time prior to the Petition Date, between Alpha Hunter and Wesbanco Bank, Inc., as lender (“Wesbanco”); Master Loan and Security Agreement, dated as of January 23, 2014, as amended, restated, modified, supplemented or replaced from time to time prior to the Petition Date, between Alpha Hunter and CIT Finance LLC, as lender, including Schedule No. 1 thereunder, as amended, restated, amended and restated, supplemented or otherwise modified from time to time; Loan Agreement, dated as of December 14, 2011, as amended, restated, modified, supplemented or replaced from time to time prior to the Petition Date, between the Borrower and Capital One, National Association, as lender; and Business Loan Agreement, dated as of February 17, 2010, as amended, restated, modified, supplemented after or replaced from time to time prior to the date hereof with Petition Date, between MH Production (as successor to Xxxxxxxxx Petroleum, Inc.) and Traditional Bank, Inc., as lender. This joinder (this “Joinder”) to the consent Restructuring Support Agreement (the “Agreement”), dated as of AgentDecember 15, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor2015, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
among: (i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
Magnum Hunter Resources Corporation; Alpha Hunter Drilling, LLC; Xxxxxx Xxxxxx, LLC; Xxxxxx Xxxxxx Canada, Inc.; Energy Hunter Securities, Inc.; Hunter Aviation, LLC; Hunter Real Estate, LLC; Magnum Hunter Marketing, LLC; Magnum Hunter Production, Inc.; Magnum Hunter Resources GP, LLC; Magnum Hunter Resources, LP; Magnum Hunter Services, LLC; NGAS Gathering, LLC; NGAS Hunter, LLC; PRC Williston LLC; Shale Hunter, LLC; Triad Holdings, LLC; Triad Hunter, LLC; Viking International Resources Co., Inc.; and Williston Hunter ND, LLC, (ii) the fraudulent acts or willful misconduct of any Credit PartyConsenting Bridge Financing Lenders, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of DefaultConsenting Second Lien Lenders, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
and (iv) the failure Consenting Noteholders, is executed and delivered by [ ] (the “Joining Party”) as of [ ]. Each capitalized term used herein but not otherwise defined shall have the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, meaning ascribed to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property it in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Restructuring Support Agreement (Magnum Hunter Resources Corp)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property or any Individual Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation or any failure to disclose a material fact by Borrower, Guarantor, Sponsor, or any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Guarantor Guarantor, Sponsor, or Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor), Sponsor or any Borrower Party which results in a forfeiture of the Property;
(iii) during a Trigger Period material physical waste to the Property caused by the intentional acts or during intentional omissions of Borrower, any SPE Component Entity, Guarantor, Sponsor, or any Borrower Party (including, without limitation, any arson or abandonment of the continuance Property) and/or the removal or disposal of any portion of the Property after an Event of DefaultDefault by Borrower, any misappropriation of the Rents by ManagerSPE Component Entity, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Guarantor, Sponsor or any Affiliate thereof), any Credit Borrower Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenantmisapplication, during the continuance of an Event of Default misappropriation or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance;
(v) failure to pay (or cause to be paid) any Taxes or Other Charges, charges for labor or materials or any Affiliate thereofother charges that can create liens on any portion of the Property to the extent that the revenue from the Property is sufficient to pay such amounts (other than (x) amounts deposited with Lender as Tax and Insurance Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate the breach of any Credit Party material representation, warranty, covenant or Guarantor)indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances and any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses indemnification of Lender with respect to the Property thereto in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)either document;
(vii) intentional physical waste any fees or commissions paid by Borrower after the occurrence of an Event of Default to Guarantor, Sponsor and/or any Borrower Party in violation of the Property (but excluding any matter that arises by reason terms of lack of cash flow with respect to the PropertyNote, except to this Agreement, the extent that such lack of cash flow arises from Security Instrument or the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)other Loan Documents;
(viii) any removal Borrower’s breach of, or disposal failure to comply with, the representations, warranties and covenants contained in Article 15 of any portion this Agreement and/or the provisions of the Property after an Event of Default in any manner prohibited by the Loan DocumentsSections 12.2 and 12.3 hereof;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, maintain insurance as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except this Agreement to the extent that such lack of cash flow arises the revenue from the misappropriation Property is sufficient to pay the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Tax and Insurance Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) abovesuch Insurance Premiums);
(x) a voluntary Lien remains an encumbrance on all or any portion Borrower fails to permit on-site inspections of the Property, fails to provide the Operating Lease Required Financial Items or fails to appoint a new property manager upon the Observatory Lease request of Lender, each as required by, and in violation accordance with the terms and provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents;
(xi) subject any litigation or other legal proceeding related to the provisions Debt filed in bad faith by Borrower, any SPE Component Entity, Guarantor, Sponsor or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Section 8.3(a)(v), the failure by Lender to exercise any Credit Party rights and remedies available to comply with the material single purpose entity requirements of this Agreement including those set forth Lender as provided herein and in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)Loan Documents;
(xii) the incurrence of Indebtedness in violation seizure or forfeiture of the Loan DocumentsProperty, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower, Guarantor, Sponsor, or any Borrower Party;
(xiii) failure of Borrower to deliver the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;Required Estoppels; and/or
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are Additional Interest not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agentbeing paid. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party representation, warranty or covenant contained in Article 5 or Article 6 or Section 4.14 hereof is violated or breached, provided, however, that any such breach or violation with respect to Article 5 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a New Non-Consolidation Opinion to the effect that such failure does not negate/impair the opinion previously delivered to Lender; (ii) Borrower or any SPE Component Entity files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws; (2iii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files Borrower or any Credit Party SPE Component Entity files, or Guarantor joins in the filing of of, an involuntary petition against Borrower or any Credit Party SPE Component Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any Credit Party or SPE Component Entity from any Person; (3iv) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party SPE Component Entity files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5v) any Affiliate, officer, trustee, director, or representative which Controls Borrower or any Credit Party SPE Component Entity consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any Credit Party SPE Component Entity or any portion of the Property; (6vi) Borrower or any Credit Party SPE Component Entity makes a general an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (vii) there is true; substantive consolidation of Borrower or any SPE Component Entity (7or any Restricted Party) with any other Person in connection with any enforcement action federal or exercise state bankruptcy proceeding involving the Guarantor or assertion any of its Affiliates; (viii) Borrower or any SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any right federal or remedy upon state bankruptcy or insolvency proceeding involving the continuance of an Event of Default and acceleration Guarantor or its Affiliates; (ix) any casualty to the Individual Property located in Anderson, South Carolina resulting in Walgreens terminating its Lease thereof (provided, however, that Borrower’s liability pursuant to this subsection (ix) shall be limited to the difference between (a) the Allocated Loan Amount of the Loan by or on behalf Individual Property located in Anderson, South Carolina and (b) the building insurance proceeds estimated to be received from the insurance carrier plus estimated the proceeds from a sale of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kindsuch Individual Property), or (IIx) asserts, or causes a third party Borrower’s failure to assert, in a pleading filed in connection with a judicial proceeding deposit any defense against Agent and/or springing Reserve Funds deposits pursuant to the Lenders, or (III) any right in connection with any security for the Loan, in each terms of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablethis Agreement.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital Trust III, Inc.)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (1) and (2) above, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, that except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent the Insurance Proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:Awards.
(ib) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to Notwithstanding the provisions of this Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect 15.1 to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereofcontrary, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Borrower shall be deemed personally liable to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim Lender for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become Losses due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.to:
Appears in 1 contract
Samples: Loan Agreement (Griffin Capital Essential Asset REIT, Inc.)
Exculpation. Subject (a) Neither the Agent, its Affiliates, nor its or their respective partners, members, officers, directors, managers, employees or agents (individually and collectively referred to as an “Exculpatee”), shall be liable, responsible, or accountable in damages or otherwise to the qualifications below and except as set forth in the Guaranty and Environmental IndemnityCompany Group, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct its owners, members, employees, agents or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Noteassigns, this Agreement, the Mortgage or the other Loan Documents by for any action taken or proceeding wherein a money judgment shall be sought against a Credit Partyfailure to act (EVEN IF SUCH ACTION OR FAILURE TO ACT CONSTITUTED THE SOLE, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or CONCURRENT OR COMPARATIVE NEGLIGENCE OF THE AGENT OR SUCH EXCULPATEE) in connection with the NoteServices provided hereunder, this Agreementunless such act or failure to act was the result of fraud, willful misconduct or gross negligence on the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions part of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerExculpatee. The provisions of Exculpatees shall have no liability whatsoever under this Section shall notAgreement for failing to act (or limiting its actions) hereunder, however, (a) constitute a waiver, release or impairment of and no obligation to provide any obligation evidenced or secured by any of the Loan Documents; Services.
(b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; IN NO EVENT SHALL THE EXCULPATEE EVER BE LIABLE TO ANY SUCH PERSON OR ENTITY, OR ANY OTHER PARTY UNDER THIS AGREEMENT OR IN CONNECTION WITH SERVICES PROVIDED HEREUNDER, FOR ANY PUNITIVE, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES IN TORT, CONTRACT OR OTHERWISE, UNLESS SUCH PUNITIVE, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES IN TORT, CONTRACT OR OTHERWISE ARE CLAIMED BY A THIRD PARTY AND SUCH DAMAGES TO SUCH THIRD PARTY WERE THE RESULT OF FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE ON THE PART OF SUCH EXCULPATEE. TO THE EXTENT PERMITTED BY LAW, THE COMPANY HEREBY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACT, §§ 17.41, ET. SEQ., OF THE TEXAS BUSINESS AND COMMERCE CODE (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given OTHER THAN SECTION 17.555). The exculpation provided by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with this Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral 2.7 shall continue as to secure all of the Debt owing an Exculpatee who has ceased to Lenders serve in accordance with the Loan Documentssuch capacity, and (B) the Debt shall be fully recourse inure to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditorsthe heirs, or admitssuccessors, in writing or in any legal proceedingassigns, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default administrators and acceleration personal representatives of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableExculpatees.
Appears in 1 contract
Samples: Management Services Agreement (Alta Mesa Holdings, LP)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property or any Individual Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation or any failure to disclose a material fact by Borrower, Guarantor, Sponsor, or any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Guarantor Guarantor, Sponsor, or Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor), Sponsor or any Borrower Party which results in a forfeiture of the Property;
(iii) during a Trigger Period material physical waste to the Property caused by the intentional acts or during intentional omissions of Borrower, any SPE Component Entity, Guarantor, Sponsor, or any Borrower Party (including, without limitation, any arson or abandonment of the continuance Property) and/or the removal or disposal of any portion of the Property after an Event of DefaultDefault by Borrower, any misappropriation of the Rents by ManagerSPE Component Entity, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Guarantor, Sponsor or any Affiliate thereof), any Credit Borrower Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenantmisapplication, during the continuance of an Event of Default misappropriation or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance;
(v) failure to pay (or cause to be paid) any Taxes or Other Charges, charges for labor or materials or any Affiliate thereofother charges that can create liens on any portion of the Property to the extent that the revenue from the Property is sufficient to pay such amounts (other than (x) amounts deposited with Lender as Tax and Insurance Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate the breach of any Credit Party material representation, warranty, covenant or Guarantor)indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances and any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses indemnification of Lender with respect to the Property thereto in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)either document;
(vii) intentional physical waste any fees or commissions paid by Borrower after the occurrence of an Event of Default to Guarantor, Sponsor and/or any Borrower Party in violation of the Property (but excluding any matter that arises by reason terms of lack of cash flow with respect to the PropertyNote, except to this Agreement, the extent that such lack of cash flow arises from Security Instrument or the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)other Loan Documents;
(viii) any removal Borrower’s breach of, or disposal failure to comply with, the representations, warranties and covenants contained in Article 15 of any portion this Agreement and/or the provisions of the Property after an Event of Default in any manner prohibited by the Loan DocumentsSections 12.2 and 12.3 hereof;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, maintain insurance as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except this Agreement to the extent that such lack of cash flow arises the revenue from the misappropriation Property is sufficient to pay the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Tax and Insurance Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) abovesuch Insurance Premiums);
(x) a voluntary Lien remains an encumbrance on all or any portion Borrower fails to permit on-site inspections of the Property, fails to provide the Operating Lease Required Financial Items or fails to appoint a new property manager upon the Observatory Lease request of Lender, each as required by, and in violation accordance with the terms and provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents;
(xi) subject any litigation or other legal proceeding related to the provisions Debt filed in bad faith by Borrower, any SPE Component Entity, Guarantor, Sponsor or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Section 8.3(a)(v), the failure by Lender to exercise any Credit Party rights and remedies available to comply with the material single purpose entity requirements of this Agreement including those set forth Lender as provided herein and in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)Loan Documents;
(xii) the incurrence of Indebtedness in violation seizure or forfeiture of the Loan DocumentsProperty, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower, Guarantor, Sponsor, or any Borrower Party;
(xiii) failure to pay (or cause the breach of payment of) rent, additional rent or any indemnification provision other amounts due and payable under the Ground Lease, including, without limitation, the SAF Contribution (as defined in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestosGround Lease);
(xiv) failure to pay (or cause the payment of) all outstanding SAF Contributions, the outstanding amounts payable under the Bonds, and any security depositscompensation payable to Trustee or the County (each as defined in the Ground Lease) upon termination or earlier expiration of the Ground Lease (including, advance deposits or any other deposits collected with respect without limitation, prior to the Property which are not delivered to Agent upon a foreclosure or delivery of the Property or transfer in deed-in-lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andforeclosure);
(xv) any modifications, amendments, restatements and/or supplements made failure to pay (or cause the payment of) an amount equal to the Ground Lease, Sublease or difference between (A) the Observatory Lease without Allocated Loan Amount for the consent New Hampshire Property and (B) the sum of Agent (i) the building insurance proceeds estimated to be received from the insurance carrier for the New Hampshire Property and any termination (ii) the proceeds from the sale of the Observatory Lease without land for the consent of AgentNew Hampshire Property (such amount being referred to herein as the “Gap Amount”), in the event that there is a Casualty at the New Hampshire Property; and/or
(xvi) Additional Interest not being paid. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party representation, warranty or covenant contained in Article 5 or Article 6 or Section 4.14 hereof is violated or breached, provided, however, that any such breach or violation with respect to Article 5 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a New Non-Consolidation Opinion to the effect that such failure does not negate/impair the opinion previously delivered to Lender; (ii) Borrower or any SPE Component Entity files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws; (2iii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files Borrower or any Credit Party SPE Component Entity files, or Guarantor joins in the filing of of, an involuntary petition against Borrower or any Credit Party SPE Component Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any Credit Party or SPE Component Entity from any Person; (3iv) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party SPE Component Entity files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5v) any Affiliate, officer, trustee, director, or representative which Controls Borrower or any Credit Party SPE Component Entity consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any Credit Party SPE Component Entity or any portion of the Property; (6vi) Borrower or any Credit Party SPE Component Entity makes a general an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (vii) there is true; substantive consolidation of Borrower or any SPE Component Entity (7or any Restricted Party) with any other Person in connection with any enforcement action federal or exercise state bankruptcy proceeding involving the Guarantor or assertion any of its Affiliates; (viii) Borrower or any SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any right federal or remedy upon state bankruptcy or insolvency proceeding involving the continuance Guarantor or its Affiliates; (ix) Borrower’s failure to deposit any springing Reserve Funds deposits pursuant to the terms of an Event of Default this Agreement; and/or (x) the Ground Lease is terminated, cancelled or otherwise ceases to exist and acceleration MO Borrower has not exercised its purchase option pursuant to the terms of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableGround Lease.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital Trust III, Inc.)
Exculpation. Subject (a) Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications below below, Xxxxxx and except as Borrower agree that:
(i) Borrower shall be liable upon the Debt and for the other obligations arising under the Loan Documents to the full extent (but only to the extent) of the security therefor; provided, however, that in the event (A) of fraud, wilful misconduct or material misrepresentation by Borrower, its members, its principals, its affiliates, its agents or its employees or by any Guarantor or any Indemnitor in connection with the loan evidenced by this Note, (B) of Xxxxxxxx's breach or default under Section 8.2 of the XXXXXX GUARANTY TRUST COMPANY Security Instrument, or (C) the Property or any part thereof becomes an asset in a voluntary bankruptcy or insolvency proceeding, the limitation on recourse set forth in this Subsection 10(a) will be null and void and completely inapplicable, and this Note shall be with full recourse to Borrower.
(ii) If a default occurs in the Guaranty timely and Environmental Indemnityproper payment of all or any part of the Debt, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this AgreementSecurity Instrument, the Mortgage Other Loan Documents and the other Loan Documents, or interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by the Security Instrument and the Other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s Xxxxxxxx's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Xxxxxx, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not xxx not, except as otherwise herein provided, sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Other Loan Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. Security Instrument.
(iii) The provisions of this Section Subsection 10(a) shall not, however, not (aA) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Other Loan DocumentsDocuments or the Security Instrument; (bB) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (cC) affect the validity or enforceability of any guaranty indemnity, guaranty, master lease or indemnification agreement similar instrument made in connection with this Note, the Security Instrument, or the Other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (dD) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (eE) impair the enforcement of the Assignment of Leasesexecuted in connection herewith; (fF) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Article 11 of the Security Instrument; or Lenders (G) impair the right of Lender to seek obtain a deficiency judgment or judgment on this Note, against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with insurance proceeds or condemnation awards to which Xxxxxx would otherwise be entitled under the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies Security Instrument; provided, however, Lender shall only enforce such judgment against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent insurance proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;condemnation awards.
(iv) Notwithstanding the failure provisions of this Article to the Observatory Tenantcontrary, during Borrower shall be personally liable to Lender for the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of Losses it incurs due to: (A) any insurance proceeds paid by reason the misapplication or misappropriation of any loss, damage or destruction to the Property, or Rents; (B) any Awards the misapplication or other amounts received in connection with the Condemnation misappropriation of insurance proceeds or condemnation awards; (C) Borrower's failure to return or to reimburse Lender for all or a portion of Personal Property taken from the Property by Manageror on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value; (D) any act of actual waste or arson by Borrower, if applicable (so long as Manager is an Affiliate of any Credit Party principal, affiliate, general partner or Guarantor member thereof or by any Indemnitor or any Affiliate thereof)Guarantor; (E) any fees or commissions paid by Borrower to any principal, affiliate, general partner or member of Borrower, any Credit Party or Guarantor Indemnitor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the terms of this Note, the Security XXXXXX GUARANTY TRUST COMPANY Instrument or the Other Loan Documents;
; (xiF) subject Xxxxxxxx's failure to comply with the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation 11.2 of the assets Security Instrument; or (G) any breach of any Credit Party with the assets of another Person (other than the other Credit Parties);Environmental Indemnity.
(xiib) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt Debt, owing to Lenders Lender in accordance with this Note, the Security Instrument and the Other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth The Plan will contain an exculpation provision substantially in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation form of the Borrower following: Exculpation. No Exculpated Party shall have or incur, and each Exculpated Party is hereby released and exculpated from any Claim, obligation, Cause of Action or liability for any Claim in connection with or arising out of the formulation, preparation, dissemination, or negotiation of the Restructuring Support Agreement or the Genco Working Capital Facility, or any holder of a direct contract, instrument, release, or indirect interest other agreement or document created or entered into in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe connection with the Obligations contained in the Note, this Restructuring Support Agreement, the Mortgage Exchange Offers, the Consent Solicitations, the Plan, the Chapter 11 Case, the filing of the Chapter 11 Case, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate distribution of property under the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance Plan or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documentsrelated agreement, or in the Property, the Rents or upon any other collateral given to Agent and/or Lenders pursuant act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the Loan Documentsforegoing, except for willful misconduct or gross negligence, but in all respects such entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities with respect to the foregoing; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding that the foregoing exculpation shall be enforceable against Borrower only not apply to the extent Unreleased Dynegy Claims. The Debtor, the Reorganized Debtor, Dynegy and the Consenting Noteholders (and each of Borrower’s interest in the Propertytheir respective affiliates, in the Rentsagents, in the Cash Collateral and in any other collateral given to Agent and/or Lendersdirectors, officers, employees, advisors, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower attorneys) have participated in any such action or proceeding under or by reason of or under or in connection compliance with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code with regard to file a claim the solicitation and distribution of the Securities pursuant to the Plan, and, therefore, are not, and on account of such distributions shall not be, liable at any time for the full amount violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Debt Plan or such distributions made pursuant to require that all collateral shall continue to secure all the Plan, including the issuance of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablesecurities thereunder.
Appears in 1 contract
Samples: Restructuring Support Agreement (Illinois Power Generating Co)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Xxxxxx’s right to enforce said rights and remedies against Xxxxxxxx and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss actually incurred by Agent and/or any Lender Xxxxxx (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any fraud or intentional material intentional misrepresentation by Borrower, any Credit Party Mezzanine Borrower, any SPE Component Entity, any Mezzanine SPE Component Entity, Sponsor, any Affiliated Manager, Guarantor or any director, officer, beneficiary, shareholder, partner, member, employee or agent acting on behalf of any of the foregoing (each, a “Recourse Party”) in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Recourse Party or Guarantor)in connection with the Loan;
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate breach of any Credit Party or Guarantor or indemnification provision in the Loan Documents concerning environmental laws, hazardous substances and asbestos and any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofindemnification of Lender with respect thereto;
(iv) material physical waste to any Property caused by the failure intentional acts of any Recourse Party, but only to the extent there is sufficient cash flow from the Properties to prevent such physical waste and such cash flow is made available by Lender for the purpose of preventing such physical waste;
(v) the removal of any property in contravention of the Observatory Tenant, Loan Documents during the continuance of an Event of Default other than in the ordinary course of business;
(vi) the misappropriation or during conversion of any of the following by a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Recourse Party in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with contravention of the Loan Documents;
(v) the misappropriation of : (A) any insurance proceeds paid received by Borrower by reason of any lossCasualty, damage or destruction to the Property, or (B) any Awards or other amounts received by Borrower from a governmental authority in connection with the a Condemnation of all or a portion of the Property by ManagerProperty, if applicable or (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(viC) any failure revenues generated by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)Properties;
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security depositsSecurity Deposits, advance deposits or any other deposits collected with respect to the any Property which are not delivered to Agent Lender upon a foreclosure of the such Property or transfer action in lieu thereof, except to the extent any such security deposits Security Deposits were applied in accordance with the terms and conditions of any of the Leases prior applicable Lease;
(viii) any litigation or other legal proceeding related to the occurrence Loan filed by a Recourse Party with the effect of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of Xxxxxx to exercise any rights and remedies available to Lender during the continuance of an Event of Default; provided, however, that there shall be no liability hereunder on account of, and the foregoing shall not restrict, Xxxxxxxx’s or Guarantor’s right to, dispute, in good faith, whether the relevant Event of Default that gave rise shall have occurred or whether an action taken by Lender pursuant to such the Loan Documents is permitted thereby, nor shall Borrower be restricted from, or have liability hereunder for, bringing a good faith counterclaim which if not raised in the foreclosure proceeding would be barred, and which does not seek to enjoin the enforcement action by Xxxxxx;
(ix) Borrower fails to obtain Xxxxxx’s prior written consent to any additional indebtedness or voluntary lien encumbering any Property and not permitted by the Loan Documents;
(x) a material breach by Borrower of Section 5.5;
(xi) intentionally omitted;
(xii) (A) any voluntary termination of any PILOT Lease and/or PILOT Document or transfer or surrender of any PILOT Lease and/or PILOT Document (including any PILOT Bond) by Borrower without Xxxxxx’s prior written consent other than in lieu thereof; and
connection with Borrower acquiring the fee estate from the applicable PILOT Lessor or as otherwise expressly permitted under this Agreement, (xvB) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of any PILOT Lease and/or PILOT Document as a result of a foreclosure of the Observatory applicable Security Instrument or deed in lieu thereof or (C) Borrower’s or the applicable Tenant’s failure to comply with or Borrower’s or the applicable Tenant’s breach of any PILOT Lease without and/or PILOT Document that results in (x) a reduction of any tax abatement and/or mandatory repayment of any past or current tax abatement under such PILOT Lease and/or PILOT Document, as applicable, (y) termination of such PILOT Lease and/or PILOT Document, as applicable, and the consent benefits thereunder in favor of Agent. Borrower or Tenant or (z) a default by such Borrower under the applicable Lease for such PILOT Property (and, in any such case, Losses shall include lost rental income); provided, that, in each case, the liability with respect to this Section 13.1(a)(xii) shall not exceed the Allocated Loan Amount of the applicable PILOT Property;
(xiii) other than as set forth in Section 13.1(b)(v), a breach by Borrower of any covenant of Article 5 of this Agreement documents (excluding any provision requiring each Borrower to remain solvent, maintain adequate capital or pay its debts as they come due); and/or
(xiv) any liability or obligation of Borrower relating to the Previously-Owned Property.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party files a voluntary petition under the Bankruptcy Code Borrower or any other Federal SPE Component Entity or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, directorany Affiliate thereof files, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary of, a petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited (or otherwise colludes with) petitioning creditors for any involuntary petition against Borrower, (ii) Borrower or any Credit Party SPE Component Entity or from any Person; (3) there is the filing of Affiliate thereof files an answer consenting to an involuntary petition filed against Borrower (other than any Credit Party answer which is required to be made by applicable law), by any other person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4iii) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code Borrower or any other Federal SPE Component Entity consents to or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion Borrower (other than with the prior written consent of the Property; Lender), (6iv) any Credit Party Borrower makes a general an assignment for the benefit of creditors, creditors (other than to Lender in connection with the Loan or admitswith the prior written consent of Lender); (v) there is a breach of any provision of Article 5 (Single Purpose Entity Covenants) hereof or the separateness covenants contained in the Borrower’s or SPE Component Entity’s organizational documents (excluding, in writing each case, any provision requiring each Borrower to remain solvent, maintain adequate capital or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless come due) and such admission breach is truecited by a court of competent jurisdiction in a final order in a proceeding under the Bankruptcy Code as a material factor in ordering the substantive consolidation of Borrower with any other Person other than a co-Borrower under the Loan; provided that the motion or pleading seeking substantive consolidation was not brought or supported by Lender and, as a result thereof, Borrower is subsequently substantively consolidated in a case under the Bankruptcy Code with any Person other than a co-Borrower under the Loan, or (7vi) in connection with Borrower fails to obtain Xxxxxx’s prior consent to (a) the transfer or conveyance of all or any enforcement action or exercise or assertion portion of any right Property, or remedy upon (b) the continuance transfer of an Event of Default and acceleration direct or indirect equity interests in Borrower or any Mezzanine Borrower, in each case in violation of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableDocuments.
Appears in 1 contract
Samples: Loan Agreement (Industrial Logistics Properties Trust)
Exculpation. Subject to the qualifications below and except (a) Except as set forth in the Guaranty and Environmental Indemnityotherwise provided herein, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations representations warranties and obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under in the Note, this Agreement, the Mortgage and Security Instrument, the other Loan Documents, or and the interest in the Property, the Rents or Rents, the Collateral and any other collateral given to Agent and/or Lenders Lender pursuant to the Note, this Agreement, the Security Instrument or the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the RentsRent, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender. In no event shall any Related Party have any personal liability for the payment of the indebtedness or any other sums due hereunder, and Lendersunder the Note, the Security Instrument or the other Loan Documents, or for the performance or observance of any other obligation of Borrower other than pursuant to a written instrument executed by such Related Party specifically providing for such liability. Lender, by accepting the Note, this Agreement, the Mortgage Agreement and the other Loan DocumentsSecurity Instrument, agrees that it shall not not, except as otherwise provided herein xxx for, seek or demand any deficiency judgment against Borrower and/or any Related Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage other Loan Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerSecurity Instrument. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Note, this Agreement, the other Loan DocumentsDocuments or the Security Instrument; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with the Note, this Agreement, the Security Instrument, or the other Loan or any of the rights and remedies of Agent or Lenders thereunder; Documents, (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Sections 4.1.8, 4.1.29, 5.1.9 and 5.2.8 of this Agreement; or Lenders (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on preserve or enforce its rights and remedies against any security given Collateral, including any insurance proceeds or condemnation awards to which Lender would otherwise be entitled under this Agreement or the Security Instrument; provided however, Lender shall only enforce such judgment against such Collateral, including the insurance proceeds and/or condemnation awards, as applicable.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the direct, actual Losses it incurs due to: (i) fraud or intentional misrepresentation by any Borrower or any other person or entity in connection with the execution and the delivery of the Note, this Agreement, the Security Instrument or the other Loan Documents; (ii) any Borrower’s intentional misapplication or misappropriation of Rents received by Borrower after the occurrence of an Event of Default; (iii) any Borrower’s intentional misapplication or misappropriation of tenant security deposits or Rents collected more than one month in advance; (iv) the intentional misapplication or the misappropriation of Insurance Proceeds or Awards; (v) any Borrower’s failure to pay Taxes, Other Charges, Ground Rent, charges for labor or materials or other charges that can create liens on any of the Property (except to the extent that sums sufficient to pay such amounts have been deposited in the Lockbox Account or are otherwise in escrow with Lender pursuant to the terms of this Agreement) but only to the extent that the Property Net Operating Income available to Borrower was sufficient to permit Borrower to pay the same when due; (vi) Borrower’s failure to return or to commence reimburse Lender for all Personal Property taken from the Property by or on behalf of Borrower after the occurrence of an Event of Default and in violation of the terms of this Agreement and the Security Instrument and not replaced with Personal Property of the same utility and of the same or greater value; (vii) any act of actual intentional waste or arson by Borrower, any Principal, Affiliate or general partner thereof or by any Indemnitor or Guarantor which is not attributable to a lack of sufficient Net Operating Income available to Borrower from the Property to perform all of Borrower’s or such Affiliate’s obligations under the Note, this Agreement, the Security Instrument or the other appropriate action Loan Documents; (viii) any fees or proceeding commissions paid by any Borrower to any principal, Affiliate or general partner of Borrower, Indemnitor or Guarantor in order for Agent violation of the terms of the Note, this Agreement, the Security Instrument or Lenders the other Loan Documents; (ix) any Borrower’s failure to exercise its remedies against such securitycomply with the provisions of Sections 4.1.41 and 5.1.19 hereof; or (gx) constitute if the Property or any part thereof shall become an asset in an involuntary bankruptcy or insolvency proceeding commenced by any Person (other than Lender) and Borrower fails to use its commercially reasonable efforts to obtain a waiver dismissal of such proceedings.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect as to Borrower (but not to any Related Party other than pursuant to a written instrument executed by such Related Party specifically providing for such liability)
(i) in the event of any Borrower’s willful default to provide a report or information under Section 5.1.10(b), (c), (f), (h), (i), (j), (k) and (l) hereof, but a failure to provide such reports and information shall not be deemed willful if such failure is the result of good faith error and is cured within ten (10) Business Days after notice is delivered to Borrower, provided, however, that if (x) Borrower is prevented by an unaffiliated third party from delivering such information, and (y) Borrower uses reasonable efforts (including the reasonable expenditure of money) to obtain such information, then such failure shall not be deemed willful so long as Borrower continuously endeavors in good faith to obtain the required financial reports and information and delivers same to Lender as soon as it becomes available to Borrower, (ii) in the event of a default under Section 4.1.37 of this Agreement such that either (A) such failure was considered by a court as a factor in the court’s finding for a consolidation of the right of Agent or Lenders to enforce the liability and obligation assets of Borrower with the assets of another person or Guarantorentity or (B) as a result thereof, by money judgment or otherwise, to the extent of Lender suffers any loss, material damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender expense (including reasonable attorneys’ fees and costs reasonably incurred) arising out disbursements, whether or not litigation has commenced); provided, however, that in the absence of or in connection an actual consolidation, recourse may be had against Borrower only to the extent of Losses for its failure to comply with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct provisions of any Credit PartySection 4.1.37 or, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during in the event of a Trigger Period default under Section 5.2.12 of this Agreement or during the continuance of an Event of Default, any misappropriation Article 7 of the Rents by ManagerSecurity Instrument; provided, however, if applicable (so long as Manager is an Affiliate agent or employee of any Credit Party Borrower or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion manager of the Property by Manager, if applicable (so long as Manager is enters into an Affiliate of any Credit Party Equipment lease or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease Equipment financing in violation of the Loan Documents;
(xi) subject to the provisions Security Instrument and without express authorization from an executive officer of Section 8.3(a)(v)Borrower, the failure by any Credit Party to comply with the material single purpose entity requirements Indemnitor or Guarantor then such violation for purposes of this Agreement including those set forth subsection (iii) shall not result in Section 4.2.19 a nullification of subsection 9.4(a) hereof if (but Borrower shall be liable for all Losses related to such failure leads violation) so long as such Equipment lease or Equipment financing is terminated and released to a consolidation Lender’s reasonable satisfaction within ten (10) Business Days of the assets earlier of any Credit Party with the assets (x) Lender’s notice to Borrower of another Person such violation or (other than the other Credit Parties);
(xiiy) the incurrence date that any executive officer of Indebtedness in violation Borrower or of the Loan Documents;
Indemnitor or Guarantor actually becomes aware of such violation; or (xiiiiv) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of if the Property or transfer any part thereof shall become an asset in lieu thereof, except to a voluntary bankruptcy or insolvency proceeding; or (v) if the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andfirst full Monthly Debt Service Payment Amount is not paid when due.
(xvd) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b506(6), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Security Instrument or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with the Note, this Agreement, the Security Instrument and the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except Except as otherwise set forth in this ----------- Section 8.14 and Section 4.2 to the Guaranty contrary, from and Environmental Indemnityafter the date on which ------------ ----------- the Difference and any applicable hedging or interest rate management breakage costs incurred by Lender on the Stabilization Date Payment Date, neither Agent nor Lenders if any, is paid to Lender pursuant to Section 8.32(c), Lender shall not enforce the liability --------------- and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note, the Mortgages or any of the other Loan Documents executed and delivered by any action or proceeding wherein a money judgment shall be sought against a Credit Party, Borrower except that Agent Lender may pursue any power of sale, bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance performance, action for money judgment, or any other appropriate action or proceeding (including, without limitation, to enable Agent obtain a deficiency judgment) against Borrower or any other Person solely for the purpose of enabling Lender to enforce and realize upon its interest under (a) the NoteCollateral, this Agreementand (b) the Rents and Accounts arising from any Facility to the extent (x) received by Borrower, any Operator or any Manager (or any of their affiliates), after the Mortgage and the other Loan Documentsoccurrence of an Event of Default or (y) distributed to Borrower, any Operator or any Manager, or in their respective shareholders, or partners or members, as applicable, or affiliates during or with respect to any period for which Lender did not receive the Propertyfull amounts it was entitled to receive as prepayments of the Loan pursuant to Section 2.6, 2.11 (all Rents and ----------- ---- Accounts covered by clauses (x) and (y) being hereinafter referred to as the Rents or ----------- --- "Recourse Distributions") and (c)) any other collateral given to Agent and/or Lenders pursuant to Lender under ---------------------- the Loan DocumentsDocuments ((a), (b), and (c) collectively, the "Default Collateral"); ------------------ provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be -------- ------- ---- enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerDefault Collateral. The provisions of this Section 8.14 shall not, however, (a) constitute a waiver, release impair the validity of the ------- ---- Indebtedness evidenced by the Loan Documents or impairment in any way affect or impair the Liens of any obligation evidenced the Mortgages or secured by any of the other Loan DocumentsDocuments or the right of Lender to foreclose the Mortgages following an Event of Default; (b) impair the right of Agent or Lenders Lender to name any Credit Party Person as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination any of the Operating Lease and Observatory LeaseMortgages; (c) affect the validity or enforceability of any guaranty the Note, the Mortgages or indemnification agreement made in connection with the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement right of Lender to bring suit for any damages, losses, expenses, liabilities or costs resulting from fraud, material misrepresentation, intentional misrepresentation, physical waste of all or any portion of any Facility, or wrongful removal or disposal of all or any portion of any Facility by any Person in connection with this Agreement, the Assignment of LeasesNote, the Mortgages or the other Loan Documents; (f) impair the right of Lender to obtain the Recourse Distributions received by any Person; (g) impair the right of Lender to bring suit with respect to any 112 misappropriation of security deposits or Rents collected more than one (1) month in advance; (h) impair the right of Lender to obtain Insurance Proceeds or Condemnation Proceeds due to Lender pursuant to the Mortgage; (i) impair the right of Lender to enforce the provisions of Sections 4.1(v) or 5.1(d) through -------------- ------ 5.1(i), inclusive of this Agreement, Section 2.8 of the Mortgage or the ------ ----------- Environmental Guaranty even after repayment in full by Borrower of the Indebtedness; (j) prevent or in any way hinder Lender from exercising, or constitute a prohibition defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy against Agent any or Lenders all of the Collateral securing the Note as provided in the Loan Documents; (k) impair the right of Lender to bring suit with respect to any misapplication of any funds; or (l) impair the right of Lender to xxx for, seek or demand a deficiency judgment against Borrower any Person solely for the purpose of foreclosing the Mortgaged Properties or any part thereof, or realizing upon the Default Collateral; provided, however, that -------- ------- ---- any such deficiency judgment referred to in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or this clause (gl) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, shall be enforceable ---------- only to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or of the Default Collateral. The provisions of this Section shall be inapplicable to any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
Person if (i) any material intentional misrepresentation petition for bankruptcy, ------- reorganization or arrangement pursuant to federal or state law against Borrower shall be filed by any Credit Party in connection with the Loan;
or against Borrower or consented to or acquiesced to by Borrower, (ii) if Borrower shall institute any proceeding for the fraudulent acts dissolution or willful misconduct liquidation of any Credit PartyBorrower, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period if Borrower shall make an assignment for the benefit of creditors or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) if Borrower shall breach the failure of representation and warranty in Section 4.1(aa). Prior to the Observatory Tenantdate on which the Difference and any --------------- applicable hedging or interest rate management brokerage costs incurred by Lender on the Stabilization Payment Date is paid to Lender, during Lender's judgment in any action or proceeding shall not be limited to the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with Collateral and the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to the Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in its shareholders, members and partners and their respective shareholders, members and partners, and the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableParent.
Appears in 1 contract
Samples: Loan Agreement (G&l Realty Corp)
Exculpation. Subject to the qualifications below and except (a) Except as set forth in the Guaranty and Environmental Indemnityotherwise provided herein, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Maryland Owner to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Maryland Owner, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgages and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Maryland Owner, only to the extent of Borrower’s their interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Maryland Owner in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgages or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Maryland Owner as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgages; (ciii) affect the validity or enforceability of any guaranty indemnity (including those contained in the Guaranty, Environmental Indemnity, Section 13.6 and Article XIV of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgages and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgages; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Maryland Owner if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, that Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent the Insurance Proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableAwards.
Appears in 1 contract
Samples: Mortgage Loan Agreement (Ashford Hospitality Trust Inc)
Exculpation. Subject to the qualifications below and The Administrative Agent shall have no duties or obligations except as those expressly set forth in herein. Without limiting the Guaranty and Environmental Indemnity, generality of the foregoing neither the Administrative Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; Administrative Agent’s directors, officers, employees or agents (bi) impair the right shall be subject to any fiduciary or other implied duties, regardless of Agent or Lenders whether a Default has occurred and is continuing, (ii) shall have any duty to name take any Credit Party as a party defendant in any discretionary action or suit exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other Lenders as shall be required by Section 13.1), (iii) except as expressly set forth herein, shall have any duty to disclose, and shall not be liable for foreclosure and sale under failure to disclose any information relating to Greektown Holdings or any of its Subsidiaries that is communicated to or obtained by the Mortgage and termination of Person serving as the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan Administrative Agent or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or GuarantorAdministrative Agent’s Affiliates, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) shall be liable for any action taken by the failure Administrative Agent with the consent or at the request of the Observatory Tenant, during the continuance Required Lenders (or such other number of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid Lenders as shall be required by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv13.1), (v) shall be deemed to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by Greektown Holdings, any of its Subsidiaries or a Lender, (vi) above);
shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for the Administrative Agent’s own bad faith, willful misconduct or gross negligence, (vii) shall be responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of this Agreement or any other Loan Document, (viii) any removal shall be responsible for the creation, perfection or disposal priority of any portion of the Property after an Event of Default in any manner prohibited Liens purported to be created by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (Aix) neither Agent nor Lenders shall be deemed responsible for the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security or (x) shall have any duty to have waived make any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) inquiry respecting the performance by Greektown Holdings or any other provisions of the Bankruptcy Code to file a claim for the full amount its Subsidiaries of the Debt its obligations hereunder or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document. Any inquiry which may be made by the Administrative Agent shall not obligate the Administrative Agent to make any further inquiry or take any action. The Administrative Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, any Credit Partyconsent, certificate, statement or Manager, if applicable (if writing which the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks Administrative Agent believes to be genuine and to have been presented by a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableproper Person.
Appears in 1 contract
Samples: Senior Secured Debtor in Possession Credit Agreement (New Greektown Holdco LLC)
Exculpation. Subject to the qualifications below and except (a) Except as set forth in the Guaranty and Environmental Indemnityotherwise provided herein, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the this Note, this Agreement, the Mortgage Security Instrument or the other Loan Other Security Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or its partners, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the this Note, this Agreementthe Security Instrument, the Mortgage Other Security Documents, and the other Loan Documents, or interest in the Property, the Rents or (as defined in the Security Instrument) and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Note, the Loan Security Instrument and the Other Security Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or its partners only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Xxxxxx, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not xxx not, except as otherwise provided in Section 11.10 of the Security Instrument, sue for, seek or demand any deficiency judgment against Borrower or its partners in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Other Security Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerSecurity Instrument. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Loan DocumentsOther Security Documents or the Security Instrument; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) impair the rights of Trustee (as defined in the Security Instrument) and Lender from exercising their right to sell the Property pursuant to the power of sale granted in the Security Instrument; (iv) affect the validity or enforceability of any guaranty indemnity, guaranty, master lease or indemnification agreement similar instrument made in connection with this Note, the Loan Security Instrument, or any of the rights and remedies of Agent or Lenders thereunderOther Security Documents; (dv) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (evi) impair the enforcement of the Assignment of LeasesLeases and Rents executed in connection herewith; or (fvii) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Sections 13.2, 13.3 and 13.4 of the Security Instrument.
(b) Notwithstanding the provisions of this Section 14 to the contrary, Xxxxxxxx shall be personally liable to Lender for the Losses (as defined in the Security Instrument) it incurs due to: (i) fraud or Lenders intentional misrepresentation by Borrower, its partners or Guarantor (as deemed in the Security Instrument) or any of their respective employees, officers, directors or counsel, or by the appraiser, the environmental consultant or the engineering company who have prepared and delivered to seek a deficiency judgment against Borrower Lender, respectively, the appraisal, the Environmental Report (as defined in order to fully realize on any security given by Borrower the Security Instrument) and the engineering report in connection with the Loan execution and the delivery of this Note, the Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Other Security Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to 15.19.1 Purchaser agrees that it does not have and will not have any claims or causes of action against the qualifications below and except as set forth in the Guaranty and Environmental IndemnitySeller Knowledge Individual, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower any Related Entity or any holder disclosed or undisclosed officer, director, employee, trustee, shareholder, member, manager, partner, principal, parent, subsidiary or other affiliate of a direct or indirect interest in ESBA Seller or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the NoteRelated Entity, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action officer, director, employee, trustee, shareholder, partner or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in principal of any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Propertyparent, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans subsidiary or other Obligations of Borrower. The provisions of this Section shall notaffiliate (collectively, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred“Seller’s Affiliates”) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with Property or this Agreement or the Loan;
(ii) transactions contemplated hereby. Purchaser agrees to look solely to Seller and its assets for the fraudulent acts or willful misconduct satisfaction of any Credit Party, Guarantor liability or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party obligation arising under this Agreement or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Propertytransactions contemplated hereby, or (B) any Awards or other amounts received in connection with for the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions performance of any of the Leases prior covenants, warranties or other agreements contained herein, or the Property and further agrees not to xxx or otherwise seek to enforce any personal obligation against any of Seller’s Affiliates with respect to any matters arising out of or in connection with this Agreement or the occurrence transactions contemplated hereby or the Property. Without limiting the generality of the Event foregoing provisions of Default that gave rise to such foreclosure this Section 15.19.1, Purchaser hereby unconditionally and irrevocably waives any and all claims and causes of action of any nature whatsoever it may now or transfer hereafter have against Seller’s Affiliates, and hereby unconditionally and irrevocably releases and discharges Seller’s Affiliates from any and all liability whatsoever which may now or hereafter accrue in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease favor of Purchaser against Seller’s Affiliates in connection with or arising out of this Agreement or the Observatory Lease without transactions contemplated hereby or the consent Property.
15.19.2 Seller agrees that it does not have and will not have any claims or causes of Agent and action against any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreementdisclosed or undisclosed officer, the Note or any of the Loan Documentsdirector, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officeremployee, trustee, shareholder, member, manager, partner, principal, parent, subsidiary or other affiliate of Seller or any officer, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officeremployee, trustee, directorshareholder, partner or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion principal of any right such parent, subsidiary or remedy upon the continuance other affiliate (collectively, “Purchaser’s Affiliates”) arising out of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges Property or this Agreement or the transactions contemplated hereby. Seller agrees to look solely to Purchaser and its assets for the satisfaction of any other Loan Document, any Credit Partyliability or obligation arising under this Agreement or the transactions contemplated hereby, or Manager, if applicable (if for the Manager is an Affiliate performance of any Credit Party or Guarantor) (I) seeks a defenseof the covenants, judicial intervention or injunctive warranties or other equitable relief of any kindagreements contained herein, or (II) asserts, the Property and further agrees not to xxx or causes a third party otherwise seek to assert, in a pleading filed enforce any personal obligation against any of Purchaser’s Affiliates with respect to any matters arising out of or in connection with a judicial proceeding this Agreement or the transactions contemplated hereby or the Property. Without limiting the generality of the foregoing provisions of this Section 15.19.2, Seller hereby unconditionally and irrevocably waives any defense and all claims and causes of action of any nature whatsoever it may now or hereafter have against Agent and/or the LendersPurchaser’s Affiliates, and hereby unconditionally and irrevocably releases and discharges Purchaser’s Affiliates from any and all liability whatsoever which may now or (III) any right hereafter accrue in favor of Seller against Purchaser’s Affiliates in connection with any security for the Loan, in each or arising out of (I), (II) or (III) that the Subordinations this Agreement or the Negative Pledges transactions contemplated hereby or the subordination Property.
15.19.3 The provisions of this Section 15.19 shall survive the Sublease or Observatory Lease are void, voidable or unenforceable.termination of this Agreement and the Closing. [Signature Page Follows]
Appears in 1 contract
Samples: Purchase and Sale Agreement (CNL Growth Properties, Inc.)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a its constituent members, partners, shareholders, directors, employees or agents or the direct or indirect interest in ESBA constituent members, partners, shareholders, directors, employees or agents thereof (collectively, the “Borrower Parties”) or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower other Person, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Partyany of the Borrower Parties or any other Person, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents all or any other collateral given to Agent and/or Lenders pursuant to portion of the Loan DocumentsCollateral; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower Parties only to the extent of Borrower’s their interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersCollateral, and LendersLender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against any of the Borrower Parties or any other Person in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note or any of the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note or any of the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party of the Borrower Parties, as a party defendant in any action or suit for foreclosure and sale in connection with exercising its remedies under the Mortgage Security Documents and termination of the Operating Lease and Observatory LeasePledged Securities; (ciii) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (gv) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower (but not against any members of Borrower (other than Guarantor to the extent provided in the Non-Recourse Guaranty) or Guarantortheir direct or indirect constituent members or partners or any other Person), by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation (but excluding any punitive, consequential or speculative damages) incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(ia) any material fraud or intentional misrepresentation by any Credit Party Borrower, Senior Mezzanine Loan Borrower, Owner or Guarantor in connection with the Loan;
(iib) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation intentional physical waste of the Rents Property (including, but not limited to, waste due to gross negligence) by ManagerBorrower, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Senior Mezzanine Loan Borrower, Owner or any Affiliate affiliate thereof); provided, any Credit Partyhowever, Guarantor such physical waste shall exclude wear and tear to the Property that occurs in the ordinary course of business of the Property by Borrower, Senior Mezzanine Loan Borrower, Owner or any Affiliate affiliate thereof;
(ivc) the failure material breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity or in this Agreement concerning Environmental Laws, Hazardous Substances or Asbestos;
(d) the removal or disposal by Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default has occurred and while it is continuing, unless such portion of the Property is replaced by an item of equal or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account greater value as determined by Lender in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsits reasonable discretion;
(ve) the misappropriation misapplication or conversion by Borrower, Senior Mezzanine Loan Borrower, Owner or any affiliate thereof of (Ai) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (Bii) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is iii) any Rents following an Affiliate Event of Default or (iv) any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents paid more than one (1) month in advance;
(vif) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect charges for labor or materials or taxes or other charges that can create liens superior to the lien of the Mortgage on any portion of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables unless such taxes or other charges are being contested in accordance with the Senior Loan Documents or in accordance with the terms herewith or such taxes or charges have been delivered to Senior Lender in accordance with the terms of the Senior Loan Documents or Borrower has complied with Section 4.1.2)5.2 hereof;
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivg) any security depositsdeposits collected by Borrower, advance deposits Senior Mezzanine Loan Borrower, Owner or any other deposits collected affiliate thereof with respect to the Property which are not delivered to Agent Lender (subject to the rights of Senior Lender) upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvh) the failure by Borrower to cause Senior Mezzanine Loan Borrower to cause Owner to deposit with Senior Lender all Rents, as required under Article 3 of the Senior Loan Agreement;
(i) the failure by Borrower to cause Senior Mezzanine Loan Borrower to cause Owner to use any funds released by Senior Lender from any subaccount provided for in the Senior Loan Agreement for the intended use therefor in default of the requirements of the Senior Loan Agreement; or
(j) any modificationscost or expense incurred by Lender in connection with the enforcement of its rights and remedies hereunder or any other Loan Document.
(1) if any petition for bankruptcy, amendmentsreorganization or arrangement pursuant to federal bankruptcy law, restatements and/or supplements made or any similar federal or state law, shall be filed by Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor, or (2) if Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor files an answer consenting to, or otherwise joining in, any involuntary petition for bankruptcy, reorganization or arrangement pursuant to the Ground Leasefederal bankruptcy law, Sublease or the Observatory Lease without the consent any similar federal or state law filed against it by any other Person, or is found pursuant to a final, unappealable order of Agent and a court of competent jurisdiction to have solicited or caused to be solicited creditors to file any termination involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law against Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor, or (3) if Owner, Senior Mezzanine Loan Borrower, Borrower or Guarantor are found, pursuant to a final unappealable order of the Observatory Lease without the consent a court of Agent. Notwithstanding anything competent jurisdiction, to the contrary have been in this Agreementcollusion with creditors that initiate a bankruptcy action or proceeding against Owner, the Note Senior Mezzanine Loan Borrower, Borrower or Guarantor; (F) an Event of Default described in Section 8.1(s) hereof shall have occurred or (G) if Guarantor, Borrower or any Affiliate of any of the Loan Documentsforegoing, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders Lender under or in connection with the GuarantyNote, Mortgage, Subordinations, Negative Pledges the Pledge or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, kind or (II) asserts, or causes a third party to assert, asserts in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, Lender or (III) any right in connection with any security for the LoanLoan which the court in any such action or proceeding, in each of (I)determines that Borrower’s defense is without merit, (II) or (III) that the Subordinations such request for judicial intervention or the Negative Pledges injunctive or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableother equitable relief is unwarranted.
Appears in 1 contract
Samples: Junior Mezzanine Loan Agreement (Maguire Properties Inc)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein, in the Guaranty and Environmental IndemnitySecurity Instrument or in the Other Security Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Security Instrument or any of the Other Security Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the this Note, this Agreementthe Security Instrument, the Mortgage Other Security Documents, and the other Loan Documents, or interest in the Property, the Rents or (as defined in the Security Instrument) and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Note, the Loan Security Instrument and the Other Security Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not not, except as otherwise provided in this Article 14, xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding proceeding, under or by reason of or under or in connection with the this Note, this Agreement, the Mortgage Other Security Documents or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of BorrowerSecurity Instrument. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Note, the Loan DocumentsOther Security Documents or the Security Instrument; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any guaranty indemnity (including, without limitation, the Environmental Indemnity (as defined in the Security Instrument)), guaranty, master lease or indemnification agreement similar instrument made in connection with this Note, the Loan Security Instrument, or any of the rights and remedies of Agent or Lenders thereunderOther Security Documents; (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of LeasesLeases and Rents executed in connection herewith; (f6) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Section 13.2, of the Security Instrument; or Lenders 7) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower if necessary to obtain any insurance proceeds or condemnation awards to which Lender would otherwise be entitled under this Security Instrument; provided however, Lender shall only enforce such judgment to the extent of the insurance proceeds and/or condemnation awards.
(b) Notwithstanding the provisions of this Article 14 to the contrary, Borrower shall be personally liable to Lender for the Losses (as defined in order to fully realize on any security given the Security Instrument) it incurs due to: 1) fraud or intentional misrepresentation by Borrower or any other person or entity in connection with the Loan execution and the delivery of this Note, the Security Instrument or to commence any other appropriate action the Other Documents; 2) Borrower's misapplication or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver misappropriation of Rents received by Borrower after the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance occurrence of an Event of Default, any ; 3) Borrower's misapplication or misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(ivcollected in advance; 4) the failure of the Observatory Tenant, during the continuance of an Event of Default misapplication or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (Bcondemnation awards; 5) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any Borrower's failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property Taxes (as defined in the ordinary course of business (except with respect to TaxesSecurity Instrument), Other Charges and Trade Payables being contested (as defined in accordance with Section 4.1.2);
the Security Instrument) (vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that sums sufficient to pay such lack amounts have been deposited in escrow with Lender pursuant to the terms of cash flow arises the Security Instrument), charges for labor or materials or other charges that can create liens on the Property; 6) Borrower's failure to return or to reimburse Lender for all Personal Property (as defined in the Security Instrument) taken from the misappropriation Property by or on behalf of revenue Borrower and not replaced with respect to Personal Property of the Property as described in clauses (iii), (iv), (v) same utility and (vi) above);
(viiiof the same or greater value; 7) any removal act of actual waste or disposal of arson by Borrower, any portion of principal, affiliate, member or general partner thereof or by any Indemnitor (as defined in the Property after an Event of Default Security Instrument) or Guarantor (as defined in the Security Instrument); 8) any manner prohibited fees or commissions paid by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent Borrower to any Transferprincipal, as applicableaffiliate, as required by the Mortgage member or Article VIII hereof (except with respect to a mechanic’sgeneral partner of Borrower, tax, judgment Indemnitor or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease Guarantor in violation of the Loan Documents;
(xi) subject to the provisions terms of Section 8.3(a)(v)this Note, the Security Instrument or the Other Security Documents; or 9) Borrower's failure by any Credit Party to comply with the material single purpose entity requirements provisions of this Agreement including those Sections 12.1 and 12.2 of the Security Instrument.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in Section 4.2.19 hereof if such failure leads to a consolidation Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect in the event of Borrower's default under Sections 3.11 (after ten (10) days written notice) or 4.2 or Article 8 of the assets Security Instrument, or in the event of any Credit Party with Principal's (as defined in the assets of another Person (other than the other Credit Parties);
(xiiSecurity Instrument) the incurrence of Indebtedness in violation default under Section 4.2 of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental lawsSecurity Instrument; provided, Hazardous Substances and asbestos;
(xiv) any security depositshowever, advance deposits or any other deposits collected that with respect to the Property which are not delivered to Agent upon a foreclosure Borrower's default under Section 3.11 of the Property or transfer in lieu thereofSecurity Instrument only, except upon Borrower's cure of said default, Lender's agreement not to pursue recourse liability shall be reinstated, provided further, however, that Borrower shall be liable to Lender for the losses it realizes due to Borrower's failure to deliver the statements required pursuant to the extent any such security deposits were applied in accordance with the terms and conditions of any Section 3.11 of the Leases prior Security Instrument from the date of said failure up to and including the occurrence date of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andsaid cure.
(xvd) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt indebtedness secured by the Security Instrument or to require that all collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Note, the Loan Security Instrument and the Other Security Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Open End Mortgage and Security Agreement (Associated Estates Realty Corp)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, except that Agent Lender may bring a foreclosure actionan action under the UCC, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s 's or Borrower Principal's interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, agrees that it shall not xxx not, except as otherwise provided in this Section 15.1, sue for, seek or demand any deficiency judgment against Borrower or Xxxrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreement or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Section 13.5 and Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreement and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Pledge Agreement; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the Loan;
(ii) execution and the fraudulent acts or willful misconduct delivery of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or Note, the Pledge Agreement, any of the other Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any certificate, report, financial statement or other provisions instrument or document furnished to Lender at the time of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration closing of the Loan by or on behalf during the term of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.;
Appears in 1 contract
Samples: Senior Mezzanine Loan Agreement (Maguire Properties Inc)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitythis Article VIII, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, or its direct or indirect owners (other than pursuant to any separate agreement, indemnity or guaranty, including pursuant to the Guarantees and the Environmental Indemnity), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the NoteNotes, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the Property, the Rents Revenues, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment awarded in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Revenues and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the NoteNotes, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, and without limitation of the foregoing and in addition thereto, agrees for itself and its successors and assigns that it and its successors and assigns shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the NoteNotes, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 8.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c) affect the validity or enforceability of any separate agreement, indemnity or guaranty or indemnification agreement made in connection with (including the Loan Guarantees and the Environmental Indemnity), or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leasesintentionally omitted; or (f) constitute a prohibition against Agent or Lenders to seek Lender seeking a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence commencing any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in the PropertyCollateral (or any portion thereof), the Rents or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its rights and remedies provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment of LeasesPledge Agreement; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof), the Mezzanine A Collateral (or any portion thereof) or the Collateral (or any portion thereof); or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, Debt filed by any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate Borrower Party or any other action of any Credit Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or Guarantor otherwise interferes with or frustrates the efforts of Lender to exercise any Affiliate thereof)rights and remedies available to Lender as provided herein and in the other Loan Documents; provided, however, that Borrower shall have no liability under this clause (iii) in the event that such Borrower Party asserts any Credit Partydefense or otherwise exercises any of its rights in good faith, Guarantor including, without limitation, by means of, or in connection with, the filing, pursuit or maintenance by such Borrower Party of any Affiliate thereoflitigation, proceeding, action or claim in good faith;
(iv) (A) waste to the failure Property caused by the intentional acts or intentional omissions of any Borrower Party and/or (B) the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property by any Borrower Party or its Affiliates after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by any Borrower Party of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, (C) any Rents, if applicable any, (so long as Manager is an Affiliate D) any Tenant security deposits or Rents collected in advance, if any, (E) any other monetary collateral for the Loan (including, without limitation, any Reserve Funds and/or any portion thereof disbursed to (or at the direction of) Borrower), or (F) any Net Liquidation Proceeds After Debt Service or any distributions or other payments made in respect of any Credit Party or Guarantor part of the Properties (or any Affiliate portion thereof), any Credit Party or Guarantor the Mezzanine A Collateral (or any Affiliate portion thereof) or the Collateral (or any portion thereof);
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to Taxes, charges for labor or materials or other charges that can create liens on any portion of the Property in accordance with the ordinary course of business terms and provisions hereof (except (1) to the extent that Mortgage Borrower does not have sufficient revenue from the Properties to make such payment, (2) to the extent that sums sufficient to pay such amounts have been deposited in escrow with Mortgage Lender pursuant to the terms of Sections 8.1, 8.2, 8.3, 8.6 or 8.8 of the Mortgage Loan Agreement, as applicable and Mortgage Lender has not made such sums available to Mortgage Borrower or (3) to the extent that Mortgage Borrower is contesting (or causing Mortgage Borrower to contest) such charges in accordance with the terms and conditions of Section 4.5 hereof (with respect to Taxes, Other Charges ) and Trade Payables being contested in accordance with the terms and conditions of Section 4.1.24.16 hereof (with respect to Work Charges and/or other trade payables));
(vii) intentional physical waste failure to pay Insurance Premiums, to maintain the Policies in full force and effect and/or to provide Lender evidence of the Property same, in each case, as expressly provided herein (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except (1) to the extent that such lack of cash flow arises Mortgage Borrower does not have sufficient revenue from the misappropriation of revenue with respect Properties to make such payment or (2) to the Property as described extent that sums sufficient to pay such amounts have been deposited in clauses (iii), (iv), (v) escrow with Mortgage Lender pursuant to the terms of Section 8.6 of the Mortgage Loan Agreement and (vi) aboveMortgage Lender has not made such sums available to Mortgage Borrower);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Mortgage Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(ix) any tax on the making of the Note or any of the other Loan Documents or any transfer or similar taxes upon the making of the same, but excluding any income, franchise or other similar taxes;
(x) any violation or breach of any applicable law mandating the forfeiture or seizure of the Property (or any portion thereof and/or interest therein);
(xi) any material violation or breach by Mortgage Borrower with respect to any representation, warranty or covenant contained in Article 5 of the Mortgage Loan Agreement (except with respect to Mortgage Borrower or any SPE Component Entity (as defined in the Mortgage Loan Agreement) remaining solvent, maintaining adequate capital or complying with Section 5.1(a)(vii) of the Mortgage Loan Agreement with respect to trade payables or Permitted Equipment Leases (as defined in the Mortgage Loan Agreement) solely (1) to the extent that Mortgage Borrower does not have sufficient revenue from the Properties to make such payment or (2) to the extent that sums sufficient to pay such amounts have been deposited in an escrow for the payment of such amounts with Mortgage Lender pursuant to the terms of Article VIII of the Mortgage Loan Agreement and Mortgage Lender has not made such sums available to Mortgage Borrower);
(xii) (A) the failure of Mortgage Borrower to make any True Up Payment (as defined in the Mortgage Loan Agreement) (except to the extent that Mortgage Borrower does not have sufficient revenue from the Properties to make such payment), (B) the failure of Mezzanine A Borrower to make any True Up Payment (as defined in the Mezzanine A Loan Agreement) (except to the extent that Mezzanine A Borrower does not have sufficient revenue from the Mezzanine A Collateral to make such payment) or (C) the failure of Borrower to make any True Up Payment (except to the extent that Borrower does not have sufficient revenue from the Collateral to make such payment), as applicable;
(xiii) the failure to purchase or replace (as applicable) any Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement (as applicable), in each case, as and when required by the terms hereof;
(xiv) any material violation or breach with respect to any representation, warranty or covenant contained in Article 5 (except with respect to Borrower or any SPE Component Entity remaining solvent or maintaining adequate capital solely to the extent that Borrower does not have sufficient revenue from the Properties to make such payments);
(xv) any modificationsviolation or breach of Section 11.6 or 11.8 hereof;
(xvi) any Property Document Event shall occur;
(xvii) any material violation or breach by Mezzanine A Borrower with respect to any representation, amendments, restatements and/or supplements made warranty or covenant contained in Article 5 of the Mezzanine A Loan Agreement (except with respect to Mezzanine A Borrower or any SPE Component Entity (as defined in the Mezzanine A Loan Agreement) remaining solvent or maintaining adequate capital solely to the Ground Leaseextent that Mezzanine A Borrower does not have sufficient revenue from the Properties to make such payments);
(xviii) any violation or breach of Section 7(a)(ii), Sublease Section 7(a)(iii) or Section 7(b) of any Subordination of Management Agreement;
(xix) the Observatory Lease without failure of Borrower or Manager to make required contributions to the consent CBA Multiemployer Plan (whether or not such failure results in an Event of Agent and Default hereunder); and/or
(xx) the failure of Mortgage Borrower, Borrower or Manager to cooperate with Lender and/or its assignees or designees in transitioning to Lender and/or its assignees or designees any termination of the Observatory Lease without the consent of Agent. liquor licenses with respect to any Individual Property.
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: :
(1i) Borrower fails or fails to cause Mezzanine A Borrower and/or Mortgage Borrower to comply with any Mortgage Loan Cash Management Provisions Mezzanine A Loan Cash Management Provisions and/or the Waived Cash Management Provisions, as applicable, and does not cure such failure within ten (10) days after written notice thereof, (ii) Borrower fails to cause Mortgage Borrower to appoint a new property manager when required to do so pursuant to this Agreement or fails to cause Mortgage Borrower to comply with any limitations on instructing the property manager, each as required by and in accordance with, as applicable, the terms and provisions of, this Agreement and the other Loan Documents; (iii) any Credit Party files representation, warranty or covenant contained in Article 5 hereof is violated or breached which results in the substantive consolidation of Borrower, Mortgage Borrower or any SPE Component Entity (as defined herein and in the Mortgage Loan Agreement) with any other Person that is a voluntary petition debtor in any proceeding under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (2iv) an Affiliatea Prohibited Transfer occurs, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the (v) a Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any PersonEvent occurs; (3vi) there Section 11.1 hereof is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code violated or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is truebreached; or (7vii) in connection with any enforcement action the Ground Lease is terminated or exercise cancelled or assertion of any right or remedy upon the continuance of an Event of Default Renewal Deadline occurs and acceleration Lender has not received evidence acceptable to Lender of the Loan by or on behalf renewal of the Agent and Lenders under or Ground Lease in connection accordance with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableits terms.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Borrower, or against Owner, any Guarantor, any Affiliates of the foregoing or any of their respective direct or indirect principals, directors, officers, employees, beneficiaries, shareholders, partners, members, trustees or agents (each, exclusive of the Borrower, an “Other Exculpated Party”), except that Agent (1) any Other Exculpated Party that is party to any Loan Document or any other separate written guaranty, indemnity or other agreement given by such Other Exculpated Party in connection with the Loan (including, without limitation, the Subordination of Management Agreement and the Qualified Preferred Equity Recognition Agreement or any other Loan Document to which such Other Exculpated Party is a party) shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Other Exculpated Party thereunder, and (2) Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, or in all or any portion of the Property, the Rents Collateral or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 10.1 shall not, however, (a) constitute a)consdtute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (c) affect the validity or enforceability of any of the Loan Documents or any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of LeasesEnvironmental Indemnity; (f) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Pledge Agreement or the other Security Documents or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against all or any portion of the Collateral; (g) waive or impair the liability of any Other Exculpated Party under any Loan Document or any other separate written guaranty, indemnity or other agreement to which such securityOther Exculpated Party is a party (including, without limitation, the Subordination of Management Agreement and the Qualified Preferred Equity Recognition Agreement or any other Loan Document to which such Other Exculpated Party is a party); or (gh) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any actual loss, damage, cost, out-of-pocket cost or expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable outside attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:following (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
(i) any material fraud or intentional misrepresentation committed by Borrower, any Credit Party Guarantor, any Individual Owner or any Affiliate of Borrower, any Individual Owner or any Guarantor in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during intentional failure to disclose a Trigger Period or during the continuance of an Event of Defaultmaterial fact known to Borrower, any misappropriation of the Rents by ManagerIndividual Owner, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Guarantor, or any Affiliate thereof)of Borrower, any Credit Party, Guarantor Individual Owner or any Affiliate thereof;
(iv) Guarantor in connection with the failure origination of the Observatory Tenant, during Loan that if disclosed would be reasonably expected to have had a material adverse effect on the continuance of an Event of Default or during a Trigger Period, Lender’s determination to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with provide the Loan Documents in the amount and Net Observatory Deck Revenue under on the Observatory Lease directly into the JP Collection Account terms set forth in accordance with the Loan Documents;
(iii) [Reserved];
(iv) wrongful removal of personal property from the Properties during an Event of Default by Borrower or on behalf of Borrower or any Individual Owner, by any Guarantor or any Affiliate of Borrower, any Individual Owner or any Guarantor, unless replaced with personal property of substantially the same or greater utility and of the same or greater value;
(v) any intentional physical Waste at any Individual Property committed by Borrower or on behalf of Borrower or any Individual Owner by any Guarantor or any Affiliate of Borrower, any Individual Owner or any Guarantor;
(vi) the misappropriation by Borrower or on behalf of Borrower or any Individual Owner, by any Guarantor or any Affiliate of Borrower, any Individual Owner or any Guarantor of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction Casualty to the any Individual Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the any Individual Property by Manager, if applicable and (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(viC) any failure by Manager, if applicable Gross Revenues after (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(viithat results in) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default Default, in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfereach case, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xivii) subject failure to obtain and maintain the fully paid for Policies in accordance with Section 5.1.1 to the provisions extent that adequate funds were available to Borrower or Owner from the income of the Properties for the payment of the premiums thereof;
(viii) any breach of any provision of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements 4.4 or Schedule V of this Agreement including those set forth (other than with respect to clause (d) of Schedule V (with respect to trade payables only), clause (f) of Schedule V. clause (j) of Schedule V. clause (w) of Schedule V and clause (x) of Schedule V) that does not result in Section 4.2.19 hereof if such failure leads to a the substantive consolidation of the assets and liabilities of Borrower or any Credit Party Individual Owner with the assets of another any other Person (other than another Individual Owner or the other Credit Parties)Liquor Subsidiary) as a result of such breach;
(xiiix) any and all Divested Property Liabilities; and/or
(x) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach modification of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any Ground Lease if such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in modification is prohibited under this Agreement, the Note Mortgage Loan Agreement or under any of Mortgage and such modification has a material adverse effect on the related Individual Property or the leasehold interest therein (including the value or operation thereof) or Lender’s ability to exercise its rights and remedies under the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (American Realty Capital Hospitality Trust, Inc.)
Exculpation. Subject The liability of Landlord or the Landlord Parties to Tenant for any default by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration or any other matter relating to the qualifications below Project or the Premises shall be limited solely and except exclusively to an amount which is equal to the lesser of (a) the interest of Landlord in the Building or (b) the equity interest Landlord would have in the Building if the Building were encumbered by third-party debt in an amount equal to eighty percent (80%) of the value of the Building (as such value is determined by Landlord), provided that in no event shall such liability extend to any sales or insurance proceeds received by Landlord or the Landlord Parties in connection with the Project, Building or Premises. Neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 30.13 shall inure to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord's obligations under this Lease. Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any circumstances for, and Tenant, on behalf of itself and its agents, contractors, subcontractors, employees, invitees and licensees, hereby waives any claim for, any injury or damage to, or interference with, Tenant's business, and any indirect, consequential or punitive damages, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring. Notwithstanding any contrary provision herein, neither Tenant nor the Tenant Parties shall be liable under any circumstances for injury or damage to, or interference with, Landlord's business, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring, other than such damages (including any loss of profits or business opportunity) incurred by Landlord in connection with Tenant's violation of Article 25 above with respect to Hazardous Materials or any holding over by Tenant in the Premises as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) Article 16 above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Lease (Bloom Energy Corp)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitythis Section 6.3, neither Administrative Agent nor Lenders shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the NoteNotes, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, or its direct or indirect owners (other than pursuant to any separate agreement, indemnity or guaranty, including pursuant to the Guaranty and the Environmental Indemnity), except that Administrative Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Administrative Agent to enforce and realize upon its interest under the NoteNotes, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Revenues, or any other collateral given to Administrative Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment awarded in any such action or proceeding shall be enforceable against Borrower only to the extent of BorrowerXxxxxxxx’s interest in the Property, in the Rents, in the Cash Collateral Revenues and in any other collateral given to Administrative Agent and/or Lendersas collateral security for the Debt, and LendersAdministrative Agent, by accepting without limitation of the Noteforegoing and in addition thereto, this Agreement, the Mortgage agrees for itself and the other Loan Documents, its successors and assigns that it and its successors and assigns shall not xxx sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under under, or by reason of or under of, or in connection with with, the NoteNotes, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 6.3(a) shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (bii) impair the right of Administrative Agent or Lenders to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) affect the validity or enforceability of any separate agreement, indemnity or guaranty or indemnification agreement made in connection with (including the Loan Guaranty and the Environmental Indemnity), or any of the rights and remedies of Administrative Agent or Lenders Lender thereunder; (div) impair the right of Administrative Agent or Lenders to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment of Leases; or (fvi) constitute a prohibition against Administrative Agent or Lenders to seek seeking a deficiency judgment against Borrower not otherwise prohibited by this Section 6.3(a) in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence commencing any other appropriate action or proceeding in order for Administrative Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce Property, provided, that, the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement such deficiency action or exercise or assertion of any right or remedy upon shall be limited (Y) to the continuance of an Recourse Liabilities and (Z) if a Springing Recourse Event of Default and acceleration of has occurred, to the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableDebt.
Appears in 1 contract
Samples: Loan Agreement (Nexpoint Diversified Real Estate Trust)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (1) and (2) above, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower shall be personally liable to Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingfor Losses due to:
(i) any material fraud or intentional misrepresentation by an Exculpated Party in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any Credit Party of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan and in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any Exculpated Party’s misapplication or misappropriation of Rents received by Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication or misappropriation of tenant security deposits (including the failure of to deliver to Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the Observatory Tenant, during extent not applied in accordance with the continuance applicable Leases prior to the occurrence of an Event of Default Default) or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Rents collected in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsadvance;
(v) the misapplication or the misappropriation of (A) Insurance Proceeds or Awards by any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofExculpated Party;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect Property Taxes, Insurance, Other Charges, charges for labor or materials or other charges that can create liens on the Property beyond any applicable notice and cure periods specified herein (provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and Borrower has not made a claim against such escrowed amounts or otherwise taken action to restrict Lender from applying such sums for the purpose of paying such items) or (B) there is insufficient cash flow from the operation of the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2pay such items);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)[intentionally omitted];
(viii) any removal material physical waste to the Property caused by the intentional acts or disposal omissions of any portion Exculpated Party when there is sufficient cash flow from the operation of the Property after an Event of Default in any manner prohibited by the Loan Documentsto avoid such waste from occurring;
(ix) any Credit PartyBorrower’s failure during the continuance of any Event of Default to obtain Agent’s prior consent deliver to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except Lender upon demand all Rents and books and records relating to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)Property;
(x) Borrower’s assertion or raising of any defense to a voluntary Lien remains an encumbrance on all proceeding instituted by Lender (whether judicial or any portion otherwise) for the foreclosure of the Property, Mortgage following an Event of Default caused by Borrower’s failure to timely pay the Operating Lease Monthly Payment Amount or the Observatory Lease Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be brought in violation of the Loan Documentsbad faith;
(xi) subject to the provisions Breach by Borrower of Section 8.3(a)(v)any representation, the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those warranty or covenant set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);10.1(a) or Section 10.2(a) hereof; or
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental lawsrepresentation, Hazardous Substances and asbestos;
(xiv) warranty or covenant of any security deposits, advance deposits or any other deposits collected Borrower with respect to the Property which are not delivered to Agent upon a foreclosure of the Property itself or transfer any SPE Component Entity set forth in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andArticle 6 hereof.
(xvc) any modifications, amendments, restatements and/or supplements made to Notwithstanding the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreementforegoing, the Note or any agreement of the Loan Documents, Lender not to pursue recourse liability as set forth in subsection (Aa) neither Agent nor Lenders above SHALL BECOME NULL AND VOID and shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, no further force and (B) effect and the Debt shall be fully recourse to Borrower, but not to any holder Borrower in the event (i) of a direct or indirect interest in ESBA breach by Borrower or any party supervising either party comprising Borrower SPE Component Entity of any of the covenants set forth in Article 6 hereof that is expressly cited in a court’s decision as a basis for a substantive consolidation (other than a substantive consolidation petitioned for or joined in by Lender) of the Borrower with any other Person in a proceeding under any Creditors’ Rights Laws, (ii) Borrower incurs any Indebtedness other than the Debt and Permitted Debt without the prior written consent of Lender or except as provided expressly permitted in this Agreement, (iii) of the Guaranty and Environmental Indemnityoccurrence of a Prohibited Transfer, (iv) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code Property or any other Federal or state part thereof shall become an asset in a bankruptcy or insolvency law; proceeding initiated by Borrower, (2v) an Borrower, Guarantor or any Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party Borrower or Guarantor files files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for the filing of any involuntary petition against any Credit Party or Borrower from any PersonPerson under any Creditors Rights Laws; (3vi) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; or (5vii) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party Borrower consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; .
(6d) any Credit Party makes Nothing herein shall be deemed to be a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion waiver of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders which Lender may have under or in connection with the GuarantySection 506(a), Mortgage506(b), Subordinations, Negative Pledges 1111(b) or any other Loan Document, any Credit Party, or Manager, if applicable (if provision of the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks U.S. Bankruptcy Code to file a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security claim for the Loanfull amount of the indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, in each of (I)the Note, (II) or (III) that the Subordinations Mortgage or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableother Loan Documents.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, or in the PropertyProperties (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instruments and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instruments or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instruments; (c3) affect the validity or enforceability of the Guaranty, the Environmental Indemnity and/or any guaranty or indemnification agreement made set forth in connection with the Loan Section 11.2 hereof or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instruments and in any other Loan Documents; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instruments or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any fraud or intentional material intentional misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto;
(iv) material physical waste to the Properties caused by the intentional acts or intentional omissions of any Borrower Party (it being agreed that is shall not be waste for purposes of this clause (iv)(A) if Borrower fails to maintain the Properties because (1) the revenue generated by the Properties (on an aggregate basis) on a current basis (after payment of the applicable Priority Payments) is insufficient to do so or (2) the Properties (on an aggregate basis) generated sufficient revenue (after payment of the applicable Priority Payments) to maintain the Properties but Borrower lacks access to such revenue as a result of any cash trap by Lender during a Trigger Period or during any exercise of Lender’s remedies under the continuance Loan Documents) and/or (B) the removal or disposal of an Event of Default, any misappropriation portion of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of Properties after an Event of Default or during a Trigger Period, to pay all Rent under in violation of the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with terms of the Loan Documents;
(v) the misappropriation misappropriation, conversion or intentional misapplication by any Borrower Party of (A) any insurance proceeds paid by reason of any lossCasualty, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all a Condemnation, (C) any Rents, or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of D) any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents paid more than one (1) month in advance;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect charges for labor or materials or other charges or judgments that can create liens on any portion of the Properties except to the Property in extent the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables same are being contested in good faith in accordance with Section 4.1.2this Agreement; provided, however, that there shall be no personal liability under this subsection solely for the failure to pay charges for labor or materials or other charges that can create liens on any portion of the Properties if (A) the revenue generated by the Properties (on an aggregate basis) on a current basis (after payment of the applicable Priority Payments) is insufficient to pay such charges, (B) the Properties (on an aggregate basis) generated sufficient revenue (after payment of the applicable Priority Payments) to pay such charges but Borrower lacks access to such revenue as a result of any cash trap by Lender during a Trigger Period or any exercise of Lender’s remedies under the Loan Documents and/or (C) sufficient sums had been reserved with Lender under the Loan Documents for the express purpose of paying the charges for labor or materials or other charges that can create liens on any portion of the Properties in question and Lender failed to pay same or give Borrower access to such sums to pay same (and in each case, Lender’s access to such funds was not restricted or impeded in any way);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property Properties which are not delivered to Agent Lender upon a foreclosure of the Property Properties or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action-in-lieu thereof or previously delivered to Lender;
(viii) any zoning matters with respect to the Property, and/or any zoning violations identified in lieu any of the Zoning Reports;
(ix) a breach of Section 4.23(e), Section 11.2 and/or Section 17.17 of this Agreement;
(x) the failure to pay Taxes or Insurance Premiums in accordance with the terms of this Agreement or the failure to maintain the Policies (to the extent such Policies are generally available) required pursuant to the terms of this Agreement in full force and effect; provided, however, that there shall be no personal liability under this subsection solely for the failure to pay Taxes and Insurance Premiums if (A) the revenue generated by the Properties (on an aggregate basis) over the prior twelve (12) month period (after payment of the applicable Priority Payments) is insufficient to pay such Taxes and Insurance Premiums, (B) the Properties (on an aggregate basis) generated sufficient revenue (after payment of the applicable Priority Payments) to pay such Taxes and Insurance Premiums but Borrower lacks access to such revenue as a result of any cash trap by Lender during a Trigger Period or any exercise of Lender’s remedies under the Loan Documents, and/or (C) sufficient sums had been reserved with Lender under Section 8.6 hereof for the express purpose of paying the Taxes and/or Insurance Premiums in question and Lender failed to pay same or give Borrower access to such sums to pay same (and in each case, Lender’s access to such funds was not restricted or impeded in any way);
(xi) if Borrower or any Affiliate of Borrower, in any judicial or quasi-judicial case, action or proceeding relating to the Debt brought by Lender (A) contests the validity or enforceability of the Loan Documents or (B) directly or indirectly contests or intentionally hinders, delays or obstructs the pursuit of any rights or remedies by Lender (including the commencement and/or prosecution of a foreclosure action, judicial or non-judicial, the appointment of a receiver for the Property or any portion thereof or any enforcement of the terms of the Assignment of Leases) after an Event of Default; provided, however, that there shall be no liability to Borrower under this subsection for raising and pursuing actions or defenses to the extent the same are raised and pursued in good faith;
(xii) any termination of a Ground Lease (other than (A) a termination due to the occurrence of a casualty or condemnation which gives the lessor the unilateral right to terminate a Ground Lease and in connection with which the insurance proceeds and condemnation award, as applicable, have been paid to Lender in accordance with this Agreement or (B) a termination in connection with the acquisition of the underlying Fee Estate provided there is no violation of the terms of the Loan Documents and Borrower causes the lien of the Security Instrument to be spread to cover such Fee Estate) or the material modification of a Ground Lease, in each case without Lender’s consent;
(xiii) any material amendment or modification of any Lease affecting any Individual Property in violation of the terms of this Agreement or any cancellation or termination of any Lease (other than a termination of a Lease due to the Tenant’s unilateral right to terminate such Lease as set forth in such Lease at the time of Lender’s approval or deemed approval thereof) in violation of the terms of this Agreement;
(xiv) the failure by any Individual Borrower or SPE Component Entity to comply with any representation, warranty or covenant set forth in Article 5 of this Agreement; andand/or
(xv) Borrower fails to obtain Lender’s prior written consent to any modifications, amendments, restatements and/or supplements made transfer to the Ground Leaseextent required pursuant to the terms of this Agreement that is not a Full Recourse Transfer or Borrower fails to obtain Lender’s prior written consent, Sublease to the extent required pursuant to the terms of this Agreement, to any Indebtedness or voluntary Lien encumbering the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Property that is not a Full Recourse Lien.
(b) Notwithstanding anything to the contrary in this Agreement, the Note Notes or any of the Loan Documents, (AI) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Security Instruments or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, Documents and (BII) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event thatof any of the following: (1A) any Credit Party files Borrower filing a voluntary petition under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law; (2B) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, law in which any Credit Party Borrower or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party Borrower from any Person; (4C) any Credit Party files Borrower filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal federal or state bankruptcy or insolvency lawlaw (provided that the foregoing shall not be deemed to require Borrower to file an objection to any such involuntary petition if Borrower determines reasonably and in good faith that it has no reasonable basis for doing so, or solicits or causes if Borrower is otherwise not permitted by law to be solicited petitioning creditors for any involuntary petition from any Personfile such an objection); (5D) any Affiliate, officer, trustee, director, Borrower consenting to or representative which Controls any Credit Party acquiescing in or Guarantor joins joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the PropertyProperties other than at Lender’s request (provided that in connection with any acquiescence, Borrower shall not be required to file an objection to any such application if Borrower determines reasonably and in good faith following consultation with legal counsel that it has no reasonable basis for doing so, or if Borrower is otherwise not permitted by law to file such an objection); (6E) any Credit Party makes a general Borrower making an assignment for the benefit of creditorscreditors other than at Lender’s request, or admitsadmitting, in writing or in any legal proceedingproceeding other than at Lender’s request, its insolvency or inability to pay its debts as they become due unless due; (F) if any Borrower fails to maintain its status as a Single Purpose Entity and such admission failure is true; or (7) cited in a final non-appealable judgment by a court of competent jurisdiction as a material factor in the substantive consolidation of such Borrower with any other Person in connection with any enforcement action federal or exercise or assertion of any right or remedy upon state bankruptcy proceeding; (G) Borrower fails to obtain Lender’s prior written consent (to the continuance of an Event of Default and acceleration extent such consent is required pursuant to the terms of the Loan by Documents) to any transfer (1) that results in a direct or on behalf indirect change in Control over Borrower or (2) of any of the Agent and Lenders under or Properties by deed, bxxx of sale, installment sales agreement, ground lease (but excluding any space Lease entered into in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges ordinary course of business) or any other similar agreement (collectively, a “Full Recourse Transfer”); and/or (H) Borrower fails to obtain Lender’s prior written consent (to the extent such consent is required pursuant to the terms of the Loan DocumentDocuments) to any voluntary mortgage, any Credit Partydeed of trust, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive collateral assignment or other equitable relief voluntary lien or interest encumbering all or a substantial portion of the Property (a “Full Recourse Lien”); provided that nothing in clauses (B), (C), (D) and (E) of this paragraph shall impose on Borrower or Guarantor any kind, recourse liability for providing (x) any truthful testimony or (IIy) assertstruthful responses to duly-served discovery or legal process in the event that Borrower or Guarantor or any of their respective Affiliates, as applicable, is advised by counsel that such Person is required to provide such testimony or causes a third party response pursuant to assertapplicable law.
(c) As used in this Section 13.1, “Priority Payments” shall mean: (i) with respect to the applicable recourse carveout liability described in a pleading filed Section 13.1(a)(x) above as it relates to the failure to pay Taxes and Insurance Premiums, no other payments; (ii) with respect to the applicable recourse carveout liability described in connection Section 13.1(a)(iv) above, the payment of all Taxes and Insurance Premiums, Ground Rent, Debt Service and sums required to be deposited into any Reserve Accounts other than the Excess Cash Flow Account, and (iii) with a judicial proceeding respect to the applicable recourse carveout liability described in Section 13.1(a)(vi) above as it relates to the failure to pay any defense against Agent and/or charges that create Liens, the Lenderspayment of all Taxes, or (III) Insurance Premiums, Ground Rent, Debt Service and sums required to be deposited into any right in connection with any security for Reserve Account other than the LoanExcess Cash Flow Account, and all sums necessary to avoid material physical waste to the Property, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablecase on a current basis.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the "Exculpated Parties"), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, ,
(a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c) affect the validity or enforceability of any guaranty indemnity, guaranty, or indemnification agreement similar instrument made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of impair the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivor of Section 4.1.6(h) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.;
Appears in 1 contract
Samples: Loan Agreement (Hartman Short Term Income Properties XX, Inc.)
Exculpation. Subject to the qualifications below and except Except as set forth otherwise specifically provided in the Guaranty Plan, no Exculpated Party shall have or incur, and Environmental Indemnityeach Exculpated Party is released and exculpated from any Cause of Action for any claim related to any act or omission in connection with, neither Agent nor Lenders shall enforce relating to, or arising out of, the liability and obligation Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, amendment, or filing or termination of the Borrower or any holder Plan Support Agreement and related transactions, the Disclosure Statement, the Plan (including, for the avoidance of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe doubt, the Obligations contained in Plan Supplement), the NoteExit RBL/Term Loan A Facility, this the Exit RBL/Term Loan A Facility Documentation, the Exit Term Loan B Facility, the Exit Term Loan B Facility Documentation, the New Preferred Equity Documentation, the DIP Facility, the DIP Credit Agreement, the Mortgage DIP Loan Documents, the Credit Agreement, the Credit Agreement Documentation, the Revolving Credit Facility, the Term Loan, the Senior Notes Indenture, the Senior Notes, or any Restructuring Transaction, contract, instrument, release or other agreement or document relating to the foregoing created or entered into before or during the Chapter 11 Cases, any preference, fraudulent transfer, or other avoidance claim arising pursuant to chapter 5 of the Bankruptcy Code or other applicable law, the Chapter 11 Cases (including the filing thereof), the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of securities pursuant to the Plan (including the New Preferred Stock and the New Common Stock), or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate distribution of property under the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance Plan or any other appropriate action related agreement, except for claims related to any act or proceeding omission that is determined in a Final Order to enable Agent to enforce and realize upon its interest under the Notehave constituted bad faith, this Agreementgross negligence, the Mortgage and the other Loan Documentsactual fraud, or willful misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the Property, the Rents or any other collateral given advice of counsel with respect to Agent and/or Lenders their duties and responsibilities pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; (d) impair the right of Agent or Lenders to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of AgentPlan. Notwithstanding anything to the contrary in the foregoing, the exculpation set forth above shall not operate to waive or release the rights of any Entity to enforce this Plan, the Plan Support Agreement, the Note any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan, including the Exit RBL/Term Loan A Facility Documentation and the Exit Term Loan B Facility Documentation or any claim or obligation arising under the Plan. The Exculpated Parties have, and upon completion of the Loan Documents, (A) neither Agent nor Lenders Plan shall be deemed to have waived have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any right which Agent and/or Lenders may have under Section 506(a)time for the violation of any applicable law, 506(b)rule, 1111(b) or any other provisions regulation governing the solicitation of acceptances or rejections of the Bankruptcy Code Plan or such distributions made pursuant to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablePlan.
Appears in 1 contract
Samples: Plan Support Agreement (Vanguard Natural Resources, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Section 12.6 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower’s misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct occurrence of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate Event of any Credit Party or Guarantor)Default;
(iii) during a Trigger Period Borrower’s misapplication or during the continuance of an Event of Default, any misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsAwards;
(v) Borrower’s failure to pay Taxes, Other Charges (except to the misappropriation of extent that (A) any insurance proceeds paid by reason of any loss, damage or destruction sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the Property, terms hereof and there exists no impediment to Lender’s utilization thereof or (B) any Awards or other amounts received in connection with there is insufficient cash flow from the Condemnation of all or a portion operation of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereofProperty), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party to return or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to reimburse Lender for all Personal Property taken from the Property in by or on behalf of Borrower and not replaced with Personal Property of the ordinary course same utility and of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)the same or greater value;
(vii) intentional physical any act of actual waste of the Property (but excluding or arson by Borrower, any matter that arises principal, Affiliate, member or general partner thereof or by reason of lack of cash flow with respect to the PropertyBorrower Principal, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii)any principal, (iv)Affiliate, (v) and (vi) above);member or general partner thereof; or
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any representation, warranty, covenant or indemnification provision set forth in the Environmental Indemnity Agreement Article 12 or Article 14 hereof or in any other Loan Document concerning environmental laws, Hazardous Substances hazardous substances and asbestos;asbestos and any indemnification of Lender with respect thereto in any document.
(xivc) any security deposits, advance deposits or any other deposits collected with respect to Notwithstanding the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreementforegoing, the Note or any agreement of the Loan Documents, Lender not to pursue recourse liability as set forth in subsection (Aa) neither Agent nor Lenders above SHALL BECOME NULL AND VOID and shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, no further force and (B) effect and the Debt shall be fully recourse to Borrower, but not to any holder of Borrower and Borrower Principal on a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty joint and Environmental Indemnity) or Controlling either party comprising Borrower, several basis in the event that: (1i) of a breach by Borrower, Borrower Principal or any Credit Party files SPE Component Entity (if any) of any of the covenants set forth in Article 6 hereof, to the extent that such breach is (A) material and (B) is not cured within fifteen (15) days of the earlier to occur of notice from Lender or such breach becomes actually known by a officer of Borrower, (ii) of a material breach of any of the covenants set forth in Article 7 hereof, (iii) the Property or any part thereof shall become an asset in a voluntary petition under the Bankruptcy Code bankruptcy or voluntary insolvency proceeding of Borrower, (iv) Borrower, Borrower Principal or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controlscontrols, directly or indirectly, any Credit Party Borrower or Guarantor files Borrower Principal files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3v) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vi) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party controls Borrower consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7vii) in connection with Borrower fails to obtain Lender’s prior written consent to any enforcement action subordinate financing or exercise or assertion other voluntary Lien encumbering the Property, if such consent is required by the Loan Documents.
(d) Nothing herein shall be deemed to be a waiver of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders which Lender may have under or in connection with the GuarantySection 506(a), Mortgage506(b), Subordinations, Negative Pledges 1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan DocumentDocuments.
(e) Subject to the terms of Section 12.6, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate upon payment in full of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each Borrower Principal shall be relieved of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableits obligations under this Article 15.
Appears in 1 contract
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any principal, director, officer, director, employee, advisor, beneficiary, shareholder, partner, manager, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx sxx for, seek or demand any deficiency judgment against Borrower Borrower, Guarantor (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (c) affect the validity or enforceability of or any guaranty or indemnification agreement indemnity made in connection with the Loan (including the Guaranty and the Environmental Indemnity) or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of any assignment of leases contained in the Assignment of LeasesMortgage; or (f) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgage (if required by applicable law and provided such deficiency judgment is not enforced against Borrower, the Exculpated Parties or Guarantor (but specifically excluding Guarantor under the Guaranty and the Environmental Indemnity) personally) or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such security; the Property. 107
(b) Nothing contained herein shall in any manner or (g) constitute a waiver of way release, affect or impair the right of Agent or Lenders Lender to enforce the liability recover, and obligation of Borrower or Guarantorshall be fully and personally liable and subject to legal action, by money judgment or otherwise, to the extent of for any loss, damage, cost, expense, liabilitydamage, claim or other obligation incurred by Agent and/or any Lender (including without limitation reasonable attorneys’ fees and costs reasonably incurredcourt costs) actually incurred or suffered by Lender arising out of or in connection with the following:following (provided that in no event shall Borrower be liable for any actions taken by, or inaction of, a receiver, regardless of whether such action or inaction is undertaken by a receiver pursuant to any authority it may have to control the actions of Borrower, in each case to the extent the acts or omissions giving rise to such right of recovery occurred prior to (1) a Transfer resulting from, the exercise of Lender’s rights under the Loan Documents or (2) the consummation of any remedial or enforcement action by the Lender or of the collateral for the Loan, including, without limitation, any foreclosure, deed-in-lieu or assignment in lieu of foreclosure and including the exercise of any rights of Lender under the Mortgage, that in each case results in any such entity or the Property not being under the Control of Guarantor (any of the foregoing pursuant to clause (1) or (2), a “Transfer Event”)):
(i) any material fraud or intentional misrepresentation by any Credit Party Borrower, Principal or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit PartyBorrower, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Principal or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation intentional material physical waste of the Rents Property by ManagerBorrower, if applicable (so long as Manager is an Affiliate of any Credit Party Principal or Guarantor or any Affiliate thereof(to the extent that there exists sufficient cash flow from the Property that is made available to Borrower), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure removal or disposal of any portion of the Observatory TenantProperty by Borrower, Principal or Guarantor (other than as permitted by the Loan Documents or required by the Franchise Agreement or with respect to obsolete Personal Property (including FF&E) removed in the ordinary course of owning and operating the Property) after the occurrence and during the continuance of an Event of Default unless such property is replaced with property of equal or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsgreater utility or value;
(v) the misappropriation misappropriation, misapplication or conversion by Borrower, Principal or Guarantor of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents during the continuance of an Affiliate Event of Default, (D) any Credit Party Rents paid more than one month in advance or Guarantor or (E) any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;amounts disbursed to Borrower from the Reserve Funds; 108
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter charges for labor or materials or other charges or judgments that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance can create Liens on all or any portion of the Property, (except for Permitted Encumbrances or to the Operating Lease extent Borrower is contesting the same in subject to and in compliance with the terms and conditions of Sections 5.1.1, 5.1.2 or the Observatory Lease in violation 5.1.4 of the Loan DocumentsAgreement), provided that sufficient cash flow is available from the Property to pay such costs (and not on reserve with Lender or Manager) and such costs either (A) are contracted for during a period in which no Event of Default had occurred and was continuing or (B) if contracted for during the continuance of an Event of Default, were approved by Lender in writing;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected by Borrower, Principal or Guarantor with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent (A) any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease thereof or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) any such deposits were deposited into the Debt shall be fully recourse Cash Management Account during a Cash Sweep Period;
(viii) if Borrower fails to Borrowermaintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30 or Section 4.1.43 hereof (but not to expressly excluding any holder of a direct representation regarding future solvency or indirect interest in ESBA or any party supervising either party comprising Borrower capital adequacy);
(other than as provided in the Guaranty and Environmental Indemnityix) or Controlling either party comprising Borrower, in the event that: [intentionally omitted];
(x) if (1) any Credit Party files without the prior written consent of Lender, the Franchise Agreement is modified in a voluntary petition manner that requires Lender’s prior written consent under the Bankruptcy Code Section 5.2.1(a) hereof or any other Federal is terminated or state bankruptcy cancelled by Borrower; or insolvency law; (2) an Affiliatewithout the prior written consent of Lender, officerBorrower accepts a surrender of the Franchise Agreement or accepts a modification of the Franchise Agreement which requires Lender’s prior written consent under Section 5.2.1(a) hereof;
(xi) any obligation of Lender to indemnify, trustee, directordefend or hold harmless Franchisor, or representative which Controlsto pay any damages, directly costs, fees or indirectly, expenses pursuant to any Credit Party term or Guarantor files or any Credit Party or Guarantor joins condition contained in the filing Comfort Letter;
(xii) if Borrower fails to permit on-site inspections of an involuntary petition against any Credit Party under the Bankruptcy Code Property or any other Federal or state bankruptcy or insolvency lawfails to provide financial information, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency laweach as required by, and in which any Credit Party or Guarantor colludes accordance with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default terms and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.this Agreement; or
Appears in 1 contract
Exculpation. Subject to the qualifications below (a) Except as otherwise provided in this Section 9.4 and except as set forth comparable provisions in the Guaranty and Environmental IndemnitySecurity Instrument or in the other Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Borrower's Affiliates to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or the other Loan Documents Security Instrument by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any of Borrower's Affiliates, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and Note, the Security Instrument, the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Collateral created by this Agreement, the Note, the Security Instrument and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersCollateral. Lender, by accepting the Note, this Agreement, the Mortgage Note and the other Loan DocumentsSecurity Instrument, agrees that it shall not not, except as otherwise provided in this Section 9.4 and comparable provisions in the Security Instrument, xxx for, seek or demand any deficiency judgment against Borrower or any of Borrower's Affiliates in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Security Instrument or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (ciii) except as set forth in this Section 9.4, affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Security Instrument, or the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) except as set forth in this Section 9.4, impair the enforcement of the Assignment of Leases; (fvi) constitute a prohibition against Agent impair the right of Lender to enforce the provisions of Sections 10.2 of the Security Instrument or Lenders Sections 4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof; or (vii) impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order to fully realize on the extent necessary to (A) preserve or enforce its rights and remedies against the Property or (B) obtain any security given by Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instrument; provided however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower shall be personally liable to Lender for the Losses Lender incurs to the extent due to: (i) fraud or material misrepresentation in connection with the execution and the delivery of this Agreement, the Note, the Security Instrument, or the other Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such securityDocuments; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) Borrower's or Operating Lessee's misapplication or misappropriation of Rents received by Borrower or Operating Lessee after the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance occurrence of an Event of Default, any ; (iii) Borrower's or Operating Lessee's misapplication or misappropriation of the Security Deposits or Rents by Manager, if applicable collected more than thirty (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
30) days in advance; (iv) Borrower's or Operating Lessee's misapplication or the failure misappropriation of the Observatory Tenant, during the continuance of an Event of Default Insurance Proceeds or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
Awards; (v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage Borrower's or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any Operating Lessee's failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that sums sufficient to pay such lack of cash flow arises from the misappropriation of revenue amounts have been deposited in escrow with respect Lender pursuant to the Property as described in clauses (iiiterms of Section 7.2 hereof), (iv), (v) and charges for labor or materials or other charges that can create Liens on the Property; (vi) above);
Borrower's or Operating Lessee's failure to return or to reimburse Lender for all Personal Property taken from the Property by or on behalf of Borrower or Operating Lessee and not replaced with Personal Property of comparable utility and value; (vii) any act of intentional waste or arson to the Collateral by Borrower, Principal, the Operating Lessee SPE Entities or any Affiliate or thereof or by any Indemnitor or Guarantor; (viii) any removal fees or disposal of any portion of the Property after an Event of Default in any manner prohibited commissions paid by the Loan Documents;
(ix) any Credit Party’s failure Borrower to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the PropertyPrincipal, the Operating Lease Lessee SPE Entities or any Affiliate of Borrower, Principal, the Observatory Lease Operating Lessee SPE Entities, Indemnitor, or Guarantor in violation of the terms of this Agreement, the Note, the Security Instrument or the other Loan Documents;
; (xiix) subject to the provisions of Section 8.3(a)(v), the Borrower's failure by any Credit Party to comply with the material single purpose entity requirements provisions of Sections 4.1.39 and 5.1.19 of this Agreement including those Agreement; (x) any Loss resulting from a Casualty due to Borrower's failure to obtain the insurance required pursuant to Section 6.1; and (xi) Borrower's default under Section 5.1.10 hereof (after ten (10) Business Days prior written notice to Borrower).
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the obligation to repay the Debt shall become a personal recourse obligation of Borrower (i) in the event of Borrower's or Principal's default under Section 4.2.19 4.1.35 hereof if or Operating Lessee's default under Section 12 of the Operating Lease Subordination Agreement (such that such failure leads to was considered by a court as a factor in the court's finding for a consolidation of the assets of any Credit Party Borrower, Principal and/or Operating Lessee with the assets of another Person) or any Transfer in violation of the provisions of Section 5.2.10 hereof or Article 7 of the Security Instrument, (ii) if the Property or any part thereof shall become an asset, or if Borrower, Principal, or an Operating Lessee SPE Entity shall be a debtor, in (A) a voluntary bankruptcy or insolvency proceeding or (B) an involuntary bankruptcy or insolvency proceeding commenced by any Person (other than the other Credit Parties);
(xiiLender) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental lawsand, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered such involuntary proceeding, Borrower consents or fails to Agent upon a foreclosure of the Property object to such proceedings) or transfer if Borrower, Principal, or an Operating Lessee SPE Entity has acted in lieu thereofconcert with, except to the extent any such security deposits were applied in accordance colluded or conspired with the terms and conditions party to cause the filing of any of the Leases prior to the occurrence of the such involuntary proceeding or (iii) an Event of Default that gave rise to such foreclosure contemplated by Section 8.1(a)(xi)(b), 8.1(a)(xi)(c) or transfer in lieu thereof; and8.1(a)(xxiii)(b) hereof has occurred (unless caused by, or at the request of Lender).
(xvd) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Nothing herein shall be deemed to have waived be a waiver of any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions provision of the Bankruptcy Code to file a claim against Borrower or Principal for the full amount of the Debt indebtedness secured by the Security Instrument or to require that all collateral Collateral shall continue to secure all of the Debt indebtedness owing to Lenders Lender in accordance with this Agreement, the Note, the Security Instrument and the other Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Exculpation. Subject to the qualifications below and except Except as otherwise set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders shall enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations contained in the Note, this Agreement, FRCC's sole obligation hereunder shall be to distribute, as aforesaid, to Bridgestone/Firestone the Mortgage Participation Percentage of any payment received by FRCC relating to the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates, as and when received by FRCC. No other obligation or duty is assumed by FRCC beyond the foregoing, nor shall any other obligation or duty be deemed to be implied. FRCC shall not have any fiduciary relationship with Bridgestone/Firestone by virtue of this Agreement or the other Loan Documents by transactions contemplated hereby. Without limiting the generality of the foregoing, it is agreed that, except with respect to representations and warranties set forth in this Agreement, FRCC does not assume, nor shall FRCC or any of its officers, directors, employees or agents have any responsibility or liability, expressed or implied, for:
(a) any action taken or proceeding wherein a money judgment shall be sought against a Credit Partyomitted, except that Agent may bring a foreclosure actionwhether by FRCC, terminate the Ground LeaseServicer, Operating Lease and Observatory Lease, bring an action for specific performance Society or any other appropriate action Person in connection with any Receivable except for FRCC's own gross negligence or proceeding to enable Agent to enforce willful misconduct;
(b) the authorization, execution, effectiveness, enforceability, genuineness or validity of any Receivable, the Pooling and realize upon its interest under the Note, this Servicing Agreement, the Mortgage and the other Loan Documents, or in the Property, the Rents or any other collateral given to Agent and/or Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Purchase Agreement, the Mortgage and Series 1992-A Supplement, the Series 1992-B Supplement, the Series 1996-1 Supplement or any document, instrument or other Loan Documentswriting in connection therewith, shall not xxx forexcept with respect to the authorization, seek execution, effectiveness, enforceability, genuineness or demand any deficiency judgment validity by or against Borrower in FRCC of any such action document, instrument or proceeding under other writing executed by FRCC;
(c) the genuineness, truthfulness or by reason accuracy of any recitals, statements, representations or under warranties made in or in connection with any Receivable, the Note, this Pooling and Servicing Agreement, the Mortgage or Purchase Agreement, the other Loan Documents; providedSeries 1992-A Supplement, furtherthe Series 1992-B Supplement, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all Series 1996-1 Supplement or any portion of the Loans other document, instrument or other Obligations writing in connection therewith, except for any representation and warranty of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders to name any Credit Party as a party defendant FRCC made in any action such document, instrument or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunder; writing executed by FRCC;
(d) impair the right financial condition of Agent any Obligor or Lenders to obtain the appointment of a receiverCFNA or for any credit or other information regarding any Obligor or card issuer; or
(e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions performance of any of the Leases prior to the occurrence obligations of the Event of Default that gave rise to such foreclosure any person (including any Obligor) primarily or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance secondarily labile with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not respect to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableReceivable.
Appears in 1 contract
Samples: Participation Agreement (Firestone Retail Credit Corp)
Exculpation. Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnity, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Borrower, to perform and observe the Obligations obligations contained in this Security Instrument, the Note, this Agreement, the Mortgage or the other Loan Other Security Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or any partner, member or equivalent person of Borrower, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Security Instrument, the Note, this Agreementthe Other Security Documents, the Mortgage and the other Loan Documents, or interests in the Property, the Rents or ; and any other collateral given to Agent and/or Lenders Lender pursuant to this Security Instrument and the Loan Other Security Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower or any partner, member or equivalent person of Borrower only to the extent of Borrower’s 's or such partner's, members or equivalent person's interest in the Property, in the Rents, in the Cash Collateral Property and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this AgreementSecurity Instrument, the Mortgage Note and the other Loan Other Security Documents, agrees that it shall not xxx for, seek or demand any deficiency judgment against Borrower or any partner, member or equivalent person of Borrower, in any such action or proceeding proceeding, under or by reason of or under or in connection with this Security Instrument, the Note, this Agreement, the Mortgage or the other Loan Other Security Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section paragraph shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Security Instrument or the Loan Other Security Documents; , (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory Lease; this Security Instrument, (ciii) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with this Security Instrument or the Loan or any of the rights and remedies of Agent or Lenders thereunder; Other Security Documents, (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; , (ev) impair the enforcement of the Assignment of Leases; any assignment, or, (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (gvi) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or Guarantorany partner, member or equivalent person of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ ' fees and costs reasonably incurred) arising out of or in connection with the following:
: (ia) any material intentional fraud or misrepresentation by Borrower or any Credit Party partner, member or equivalent person in connection with this Security Instrument, the Loan;
Note or the Other Security Documents; (iib) the fraudulent acts gross negligence or willful misconduct of Borrower or any Credit Partypartner, Guarantor member or Manager, if applicable equivalent person of Borrower; (so long as Manager is an Affiliate c) material physical waste of the Property; (d) the breach of provisions in this Security Instrument or the Other Security Documents concerning Environmental Laws and Hazardous Substances and any indemnification of Lender with respect thereto in any document; (e) the removal or disposal of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation portion of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of Property after an Event of Default under this Security Instrument, the Note or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Other Security Documents;
; (vf) the misappropriation misapplication or conversion by Borrower or any partner, member or equivalent person of Borrower of (Ai) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (Bii) any Awards awards or other amounts received in connection with the Condemnation condemnation of all or a portion of the Property Property, or (iii) any Rents following an Event of Default under this Security Instrument, the Note or the Other Security Documents; (g) failure to pay Taxes (provided that the liability of Borrower shall be only for amounts in excess of the amount held by Manager, if applicable (so long as Manager is an Affiliate Lender in escrow for the payment of any Credit Party or Guarantor or any Affiliate thereofTaxes), any Credit Party assessments, charges for labor or Guarantor materials or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter other charges that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of can create liens on any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s which are prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack lien of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) this Security Instrument; and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivh) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent o Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and.
(xvi) any modifications, amendments, restatements and/or supplements made the Debt shall be fully recourse to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent Borrower; and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (Aii) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with this Security Instrument, the Loan Note or the Other Security Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1A) any Credit Party files a voluntary petition the first full monthly payment of principal and interest under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawNote is not paid when due; (2B) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes Borrower fails to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion permit on-site inspections of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, fails to provide financial information, or admitsfails to maintain its status as a single purpose entity, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan required by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.this Security Instrument;
Appears in 1 contract
Samples: Consolidation, Modification, Spreader and Extension Agreement (Unitel Video Inc/De)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, the indemnities set forth in Article 12 hereof, in the Guaranty and in the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument; (f6) impair the right of Lender to enforce Section 4.12(e) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property or any Individual Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any of the following:
(i) any material fraud or intentional misrepresentation or any failure to disclose a material fact by Borrower, Guarantor, Sponsor, or any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of Borrower, any Credit PartySPE Component Entity, Guarantor Guarantor, Sponsor, or Manager, if applicable (so long as Manager is an Affiliate of any Credit Borrower Party or the commission of a criminal act by Borrower, any SPE Component Entity, Guarantor), Sponsor or any Borrower Party which results in a forfeiture of the Property;
(iii) during a Trigger Period material physical waste to the Property caused by the intentional acts or during intentional omissions of Borrower, any SPE Component Entity, Guarantor, Sponsor, or any Borrower Party (including, without limitation, any arson or abandonment of the continuance Property) and/or the removal or disposal of any portion of the Property after an Event of DefaultDefault by Borrower, any misappropriation of the Rents by ManagerSPE Component Entity, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Guarantor, Sponsor or any Affiliate thereof), any Credit Borrower Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenantmisapplication, during the continuance of an Event of Default misappropriation or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor Rents collected in advance;
(v) failure to pay (or cause to be paid) any Taxes or Other Charges, charges for labor or materials or any Affiliate thereofother charges that can create liens on any portion of the Property to the extent that the revenue from the Property is sufficient to pay such amounts (other than (x) amounts deposited with Lender as Tax and Insurance Reserve Funds for Taxes or Other Charges where Lender elects not to apply such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in accordance with the terms of the Loan Documents), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate the breach of any Credit Party material representation, warranty, covenant or Guarantor)indemnification provision in the Environmental Indemnity, this Agreement or in the Security Instrument concerning Environmental Laws and Hazardous Substances and any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses indemnification of Lender with respect to the Property thereto in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)either document;
(vii) intentional physical waste any fees or commissions paid by Borrower after the occurrence of an Event of Default to Guarantor, Sponsor and/or any Borrower Party in violation of the Property (but excluding any matter that arises by reason terms of lack of cash flow with respect to the PropertyNote, except to this Agreement, the extent that such lack of cash flow arises from Security Instrument or the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)other Loan Documents;
(viii) any removal Borrower’s breach of, or disposal failure to comply with, the representations, warranties and covenants contained in Article 15 of any portion this Agreement and/or the provisions of the Property after an Event of Default in any manner prohibited by the Loan DocumentsSections 12.2 and 12.3 hereof;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, maintain insurance as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except this Agreement to the extent that such lack of cash flow arises the revenue from the misappropriation Property is sufficient to pay the Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Tax and Insurance Funds for Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) abovesuch Insurance Premiums);
(x) a voluntary Lien remains an encumbrance on all or any portion Borrower fails to permit on-site inspections of the Property, fails to provide the Operating Lease Required Financial Items or fails to appoint a new property manager upon the Observatory Lease request of Lender, each as required by, and in violation accordance with the terms and provisions of, this Agreement, the Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents;
(xi) subject any litigation or other legal proceeding related to the provisions Debt filed in bad faith by Borrower, any SPE Component Entity, Guarantor, Sponsor or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Section 8.3(a)(v), the failure by Lender to exercise any Credit Party rights and remedies available to comply with the material single purpose entity requirements of this Agreement including those set forth Lender as provided herein and in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)Loan Documents;
(xii) the incurrence of Indebtedness in violation seizure or forfeiture of the Loan DocumentsProperty, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower, Guarantor, Sponsor, or any Borrower Party;
(xiii) failure to pay (or cause the breach of payment of) rent, additional rent or any indemnification provision other amounts due and payable under the Ground Lease, including, without limitation, the SAF Contribution under the Missouri Ground Lease (as defined in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestosMissouri Ground Lease);
(xiv) failure to pay (or cause the payment of) all outstanding SAF Contributions, the outstanding amounts payable under the Bonds, and any security depositscompensation payable to Trustee or the County (each as defined in the Missouri Ground Lease) upon termination or earlier expiration of the Missouri Ground Lease (including, advance deposits or any other deposits collected with respect without limitation, prior to the Property which are not delivered to Agent upon a foreclosure or delivery of the Property or transfer in deed-in-lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andforeclosure);
(xv) any modifications, amendments, restatements and/or supplements made failure to pay (or cause the payment of) an amount equal to the Ground Lease, Sublease or difference between (A) the Observatory Lease without Allocated Loan Amount for the consent New Hampshire Property and (B) the sum of Agent (i) the building insurance proceeds estimated to be received from the insurance carrier for the New Hampshire Property and any termination (ii) the proceeds from the sale of the Observatory land for the New Hampshire Property (such amount being referred to herein as the “Gap Amount”), in the event that there is a Casualty at the New Hampshire Property;
(xvi) the Condemnation of the Colorado Property whereby the Tenant at the Colorado Property makes a claim for an award pursuant to the terms of its Lease without which then reduces an award payable to Colorado Borrower for its fee interest in the consent of AgentColorado Property; and/or
(xvii) Additional Interest not being paid. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party representation, warranty or covenant contained in Article 5 or Article 6 or Section 4.14 hereof is violated or breached, provided, however, that any such breach or violation with respect to Article 5 shall not result in recourse liability hereunder unless such breach was material and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a New Non-Consolidation Opinion to the effect that such failure does not negate/impair the opinion previously delivered to Lender; (ii) Borrower or any SPE Component Entity files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws; (2iii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files Borrower or any Credit Party SPE Component Entity files, or Guarantor joins in the filing of of, an involuntary petition against Borrower or any Credit Party SPE Component Entity under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any Credit Party or SPE Component Entity from any Person; (3iv) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party SPE Component Entity files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5v) any Affiliate, officer, trustee, director, or representative which Controls Borrower or any Credit Party SPE Component Entity consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower, any Credit Party SPE Component Entity or any portion of the Property; (6vi) Borrower or any Credit Party SPE Component Entity makes a general an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (vii) there is true; substantive consolidation of Borrower or any SPE Component Entity (7or any Restricted Party) with any other Person in connection with any enforcement action federal or exercise state bankruptcy proceeding involving the Guarantor or assertion any of its Affiliates; (viii) Borrower or any SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the event of any right federal or remedy upon state bankruptcy or insolvency proceeding involving the continuance Guarantor or its Affiliates; (ix) Borrower’s failure to deposit any springing Reserve Funds deposits pursuant to the terms of an Event of Default this Agreement; (x) the Missouri Ground Lease is terminated, cancelled or otherwise ceases to exist and acceleration MO Borrower has not exercised its purchase option pursuant to the terms of the Loan by Missouri Ground Lease, and/or (xi) the Tennessee Sub-Ground Lease is terminated, cancelled or on behalf of otherwise ceases to exist and the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Tennessee Prime Lease are void, voidable or unenforceabledoes not simultaneously terminate.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital Trust III, Inc.)
Exculpation. Subject to the qualifications below and except for the obligation of Guarantor as set forth in the Guaranty and Environmental IndemnityGuaranty, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower, Principal, any member, manager, partner, shareholder, officer or director of Borrower or its constituent partners or members (“Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, or in the PropertyProperties, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Mortgages and the other Loan Documents, agrees that it shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseMortgages; (c) affect the validity or enforceability of or any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent or Lenders Lender thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of any assignment of leases contained in the Assignment of LeasesMortgages; (f) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Mortgages or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Properties; or (g) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs expenses reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by any Credit Party Individual Borrower, Principal or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit PartyIndividual Borrower, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party Principal or Guarantor);
(iii) during a Trigger Period material physical waste of any Individual Property caused by Borrower, Principal, Guarantor or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager Person that is an Affiliate of any Credit Party Borrower, Principal or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofGuarantor;
(iv) the failure removal or disposal of any portion of the Observatory Tenant, during the continuance of Properties after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misappropriation misapplication or conversion by any Individual Borrower, Principal or Guarantor of (A) any insurance proceeds Insurance Proceeds paid by reason of any loss, damage or destruction to the any Individual Property, or (B) any Awards or other amounts received in connection with the a Condemnation of all or a portion of the Property by Managerany Individual Property, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default, or (D) any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents paid more than one month in advance;
(vi) failure to pay charges for labor or materials or other charges or judgments that can create Liens on any failure by Manager, if applicable (so long as Manager is an Affiliate portion of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents Individual Property (other than resulting from Lender’s failure to pay Taxes from the Tax and Insurance Escrow Fund or to pay for Replacements from the Replacement Reserve Fund provided that (A) no other Event of Default shall then current material operating expenses with respect to exist, (B) Borrower has performed all of its obligations under Sections 5.1.2, 7.2 and 7.3 hereof, and (C) sufficient funds are then on deposit therein and such funds are allocated for the Property in the ordinary course payment of business (except with respect to Taxessuch Taxes or such Replacements, Other Charges and Trade Payables being contested in accordance with Section 4.1.2as applicable);; or
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the any Individual Property which are not delivered to Agent Lender upon a foreclosure of the such Individual Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) any modifications, amendments, restatements and/or supplements made failure to comply with Section 3.1(d) of the Cash Management Agreement or if Borrower fails to cooperate with or otherwise interferes with Lender’s election to deliver Tenant Direction Letters pursuant to Section 3.1(e) of the Cash Management Agreement;
(ix) with respect to the Ground LeaseIndividual Property known as Four Seasons located in Elkhart, Sublease Indiana, if the License Agreement dated on or about of even date herewith by and between Sun Secured Financing LLC and Sun Four Seasons LLC shall be amended, modified or terminated for any reason without Lender’s prior written consent, of if the Observatory Lease without Tenants at such Individual Property are denied the consent rights granted by such License Agreement, except that such License Agreement maybe terminated as specifically provided therein;
(x) if any Individual Borrower fails to permit on-site inspections of Agent any Individual Property, fails to provide financial information, or fails to appoint a new property manager upon the request of Lender made in accordance with the terms and provisions of this Agreement;
(xi) if any termination Individual Borrower or Principal fails to maintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30 or Section 4.1.39 hereof in accordance with the terms and provisions of this Agreement; or
(xii) if applicable Legal Requirements relating to discontinuance or destruction when the use of a property is legal nonconforming shall prohibit that portion of the Observatory Lease without Individual Property known as Lake San Marino located in Naples, Florida, which is currently being used as a mobile home park, from being used as a mobile home park in the consent future as a result of Agenta prior destruction or discontinuance of use. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt secured by the Mortgages or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Individual Borrower (other than as provided in the Guaranty and Environmental Indemnityi) or Controlling either party comprising Borrower, in the event thatof: (1a) any Credit Party files Individual Borrower or Principal filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2b) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party Individual Borrower or Principal under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, law in which any Credit Party such Individual Borrower, Principal or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party such Individual Borrower or Principal from any Person; (4c) any Credit Party files Individual Borrower or Principal filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5d) any Affiliate, officer, trustee, director, Individual Borrower or representative which Controls any Credit Party Principal consenting to or Guarantor joins acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party such Individual Borrower or Principal or any portion of the Individual Property; (6e) any Credit Party makes a general Individual Borrower or Principal making an assignment for the benefit of creditors, or admitsadmitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission due; (ii) if the first full monthly payment of principal and interest on the Note is truenot paid when due; (iii) if any Individual Borrower or (7) in connection Principal fails to maintain its status as a Special Purpose Entity or comply with any enforcement action representation, warranty or exercise covenant set forth in Section 4.1.30 or assertion Section 4.1.39 hereof and there is a substantive consolidation of the assets and liabilities of any right such Individual Borrower or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection Principal with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate those of any Credit Party Person other than Borrower or GuarantorPrincipal; (iv) if Individual Borrower fails to obtain Lender’s prior written consent to any Indebtedness or voluntary Lien encumbering the Individual Property; (Iv) seeks a defense, judicial intervention or injunctive or other equitable relief of if Individual Borrower fails to obtain Lender’s prior written consent to any kind, or (II) asserts, or causes a third party Transfer to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations extent required by this Agreement or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableMortgages.
Appears in 1 contract
Samples: Loan Agreement (Sun Communities Inc)
Exculpation. Subject (a) Lender acknowledges that in making the Loan, Lender has not relied on the credit or the assets of Borrower and that Lender is relying on and looking solely to the qualifications below credit and except as set forth the assets of the Senior Mezzanine Guarantor, the Collateral under the Pledge Agreements that do not constitute assets of the Borrower or its general partner, and any other collateral, guaranties, or indemnities (from Persons other than Borrower or its general partner) (collectively, the “Collateral Obligations”, and the obligors under such Collateral Obligations, the “Collateral Providers”), for the repayment of the Loan. Therefore, notwithstanding anything to the contrary contained in the Guaranty and Environmental IndemnityNote, this Loan Agreement or any of the other Loan Documents, neither Agent Borrower nor Lenders any present nor future direct general partner in Borrower (as used in this Section 11.22, “general partner”) shall have any personal liability, directly or indirectly, under or in connection with the Note, this Loan Agreement or any of the Loan Documents, or any amendment or amendments to any of the foregoing made at any time or times hereafter. Lender shall not have any claim against Borrower and shall have no recourse against any assets of Borrower or such general partner, including the Property, under any circumstances, for Borrower’s breach of any obligation under the Note, this Loan Agreement or any other Loan Document, and Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower its general partner, except as provided below, to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Note or any of the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party, except that Agent may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance Borrower or any such general partner or their respective assets. Lender, on behalf of itself and its successors and assigns, hereby waives any and all such personal liability and rights against the assets of Borrower and the general partner, including the Property; provided, however, that nothing contained herein shall affect or limit Lender’s rights (i) to enforce any of the obligations under the Note, this Loan Agreement or any of the other appropriate action Loan Document against the Senior Mezzanine Guarantor or proceeding to enable Agent to enforce and realize upon its interest interests under the Note, this Agreement, the Mortgage Pledge Agreements and the other Loan Documents, or in the Property, the Rents or any other collateral Collateral Obligations given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment (ii) to name Borrower in any such action or proceeding shall be enforceable solely to enforce Lender’s rights and remedies against Borrower only to Senior Mezzanine Guarantor or the extent of Borrower’s interest in Collateral Providers, including foreclosure and other remedies under the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and Lenders, by accepting the Note, this Agreement, the Mortgage Pledge Agreement and the other Collateral Obligations; (iii) to seek specific performance of any terms and conditions under the Loan Documents; or (iv) to seek declaratory relief under the Loan Documents; provided, further that in each of clauses (i), (ii), (iii) and (iv) above, in no event shall not xxx forBorrower or its general partner have any personal liability with respect to such actions or proceedings or judgments issued therein, seek in no event shall any assets of Borrower or demand its general partner be available to pay any deficiency judgment against Borrower in any such action or proceeding under or by reason of or other obligation under or in connection with the Notesuch action or proceeding, this Agreementand in no event shall Lender enforce or execute any judgment against any assets of Borrower or its general partner or seek any monetary relief against Borrower or its general partner. For further avoidance of doubt, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, not (a) constitute a waiver, release or impairment of any obligation of Senior Mezzanine Guarantor or the Collateral Providers evidenced or secured by any of the Loan Documents; (b) impair to the right of Agent extent Lender commences an action or Lenders to suit seeking foreclosure under the Pledge Agreements, it shall only name any Credit Party Borrower as a party defendant in any such action or suit for to the extent required to pursue such foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreements; (c) affect the validity or enforceability of any guaranty or indemnification agreement made in connection with the Loan or any of the rights and remedies of Agent Lender thereunder, including the right of Lender to seek recourse thereunder against the guarantor, to the extent permitted in such guaranty; or Lenders thereunder; (d) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Agent or Lenders to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses receiver with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease Senior Mezzanine Guarantor or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements Collateral Providers. The execution of this Agreement including by the Senior Mezzanine Guarantor shall not in any way increase of alter the obligations of the Senior Mezzanine Guarantor from those obligations set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);its Guaranty.
(xiib) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral Collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and .
(Bc) Notwithstanding anything to the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest contrary contained in ESBA or any party supervising either party comprising Borrower this Agreement (other than as provided in the Guaranty and Environmental IndemnitySection 11.22(d) below) or Controlling either party comprising Borrowerthe Note, except as set forth in the event that: (1Section 11.22(d) below, neither any Credit Party files a voluntary petition under the Bankruptcy Code present or future Constituent Partner in Borrower nor any other Federal present or state bankruptcy or insolvency law; (2) an Affiliatefuture shareholder, officer, director, employee, trustee, directorbeneficiary, advisor, partner, member, principal, participant or representative which Controlsagent of or in Borrower or of or in any person or entity that is or becomes a Constituent Partner in Borrower (collectively, the “Borrower’s Partners”) shall have any personal liability, directly or indirectly, any Credit Party or Guarantor files under this Agreement, the Note or any Credit Party of the Loan Documents, or Guarantor joins any Modifications to any of the foregoing made at any time or times hereafter and, except as set forth in this Section 11.22(c) and Section 11.22(d) below, Lender, on behalf of itself and its successors and assigns, hereby waives any such personal liability. The term “Constituent Partner”, as used herein, shall mean, any direct partner in Borrower and any person or entity that, directly or indirectly, through one or more other partnerships, limited liability companies or corporation or other entities is a partner in Borrower. For purposes of this Section 11.22(c), subject to Section 11.22(d) below, neither the filing negative capital account of any Constituent Partner in Borrower or in any other Constituent Partner in Borrower, nor any obligation of any. Constituent Partner in Borrower to restore a negative capital account or to contribute or loan capital to Borrower or to any other Constituent Partner in Borrower shall at any time be deemed to be the property or an involuntary petition against any Credit Party under the Bankruptcy Code asset of Borrower (or any other Federal Constituent Partner) and neither Lender nor any of its successors or state bankruptcy assigns shall have any right to collect, enforce or insolvency lawproceed against with respect to any such negative capital account or obligation to restore, contribute or solicits or causes loan.
(d) Notwithstanding anything in this Section 11.22 to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3the contrary, the provisions of Section 11.22(c) there is above limiting the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion liability of the Property; (6) any Credit Party makes a general assignment for Borrower Partners and the benefit rights of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability Lender with respect to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion the capital accounts of any right or remedy upon Constituent Partner shall not (i) limit the continuance rights, remedies, obligations, liabilities and other terms set forth in the Guaranties, Pledge Agreements, the Environmental Indemnity, the Mezzanine Cash Management Agreement, the Subordination of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the GuarantyProperty Management Agreement, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks Document executed by a defense, judicial intervention or injunctive or other equitable relief of any kindBorrower Partner and imposing liability on such Person thereunder, or (IIii) asserts, limit the liability of any Borrower Partner for its own willful or causes a third party tortious misconduct to assert, in a pleading filed in connection with a judicial proceeding the extent any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablesuch Borrower Partner would otherwise be liable under applicable law.
Appears in 1 contract
Samples: Senior Mezzanine Loan Agreement (Thomas Properties Group Inc)
Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the PropertyProperty (or any portion thereof), the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx sxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of the Guaranty, the Environmental Indemnity and/or any guaranty or indemnification agreement made set forth in connection with the Loan Section 11.2 hereof or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to (A) obtain the appointment of a receiverreceiver and/or (B) enforce its security interest in the Accounts as provided in Articles 8 and 9 hereof; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property (or any portion thereof); or (g7) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any fraud or material intentional willful misrepresentation by any Credit Borrower Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Borrower Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period any intentional act or omission of any Borrower Party made frivolously or in bad faith, including any assertion of defenses or counterclaims asserted in bad faith by any Borrower Party and which, in bad faith, hinders, delays or interferes in any material respect with the Lender’s enforcement of its rights under the Loan Documents or the realization of the collateral;
(iv) (A) material physical waste to the Property (or any portion thereof) and/or (B) after the occurrence and during the continuance of an Event of Default, removal or disposal of any misappropriation portion of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) Property other than in the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsordinary course;
(v) the misapplication, misappropriation or conversion by (I) any Borrower Party and/or (II) any Affiliated Manager that is Controlled by Borrower, any SPE Component Entity and/or any of their respective Affiliates, in each instance, of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the PropertyProperty (or any portion thereof), or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is an Affiliate of C) any Credit Party Rents, (D) any Tenant security deposits or Guarantor Rents collected in advance or (E) any Affiliate thereof)other monetary collateral for the Loan (including, without limitation, any Credit Party Reserve Funds and/or any portion thereof disbursed to (or Guarantor or any Affiliate thereof;at the direction of) Borrower); and/or
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested Taxes in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except terms and provisions hereof to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses has generated sufficient net operating income for the immediately preceding twelve (iii)12) month period to pay the same, (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of unless such charges are the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect subject to a mechanic’s, tax, judgment bona fide dispute in which the Borrower is contesting the amount or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied validity thereof in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; andset forth herein.
(xvb) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) any Credit Party files a Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any indebtedness or voluntary petition under lien encumbering the Bankruptcy Code Property to the extent required by this Agreement or the other Loan Documents, (ii) any Borrower and/or any SPE Component Entity fails to obtain Lender’s prior written consent to any transfer in violation of Article 6 hereof to the extent required by this Agreement or the other Federal or state bankruptcy or insolvency lawLoan Documents; (2iii) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the a Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is trueEvent occurs; or (7iv) any representation, warranty or covenant contained in connection Article 5 is violated or breached and such breach or violation is cited as a material contributing factor by the applicable bankruptcy court in the substantive consolidation of Borrower and/or any SPE Component Entity with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceablePerson.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital New York City REIT, Inc.)
Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity), (3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, or and the interest in the PropertyProperties, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgages and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the PropertyProperties, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Mortgages and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Mortgages or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgages or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Operating Lessee as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgages; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgages and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgages; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation Borrower shall be personally liable to Lender for Losses incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the followingdue to:
(i) any material fraud or intentional misrepresentation by Borrower, Operating Lessee, Guarantor or any Credit Party Affiliate of any of the foregoing in connection with the execution and the delivery of this Agreement, the Note, the Mortgages, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit an Exculpated Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period Remington’s or any Exculpated Party’s misapplication, misappropriation or conversion of Rents received by Borrower during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) any Exculpated Party’s misapplication, misappropriation or conversion of tenant security deposits (including the failure of to deliver to Lender tenant security deposits upon foreclosure or deed in lieu thereof, to the Observatory Tenant, during extent not applied in accordance with the continuance applicable Leases prior to the occurrence of an Event of Default Default) or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account Rents collected in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentsadvance;
(v) the misapplication, misappropriation or conversion of (A) Insurance Proceeds or Awards by any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofExculpated Party;
(vi) any Borrower’s failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Insurance Premiums, Other Charges (provided that there shall be no liability hereunder to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and Trade Payables being contested in accordance with Section 4.1.2Borrower has not made a claim against such escrowed amounts or otherwise taken action to restrict Lender from applying such sums for the purpose of paying such items) or (B) there is insufficient cash flow from the operation of the Properties to pay such items), charges for labor or materials or other charges that can create liens on any Individual Property beyond any applicable notice and cure periods specified herein;
(vii) intentional physical waste Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Individual Property by or on behalf of Borrower or Operating Lessee and not replaced with Personal Property of the Property (but excluding any matter that arises by reason same utility and of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)same or greater value;
(viii) material physical waste to any removal Individual Property caused by the intentional acts or disposal omissions of any portion Exculpated Party when there is sufficient cash flow from the operation of the any Individual Property after an Event of Default in any manner prohibited by the Loan Documentsto avoid such waste from occurring;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above)intentionally omitted;
(x) Borrower’s assertion or raising of any defense to a voluntary Lien remains an encumbrance on all proceeding instituted by Lender (whether judicial or any portion otherwise) for the foreclosure of the Property, Mortgages following an Event of Default caused by Borrower’s failure to timely pay the Operating Lease Monthly Payment Amount or the Observatory Lease Debt due on the Maturity Date, which defense is determined by a court of competent jurisdiction to be without merit or brought in violation of the Loan Documentsbad faith;
(xi) subject Borrower’s failure to the provisions of Section 8.3(a)(v), the failure by any Credit Party pay to comply Lender each PIP Required Deposit in accordance with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties)terms hereof;
(xii) the incurrence breach of Indebtedness any representation, warranty or covenant of (i) any Borrower with respect to itself or any SPE Component Entity set forth in violation Article 6 hereof (other than Section 6.1(a)(xv) and (xviii)) or (ii) any Operating Lessee with respect to itself or any Operating Lessee Principal as set forth in Paragraph 15 of the Loan Documents;Operating Lease Subordination Agreement (other than Paragraph 15(h) and (q) thereof); or
(xiii) the breach failure of Borrower and/or Operating Lessee to make any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect required contributions pursuant to the Property which are Collective Bargaining Agreement, whether or not delivered to Agent upon a foreclosure such failure results in an Event of the Property or transfer in lieu thereof, except Default hereunder (provided that there shall be no liability hereunder to the extent any such security deposits were applied in accordance with that there is insufficient cash flow from the terms and conditions of any operation of the Leases prior applicable Individual Property to the occurrence of the Event of Default that gave rise to make such foreclosure or transfer in lieu thereof; andrequired contributions).
(xvc) any modifications, amendments, restatements and/or supplements made to Notwithstanding the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreementforegoing, the Note or any agreement of the Loan Documents, Lender not to pursue recourse liability as set forth in subsection (Aa) neither Agent nor Lenders above SHALL BECOME NULL AND VOID and shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, no further force and (B) effect and the Debt shall be fully recourse to Borrower in the event (i) of a breach by Borrower, but not to any holder of a direct or indirect interest in ESBA SPE Component Entity, Operating Lessee or any party supervising either party comprising Borrower Operating Lessee Principal of any of the covenants set forth in Article 6 hereof or Paragraph 15 of the Operating Lease Subordination Agreement, as applicable, that is cited as a factor in a court’s decision that results in a substantive consolidation (other than as provided a substantive consolidation petitioned for or joined in by Lender) of Borrower or Operating Lessee with any other Person (excluding another Borrower or Operating Lessee) in a proceeding under any Creditors’ Rights Laws, (ii) Borrower or Operating Lessee incurs any voluntary secured Indebtedness other than the Debt and Permitted Debt (excluding Indebtedness relating to trade payables incurred in the Guaranty and Environmental Indemnityordinary course of business, mechanic’s or other similar liens, such as statutory liens, judgment liens or lis pendens) without the prior written consent of Lender or Controlling either party comprising Borrowerexcept as expressly permitted in this Agreement, in (iii) of the event that: occurrence of a Prohibited Transfer (1excluding a mortgage foreclosure or deed-in-lieu of foreclosure); (iv) any Credit Party files a voluntary petition under the Bankruptcy Code Properties or any other Federal or state part thereof shall become an asset in a bankruptcy or insolvency law; proceeding initiated by Borrower or Operating Lessee, (2v) an Borrower, Operating Lessee, Guarantor or any Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party Borrower, Operating Lessee or Guarantor files files, or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against Borrower or Operating Lessee under any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors or colludes with petitioning creditors for the filing of any involuntary petition against any Credit Party Borrower or Operating Lessee from any PersonPerson under any Creditors Rights Laws; (3vi) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code Borrower or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Operating Lessee files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vii) other than with the written consent of Lender, any Affiliate, officer, trustee, director, or representative which Controls any Credit Party Borrower or Guarantor Operating Lessee consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower, Operating Lessee or any portion of the PropertyProperties; (6viii) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; [intentionally omitted] or (7ix) in connection with any enforcement action or exercise or assertion [intentionally omitted].
(d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or remedy upon any other provision of the continuance U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Mortgages or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Mortgages or the other Loan Documents.
(e) Notwithstanding anything to the contrary in this Section 15.1, (i) Borrower and Guarantor shall have no liability under this Section 15.1 to the extent such liability solely arises (1) as a result of any exercise of remedies, foreclosure, deed-in-lieu of foreclosure or assignment-in-lieu of foreclosure by Lender, Senior Mezzanine Lender or Junior Mezzanine Lender, (2) as a result of an Event act or omission of Default and acceleration (A) Lender or a third-party purchaser following Lender or such third-party taking title to the Properties pursuant to a foreclosure, deed-in-lieu of foreclosure or otherwise or (B) a court appointed receiver after such receiver takes control of the Loan by or on behalf day-to-day operations of the Agent Properties or (3) as a result of an act or omission of Senior Mezzanine Lender, Junior Mezzanine Lender, a third-party purchaser or any Affiliate or subsidiary of any of the foregoing following a foreclosure or an assignment-in-lieu of foreclosure of the Senior Mezzanine Loan or the Junior Mezzanine Loan; unless in each case, such act or omission was caused by Borrower, Guarantor or any of their respective Affiliates (but only prior to such Exculpated Party becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any purchaser at any foreclosure of the Mortgage Loan, the Senior Mezzanine Loan or the Junior Mezzanine Loan) or such acts or omissions are the proximate result of acts, events, conditions, or circumstances that existed prior to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, whether or not discovered prior or subsequent to the date of such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure, provided, however, Borrower and Lenders Guarantor will bear the burden of proof to show that an event triggering liability of Borrower or Guarantor under this Section 15.1 first occurred after such foreclosure, deed in lieu of foreclosure or assignment in connection with lieu of foreclosure, was not the proximate result of events that first occurred prior to such foreclosure, deed in lieu of foreclosure or assignment in lieu of foreclosure and was not caused by any Exculpated Party (but only prior to such Exculpated Party becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any purchaser at any foreclosure of the Mortgage Loan, the Senior Mezzanine Loan or the Junior Mezzanine Loan) or their respective Affiliates; (ii) Borrower and Guarantor shall have no liability under Section 15.1(b) to the extent such liability solely arises after (1) Lender or a third-party has taken title to the Properties pursuant to a foreclosure, deed-in-lieu of foreclosure or otherwise or (2) a court appointed receiver has taken control of the day-to-day operations of the Properties; and (iii) no Operating Lessee shall have any liability under this Section 15.1, the Guaranty, Mortgageor the Environmental Indemnity, Subordinations, Negative Pledges except to the extent that such liability arises as a result of any act or any other Loan Document, any Credit Party, or Manager, if applicable omission of such Operating Lessee (if the Manager is but only prior to such Operating Lessee becoming an Affiliate of Lender, Senior Mezzanine Lender or Junior Mezzanine Lender or any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief purchaser at any foreclosure of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Mortgage Loan, in each of (Ithe Senior Mezzanine Loan or the Junior Mezzanine Loan), provided, however, such Operating Lessee will bear the burden of proof to show that an event triggering liability of Operating Lessee under this Section 15.1 was not caused by Operating Lessee (II) but only prior to such Operating Lessee becoming an Affiliate of Lender, Senior Mezzanine Lender or (III) that Junior Mezzanine Lender or any purchaser at any foreclosure of the Subordinations Mortgage Loan, the Senior Mezzanine Loan or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableJunior Mezzanine Loan).
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Exculpation. Subject to the qualifications below and except (a) Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower Principal, as applicable, to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit PartyBorrower or Borrower Principal or any direct or indirect owner therein, except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, or and the interest in the Property, the Rents or and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s 's or Borrower Principal's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting this Agreement, the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that it shall not xxx not, except as otherwise provided in this Section 15.1, sue for, seek or demand any deficiency judgment against Borrower or Xxxrower Principal in any such action or proceeding proceeding, under or by reason of or under or in connection with this Agreement, the Note, this Agreement, the Mortgage or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Mortgage or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeaseMortgage; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, those contained in Section 12.6 and Article 14 of this Agreement), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment assignment of Leasesleases provisions contained in the Mortgage; or (fvi) constitute a prohibition against Agent or Lenders impair the right of Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order or Borrower Principal if necessary to fully realize on obtain any security given by Borrower in connection with the Loan Insurance Proceeds or Awards to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any lossthe Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the contrary, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or any Borrower and Borrower Principal shall be personally liable to Lender (including reasonable attorneys’ fees on a joint and costs reasonably incurred) arising out of or in connection with the followingseveral basis for Losses due to:
(i) any material fraud or intentional misrepresentation by Borrower, Borrower Principal or any Credit Party other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender by or on behalf of Borrower, any Borrower Principal, Manager or any Affiliate of any of the foregoing at the time of the closing of the Loan or during the term of the Loan;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower after the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or occurrence and during the continuance of an Event of Default, any ;
(iii) Borrower's misapplication or misappropriation of the tenant security deposits or Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereofcollected in advance;
(iv) the failure misapplication or the misappropriation of the Observatory TenantInsurance Proceeds or Awards by any Person other than Lender, during the continuance of an Event of Default its agents, servants, representatives, contractors, subcontractors, affiliates or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documentssubsidiaries;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofIntentionally Omitted;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2)Intentionally Omitted;
(vii) intentional any act of actual physical waste of the Property (but excluding or arson by Borrower, any matter that arises principal, affiliate, member or general partner thereof or by reason of lack of cash flow with respect to the PropertyBorrower Principal, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii)any principal, (iv)affiliate, (v) and (vi) above)member or general partner thereof;
(viii) any removal the intentional misrepresentation or disposal intentional breach of any portion of the Property after an Event of Default covenants and warranties contained in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicableincluding, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’swithout limitation, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision contained in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
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Exculpation. (a) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any indemnity, guaranty or indemnification agreement similar instrument (including, without limitation, indemnities set forth in Article 12 hereof, Section 11.2 hereof, in the Guaranty and the Environmental Indemnity) made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender’s right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment of Leases; (f6) impair the right of Lender to enforce Section 4.12(f) of this Agreement; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower in order to fully realize on any the security given granted by Borrower in connection with the Loan Security Instrument or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material fraud or intentional misrepresentation by Borrower, any Credit Party of the Exculpated Parties, Sponsor or Guarantor in connection with the Loan;
(ii) the fraudulent acts gross negligence or willful misconduct of any Credit PartyBorrower, Guarantor its agents, Affiliates, officers, or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor)employees;
(iii) during a Trigger Period any litigation or during other legal proceeding related to the continuance of an Event of Default, any misappropriation of the Rents Debt filed by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor Borrower or any Affiliate thereof)thereof that delays or impairs Lender’s ability to preserve, any Credit Partyenforce or foreclose its lien on the Property in which action a claim, Guarantor counterclaim, or any Affiliate thereofdefense is asserted against Lender;
(iv) waste to the failure Property caused by the intentional acts or intentional omissions of Borrower, its agents, Affiliates, officers, employees or contractors and/or the removal or disposal of any portion of the Observatory Tenant, during the continuance of Property after an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan DocumentsDefault;
(v) the misapplication, misappropriation or conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by ManagerProperty, if applicable (so long as Manager is C) any Rents following an Affiliate Event of Default or (D) any Credit Party Tenant security deposits or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereofRents collected in advance;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter charges for labor or materials or other charges that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of can create liens on any portion of the Property after an Event and/or failure to pay Insurance Premiums in accordance with the terms and provisions hereof, but only to the extent the net cash flow of Default in any manner prohibited the Property (that is, Operating Income less Operating Expenses) was sufficient to permit payment of the same by the Loan DocumentsBorrower;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xivvii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent Lender upon a foreclosure of the Property or transfer action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer action in lieu thereof; and;
(xvviii) any modifications, amendments, restatements tax on the making and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination recording of the Observatory Lease without Security Instrument, the consent Note or any of Agent. the other Loan Documents (whether due upon the making of the same or upon Lender’s exercise of its remedies under the Loan Documents), but excluding any income, franchise or other similar taxes;
(ix) the seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower, its agents, Affiliates, officers, or employees; or
(x) any violation or breach of any representation, warranty or covenant contained in Article 5 hereof;
(b) Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders Lender shall not be deemed to have waived any right which Agent and/or Lenders Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1i) the first full monthly payment of principal and interest under the Note is not paid when due; (ii) Borrower fails to permit on-site inspections of the Property, fails to provide the Required Financial Items or fails to appoint a new property manager upon the request of Lender, each as required by, and in accordance with the terms and provisions of, this Agreement and the Security Instrument; (iii) any Credit Party representation, warranty or covenant contained in Article 6 hereof is violated or breached; (iv) Borrower files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws; (2v) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party Borrower files, or Guarantor files or any Credit Party or Guarantor joins in the filing of of, an involuntary petition against any Credit Party Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or Borrower from any Person; (3vi) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency lawCreditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5vii) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party Borrower consents to or Guarantor acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party Borrower or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.or
Appears in 1 contract
Exculpation. (1) Subject to the qualifications below and except as set forth in the Guaranty and Environmental Indemnitybelow, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained in the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against a Credit PartyBorrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of Borrower or any legal representatives, successors or assigns of any of the foregoing (collectively, the "Exculpated Parties"), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, or in the Property, the Rents Rents, or any other collateral given to Agent and/or Lenders Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s 's interest in the Property, in the Rents, in the Cash Collateral Rents and in any other collateral given to Agent and/or LendersLender, and LendersLender, by accepting the Note, this Agreement, the Mortgage Security Instrument and the other Loan Documents, shall not xxx for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Security Instrument or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section shall not, however, (a1) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b2) impair the right of Agent or Lenders Lender to name any Credit Party LOAN AGREEMENT – Page 110 41458-110/JANAF Shopping Yard (VA) Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage and termination of the Operating Lease and Observatory LeaseSecurity Instrument; (c3) affect the validity or enforceability of any guaranty or indemnification agreement the Guaranty and the Environmental Indemnity made in connection with the Loan or any of the rights and remedies of Agent or Lenders thereunderLender thereunder (including, without limitation, Lender's right to enforce said rights and remedies against Borrower and/or Guarantor (as applicable) personally and without the effect of the exculpatory provisions of this Article 13); (d4) impair the right rights of Agent or Lenders Lender to obtain the appointment of a receiver; (e5) impair the enforcement of the Assignment assignment of Leasesleases and rents contained in the Security Instrument and in any other Loan Documents; (f6) intentionally deleted; (7) constitute a prohibition against Agent or Lenders Lender to seek a deficiency judgment against Borrower (but not Guarantor) in order to fully realize on any the security given granted by Borrower the Security Instrument to the full extent of Borrower's interest in connection with the Property and collateral for the Loan or to commence any other appropriate action or proceeding in order for Agent or Lenders Lender to exercise its remedies against such securitythe Property; or (g) 8) constitute a waiver of the right of Agent or Lenders Lender to enforce the liability and obligation of Borrower or GuarantorBorrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation Loss incurred by Agent and/or any Lender (including reasonable attorneys’ ' fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceable.
Appears in 1 contract
Samples: Loan Agreement (Wheeler Real Estate Investment Trust, Inc.)
Exculpation. Subject to the qualifications below and except Except as set forth otherwise provided herein or in the Guaranty and Environmental Indemnityother Loan Documents, neither Agent nor Lenders Lender shall not enforce the liability and obligation of the Borrower or any holder of a direct or indirect interest in ESBA or any supervisor of either party comprising Borrower or Controlling either party comprising Borrower to perform and observe the Obligations obligations contained herein or in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against a Credit Party(1) Borrower (except as set forth in this Section 15.1 and the Environmental Indemnity), (2) Guarantor (except as set forth in the Guaranty, the PIP Guaranty and the Environmental Indemnity), (3) any Affiliate of Mortgage Borrower or Borrower, (4) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited partner, member, principal, officer, beneficiary, trustee, advisor, employee, agent, shareholder, Affiliate or director of any Persons described in clauses (1) through (5) above (collectively, subject to the exceptions in clauses (i) and (ii) below, the “Exculpated Parties”), except that Agent Lender may bring a foreclosure action, terminate the Ground Lease, Operating Lease and Observatory Lease, bring an action for specific performance or any other appropriate action or proceeding to enable Agent Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, or and the interest in the Property, the Rents or Collateral and any other collateral given to Agent and/or Lenders pursuant to Lender created by this Agreement, the Note, the Pledge Agreement and the other Loan Documents; provided, however, that, except as specifically provided herein, that any judgment in any such action or proceeding shall be enforceable against Borrower Borrower, only to the extent of Borrower’s interest in the Property, in the Rents, in the Cash Collateral and in any other collateral given to Agent and/or Lenders, and LendersLender. Lender, by accepting the Note, this Agreement, the Mortgage Note, the Pledge Agreement and the other Loan Documents, agrees that it shall not not, except as otherwise provided in this Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower any Exculpated Party in any such action or proceeding proceeding, under or by reason of or under or in connection with the Note, this Agreement, the Mortgage Note, the Pledge Agreement or the other Loan Documents; provided, further, that, subject to the terms and provisions of the Sublease as the same is amended, modified or supplemented after the date hereof with the consent of Agent, nothing herein shall constitute an acknowledgement by any party hereto that Operating Company or Observatory Tenant is liable for all or any portion of the Loans or other Obligations of Borrower. The provisions of this Section 15.1 shall not, however, (ai) constitute a waiver, release or impairment of any obligation evidenced or secured by any of this Agreement, the Note, the Pledge Agreement or the other Loan Documents; (bii) impair the right of Agent or Lenders Lender to name any Credit Party Borrower or Additional Pledgor as a party defendant in any action or suit for foreclosure and sale under this Agreement and the Mortgage and termination of the Operating Lease and Observatory LeasePledge Agreement; (ciii) affect the validity or enforceability of any guaranty indemnity (including, without limitation, 00000000.0.XXXXXXXX those contained in Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or indemnification agreement similar instrument made in connection with this Agreement, the Note, the Pledge Agreement and the other Loan or any of the rights and remedies of Agent or Lenders thereunderDocuments; (div) impair the right of Agent or Lenders Lender to obtain the appointment of a receiver; (ev) impair the enforcement of the Assignment provisions contained in the Pledge Agreement; or (vi) impair the right of Leases; (f) constitute a prohibition against Agent or Lenders Lender to seek obtain a deficiency judgment or other judgment on the Note against Borrower in order if necessary to fully realize on obtain any security given by Borrower in connection with the Loan or Net Liquidation Proceeds After Debt Service to commence any other appropriate action or proceeding in order for Agent or Lenders to exercise its remedies against which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such security; or (g) constitute a waiver of the right of Agent or Lenders to enforce the liability and obligation of Borrower or Guarantor, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent the Insurance Proceeds and/or any Lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:
(i) any material intentional misrepresentation by any Credit Party in connection with the Loan;
(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor);
(iii) during a Trigger Period or during the continuance of an Event of Default, any misappropriation of the Rents by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party, Guarantor or any Affiliate thereof;
(iv) the failure of the Observatory Tenant, during the continuance of an Event of Default or during a Trigger Period, to pay all Rent under the Observatory Lease into the HSBC Collection Account in accordance with the Loan Documents and Net Observatory Deck Revenue under the Observatory Lease directly into the JP Collection Account in accordance with the Loan Documents;
(v) the misappropriation of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or any Affiliate thereof;
(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate of any Credit Party or Guarantor), any Credit Party or Guarantor or any Affiliate thereof to use current Rents to pay then current material operating expenses with respect to the Property in the ordinary course of business (except with respect to Taxes, Other Charges and Trade Payables being contested in accordance with Section 4.1.2);
(vii) intentional physical waste of the Property (but excluding any matter that arises by reason of lack of cash flow with respect to the Property, except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(viii) any removal or disposal of any portion of the Property after an Event of Default in any manner prohibited by the Loan Documents;
(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer, as applicable, as required by the Mortgage or Article VIII hereof (except with respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient Property cash flow except to the extent that such lack of cash flow arises from the misappropriation of revenue with respect to the Property as described in clauses (iii), (iv), (v) and (vi) above);
(x) a voluntary Lien remains an encumbrance on all or any portion of the Property, the Operating Lease or the Observatory Lease in violation of the Loan Documents;
(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit Party to comply with the material single purpose entity requirements of this Agreement including those set forth in Section 4.2.19 hereof if such failure leads to a consolidation of the assets of any Credit Party with the assets of another Person (other than the other Credit Parties);
(xii) the incurrence of Indebtedness in violation of the Loan Documents;
(xiii) the breach of any indemnification provision in the Environmental Indemnity Agreement concerning environmental laws, Hazardous Substances and asbestos;
(xiv) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Agent upon a foreclosure of the Property or transfer in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or transfer in lieu thereof; and
(xv) any modifications, amendments, restatements and/or supplements made to the Ground Lease, Sublease or the Observatory Lease without the consent of Agent and any termination of the Observatory Lease without the consent of Agent. Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived any right which Agent and/or Lenders may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lenders in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a direct or indirect interest in ESBA or any party supervising either party comprising Borrower (other than as provided in the Guaranty and Environmental Indemnity) or Controlling either party comprising Borrower, in the event that: (1) any Credit Party files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer, trustee, director, or representative which Controls, directly or indirectly, any Credit Party or Guarantor files or any Credit Party or Guarantor joins in the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party or from any Person; (3) there is the filing of an involuntary petition against any Credit Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, in which any Credit Party or Guarantor colludes with, or otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any Credit Party from any Person; (4) any Credit Party files an answer joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (5) any Affiliate, officer, trustee, director, or representative which Controls any Credit Party or Guarantor joins in an application for the appointment of a custodian, receiver, trustee, or examiner for any Credit Party or any portion of the Property; (6) any Credit Party makes a general assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due unless such admission is true; or (7) in connection with any enforcement action or exercise or assertion of any right or remedy upon the continuance of an Event of Default and acceleration of the Loan by or on behalf of the Agent and Lenders under or in connection with the Guaranty, Mortgage, Subordinations, Negative Pledges or any other Loan Document, any Credit Party, or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or Guarantor) (I) seeks a defense, judicial intervention or injunctive or other equitable relief of any kind, or (II) asserts, or causes a third party to assert, in a pleading filed in connection with a judicial proceeding any defense against Agent and/or the Lenders, or (III) any right in connection with any security for the Loan, in each of (I), (II) or (III) that the Subordinations or the Negative Pledges or the subordination provisions of the Sublease or Observatory Lease are void, voidable or unenforceableAwards.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
