LOAN AGREEMENT
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LOAN AGREEMENT
Dated as of May 25, 2005
Between
FT-AMHERST PROPERTY LLC
as Borrower
And
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
as Lender
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TABLE OF CONTENTS
1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION..................................1
1.1 Specific Definitions............................................1
1.2 Index of Other Definitions.....................................14
1.3 Principles of Construction.....................................16
2. GENERAL LOAN TERMS......................................................16
2.1 The Loan.......................................................16
2.2 Interest; Monthly Payments.....................................16
2.2.1 Generally.............................................16
2.2.2 Default Rate..........................................17
2.2.3 Taxes.................................................17
2.2.4 New Payment Date......................................17
2.3 Loan Repayment.................................................18
2.3.1 Repayment.............................................18
2.3.2 Mandatory Prepayments.................................18
2.3.3 Defeasance............................................19
2.3.4 Optional Prepayments..................................21
2.4 Release of Property............................................21
2.4.1 Release on Defeasance.................................21
2.4.2 Release on Payment in Full............................21
2.5 Payments and Computations......................................22
2.5.1 Making of Payments....................................22
2.5.2 Computations..........................................23
2.5.3 Late Payment Charge...................................23
3. CASH MANAGEMENT AND RESERVES............................................23
3.1 Cash Management Arrangements...................................23
3.2 Intentionally Deleted..........................................23
3.3 Taxes and Insurance............................................23
3.4 Capital Expense Reserves.......................................25
3.5 Rollover Reserves..............................................25
3.6 Operating Expense Subaccount...................................27
3.7 Casualty/Condemnation Subaccount...............................27
3.8 Security Deposits..............................................28
3.9 Cash Collateral Subaccount.....................................28
3.10 Grant of Security Interest; Application of Funds...............29
3.11 Property Cash Flow Allocation..................................29
4. REPRESENTATIONS AND WARRANTIES..........................................30
4.1 Organization; Special Purpose..................................30
4.2 Proceedings; Enforceability....................................31
4.3 No Conflicts...................................................31
4.4 Litigation.....................................................31
4.5 Agreements.....................................................31
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4.6 Title..........................................................32
4.7 No Bankruptcy Filing...........................................33
4.8 Full and Accurate Disclosure...................................33
4.9 Tax Filings....................................................33
4.10 ERISA; No Plan Assets..........................................33
4.11 Compliance.....................................................34
4.12 Contracts......................................................34
4.13 Federal Reserve Regulations; Investment Company Act............34
4.14 Easements; Utilities and Public Access.........................35
4.15 Physical Condition.............................................35
4.16 Leases.........................................................35
4.17 Fraudulent Transfer............................................36
4.18 Ownership of Borrower..........................................37
4.19 Purchase Options...............................................37
4.20 Management Agreement...........................................37
4.21 Hazardous Substances...........................................37
4.22 Name; Principal Place of Business..............................38
4.23 Other Debt.....................................................38
4.24 XXX Lease......................................................38
4.24.1 Recording; Modification...............................38
4.24.2 No Liens..............................................38
4.24.3 XXX Lease Assignable..................................38
4.24.4 Term..................................................38
4.24.5 Default...............................................38
4.24.6 Notice................................................39
4.24.7 Cure..................................................39
4.24.8 Subleasing............................................39
4.24.9 Insurance Proceeds....................................39
5. COVENANTS...............................................................39
5.1 Existence......................................................39
5.2 Taxes and Other Charges........................................39
5.3 Access to Property.............................................40
5.4 Repairs; Maintenance and Compliance; Alterations...............40
5.4.1 Repairs; Maintenance and Compliance...................40
5.4.2 Alterations...........................................41
5.5 Performance of Other Agreements................................42
5.6 Cooperate in Legal Proceedings.................................42
5.7 Further Assurances.............................................42
5.8 Environmental Matters..........................................42
5.8.1 Hazardous Substances..................................42
5.8.2 Environmental Monitoring..............................43
5.9 Title to the Property..........................................44
5.10 Leases.........................................................44
5.10.1 Generally.............................................45
5.10.2 Additional Covenants with respect to Leases...........45
5.11 Estoppel Statement.............................................45
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5.12 Property Management............................................45
5.12.1 Management Agreement..................................46
5.12.2 Termination of Manager................................46
5.13 Special Purpose Bankruptcy Remote Entity.......................47
5.14 Intentionally Deleted..........................................47
5.15 Change in Business or Operation of Property....................47
5.16 Debt Cancellation..............................................47
5.17 Affiliate Transactions.........................................47
5.18 Zoning.........................................................47
5.19 No Joint Assessment............................................47
5.20 Principal Place of Business....................................48
5.21 Change of Name, Identity or Structure..........................48
5.22 Indebtedness...................................................48
5.23 Licenses.......................................................48
5.24 Compliance with Restrictive Covenants, Etc.....................48
5.25 ERISA..........................................................48
5.26 Prohibited Transfers...........................................49
5.26.1 Generally.............................................49
5.26.2 Transfer and Assumption...............................49
5.27 Liens..........................................................51
5.28 Dissolution....................................................51
5.29 Expenses.......................................................51
5.30 Indemnity......................................................52
5.31 Patriot Act Compliance.........................................53
5.32 Required Repairs...............................................54
5.33 XXX Lease......................................................54
6. NOTICES AND REPORTING...................................................56
6.1 Notices........................................................56
6.2 Borrower Notices and Deliveries................................57
6.3 Financial Reporting............................................57
6.3.1 Bookkeeping...........................................57
6.3.2 Annual Reports........................................57
6.3.3 Monthly/Quarterly Reports.............................58
6.3.4 Other Reports.........................................59
6.3.5 Annual Budget.........................................59
6.3.6 Breach................................................59
7. INSURANCE; CASUALTY; AND CONDEMNATION...................................60
7.1 Insurance......................................................60
7.1.1 Coverage..............................................60
7.1.2 Policies..............................................62
7.2 Casualty.......................................................63
7.2.1 Notice; Restoration...................................63
7.2.2 Settlement of Proceeds................................63
7.3 Condemnation...................................................64
7.3.1 Notice; Restoration...................................64
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7.3.2 Collection of Award...................................64
7.4 Application of Proceeds or Award...............................65
7.4.1 Application to Restoration............................65
7.4.2 Application to Debt...................................65
7.4.3 Procedure for Application to Restoration..............66
7.4.4 Xxxxxx Micro Lease....................................66
8. DEFAULTS................................................................66
8.1 Events of Default..............................................66
8.2 Remedies.......................................................68
8.2.1 Acceleration..........................................68
8.2.2 Remedies Cumulative...................................69
8.2.3 Severance.............................................69
8.2.4 Delay.................................................69
8.2.5 Lender's Right to Perform.............................70
9. SPECIAL PROVISIONS......................................................70
9.1 Sale of Note and Secondary Market Transaction..................70
9.1.1 General; Borrower Cooperation.........................70
9.1.2 Use of Information....................................71
9.1.3 Borrower Obligations Regarding Disclosure Documents...71
9.1.4 Borrower Indemnity Regarding Filings..................72
9.1.5 Indemnification Procedure.............................72
9.1.6 Contribution..........................................73
9.1.7 Intentionally Deleted.................................73
9.1.8 Severance of Loan.....................................73
10. MISCELLANEOUS...........................................................74
10.1 Exculpation....................................................74
10.2 Brokers and Financial Advisors.................................76
10.3 Retention of Servicer..........................................76
10.4 Survival.......................................................76
10.5 Lender's Discretion............................................76
10.6 Governing Law..................................................77
10.7 Modification, Waiver in Writing................................78
10.8 Trial by Jury..................................................78
10.9 Headings/Exhibits..............................................78
10.10 Severability...................................................79
10.11 Preferences....................................................79
10.12 Waiver of Notice...............................................79
10.13 Remedies of Borrower...........................................79
10.14 Prior Agreements...............................................79
10.15 Offsets, Counterclaims and Defenses............................80
10.16 Publicity......................................................80
10.17 No Usury.......................................................80
10.18 Conflict; Construction of Documents............................81
10.19 No Third Party Beneficiaries...................................81
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10.20 Yield Maintenance Premium......................................81
10.21 Assignment.....................................................81
10.22 Intentionally Deleted..........................................82
10.23 Certain Additional Rights of Lender............................82
10.24 Set-Off........................................................83
10.25 Counterparts...................................................83
Schedule 1 Required Repairs
Schedule 2 Exceptions to Representations and Warranties
Schedule 3 Rent Roll
Schedule 4 Organization of Borrower
Schedule 5 Definition of Special Purpose Bankruptcy Remote Entity
Schedule 6 Description of Road Widening Parcel
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LOAN AGREEMENT
LOAN AGREEMENT dated as of May 25, 2005 (as the same may be modified,
supplemented, amended or otherwise changed, this "Agreement") between FT-AMHERST
PROPERTY LLC, a Delaware limited liability company (together with its permitted
successors and assigns, "Borrower"), and GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation (together with its successors and assigns,
"Lender").
1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1 Specific Definitions. The following terms have the meanings set forth
below:
Affiliate: as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person or is a director or officer of such Person or of an Affiliate of
such Person.
Amortization Commencement Date: November 6, 2005, as such date may
be changed in accordance with Section 2.2.4 hereof.
Approved Capital Expenses: Capital Expenses incurred by Borrower,
provided that during a Cash Management Period, such Capital Expenses shall
either be (i) included in the Approved Capital Budget for the current calendar
month or (ii) approved by Lender.
Approved Xxxxxx Micro Extension: a lease extension agreement between
Borrower and Xxxxxx Micro with respect to the Xxxxxx Micro Lease which (i)
provides that the rent payable thereunder is on a triple net basis, (ii) has a
term expiring no earlier than April 1, 2020 and (iii) provides for an annual net
effective base rent of no less than $1,800,000.
Approved Leasing Expenses: actual out-of-pocket expenses incurred by
Borrower and payable to third parties that are not Affiliates of Borrower or
Guarantor in leasing space at the Property pursuant to Leases entered into in
accordance with the Loan Documents, including brokerage commissions and tenant
improvements, which expenses (i) are (A) specifically approved by Lender in
connection with approving the applicable Lease, (B) incurred in the ordinary
course of business and on market terms and conditions in connection with Leases
which do not require Lender's approval under the Loan Documents, or (C)
otherwise approved by Lender, which approval shall not be unreasonably withheld
or delayed, and (ii) are substantiated by executed Lease documents and brokerage
agreements.
Approved Major Lease Leasing Expenses: actual out-of-pocket expenses
incurred by Borrower and payable to third parties that are not Affiliates of
Borrower or Guarantor in re-leasing space demised under a Major Lease at the
Property pursuant to replacement Leases entered into in accordance with the Loan
Documents, including brokerage commissions and tenant improvements, which
expenses (i) are (A) specifically approved by Lender in connection with
approving the applicable Lease, or (B) otherwise approved by Lender, which
approval shall not be unreasonably withheld or delayed, and (ii) are
substantiated by executed Lease documents and brokerage agreements.
Approved Operating Expenses: during a Cash Management Period,
operating expenses incurred by Borrower which (i) are included in the Approved
Operating Budget for the current calendar month, (ii) are for real estate taxes,
insurance premiums, electric, gas, oil, water, sewer or other utility service to
the Property, or (iii) have been approved by Lender.
Approved Sublease: a sublease by a Major Tenant of up to 15% of the
Property on fair market terms for a term of not less than 3 years.
Available Cash: as of each Payment Date during the continuance of
Cash Trap Period, the amount of Rents, if any, remaining in the Deposit Account
after the application of all of the payments required under clauses (i) through
(vii) of Section 3.11(a) hereof.
Business Day: any day other than a Saturday, Sunday or any day on
which commercial banks in New York, New York are authorized or required to
close.
Calculation Date: the last day of each calendar quarter during the
Term.
Capital Expenses: expenses that are capital in nature or required
under GAAP to be capitalized.
Cash Management Period: shall commence upon Lender giving notice to
the Clearing Bank of the occurrence of any of the following: (i) the Stated
Maturity Date, (ii) a Default or an Event of Default, or (iii) if, as of any
Calculation Date, the Debt Service Coverage Ratio is less than 0.95:1 (a "DSCR
Cash Management Period") or (iv) the commencement of a Lease Sweep Period; and
shall end upon Lender giving notice to the Clearing Bank that the sweeping of
funds into the Deposit Account may cease, which notice Lender shall only be
required to give if (1) the Loan and all other obligations under the Loan
Documents have been repaid in full or (2) the Stated Maturity Date has not
occurred and (A) with respect for the matters described in clause (ii) above,
such Event of Default has been cured and no other Event of Default has occurred
and is continuing or (B) with respect to the matter described in clause (iii)
above, Lender has determined that the Property has achieved a Debt Service
Coverage Ratio of at least 0.95:1 for two (2) consecutive Calculation Dates or
(C) with respect to the matter described in clause (iv) above, such Lease Sweep
Period has ended.
Code: the Internal Revenue Code of 1986, as amended and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Control: with respect to any Person, either (i) ownership directly
or indirectly of 49% or more of all equity interests in such Person or (ii) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, by contract or otherwise.
Debt: the unpaid Principal, all interest accrued and unpaid thereon,
any Yield Maintenance Premium and all other sums due to Lender in respect of the
Loan or under any Loan Document.
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Debt Service: with respect to any particular period, the greater of
(i) scheduled Principal and interest payments due under the Note in such period
or (ii) the product of (A) the outstanding principal as of the end of such
period multiplied by (B) 9.00%.
Debt Service Coverage Ratio: as of any date, the ratio calculated by
Lender of (i) the Net Operating Income for the twelve (12)-month period ending
with the most recently completed calendar month to (ii) the Debt Service with
respect to such period.
Default: the occurrence of any event under any Loan Document which,
with the giving of notice or passage of time, or both, would be an Event of
Default.
Default Rate: a rate per annum equal to the lesser of (i) the
maximum rate permitted by applicable law, or (ii) five percent (5%) above the
Interest Rate, compounded monthly.
Defeasance Collateral: U.S. Obligations, which provide payments (i)
on or prior to, but as close as possible to, all Payment Dates and other
scheduled payment dates, if any, under the Note after the Defeasance Date and up
to and including the Stated Maturity Date, and (ii) in amounts equal to or
greater than the Scheduled Defeasance Payments.
Deposit Bank: Wachovia Bank, National Association, or such other
bank or depository selected by Lender in its discretion.
Eligibility Requirements: with respect to any Person, that such
Person (i) has total assets (in name or under management) in excess of
$600,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder's equity in excess of
$250,000,000 and (ii) is regularly engaged in the business of making or owning
commercial real estate loans or operating commercial mortgage properties.
Eligible Account: a separate and identifiable account from all other
funds held by the holding institution that is either (i) an account or accounts
(A) maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (B) as to
which Lender has received a Rating Comfort Letter from each of the applicable
Rating Agencies with respect to holding funds in such account, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations ss.9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.
Eligible Institution: a depository institution insured by the
Federal Deposit Insurance Corporation the short term unsecured debt obligations
or commercial paper of which are rated at least A-1 by S&P, P-1 by Xxxxx'x and
F-1+ by Fitch, in the case of accounts in which funds are held for thirty (30)
days or less or, in the case of Letters of Credit or accounts in which funds are
held for more than thirty (30) days, the long term unsecured debt obligations of
which are rated at least "AA" by Fitch and S&P and "Aa2" by Xxxxx'x.
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ERISA: the Employment Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder.
ERISA Affiliate: all members of a controlled group of corporations
and all trades and business (whether or not incorporated) under common control
and all other entities which, together with Borrower, are treated as a single
employer under any or all of Section 414(b), (c), (m) or (o) of the Code.
GAAP: generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.
Governmental Authority: any court, board, agency, commission, office
or authority of any nature whatsoever for any governmental xxxx (xxxxxxx, xxxxx,
xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) now or hereafter in existence.
Guarantor: First Union REIT L.P., a Delaware limited partnership.
XXX Lease: individually and collectively, each Amended and Restated
Lease Agreement dated as of October 21, 1998 between Town of Amherst Industrial
Development Agency ("Fee Owner"), as landlord, and Amherst Investors Business
Trust (predecessor-in-interest to Borrower,) as tenant.
Interest Period: (i) the period from the date hereof through the
first day thereafter that is the 5th day of a calendar month and (ii) each
period thereafter from the 6th day of each calendar month through the 5th day of
the following calendar month; except that the Interest Period, if any, that
would otherwise commence before and end after the Maturity Date shall end on the
Maturity Date. Notwithstanding the foregoing, if Lender exercises its right to
change the Payment Date to a New Payment Date in accordance with Section 2.2.4
hereof, then from and after such election, each Interest Period shall be the
period from the New Payment Date in each calendar month through the day in the
next succeeding calendar month immediately preceding the New Payment Date in
such calendar month.
Interest Rate: a rate of interest equal to 5.65% per annum (or, when
applicable pursuant to this Agreement or any other Loan Document, the Default
Rate).
Key Principal(s): First Union Real Estate Equity and Mortgage
Investments, an Ohio business trust.
Lease Default: an "Event of Default" (as defined in the Xxxxxx Micro
Lease) by Xxxxxx Micro in the performance of its obligations under the Xxxxxx
Micro Lease.
Leases: all leases and other agreements or arrangements heretofore
or hereafter entered into affecting the use, enjoyment or occupancy of, or the
conduct of any activity upon or in, the Property or the Improvements, including
any guarantees, extensions, renewals, modifications or amendments thereof and
all additional remainders, reversions and other rights and estates appurtenant
thereunder.
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Lease Sweep Period: the period which shall commence and end as
hereinafter provided.
A Lease Sweep Period shall commence on the first Payment Date
following the occurrence of any of the following:
(i) the date that is twelve (12) months prior to the end of the term
of any Major Lease (including any renewal terms), or
(ii) the date required under any Major Lease by which the applicable
Major Tenant is required to give notice of its exercise of a renewal
option thereunder (and such renewal has not been so exercised); or
(iii) any Major Lease (or any material portion thereof) is
surrendered, cancelled or terminated prior to its then current expiration
date; or
(iv) any Major Tenant shall discontinue its business at its premises
(or any material portion thereof (i.e., "goes dark") or give notice that
it intends to discontinue its business (except with respect to the
expiration of the Cognigen Sublease or with respect to space which has
been subleased in accordance with an Approved Sublease); or
(v) the occurrence and continuance (beyond any applicable notice and
cure periods) of a default under any Major Lease by the applicable Major
Tenant thereunder; or
(vi) the occurrence of a Major Tenant Insolvency Proceeding; or
(vii) the credit rating of a Major Tenant being downgraded below B
by S&P (or its functional equivalent by any other Rating Agency).
A Lease Sweep Period shall end upon the earlier to occur of (x) the
determination by Lender that sufficient funds have been accumulated in the
Special Rollover Reserve Subaccount to pay for all anticipated expenses in
connection with the re-leasing of the space under the applicable Major Lease
that gave rise to the subject Lease Sweep Period, including brokerage
commissions and tenant improvements, and any anticipated shortfalls of payments
required hereunder during any period of time that Rents are insufficient as a
result of down-time or free rent periods, or (y) the occurrence of any of the
following:
(1) with respect to a Lease Sweep Period caused by a matter
described in clauses (i), (ii), (iii) or (iv) above, upon the earlier to occur
of (A) the date on which the subject Major Tenant irrevocably exercises its
renewal or extension option (or otherwise enters into an extension agreement
with Borrower and acceptable to Lender) with respect to all of the space demised
under its Major Lease, and in Lender's judgment, sufficient funds have been
accumulated in the Special Rollover Reserve Subaccount (during the continuance
of the subject Lease Sweep Period) to pay for all anticipated Approved Major
Lease Leasing Expenses for such Major Lease and any other anticipated expenses
in connection with such renewal or extension, or (B) the date on which all of
the space demised under the subject Major Lease (or portion thereof) that gave
rise to the subject Lease Sweep Period has been fully leased pursuant to a
5
replacement Lease or replacement Leases approved by Lender, and entered into in
accordance with Section 5.10 hereof, and all Approved Major Lease Leasing
Expenses (and any other expenses in connection with the re-tenanting of such
space) have been paid in full;
(2) with respect to a Lease Sweep Period caused by a matter
described in clause (v) above, if the subject Major Tenant default has been
cured, and no other Major Tenant default has occurred for a period of six (6)
consecutive months following such cure;
(3) with respect to a Lease Sweep Period caused by a matter
described in clause (vi) above, if the applicable Major Tenant Insolvency
Proceeding has terminated and the applicable Major Lease has been affirmed,
assumed or assigned in a manner satisfactory to Lender;
(4) with respect to a Lease Sweep Period caused by a matter
described in clause (vii) above, upon the credit rating of the applicable Major
Tenant being restored to B or higher then B by S&P (or its functional equivalent
by any other Rating Agency); or
(5) with respect to a Lease Sweep Period caused by a matter
described in clauses (iv) or (vii) above, an amount equal to (y) $1,500,000
minus (z) the sum of the balances of the Capital Reserve Subaccount and the
Rollover Reserve Subaccount that has been deposited into the Special Rollover
Reserve Subaccount solely by reason of the applicable Lease Sweep Period.
Lease Termination Payments: (i) all fees, penalties, commissions or
other payments made to Borrower in connection with or relating to the rejection,
buy-out, termination, surrender or cancellation of any Lease (including in
connection with any bankruptcy proceeding), (ii) any security deposits or
proceeds of letters of credit held by Borrower in lieu of cash security
deposits, which Borrower is permitted to retain pursuant to the applicable
provisions of any Lease and (iii) any payments made to Borrower relating to
unamortized tenant improvements and leasing commissions under any Lease.
Legal Requirements: statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting Borrower, any Loan Document or all or part of the Property or the
construction, ownership, use, alteration or operation thereof, whether now or
hereafter enacted and in force, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instrument, either of record or known to Borrower,
at any time in force affecting all or part of the Property.
Lien: any mortgage, deed of trust, lien (statutory or otherwise),
pledge, hypothecation, easement, restrictive covenant, preference, assignment,
security interest or any other encumbrance, charge or transfer of, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any part of the Property or any interest therein, or any direct or indirect
interest in Borrower including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic's,
materialmen's and other similar liens and encumbrances.
6
Loan Documents: this Agreement and all other documents, agreements
and instruments now or hereafter evidencing, securing or delivered to Lender in
connection with the Loan, including the following, each of which is dated as of
the date hereof: (i) the Promissory Note or Promissory Notes made by Borrower to
Lender in the aggregate principal amount equal to the Loan (the "Note"), (ii)
the Fee and Leasehold Mortgage, Assignment of Leases and Rents and Security
Agreement made by Borrower and Fee Owner in favor of Lender which covers the
Property (the "Mortgage"), (iii) Assignment of Leases and Rents from Borrower to
Lender, (iv) Assignment of Agreements, Licenses, Permits and Contracts from
Borrower to Lender, (v) the Deposit Account Agreement (the "Deposit Account
Agreement") among Borrower, Lender and the Deposit Bank and (vi) the Guaranty of
Recourse Obligations made by Guarantor; as each of the foregoing may be (and
each of the foregoing defined terms shall refer to such documents as they may
be) amended, restated, replaced, severed, split, supplemented or otherwise
modified from time to time (including pursuant to Section 9.1.8 hereof).
Major Lease: the Consolidated, Amended and Restated Sublease
Agreement ("Xxxxxx Micro Lease") dated as of October 21, 1998 between Wilpet
L.P. (predecessor-in-interest of Borrower), as sublessor, and Xxxxxx Micro Inc.
("Xxxxxx Micro"), and any Lease (or multiple Leases with the same tenant and/or
its Affiliates) entered into after the date hereof which demises all or
substantially all of the premises demised under the Xxxxxx Micro Lease.
Major Tenant: Xxxxxx Micro and any tenant under either a Major
Lease, or under one or more Leases (leased by such tenant and/or its
Affiliates), which when taken together would constitute a Major Lease.
Major Tenant Insolvency Proceeding: (A) the admission in writing by
any Major Tenant or any Affiliate which controls such Major Tenant of its
inability to pay its debts generally, or the making of a general assignment for
the benefit of creditors, or the instituting by any Major Tenant or any
Affiliate which controls such Major Tenant of any proceeding seeking to
adjudicate it insolvent or seeking a liquidation or dissolution, or the taking
advantage by any Major Tenant or any Affiliate which controls such Major Tenant
of any Insolvency Law (as hereinafter defined), or the commencement by any Major
Tenant or any Affiliate which controls such Major Tenant of a case or other
proceeding naming it as debtor under any Insolvency Law or the instituting of a
case or other proceeding against or with respect to any Major Tenant or any
Affiliate which controls such Major Tenant under any Insolvency Law or (B) the
instituting of any proceeding against or with respect to any Major Tenant or any
Affiliate which controls such Major Tenant seeking liquidation of its assets or
the appointment of (or if any Major Tenant or any Affiliate which controls such
Major Tenant shall consent to or acquiesce in the appointment of) a receiver,
liquidator, conservator, trustee or similar official in respect of it or the
whole or any substantial part of its properties or assets or the taking of any
corporate, partnership or limited liability company action in furtherance of any
of the foregoing. As used herein, the term "Insolvency Law" shall mean Title 11
of the United States Code (11 U.S.C. xx.xx. 101 et seq.) as the same has been or
may be amended or superseded from time to time, or any other applicable domestic
or foreign liquidation, conservatorship, bankruptcy, receivership, insolvency,
reorganization, or any similar debtor relief laws affecting the rights,
remedies, powers, privileges and benefits of creditors generally.
7
Management Agreement: any management agreement between Borrower and
Manager, pursuant to which Manager is to manage the Property, as same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with Section 5.12 hereof.
Manager: a property manager appointed by Borrower in accordance with
Section 5.12 hereof.
Material Alteration: any alteration affecting structural elements of
the Property the cost of which exceeds $250,000; provided, however, that in no
event shall (i) any Required Repairs, (ii) any tenant improvement work performed
pursuant to any Lease existing on the date hereof or entered into hereafter in
accordance with the provisions of this Agreement, or (iii) alterations performed
as part of a Restoration, constitute a Material Alteration.
Maturity Date: the date on which the final payment of principal of
the Note becomes due and payable as therein provided, whether at the Stated
Maturity Date, by declaration of acceleration, or otherwise.
Net Operating Income: for any period, the actual net operating
income of the Property determined on a cash basis of accounting, after deducting
therefrom deposits to (but not withdrawals from) any reserves required under
this Agreement, and without giving credit for non-recurring extraordinary items
of income.
Net Sales Proceeds: with respect to the conveyance of the Road
Widening Parcel to the County of Erie, New York in accordance with Section
2.4.2, the gross proceeds of such conveyance less all reasonable and customary
transaction costs and uses of funds approved by Lender in its reasonable
discretion.
Officer's Certificate: a certificate delivered to Lender by Borrower
which is signed by a senior executive officer of Borrower.
Other Charges: all ground rents, maintenance charges, impositions
other than Taxes, and any other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Property, now
or hereafter levied or assessed or imposed against the Property or any part
thereof.
Payment Date: the 6th day of each calendar month or, upon Lender's
exercise of its right to change the Payment Date in accordance with Section
2.2.4 hereof, the New Payment Date (in either case, if such day is not a
Business Day, the Payment Date shall be the first Business Day thereafter). The
first Payment Date hereunder shall be July 6, 2005.
Permitted Encumbrances: (i) the Liens created by the Loan Documents,
(ii) all Liens and other matters disclosed in the Title Insurance Policy, (iii)
Liens, if any, for Taxes or Other Charges not yet due and payable and not
delinquent, (iv) any workers', mechanics' or other similar Liens on the Property
provided that any such Lien is bonded or discharged within thirty (30) days
8
after Borrower first receives notice of such Lien and (v) such other title and
survey exceptions as Lender approves in writing in Lender's discretion.
Permitted Transfers:
(i) a Lease entered into in accordance with the Loan Documents;
(ii) a Permitted Encumbrance;
(iii) a Transfer and Assumption;
(iv) a Transfer or pledge of publicly traded shares in any direct or
indirect owner of Borrower.
(v) provided that no Default or Event of Default shall then exist, a
Transfer of an interest in Borrower to any Person provided that (A) such
Transfer shall not (x) cause the transferee (other than Key Principal), together
with its Affiliates, to acquire Control of Borrower or to increase its direct or
indirect interest in Borrower to an amount which equals or exceeds 49% or (y)
result in Borrower or no longer being Controlled by Key Principal(s), (B) if
such Transfer would cause the transferee to increase its direct or indirect
interest in Borrower to an amount which equals or exceeds twenty percent (20%),
Lender shall have approved in its reasonable discretion such proposed
transferee, which approval shall be based upon Lender's satisfactory
determination as to the reputable character and creditworthiness of such
proposed transferee, as evidenced by credit and background checks performed by
Lender and such other financial statements and other information reasonably
requested by Lender, (C) Borrower shall give Lender notice of such Transfer
together with copies of all instruments effecting such Transfer not less than
ten (10) days prior to the date of such Transfer, and (D) the legal and
financial structure of Borrower and its members and the single purpose nature
and bankruptcy remoteness of Borrower and its members after such Transfer, shall
satisfy Lender's then current applicable underwriting criteria and requirements;
(vi) provided that no Default or Event of Default shall then exist,
a Transfer of an interest in Borrower, which shall cause the transferee to
increase its direct or indirect interest in Borrower to an amount which equals
or exceeds 49% or which results in a change of Control of Borrower, provided
that:
(A) (1) such Transfer is first approved by Lender and, if such
Transfer occurs after a Secondary Market Transaction, the applicable
Rating Agencies, in Lender's and, if applicable, the Rating Agencies' sole
and absolute discretion, (2) Borrower, at its sole cost and expense, shall
have (y) delivered (or caused to be delivered) to Lender and, if such
Transfer occurs after a Secondary Market Transaction, the applicable
Rating Agencies, a substantive non-consolidation opinion with respect to
Borrower in form and substance satisfactory to Lender and the applicable
Rating Agencies and (z) reimbursed Lender for all reasonable expenses
incurred by it in connection with such Transfer, (3) if such Transfer
occurs after a Secondary Market Transaction, Borrower, at its sole cost
and expense, shall have delivered (or caused to be delivered) to Lender
and the applicable Rating Agencies, a Rating Comfort Letter and (4)
Borrower shall give Lender notice of such Transfer together with copies of
all instruments effecting such Transfer not less than 10 days prior to the
date of such Transfer; or
9
(B) such Transferee is a Qualified Transferee and (1) Borrower
shall give Lender notice of such Transfer together with copies of all
instruments effecting such Transfer not less than 10 days prior to the
date of such Transfer, (2) Borrower, at its sole cost and expense, shall
have (y) delivered (or caused to be delivered) to Lender and, if such
Transfer occurs after a Secondary Market Transaction, the applicable
Rating Agencies, a substantive non-consolidation opinion with respect to
Borrower in form and substance satisfactory to Lender and the applicable
Rating Agencies and (z) reimbursed Lender for all reasonable expenses
incurred by it in connection with such Transfer, (3) Borrower shall give
Lender notice of such Transfer together with copies of all instruments
effecting such Transfer not less than 10 days prior to the date of such
Transfer and (4) the Property is managed by a Qualified Manager.
(vii) immaterial Transfers of portions of a Property to Governmental
Authorities for dedication or public use or the granting of easements,
restrictions, covenants, reservations and rights of way in the ordinary course
of business for access, water and sewer lines, telephone and telegraph lines,
electric lines or other utilities or for other similar purposes; provided that
(i) no Default or Event of Default shall then exist, (ii) no such Transfer shall
impair the utility, operation or value of the Property, (iii) shall receive (1)
thirty (30) days prior written notice thereof (2) a copy of the instrument or
instruments of Transfer; and (3) an Officer's Certificate stating (x) with
respect to any Transfer, the consideration, if any, being paid for the Transfer
and (y) that such Transfer does not impair the utility, operation or value of
the Property.
Person: any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
person or entity, and any federal, state, county or municipal government or any
bureau, department or agency thereof and any fiduciary acting in such capacity
on behalf of any of the foregoing.
Plan: (i) an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate or to which Borrower or any ERISA
Affiliate makes or is obligated to make contributions and (ii) which is subject
to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
Property: the parcel of real property and Improvements thereon owned
by Borrower and encumbered by the Mortgage; together with all rights pertaining
to such real property and Improvements, and all other collateral for the Loan as
more particularly described in the Granting Clauses of the Mortgage and referred
to therein as the Mortgaged Property. The Property is located in Amherst, New
York.
"Qualified Manager": Guarantor (or its Affiliate) or such other
property manager of the Property which (i) is a reputable management company
having at least five (5) years' experience in the management of commercial
properties with similar uses as the Premises and in the jurisdiction in which
the Property is located, (ii) has, for at least five (5) years prior to its
engagement as property manager, managed at least (5) properties of the same
property type as the Property, (iii) at the time of its engagement as property
10
manager has leasable square footage of the same property type as the Property
equal to the lesser of (A) 1,000,000 leasable square feet and (B) five (5) times
the leasable square feet of the Property and (iv) is not the subject of a
Bankruptcy Proceeding.
"Qualified Transferee": one or more of the following:
(A) a real estate investment trust, bank, saving and loan
association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm,
mutual fund, government entity or plan, provided that any such Person
referred to in this clause (A) satisfies the Eligibility Requirements;
(B) an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities
Act of 1933, as amended, or an institutional "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, as amended,
provided that any such Person referred to in this clause (B) satisfies the
Eligibility Requirements;
(C) an institution substantially similar to any of the foregoing
entities described in clauses (A) or (B) that satisfies the Eligibility
Requirements;
(D) any entity Controlled by any of the entities described in
clauses (A) or (C) above; or
(E) an investment fund, limited liability company, limited
partnership or general partnership where a Permitted Fund Manager or an
entity that is otherwise a Qualified Transferee under clauses (A), (B),
(C) or (D) of this definition acts as the general partner, managing member
or fund manager and at least 50% of the equity interests in such
investment vehicle are owned, directly or indirectly, by one or more
entities that are otherwise Qualified Transferees under clauses (A), (B),
(C) or (D) of this definition.
Rating Agency: each of Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P"), Xxxxx'x Investors Service, Inc.
("Xxxxx'x"), and Fitch, Inc., a division of Fitch Ratings Ltd. ("Fitch") or any
other nationally-recognized statistical rating organization to the extent any of
the foregoing have been engaged by Lender or its designee in connection with or
in anticipation of any Secondary Market Transaction.
Rating Comfort Letter: a letter issued by each of the applicable
Rating Agencies which confirms that the taking of the action referenced to
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of Securities created in a Secondary Market Transaction.
Release Date: the earlier to occur of (i) the forty second (42nd)
Payment Date of the Term and (ii) the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the final Secondary Market
Transaction involving this Loan.
11
REMIC Trust: a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code that holds the Note.
Rents: all rents, rent equivalents, moneys payable as damages
(including payments by reason of the rejection of a Lease in a Bankruptcy
Proceeding) or in lieu of rent or rent equivalents, royalties (including all oil
and gas or other mineral royalties and bonuses), income, fees, receivables,
receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
payment and consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower or any of their agents or employees
from any and all sources arising from or attributable to the Property and the
Improvements, including all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease, license, concession or other grant of
the right of the use and occupancy of the Property or rendering of services by
Borrower or any of their agents or employees and proceeds, if any, from business
interruption or other loss of income insurance.
Road Widening Parcel: that portion of the Property which is
idenfified on Schedule 6.
Scheduled Defeasance Payments: the Monthly Debt Service Payment
Amount required under the Note for all Payment Dates occurring after the
Defeasance Date (including the outstanding Principal balance on the Note as of
the Stated Maturity Date).
Security Agreement: a security agreement in form and substance that
would be satisfactory to Lender (in Lender's sole but good faith discretion)
pursuant to which Borrower grants Lender a perfected, first priority security
interest in the Defeasance Collateral Account and the Defeasance Collateral.
Servicer: a servicer selected by Lender to service the Loan,
including any "master servicer" or "special servicer" appointed under the terms
of any pooling and servicing agreement or similar agreement entered into as a
result of a Secondary Market Transaction.
State: the state in which the Property is located.
Stated Maturity Date: November 6, 2013, as such date may be changed
in accordance with Section 2.2.4 hereof.
Taxes: all real estate and personal property taxes, assessments,
water rates or sewer rents, maintenance charges, impositions, vault charges and
license fees, now or hereafter levied or assessed or imposed against all or part
of the Property, including, without limitation, PILOT Payments, all real estate
and personal property taxes, assessments, water rates or sewer rents,
maintenance charges, impositions, vault charges and license fees that would
otherwise be imposed on the portion of the Property subject to the XXX Lease, if
the XXX Lease were no longer in effect (i.e., if the Borrower was the fee owner
of the Fee Estate (as defined in Section 5.32 hereof)).
12
Term: the entire term of this Agreement, which shall expire upon
repayment in full of the Debt and full performance of each and every obligation
to be performed by Borrower pursuant to the Loan Documents.
Title Insurance Policy: the ALTA mortgagee title insurance policy in
the form acceptable to Lender issued with respect to the Property and insuring
the Lien of the Mortgage.
Transfer: (i) any sale, conveyance, transfer, Lease or assignment,
or the entry into any agreement to sell, convey, transfer, lease or assign,
whether by law or otherwise, of, on, in or affecting (x) all or part of the
Property (including any legal or beneficial direct or indirect interest
therein), (y) any direct or indirect interest in Borrower (including any profit
interest), or (ii) any change of Control of Borrower. For purposes hereof, (i) a
Transfer of an interest in Borrower shall be deemed to include (A) if Borrower
or controlling shareholder of Borrower is a corporation, the voluntary or
involuntary sale, conveyance or transfer of such corporation's stock (or the
stock of any corporation directly or indirectly controlling such corporation by
operation of law or otherwise) or the creation or issuance of new stock in one
or a series of transactions by which an aggregate of more than ten percent (10%)
of such corporation's stock shall be vested in a party or parties who are not
now stockholders or any change in the control of such corporation and (B) if
Borrower or controlling shareholder of Borrower is a limited or general
partnership, joint venture or limited liability company, the change, removal,
resignation or addition of a general partner, managing partner, limited partner,
joint venturer or member or the transfer of the partnership interest of any
general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member and (ii) a change of Control of
Borrower shall be deemed to have occurred if there is any change in the identity
of any individual or entity or any group of individuals or entities who have the
right, by virtue of any partnership agreement, articles of incorporation,
by-laws, articles of organization, operating agreement or any other agreement,
with or without taking any formative action, to cause Borrower to take some
action or to prevent, restrict or impede Borrower from taking some action which,
in either case, Borrower could take or could refrain from taking were it not for
the rights of such individuals.
UCC: the Uniform Commercial Code as in effect in the State or the
state in which any of the Cash Management Accounts are located, as the case may
be.
U.S. Obligations: obligations that are "government securities"
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as
amended, and, to the extent acceptable to the applicable Rating Agencies, other
non-callable government securities satisfying the REMIC Provisions (hereinafter
defined), in each case to the extent such obligations are not subject to
prepayment, call or early redemption. As used herein, "REMIC Provisions" mean
provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of Subchapter M
of Chapter 1 of Subtitle A of the Code, and related provisions, and temporary
and final regulations and, to the extent not inconsistent with such temporary
and final regulations, proposed regulations, and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
Welfare Plan: an employee welfare benefit plan, as defined in
Section 3(1) of ERISA.
13
Yield Maintenance Premium: an amount which, when added to the
outstanding Principal, would be sufficient to purchase U.S. Obligations which
provide payments (a) on or prior to, but as close as possible to, all successive
scheduled payment dates under this Agreement through the Stated Maturity Date
and (b) in amounts equal to the Monthly Debt Service Payment Amount required
under this Agreement through the Stated Maturity Date together with the
outstanding principal balance of the Note as of the Stated Maturity Date
assuming all such Monthly Debt Service Payments are made (including any
servicing costs associated therewith). In no event shall the Yield Maintenance
Premium be less than zero.
1.2 Index of Other Definitions. The following terms are defined in the
sections or Loan Documents indicated below:
"Alternative Tax and Insurance Funds" - 3.3(b)
"Approved Annual Budget " - 6.3.5
"Annual Budget " - 6.3.5
"Approved Capital Budget" - 6.3.5
"Approved Operating Budget" - 6.3.5
"Applicable Taxes" - 2.2.3
"Award" - 7.3.2
"Bankruptcy Proceeding" - 4.7
"Borrower's Recourse Liabilities" - 10.1
"Capital Reserve Subaccount" - 3.4
"Cash Collateral Subaccount" - 3.9
"Cash Management Accounts" - 3.10
"Casualty" - 7.2.1
"Casualty/Condemnation Prepayment" - 2.3.2
"Casualty/Condemnation Subaccount" - 3.7
"Cognigen Sublease" - 4.1.6
"Condemnation" - 7.3.1
"Defeasance Collateral Account" - 2.3.3
"Defeasance Event" - 2.3.3
"Defeasance Date" - 2.3.3
"Deposit Account" - 3.1
"Deposit Account Agreement" - 1.1 (Definition of Loan Documents)
"Disclosure Document" - 9.1.2
"DSCR Cash Management Period" - 1.1 (Definition of Cash Management Period).
"Easements" - 4.14
"Endorsement" - 5.26
"Environmental Laws" - 4.21
"Equipment" - Mortgage
"Event of Default" - 8.1
"Exchange Act" - 9.1.2
"Fee Owner" 1.1 (Definition of XXX Lease)
"Fitch" - 1.1 (Definition of Rating Agency)
"GCM Group" - 9.1.3
"Government Lists" - 5.31
"Hazardous Substances" - 4.21
14
"Improvements" - Mortgage
"Indemnified Liabilities" - 5.30
"Indemnified Party" - 5.30
"Independent Director" - Schedule 5
"Xxxxxx Micro" 1.1 (Definition of Major Lease)
"Xxxxxx Micro Lease" 1.1 (Definition of Major Lease)
"Insurance Premiums" - 7.1.2
"Insured Casualty" - 7.2.2
"Issuer" - 9.1.3
"Late Payment Charge" - 2.5.3
"Lender's Consultant" - 5.7.1
"Liabilities" - 9.1.3
"Licenses" - 4.11
"Loan" - 2.1
"Monthly Debt Service Payment Amount" - 2.2.1
"Monthly Interest Payment Amount" - 2.2.1
"Moody's" - 1.1 (Definition of Rating Agency)
"Mortgage" - 1.1 (Definition of Loan Documents)
"New Payment Date" - 2.2.4
"Note" - 1.1 (Definition of Loan Documents)
"Notice" - 6.1
"OFAC" - 5.31
"Operating Expense Subaccount" - 3.6
"Patriot Act" - 5.31
"Patriot Act Offense" - 5.31
"Permitted Indebtedness" - 5.22
"Permitted Investments" - Deposit Account Agreement
"Permitted Prepayment Date" - 2.3.4
"PILOT Payments" - XXX Lease
"Policies" - 7.1.2
"Principal" - 2.1
"Proceeds" - 7.2.2
"Proposed Material Lease" - 5.10.2
"Provided Information" - 9.1.1
"Qualified Carrier" - 7.1.1
"Registration Statement" - 9.1.3
"Remaining Property" - 2.4.3
"Remedial Work" - 5.7.2
"REMIC Provisions" - 1.1 (Definition of U.S. Obligations)
"Rent Roll" - 4.16
"Required Records" - 6.3.6
"Required Repairs" - .32
"Restoration" - 7.4.1
"Rollover Reserve Subaccount" - 3.5
"S&P" - 1.1 (Definition of Rating Agency)
"Secondary Market Transaction" - 9.1.1
15
"Securities" - 9.1.1
"Securities Act" - 9.1.2
"Security Deposit Account" - 3.8
"Security Deposit Subaccount" - 3.8
"Significant Casualty" - 7.2.2
"Special Purpose Bankruptcy Remote Entity" - 5.13
"Special Rollover Reserve Subaccount" - 3.5
"Springing Recourse Event" - 10.1
"Subaccounts" - 3.1
"Successor Borrower" - 2.3.3
"Tax and Insurance Subaccount" - 3.3
"Toxic Mold" - 4.21
"Transfer and Assumption" - 5.26
"Transferee Borrower" - 5.26
"Underwriter Group" - 9.1.3
"Underwriters" - 9.1.3
1.3 Principles of Construction. Unless otherwise specified, (i) all
references to sections and schedules are to those in this Agreement, (ii) the
words "hereof," "herein" and "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular provision, (iii) all
definitions are equally applicable to the singular and plural forms of the terms
defined, (iv) the word "including" means "including but not limited to," and (v)
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
2. GENERAL LOAN TERMS
2.1 The Loan. Lender is making a loan (the "Loan") to Borrower on the date
hereof, in the original principal amount (the "Principal") of $18,000,000, which
shall mature on the Stated Maturity Date. Borrower acknowledges receipt of the
Loan, the proceeds of which are being and shall be used to (i) acquire the
Property, (ii) fund certain of the Subaccounts, and (iii) pay transaction costs.
Any excess proceeds may be used for any lawful purpose. No amount repaid in
respect of the Loan may be reborrowed.
2.2 Interest; Monthly Payments.
2.2.1 Generally. From and after the date hereof, interest on the
unpaid Principal shall accrue at the Interest Rate and be payable as hereinafter
provided. On the date hereof, Borrower shall pay interest on the unpaid
Principal from the date hereof through and including June 5, 2005. On July 6,
2005 and on each Payment Date thereafter through and including the Payment Date
immediately preceding the Amortization Commencement Date, Borrower shall make a
monthly payment of interest on the unpaid Principal accrued at the Interest Rate
during the Interest Period immediately preceding such Payment Date (the "Monthly
Interest Payment Amount"). On the Amortization Commencement Date and each
Payment Date thereafter through and including October 6, 2013, the Principal and
interest thereon at the Interest Rate shall be payable in equal monthly
installments of $112,153.96 (the "Monthly Debt Service Payment Amount"); which
is based on the Interest Rate and a 300-month amortization schedule. The Monthly
Debt Service Payment Amount due on any Payment Date shall first be applied to
16
the payment of interest accrued during the preceding Interest Period and the
remainder of such Monthly Debt Service Payment Amount shall be applied to the
reduction of the unpaid Principal. All accrued and unpaid interest shall be due
and payable on the Maturity Date. If the Loan is repaid on any date other than
on a Payment Date (whether prior to or after the Stated Maturity Date), Borrower
shall also pay interest that would have accrued on such repaid Principal to but
not including the next Payment Date.
2.2.2 Default Rate. After the occurrence and during the continuance
of an Event of Default, the entire unpaid Debt shall bear interest at the
Default Rate, and shall be payable upon demand from time to time, to the extent
permitted by applicable law.
2.2.3 Taxes. Any and all payments by Borrower hereunder and under
the other Loan Documents shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on Lender's income, and franchise taxes imposed on Lender by the law or
regulation of any Governmental Authority (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to in this Section 2.2.3 as "Applicable Taxes"). If Borrower shall be
required by law to deduct any Applicable Taxes from or in respect of any sum
payable hereunder to Lender, the following shall apply: (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.2.3), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions and (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Payments pursuant to this Section 2.2.3 shall be made within ten (10) days after
the date Lender makes written demand therefor.
2.2.4 New Payment Date. Lender shall have the right, to be exercised
not more than once during the term of the Loan, to change the Payment Date to a
date other than the sixth day of each month (a "New Payment Date"), on thirty
(30) days' written notice to Borrower; provided, however, that any such change
in the Payment Date: (i) shall not modify the amount of regularly scheduled
monthly principal and interest payments, except that the first payment of
principal and interest payable on the New Payment Date shall be accompanied by
interest at the interest rate herein provided for the period from the Payment
Date in the month in which the New Payment Date first occurs to the New Payment
Date, (ii) shall extend the Amortization Commencement Date to the New Payment
Date occurring in the month set forth in the definition of Amortization
Commencement Date and (iii) shall extend the Stated Maturity Date to the New
Payment Date occurring in the month set forth in the definition of Stated
Maturity Date.
2.3 Loan Repayment.
2.3.1 Repayment. Borrower shall repay the entire outstanding
principal balance of the Note in full on the Maturity Date, together with
interest thereon to (but excluding) the date of repayment and any other amounts
due and owing under the Loan Documents. Borrower shall have no right to prepay
or defease all or any portion of the Principal except in accordance with Section
2.3.2 below, Section 2.3.3 below and Section 2.4 below. Except during the
continuance of an Event of Default, all proceeds of any repayment, including any
prepayments of the Loan, shall be applied by Lender as follows in the following
17
order of priority: First, accrued and unpaid interest at the Interest Rate;
Second, to Principal; and Third, to and any other amounts then due and owing
under the Loan Documents. If prior to the Stated Maturity Date the Debt is
accelerated by reason of an Event of Default, then Lender shall be entitled to
receive, in addition to the unpaid Principal and accrued interest and other sums
due under the Loan Documents, an amount equal to the Yield Maintenance Premium
applicable to such Principal so accelerated. During the continuance of an Event
of Default, all proceeds of repayment, including any payment or recovery on the
Property (whether through foreclosure, deed-in-lieu of foreclosure, or
otherwise) shall, unless otherwise provided in the Loan Documents, be applied in
such order and in such manner as Lender shall elect in Lender's discretion.
2.3.2 Mandatory Prepayments. The Loan is subject to mandatory
prepayment in certain instances of Insured Casualty or Condemnation (each a
"Casualty/Condemnation Prepayment"), in the manner and to the extent set forth
in Section 7.4.2 hereof. Each Casualty/Condemnation Prepayment, after deducting
Lender's costs and expenses (including reasonable attorneys' fees and expenses)
in connection with the settlement or collection of the Proceeds or Award, shall
be applied in the same manner as repayments under Section 2.3.1 above, and if
such Casualty/Condemnation Payment is made on any date other than a Payment
Date, then such Casualty/Condemnation Payment shall include interest that would
have accrued on the Principal prepaid to but not including the next Payment
Date. Provided that no Event of Default is continuing, any such mandatory
prepayment under this Section 2.3.2 shall be without the payment of the Yield
Maintenance Premium. Notwithstanding anything to the contrary contained herein,
each Casualty/Condemnation Prepayment shall be applied in inverse order of
maturity and shall not extend or postpone the due dates of the monthly
installments due under the Note or this Agreement, or change the amounts of such
installments.
2.3.3 Defeasance
(a) Conditions to Defeasance. Provided no Event of Default shall be
continuing, Borrower shall have the right on any Payment Date after the Release
Date and prior to the Permitted Prepayment Date to voluntarily defease the
entire amount of the Principal and obtain a release of the Lien of the Mortgage
by providing Lender with the Defeasance Collateral (a "Defeasance Event"),
subject to the satisfaction of the following conditions precedent:
(i) Borrower shall give Lender not less than thirty (30) days
prior written notice specifying a Payment Date (the "Defeasance Date") on which
the Defeasance Event is to occur.
(ii) Borrower shall pay to Lender (A) all payments of
Principal and interest due on the Loan to and including the Defeasance Date and
(B) all other sums, then due under the Note, this Agreement and the other Loan
Documents;
(iii) Borrower shall deposit the Defeasance Collateral into
the Defeasance Collateral Account and otherwise comply with the provisions of
subsections (b) and (c) of this Section 2.3.3;
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(iv) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the Defeasance
Collateral;
(v) Borrower shall deliver to Lender an opinion of counsel for
Borrower that is standard in commercial lending transactions and subject only to
customary qualifications, assumptions and exceptions opining, among other
things, that (i) Lender has a legal and valid perfected first priority security
interest in the Defeasance Collateral Account and the Defeasance Collateral,
(ii) if a securitization has occurred, the REMIC Trust formed pursuant to such
securitization will not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code as a result
of a Defeasance Event pursuant to this Section 2.3.3, (iii) the Defeasance Event
will not result in a significant modification and will not be an exchange of the
Note for purposes of Section 1001 of the Code and the Treasury Regulations
thereunder, (iv) delivery of the Defeasance Collateral and the grant of a
security interest therein to Lender shall not constitute an avoidable preference
under Section 547 of the Bankruptcy Code or applicable state law and (v) a
non-consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender and the Rating Agencies
a Rating Comfort Letter as to the Defeasance Event;
(vii) Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in this Section 2.3.3 have been
satisfied;
(viii) Borrower shall deliver a certificate of a "big four" or
other nationally recognized public accounting firm acceptable to Lender
certifying that (i) the Defeasance Collateral will generate monthly amounts
equal to or greater than the Scheduled Defeasance Payments, (ii) the revenue
from the Defeasance Collateral will be applied within four (4) months of receipt
towards payments of Debt Service, (iii) the securities that comprise the
Defeasance Collateral are not subject to prepayment, call or early redemption
and (iv) the interest income to Borrower (or the Successor Borrower, if
applicable) from the Defeasance Collateral will not in any tax year exceed the
interest expense associated with the defeased Loan;
(ix) Borrower shall deliver such other certificates, opinions,
documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all costs and expenses of Lender
incurred in connection with the Defeasance Event, including Lender's reasonable
attorneys' fees and expenses and Rating Agency fees and expenses.
(b) Defeasance Collateral Account. On or before the date on which
Borrower delivers the Defeasance Collateral, Borrower shall open at any Eligible
Institution the defeasance collateral account (the "Defeasance Collateral
Account") which shall at all times be an Eligible Account. The Defeasance
Collateral Account shall contain only (i) Defeasance Collateral, and (ii) cash
from interest and principal paid on the Defeasance Collateral. All cash from
interest and principal payments paid on the Defeasance Collateral shall be paid
over to Lender on each Payment Date and applied first to accrued and unpaid
interest and then to Principal. Any cash from interest and principal paid on the
Defeasance Collateral not needed to pay accrued and unpaid interest or Principal
shall be retained in the Defeasance Collateral Account as additional collateral
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for the Loan. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Agreement. The Successor Borrower shall be
the owner of the Defeasance Collateral Account and shall report all income
accrued on Defeasance Collateral for federal, state and local income tax
purposes in its income tax return. Borrower shall prepay all cost and expenses
associated with opening and maintaining the Defeasance Collateral Account.
Lender shall not in any way be liable by reason of any insufficiency in the
Defeasance Collateral Account.
(c) Successor Borrower. In connection with a Defeasance Event under
this Section 2.3.3, Borrower shall, if required by the Rating Agencies or if
Borrower elects to do so, establish or designate a successor entity (the
"Successor Borrower") which shall be a Single Purpose Bankruptcy Remote Entity
and which shall be approved by the Rating Agencies. Any such Successor Borrower
may, at Borrower's option, be an Affiliate of Borrower unless the Rating
Agencies shall require otherwise. Borrower shall transfer and assign all
obligations, rights and duties under and to the Defeased Note, together with the
Defeasance Collateral to such Successor Borrower. Such Successor Borrower shall
assume the obligations under the Note and the Security Agreement and Borrower
shall be relieved of its obligations under such documents. Borrower shall pay a
minimum of $1,000 to any such Successor Borrower as consideration for assuming
the obligations under the Note and the Security Agreement. Borrower shall pay
all costs and expenses incurred by Lender, including Lender's attorney's fees
and expenses, incurred in connection therewith.
2.3.4 Optional Prepayments. From and after the third Payment Date
prior to the Stated Maturity Date (the "Permitted Prepayment Date"), Borrower
shall have the right to prepay the Loan in whole (but not in part), provided
that Borrower gives Lender at least fifteen (15) days' prior written notice
thereof. If any such prepayment is not made on a Payment Date, Borrower shall
also pay interest that would have accrued on such prepaid Principal to, but not
including, the next Payment Date. Any such prepayment shall be made without
payment of the Yield Maintenance Premium.
2.4 Release of Property.
2.4.1 Release on Defeasance(a) . If Borrower has elected to defease
the Note and the requirements of Section 2.3.3 above and this Section 2.4 have
been satisfied, the Property shall be released from the Lien of the Mortgage and
the Defeasance Collateral pledged pursuant to the Security Agreement shall be
the sole source of collateral securing the Note. In connection with the release
of the Lien, Borrower shall submit to Lender, not less than thirty (30) days
prior to the Defeasance Date (or such shorter time as is acceptable to Lender in
its sole discretion), a release of Lien (and related Loan Documents) for
execution by Lender. Such release shall be in a form appropriate in the
jurisdiction in which the Property is located and contain standard provisions
protecting the rights of the releasing lender. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release, together with an Officer's Certificate
certifying that such documentation (i) is in compliance with all Legal
Requirements, and (ii) will effect such release in accordance with the terms of
this Agreement. Borrower shall pay all costs, taxes and expenses associated with
the release of the Lien of the Mortgage, including Lender's reasonable
attorneys' fees.
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2.4.2 Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of the Debt in
accordance herewith, release or, if requested by Borrower, assign to Borrower's
designee (without any representation or warranty by and without any recourse
against Lender whatsoever), the Lien of the Loan Documents if not theretofore
released.
2.4.3 Release of Road Widening Parcel. Borrower may convey the Road
Widening Parcel to the County of Erie New York in connection with the widening
of Xxxxxx Drive, and obtain a release of the Road Widening Parcel from the Lien
of the Loan Documents provided that each of the following conditions is
satisfied:
(a) both immediately before such conveyance and immediately
thereafter, no Event of Default shall be continuing;
(b) to the extent that the Net Sales Proceeds exceeds $15,000, such
Net Sales Proceeds shall be paid to Lender and, at Lender's option, either
applied to the Debt in accordance with Section 2.3.2 or deposited into the Cash
Collateral Subaccount and held as additional collateral for the Loan.
(c) the representations and warranties made by Borrower and/or
Guarantor in this Agreement and the other Loan Documents shall be true and
correct in all material respects on and as of the date of such conveyance (and
after giving effect to such conveyance);
(d) Borrower shall have given Lender at least ten (10) days prior
written notice of such conveyance, accompanied by a copy of the applicable
contract of sale or similar document, if any, and all related documents, and
drafts of any applicable release documents;
(e) Borrower shall pay to Lender all costs and expenses (including
reasonable attorneys' fees) incurred by Lender in connection with such
conveyance and release of the Road Widening Parcel from the Lien of the Loan
Documents;
(f) Borrower and Guarantor shall execute and deliver such documents
as Lender may reasonably request to confirm the continued validity of the Loan
Documents and the Liens thereof; and
(g) Borrower shall have delivered to Lender together with the notice
described in clause (c) above, evidence reasonably satisfactory to Lender that
(1) the Road Widening Parcel being released and the portion of the Property
continuing to be subject to the lien of the Mortgage after such release (the
"Remaining Property") have been legally subdivided into separate tax parcels,
(2) the subject release of the Road Widening Parcel and Remaining Property does
not cause the Remaining Property to be in non-compliance with any zoning laws or
other Legal Requirements (provided that evidence that there has been no change
in the zoning laws or other Legal Requirements between the date hereof and the
date of the release shall satisfy this clause (2)), (3) the conveyance of the
Road Widening Parcel does not adversely affect the operation of or access to or
from the Property; and (4) all of the Licenses, including all of the then
existing certificates of occupancy, shall remain in full force and effect after
the conveyance of the Road Widening Parcel to be released.
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2.5 Payments and Computations.
2.5.1 Making of Payments. Each payment by Borrower shall be made in
funds settled through the New York Clearing House Interbank Payments System or
other funds immediately available to Lender by 11:00 a.m., New York City time,
on the date such payment is due, to Lender by deposit to such account as Lender
may designate by written notice to Borrower. Whenever any such payment shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the first Business Day thereafter. All such payments shall be made
irrespective of, and without any deduction, set-off or counterclaim whatsoever
and are payable without relief from valuation and appraisement laws and with all
costs and charges incurred in the collection or enforcement thereof, including
attorneys' fees and court costs.
2.5.2 Computations. Interest payable under the Loan Documents shall
be computed on the basis of the actual number of days elapsed over a 360-day
year.
2.5.3 Late Payment Charge. If any Principal, interest or other sum
due under any Loan Document is not paid by Borrower on the date on which it is
due, Borrower shall pay to Lender upon demand an amount equal to the lesser of
five percent (5%) of such unpaid sum or the maximum amount permitted by
applicable law (the "Late Payment Charge"), in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Such
amount shall be secured by the Loan Documents.
3. CASH MANAGEMENT AND RESERVES
3.1 Cash Management Arrangements. Borrower shall cause all Rents to be
transmitted directly by non-residential tenants of the Property into an Eligible
Account at the Deposit Bank controlled by Lender (the "Deposit Account") and
applied and disbursed in accordance with this Agreement. Without in any way
limiting the foregoing, all Rents received by Borrower shall be deposited into
the Deposit Account within one (1) Business Day of receipt. Funds in the Deposit
Account shall be invested at Lender's discretion only in Permitted Investments.
Lender will also establish subaccounts of the Deposit Account which shall at all
times be Eligible Accounts (and may be ledger or book entry accounts and not
actual accounts) (such subaccounts are referred to herein as "Subaccounts"). The
Deposit Account and any Subaccount will be under the sole control and dominion
of Lender, and Borrower shall have no right of withdrawal therefrom. Borrower
shall pay for all expenses of opening and maintaining all of the above accounts.
3.2 Intentionally Deleted.
3.3 Taxes and Insurance. (a) Borrower shall pay to Lender on each Payment
Date (i) one-twelfth (1/12th) of the Taxes that Lender estimates will be payable
during the next twelve (12) months in order to accumulate with Lender sufficient
funds to pay all such Taxes at least thirty (30) days prior to their respective
due dates and (ii) one-twelfth (1/12th) of the Insurance Premiums that Lender
estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies. Such amounts will be transferred by
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Lender to a Subaccount (the "Tax and Insurance Subaccount"). Provided that no
Default or Event of Default has occurred and is continuing, Lender will (a)
apply funds in the Tax and Insurance Subaccount to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Section 5.2
hereof and Section 7.1 hereof, provided that Borrower has promptly supplied
Lender with notices of all Taxes and Insurance Premiums due, or (b) reimburse
Borrower for such amounts upon presentation of evidence of payment; subject,
however, to Borrower's right to contest Taxes in accordance with Section 5.2
hereof. In making any payment relating to Taxes and Insurance Premiums, Lender
may do so according to any xxxx, statement or estimate procured from the
appropriate public office (with respect to Taxes) or insurer or agent (with
respect to Insurance Premiums), without inquiry into the accuracy of such xxxx,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If Lender determines in its
reasonable judgment that the funds in the Tax and Insurance Subaccount will be
insufficient to pay (or in excess of) the Taxes or Insurance Premiums next
coming due, Lender may increase (or decrease) the monthly contribution required
to be made by Borrower to the Tax and Insurance Subaccount.
(b) Notwithstanding anything to the contrary contained in Section
3.3(a), Borrower shall not be required to make the monthly payments required
under Section 3.3(a), provided that (i) Borrower shall deliver to Lender to be
held in the Tax and Insurance Subaccount an amount (the "Alternative Tax and
Insurance Funds") equal to one-quarter of the amount determined by Lender to be
required to pay all Taxes and Insurance Premiums over the ensuing twelve month
period, (ii) Xxxxxx Micro is required to pay all Taxes and Insurance Premiums
pursuant to the terms of the Xxxxxx Micro Lease, (iii) subject to Xxxxxx Micro's
contest rights set forth in the Xxxxxx Micro Lease, Xxxxxx Micro shall pay all
Taxes and Insurance Premiums as the same become due and payable and before
delinquency, (iv) Borrower or Xxxxxx Micro shall furnish to Lender evidence of
the renewal of any expiring Policy prior to the expiration thereof, (v) Borrower
or Xxxxxx shall, upon request, furnish to Lender receipts for the payment of all
such amounts or other evidence of such payment reasonably satisfactory to
Lender, (vi) the Xxxxxx Micro Lease remains in full force and effect, (vii)
Borrower or Xxxxxx shall provide Lender with notice of any increases in the
annual payments for Taxes or Insurance Premiums not less than thirty (30) days
prior to the effective date of any such increase and the Alternative Tax and
Insurance Funds shall be increased by an amount equal to one quarter of such
increased amount at least ten (10) Business Days prior to the effective date of
such increase, (viii) no Lease Default is continuing under the Xxxxxx Micro
Lease, (ix) no Event of Default shall be continuing and (x) the credit rating of
Xxxxxx Micro has not been downgraded below B by S&P (or its functional
equivalent by any other Rating Agency), (xi) Xxxxxx Micro (and subtenant under
an Approved sublease) remains in full occupancy of the Property and (xii) Xxxxxx
Micro is not required to establish an escrow for taxes and insurance premiums in
accordance with the Xxxxxx Micro Lease. Borrower's obligation to make the
payments required under Section 3.3(a) shall immediately resume and shall
continue (A) in the event of the failure of any condition set forth in clauses
(i) through (vii) of this Section 3.3(b), until the end of the Term, (B) in the
event of the failure of the condition set forth in (viii) or (ix) until such
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time as no Event of Default or Lease Default, as the case may be, shall be
continuing (provided, that once an Event of Default has occurred or Lease
Default has occurred, then with respect to each subsequent Event of Default or
Lease Default, as the case may be, Borrower's obligation to make the payments
required under Section 3.3(a) shall continue until such time as no Event of
Default or Lease Default, as the case may be, has been continuing for a period
of six consecutive months) or (C) in the event of the failure of the condition
set forth in (x), until such time as the credit rating of Xxxxxx Micro has been
upgraded to B or higher by S&P (and its functional equivalent by any other
Rating Agency) (D) in the event of the failure of the condition set forth in
(xi), until such time as Xxxxxx Micro (or the subtenants under an Approved
Sublease) takes full occupancy of the Property or (E) with respect to the
failure of the condition set forth in (xii), until such time as Xxxxxx Micro is
no longer required to maintain an escrow for taxes and insurance in accordance
with the Xxxxxx Micro Lease. If any non-payment of Taxes or Insurance Premiums
is not cured within five (5) days of notice of such nonpayment, Lender shall
have the right, but not the obligation, to draw on the Alternative Tax and
Insurance Funds for purposes of making the payment of Taxes or Insurance
Premiums.
3.4 Capital Expense Reserves. Borrower shall pay $1,667.29 to Lender on
each Payment Date which amount is equal to one-twelfth (1/12th) of the product
obtained by multiplying $0.10 by the aggregate number of rentable square feet of
space in the Property. Lender will transfer such amounts into a Subaccount (the
"Capital Reserve Subaccount"). Provided that no Default or Event of Default has
occurred and is continuing, Lender shall disburse funds held in the Capital
Reserve Subaccount to Borrower, within fifteen (15) days after the delivery by
Borrower to Lender of a request therefor (but not more often than once per
month), in increments of at least $5,000 provided that (i) such disbursement is
for an Approved Capital Expense; (ii) Lender shall have (if it desires) verified
(by an inspection conducted at Borrower's expense) performance of the work
associated with such Approved Capital Expense; and (iii) the request for
disbursement is accompanied by (A) an Officer's Certificate certifying (1) that
such funds will be used to pay or reimburse Borrower for Approved Capital
Expenses and a description thereof, (2) that all outstanding trade payables
(other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same
has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been used to pay the previously identified Approved Capital
Expenses, and (B) lien waivers or other evidence of payment satisfactory to
Lender, (C) at Lender's option, a title search for the Property indicating that
the Property is free from all Liens, claims and other encumbrances not
previously approved by Lender and (D) such other evidence as Lender shall
reasonably request that the Approved Capital Expenses at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower. Any such disbursement of more
than $10,000 to pay (rather than reimburse) Approved Capital Expenses may, at
Lender's option, be made by joint check payable to Borrower and the payee on
such Approved Capital Expenses. Notwithstanding anything contained in this
Section 3.3 to the contrary, if Borrower shall enter into an Approved Xxxxxx
Micro Extension on or before December 31, 2005, then Borrower shall no longer be
required to make deposits into the Capital Reserve Subaccount and, provided that
no Event of Default or Cash Management Period is then continuing, any funds then
on deposit in the Capital Reserve Subaccount shall be disbursed to Borrower
within 5 days of Borrower's request therefor.
3.5 Rollover Reserves. (a) Borrower shall pay to Lender $4,168 on each
Payment Date. Lender will transfer such amount into a Subaccount (the "Rollover
Reserve Subaccount"). Borrower shall also pay to Lender for transfer into the
Rollover Reserve Subaccount all Lease Termination Payments received by Borrower.
Provided that no Default or Event of Default has occurred and is continuing,
Lender shall disburse funds held in the Rollover Reserve Subaccount to Borrower,
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within fifteen (15) days after the delivery by Borrower to Lender of a request
therefor (but not more often than once per month), in increments of at least
$5,000, provided (i) such disbursement is for an Approved Leasing Expense; (ii)
Lender shall have (if it desires) verified (by an inspection conducted at
Borrower's expense) performance of any construction work associated with such
Approved Leasing Expense; and (iii) the request for disbursement is accompanied
by (A) an Officer's Certificate certifying (1) that such funds will be used only
to pay (or reimburse Borrower for) Approved Leasing Expenses and a description
thereof, (2) that all outstanding trade payables (other than those to be paid
from the requested disbursement or those constituting Permitted Indebtedness)
have been paid in full, (3) that the same has not been the subject of a previous
disbursement, and (4) that all previous disbursements have been used only to pay
(or reimburse Borrower for) the previously identified Approved Leasing Expenses,
and (B) reasonably detailed supporting documentation as to the amount, necessity
and purpose therefor. Any such disbursement of more than $10,000 to pay (rather
than reimburse) Approved Leasing Expenses may, at Lender's option, be made by
joint check payable to Borrower and the payee of such Approved Leasing Expenses.
Notwithstanding anything contained in this Section 3.3 to the contrary, if
Borrower shall enter into an Approved Xxxxxx Micro Extension on or before
December 31, 2005, then Borrower shall no longer be required to make deposits
into the Rollover Reserve Subaccount pursuant to this paragraph (a) and,
provided that no Event of Default or Cash Management Period is then continuing,
any funds then on deposit in the Rollover Reserve Subaccount shall be disbursed
to Borrower within 5 days of Borrower's request therefor.
(b) Any Lease Termination Payments and any other funds deposited into the
Rollover Reserve Subaccount from the Security Deposit Subaccount in accordance
with Section 3.8 hereof shall be applied, at Lender's election, towards either
(a) subject to the rights of Borrower under the applicable Lease, rent
arrearages under such Lease (or to cure any other tenant default under such
Lease), (b) debt service shortfalls that may arise as a result of a termination
of such Lease (and Borrower hereby authorizes Lender to disburse to itself any
such amounts without any request therefor by Borrower) or (c) funding any
Approved Leasing Expenses (or Approved Major Lease Leasing Expenses, if
applicable) which are anticipated to occur in connection with the re-tenanting
of the space under the Lease that was the subject of such termination (in
accordance with the terms and conditions of Section 3.5(a) above or Section
3.5(c) below, if applicable).
(c) On each Payment Date occurring during the continuance of a Lease Sweep
Period (provided no Cash Management Period is then continuing (other than a Cash
Management Period triggered solely as a result of a Lease Sweep Period)), all
Available Cash shall be paid to Lender. Lender will transfer such amount into a
Subaccount (the "Special Rollover Reserve Subaccount"). Borrower shall also pay
to Lender for transfer into the Special Rollover Reserve Subaccount any Lease
Termination Payments received from any Major Tenant. Provided that no Default or
Event of Default has occurred and is continuing, Lender shall disburse funds
held in the Special Rollover Reserve Subaccount to Borrower, within fifteen (15)
days after the delivery by Borrower to Lender of a request therefor (but not
more often than once per month), in increments of at least $5,000, provided (i)
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such disbursement is for an Approved Major Lease Leasing Expense; (ii) Lender
shall have (if it desires) verified (by an inspection conducted at Borrower's
expense) performance of any construction work associated with such Approved
Major Lease Leasing Expense; and (iii) the request for disbursement is
accompanied by (A) an Officer's Certificate certifying (1) that such funds will
be used only to pay (or reimburse Borrower for) Approved Major Lease Leasing
Expenses and a description thereof, (2) that all outstanding trade payables
(other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same
has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been used only to pay (or reimburse Borrower for) the
previously identified Approved Major Lease Leasing Expenses, and (B) reasonably
detailed supporting documentation as to the amount, necessity and purpose
therefor. Any such disbursement of more than $10,000 to pay (rather than
reimburse) Approved Major Lease Leasing Expenses may, at Lender's option, be
made by joint check payable to Borrower and the payee of such Approved Major
Lease Leasing Expenses. Provided no Default or Event of Default is continuing,
upon the termination of the subject Lease Sweep Period, and Lender's receipt of
satisfactory evidence that all Approved Major Lease Leasing Expenses incurred in
connection therewith (and any other expenses in connection with the re-tenanting
of the applicable space) have been paid in full (which evidence may include (i)
a letter or certification from the applicable broker, if any, that all brokerage
commissions payable in connection therewith have been paid and (ii) an estoppel
certificate executed by each applicable tenant which certifies that all
contingencies under such Lease to the payment of full rent (including Borrower's
contribution to the cost of any tenant improvement work) have been satisfied),
any funds (if any) remaining in the Special Rollover Reserve Subaccount that
have been deposited therein as a result of such Lease Sweep Period shall be
disbursed to Borrower; provided, however, if a Cash Management Period is then
continuing, then no such funds shall be disbursed to Borrower, and all such
funds shall instead be deposited into the Cash Collateral Subaccount, to be
applied in accordance with Section 3.9 hereof.
3.6 Operating Expense Subaccount. During a Cash Management Period, on each
Payment Date, a portion of the Rents that have been deposited into the Deposit
Account during the immediately preceding Interest Period in an amount equal to
the monthly amount set forth in the Approved Operating Budget for the following
month as being necessary for payment of Approved Operating Expenses at the
Property for such month, shall be transferred into a Subaccount for the payment
of Approved Operating Expenses (the "Operating Expense Subaccount"). Provided no
Default or Event of Default has occurred and is continuing, Lender shall
disburse funds held in the Operating Expense Subaccount to Borrower, within
fifteen (15) days after delivery by Borrower to Lender of a request therefor
(but not more often than once per month), in increments of at least $1,000,
provided (i) such disbursement is for an Approved Operating Expense; and (ii)
such disbursement is accompanied by (A) an Officer's Certificate certifying (1)
that such funds will be used to pay Approved Operating Expenses and a
description thereof, (2) that all outstanding trade payables (other than those
to be paid from the requested disbursement or those constituting Permitted
Indebtedness) have been paid in full, (3) that the same has not been the subject
of a previous disbursement, and (4) that all previous disbursements have been or
will be used to pay the previously identified Approved Operating Expenses, and
(B) reasonably detailed documentation satisfactory to Lender as to the amount,
necessity and purpose therefor.
3.7 Casualty/Condemnation Subaccount. Borrower shall pay, or cause to be
paid, to Lender all Proceeds or Awards due to any Casualty or Condemnation to be
transferred to a Subaccount (the "Casualty/Condemnation Subaccount") in
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accordance with the provisions of Article 7 hereof. All amounts in the
Casualty/Condemnation Subaccount shall disbursed in accordance with the
provisions of Article 7 hereof.
3.8 Security Deposits. Borrower shall deliver to Lender all security
deposits (and any interest theretofore earned thereon) under Leases, and, if
requested by Lender, Borrower shall also deliver any letters of credit
(delivered in lieu of a cash security deposit), assigned with full power of
attorney and executed sight drafts to Lender. Lender will transfer such security
deposits into a Subaccount (the "Security Deposit Subaccount"), which will be
held subject to the terms of the Leases. Borrower shall also deliver to Lender
(for deposit into the Security Deposit Subaccount) all amounts drawn under any
letters of credit held by Borrower in lieu of cash security deposits. Security
deposits held in the Security Deposit Subaccount will be released by Lender upon
notice from Borrower together with such evidence as Lender may reasonably
request that such security deposit is required to be returned to a tenant
pursuant to the terms of a Lease. Any funds in the Security Deposit Subaccount
which Borrower is permitted to retain pursuant to the applicable provisions of
any Lease shall be transferred by Lender into the Rollover Reserve Subaccount,
to be applied and disbursed in accordance with the provisions of Section 3.5
hereof. Any letter of credit or other instrument that Borrower receives in lieu
of a cash security deposit under any Lease entered into after the date hereof
shall (i) be maintained in full force and effect in the full amount unless
replaced by a cash deposit as hereinabove described and (ii) if permitted
pursuant to any Legal Requirements, name Lender as payee or mortgagee thereunder
(or at Lender's option, be fully assignable to Lender).
3.9 Cash Collateral Subaccount. If a Cash Management Period shall have
commenced (other than a Cash Management Period triggered solely as a result of a
Lease Sweep Period), then on the immediately succeeding Payment Date and on each
Payment Date thereafter during the continuance of such Cash Management Period,
all Available Cash shall be paid to Lender, which amounts shall be transferred
by Lender into a Subaccount (the "Cash Collateral Subaccount") as cash
collateral for the Debt. Notwithstanding the foregoing, if a Lease Sweep Period
has occurred and is then continuing during the continuance of any Cash
Management Period (other than a Cash Management Period triggered solely as a
result of a Lease Sweep Period), Lender shall have the right (but not the
obligation) to allocate any funds in the Cash Collateral Subaccount to the
Special Rollover Reserve Subaccount to be applied in accordance with the terms
and conditions of Section 3.5(c) hereof. Any funds in the Cash Collateral
Account and not previously disbursed or applied shall be disbursed to Borrower
upon the termination of such Cash Management Period. Lender shall have the
right, but not the obligation, at any time during the continuance of an Event of
Default, in its sole and absolute discretion to apply all sums then on deposit
in the Cash Collateral Subaccount to the Debt, in such order and in such manner
as Lender shall elect in its sole and absolute discretion, including to make a
prepayment of Principal (together which the applicable Yield Maintenance Premium
applicable thereto). Additionally, Lender shall have the right, but not the
obligation, at any time subsequent to the second Calculation Date following the
commencement of a DSCR Cash Management Period (whether or not an Event of
Default is then continuing), in its sole and absolute discretion to apply all
sums then on deposit in the Cash Collateral Subaccount towards a partial
Defeasance of the Loan (together with any Defeasance costs associated
therewith), and Borrower shall execute such documents and take such other
actions necessary t to satisfy the Defeasance requirements set forth in Section
2.3.3 hereof.
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3.10 Grant of Security Interest; Application of Funds. As security for
payment of the Debt and the performance by Borrower of all other terms,
conditions and provisions of the Loan Documents, Borrower hereby pledges and
assigns to Lender, and grants to Lender a security interest in, all Borrower's
right, title and interest in and to all Rents and in and to all payments to or
monies held in the Clearing Account, the Deposit Account, all Subaccounts
created pursuant to this Agreement (collectively, the "Cash Management
Accounts"). Borrower hereby grants to Lender a continuing security interest in,
and agrees to hold in trust for the benefit of Lender, all Rents in its
possession prior to the (i) payment of such Rents to Lender or (ii) deposit of
such Rents into the Deposit Account. Borrower shall not, without obtaining the
prior written consent of Lender, further pledge, assign or grant any security
interest in any Cash Management Account, or permit any Lien to attach thereto,
or any levy to be made thereon, or any UCC Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security
agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in any Cash
Management Account in any order and in any manner as Lender shall elect in
Lender's discretion without seeking the appointment of a receiver and without
adversely affecting the rights of Lender to foreclose the Lien of the Mortgage
or exercise its other rights under the Loan Documents. Cash Management Accounts
shall not constitute trust funds and may be commingled with other monies held by
Lender. All interest which accrues on the funds in any Cash Management Account
(other than the Tax and Insurance Subaccount) shall accrue for the benefit of
Borrower and shall be taxable to Borrower and shall be added to and disbursed in
the same manner and under the same conditions as the principal sum on which said
interest accrued. Upon repayment in full of the Debt, all remaining funds in the
Subaccounts, if any, shall be promptly disbursed to Borrower.
3.11 Property Cash Flow Allocation.
(a) All Rents deposited into the Deposit Account during the
immediately preceding Interest Period shall be applied on each Payment Date as
follows in the following order of priority:
(i) First, to make payments into the Tax and Insurance
Subaccount as required under Section 3.3 hereof;
(ii) Second, to pay the monthly portion of the fees charged by
the Deposit Bank in accordance with the Deposit Account Agreement;
(iii) Third, to Lender to pay the Monthly Interest Payment
Amount or, from and after the Amortization Commencement Date, the Monthly
Debt Service Payment Amount due on such Payment Date (plus, if applicable,
interest at the Default Rate and all other amounts, other than those
described under other clauses of this Section 3.11(a), then due to Lender
under the Loan Documents);
(iv) Fourth, to make payments into the Capital Reserve
Subaccount as required under Section 3.4 hereof;
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(v) Fifth, to make payments into the Rollover Reserve
Subaccount as required under Section 3.5(a) hereof;
(vi) Sixth, during the continuance of a Cash Management
Period, to make payments for Approved Operating Expenses as required under
Section 3.6 hereof;
(vii) Seventh, after the consummation of a Secondary Market
Transaction, to pay the pro rata portion of the expenses described in
Section 9.1.7 hereof;
(viii) Eighth, during the continuance of a Cash Management
Period triggered solely a result of a Lease Sweep Period, to make payments
in an amount equal to all remaining Available Cash on such Payment Date
into the Special Rollover Reserve Subaccount in accordance with Section
3.5(c) hereof;
(ix) Tenth, during the continuance of a Cash Management
Period, to make payments in an amount equal to all remaining Available
Cash on such Payment Date into the Cash Collateral Subaccount in
accordance with Section 3.9 hereof; and
(x) Lastly, provided that no Cash Management Period shall then
exist, payments to Borrower of any remaining amounts.
(b) The failure of Borrower to make all of the payments required
under clauses (i) through (ix) of Section 3.11(a) above in full on each Payment
Date shall constitute an Event of Default under this Agreement; provided,
however, if adequate funds are available in the Deposit Account for such
payments, the failure by the Deposit Bank to allocate such funds into the
appropriate Subaccounts shall not constitute an Event of Default.
(c) Notwithstanding anything to the contrary contained in this
Section 3.11, after the occurrence of a Default or an Event of Default, Lender
may apply all Rents deposited into the Deposit Account and other proceeds of
repayment in such order and in such manner as Lender shall elect.
4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the date hereof that, except to
the extent (if any) disclosed on Schedule 2 hereto with reference to a specific
Section of this Article 4:
4.1 Organization; Special Purpose. Borrower has been duly organized and is
validly existing and in good standing under the laws of the state of its
formation, with requisite power and authority, and all rights, licenses, permits
and authorizations, governmental or otherwise, necessary to own its properties
and to transact the business in which it is now engaged. Borrower is duly
qualified to do business and is in good standing in each jurisdiction where it
is required to be so qualified in connection with its properties, business and
operations. Borrower is a Special Purpose Bankruptcy Remote Entity.
4.2 Proceedings; Enforceability. Borrower has taken all necessary action
to authorize the execution, delivery and performance of the Loan Documents. The
Loan Documents have been duly executed and delivered by Borrower and constitute
legal, valid and binding obligations of Borrower enforceable against Borrower in
29
accordance with their respective terms, subject to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and general
principles of equity. The Loan Documents are not subject to, and Borrower has
not asserted, any right of rescission, set-off, counterclaim or defense,
including the defense of usury. No exercise of any of the terms of the Loan
Documents, or any right thereunder, will render any Loan Document unenforceable.
4.3 No Conflicts. The execution, delivery and performance of the Loan
Documents by Borrower and the transactions contemplated hereby will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Lien (other than
pursuant to the Loan Documents) upon any of the property of Borrower pursuant to
the terms of, any agreement or instrument to which Borrower is a party or by
which its property is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over Borrower or any of its
properties. Borrower's rights under the Licenses will not be adversely affected
by the execution and delivery of the Loan Documents, Borrower's performance
thereunder, the recordation of the Mortgage, or the exercise of any remedies by
Lender. Any consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority required for the execution,
delivery and performance by Borrower of the Loan Documents has been obtained and
is in full force and effect.
4.4 Litigation. There are no actions, suits or other proceedings at law or
in equity by or before any Governmental Authority now pending or threatened
against or affecting Borrower or the Property, which, if adversely determined,
might materially adversely affect the condition (financial or otherwise) or
business of Borrower (including the ability of Borrower to carry out its
obligations under the Loan Documents), or the use, value, condition or ownership
of the Property.
4.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which might adversely affect Borrower or the
Property, or Borrower's business, properties, operations or condition, financial
or otherwise. Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Permitted Encumbrance or any other agreement or
instrument to which it is a party or by which it or the Property is bound.
4.6 Title. Borrower has good, marketable leasehold title to the real
property demised under the XXX Lease and good, marketable and indefeasible title
in fee to the balance of the Property, free and clear of all Liens except the
Permitted Encumbrances. After the Fee Estate (as defined in Section 5.32 hereof)
is conveyed to the Borrower by the lessor under the XXX Lease, Borrower will
have good, marketable and indefeasible title in fee to the Fee Estate, free and
clear of all Liens except the Permitted Encumbrances. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements in
connection with the transfer of the Property to Borrower have been paid. The
Mortgage when properly recorded in the appropriate records, together with any
UCC Financing Statements required to be filed in connection therewith, will each
create (i) a valid, perfected first priority lien on the Borrower's interest in
the applicable portion of the Property and (ii) valid and perfected first
30
priority security interests in and to, and perfected collateral assignments of,
all personalty (including the Leases), all in accordance with the terms thereof,
in each case subject only to any applicable Permitted Encumbrances. All
mortgage, recording, stamp, intangible or other similar taxes required to be
paid by any Person under applicable Legal Requirements in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents have been paid. The Permitted
Encumbrances do not materially adversely affect the value, operation or use of
the Property, or Borrower's ability to repay the Loan. No Condemnation or other
proceeding has been commenced or, to Borrower's best knowledge, is contemplated
with respect to all or part of the Property or for the relocation of roadways
providing access to the Property. There are no claims for payment for work,
labor or materials affecting the Property which are or may become a Lien prior
to, or of equal priority with, the Liens created by the Loan Documents. There
are no outstanding options to purchase or rights of first refusal affecting all
or any portion of the Property or the leasehold estate demised under the XXX
Lease, except pursuant to the Xxxxxx Micro Lease. The survey for the Property
delivered to Lender does not fail to reflect any material matter affecting the
Property or the title thereto. All of the Improvements included in determining
the appraised value of the Property lie wholly within the boundaries and
building restriction lines of the Property, and no improvement on an adjoining
property encroaches upon the Property, and no easement or other encumbrance upon
the Property encroaches upon any of the Improvements, except those insured
against by the Title Insurance Policy. Each parcel comprising the Property is a
separate tax lot and is not a portion of any other tax lot that is not a part of
the Property. There are no pending or proposed special or other assessments for
public improvements or otherwise affecting the Property, or any contemplated
improvements to the Property that may result in such special or other
assessments. With respect to the Title Insurance Policy, (i) the Title Insurance
Policy is in full force and effect, (ii) the Title Insurance Policy is freely
assignable by Lender to and will inure to the benefit of the transferee (subject
to recordation of an assignment of mortgage) without the consent or any
notification to the insurer, (iii) the premium with respect thereto has been
paid in full (or will be paid in full with a portion of the proceeds of the
Loan), (iv) the Title Insurance Policy is issued by a title insurance company
licensed to issue policies in the State, (v) no claims have been made under the
Title Insurance Policy and no other action has been taken that would materially
impair the Title Insurance Policy and (vi) the Title Insurance Policy contains
no exclusions for any of the following circumstances, or it affirmatively
insures Lender against losses relating to any of the following circumstances
(unless the Property is located in a jurisdiction where such affirmative
insurance is not available): (a) that the Property has access to a public road
and (b) that the area shown on the survey delivered to Lender in connection with
the Loan is the same as the property legally described in the Mortgage.
4.7 No Bankruptcy Filing. Borrower is not contemplating either the filing
of a petition by it under any state or federal bankruptcy or insolvency law or
the liquidation of all or a major portion of its property (a "Bankruptcy
Proceeding"), and Borrower has no knowledge of any Person contemplating the
filing of any such petition against it. In addition, neither Borrower nor any
principal nor Affiliate of either has been a party to, or the subject of a
Bankruptcy Proceeding for the past ten (10) years.
4.8 Full and Accurate Disclosure. No statement of fact made by Borrower in
any Loan Documents contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein not
misleading. There is no material fact presently known to Borrower that has not
been disclosed to Lender which adversely affects, or, as far as Borrower can
foresee, might adversely affect, the Property or the business, operations or
31
condition (financial or otherwise) of Borrower. All financial data, including
the statements of cash flow and income and operating expense, that have been
delivered to Lender in respect of Borrower and the Property (i) are true,
complete and correct in all material respects, (ii) accurately represent the
financial condition of Borrower and the Property as of the date of such reports,
and (iii) to the extent prepared by an independent certified public accounting
firm, have been prepared in accordance with GAAP consistently applied throughout
the periods covered, except as disclosed therein. Borrower has no contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments,
unrealized or anticipated losses from any unfavorable commitments or any
liabilities or obligations not expressly permitted by this Agreement. Since the
date of such financial statements, there has been no materially adverse change
in the financial condition, operations or business of Borrower or the Property
from that set forth in said financial statements.
4.9 Tax Filings. To the extent required, Borrower has filed (or has
obtained effective extensions for filing) all federal, state and local tax
returns required to be filed and have paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable
by Borrower. Borrower believes that its tax returns (if any) properly reflect
the income and taxes of Borrower for the periods covered thereby, subject only
to reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit.
4.10 ERISA; No Plan Assets. As of the date hereof and throughout the Term
(i) Borrower is not and will not be an "employee benefit plan," as defined in
Section 3(3) of ERISA, (ii) none of the assets of Borrower constitutes or will
constitute "plan assets" of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101, (iii) Borrower is not and will not be a "governmental
plan" within the meaning of Section 3(32) of ERISA, and (iv) transactions by or
with Borrower are not and will not be subject to state statutes regulating
investment of, and fiduciary obligations with respect to, governmental plans. As
of the date hereof, neither Borrower, nor any member of a "controlled group of
corporations" (within the meaning of Section 414 of the Code) maintains,
sponsors or contributes to a "defined benefit plan" (within the meaning of
Section 3(35) of ERISA) or a "multiemployer pension plan" (within the meaning of
Section 3(37)(A) of ERISA).
4.11 Compliance. Borrower and the Property and the use thereof comply in
all material respects with all applicable Legal Requirements (including with
respect to parking and applicable zoning and land use laws, regulations and
ordinances). Borrower is not in default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority, the violation of
which might materially adversely affect the condition (financial or otherwise)
or business of Borrower. The Property is used exclusively for office use and
other appurtenant and related uses. In the event that all or any part of the
Improvements are destroyed or damaged, said Improvements can be legally
reconstructed to their condition prior to such damage or destruction, and
thereafter exist for the same use without violating any zoning or other
ordinances applicable thereto and without the necessity of obtaining any
variances or special permits. No legal proceedings are pending or, to the
knowledge of Borrower, threatened with respect to the zoning of the Property.
Neither the zoning nor any other right to construct, use or operate the Property
32
is in any way dependent upon or related to any property other than the Property.
All certifications, permits, licenses and approvals, including certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Property (collectively, the "Licenses"), have been obtained and
are in full force and effect. The use being made of the Property is in
conformity with the certificate of occupancy issued for the Property and all
other restrictions, covenants and conditions affecting the Property.
4.12 Contracts. There are no service, maintenance or repair contracts
affecting the Property to which Borrower is a party that are not terminable on
one (1) month's notice or less without cause and without penalty or premium. All
service, maintenance or repair contracts affecting the Property to which
Borrower is a party have been entered into at arms-length in the ordinary course
of Borrower's business and provide for the payment of fees in amounts and upon
terms comparable to existing market rates.
4.13 Federal Reserve Regulations; Investment Company Act. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose that would be inconsistent
with such Regulation U or any other regulation of such Board of Governors, or
for any purpose prohibited by Legal Requirements or any Loan Document. Borrower
is not (i) an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended;
(ii) a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
4.14 Easements; Utilities and Public Access. All easements, cross
easements, licenses, air rights and rights-of-way or other similar property
interests (collectively, "Easements"), if any, necessary for the full
utilization of the Improvements for their intended purposes have been obtained,
are described in the Title Insurance Policy and are in full force and effect
without default thereunder. The Property has rights of access to public ways and
is served by water, sewer, sanitary sewer and storm drain facilities adequate to
service it for its intended uses. All public utilities necessary or convenient
to the full use and enjoyment of the Property are located in the public
right-of-way abutting the Property, and all such utilities are connected so as
to serve the Property without passing over other property absent a valid
easement. All roads necessary for the use of the Property for its current
purpose have been completed and dedicated to public use and accepted by all
Governmental Authorities.
4.15 Physical Condition. To the best knowledge of Borrower and except as
disclosed in the property condition report delivered to Lender prior to the date
hereof, the Property, including all Improvements, parking facilities, systems,
Equipment and landscaping, are in good condition, order and repair in all
material respects; there exists no structural or other material defect or
damages to the Property, whether latent or otherwise. Borrower has not received
notice from any insurance company or bonding company of any defect or inadequacy
in the Property, or any part thereof, which would adversely affect its
insurability or cause the imposition of extraordinary premiums or charges
thereon or any termination of any policy of insurance or bond. No portion of the
Property is located in an area as identified by the Federal Emergency Management
Agency as an area having special flood hazards. The Improvements have suffered
no material casualty or damage which has not been fully repaired and the cost
thereof fully paid.
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4.16 Leases.
(a) There are no other Leases in effect with respect to the Property
other than the Xxxxxx Micro Lease, a true, correct and complete copy of which
has been delivered by Borrower to Lender;
(b) The Xxxxxx Micro Lease is in full force and effect;
(c) Xxxxxx Micro has accepted possession of and is in occupancy of
all of the Property (other than the spaced subleased under the Cognigen
Sublease);
(d) Xxxxxx Micro has commenced the payment of rent under the Xxxxxx
Micro Lease;
(e) There are no offsets, claims or defenses to the enforcement of
the Xxxxxx Micro Lease;
(f) Xxxxxx Micro has not made any claim against the sublessor under
the Xxxxxx Micro Lease which remains outstanding, there are no defaults on the
part of the sublessor under the Xxxxxx Micro Lease, and no event has occurred
which, with the giving of notice or passage of time, or both, would constitute
such a default;
(g) No Lease Default exists;
(h) Borrower is the sole owner of the entire sublessor's interest in
the Xxxxxx Micro Lease;
(i) The Xxxxxx Micro Lease is the valid, binding and enforceable
obligation of the Borrower and Xxxxxx Micro;
(j) Except for Cognigen Corporation (formerly known as
Pharmaceutical Outcomes Research, Inc.), a New York corporation (the "Existing
Subtenant"), which subleases a portion of the Property from Xxxxxx Micro, no
Person has any possessory interest in, or right to occupy, the Property except
under the terms of the Xxxxxx Micro Lease;
(k) The Xxxxxx Micro Lease is subordinate to the Loan Documents
pursuant to a subordination and attornment agreement;
(l) The Xxxxxx Micro Lease has not been assigned or pledged except
to Lender, and no other Person has any interest therein; and
(m) There are no brokerage fees or commissions due and payable by
Borrower in connection with the leasing of space at the Property and no such
fees or commissions will become due and payable in the future in connection with
the Xxxxxx Micro Lease, including by reason of any extension thereof or
expansion of the space leased thereunder.
34
4.17 Fraudulent Transfer. Borrower has not entered into the Loan or any
Loan Document with the actual intent to hinder, delay, or defraud any creditor,
and Borrower has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair saleable value of Borrower's assets
exceeds and will, immediately following the execution and delivery of the Loan
Documents, exceed Borrower's total probable liabilities, including subordinated,
unliquidated, disputed or contingent liabilities, including the maximum amount
of its contingent liabilities or its debts as such debts become absolute and
matured. Borrower's assets do not and, immediately following the execution and
delivery of the Loan Documents will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of Borrower).
4.18 Ownership of Borrower. The sole managing member of Borrower is
FT-Amherst Property Manager LLC . The only other members of Borrower is
Guarantor. The membership interests in Borrower are owned free and clear of all
Liens, warrants, options and rights to purchase. Borrower has no obligation to
any Person to purchase, repurchase or issue any ownership interest in it. The
organizational chart attached hereto as Schedule 4 is complete and accurate and
illustrates all Persons who have a direct or indirect ownership interest in
Borrower.
4.19 Purchase Options. Except as set forth in the Xxxxxx Micro Lease,
neither the Property nor any part thereof is subject to any purchase options or
other similar rights in favor of third parties.
4.20 Management Agreement. Neither Borrower, nor to the best knowledge of
Borrower, any other Person, is a party to any management agreement with respect
to the Property.
4.21 Hazardous Substances. To the best knowledge of Borrower, after due
inquiry, and except as set forth in the Phase I Environmental report delivered
to Lender prior to the date hereof, (i) the Property is not in violation of any
Legal Requirement pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up, including the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and
Health Act, any state super-lien and environmental clean-up statutes (including
with respect to Toxic Mold), any local law requiring related permits and
licenses and all amendments to and regulations in respect of the foregoing laws
(collectively, "Environmental Laws"); (ii) the Property is not subject to any
35
private or governmental Lien or judicial or administrative notice or action or
inquiry, investigation or claim relating to hazardous, toxic and/or dangerous
substances, toxic mold or fungus of a type that may pose a risk to human health
or the environment or would negatively impact the value of the Property ("Toxic
Mold") or any other substances or materials which are included under or
regulated by Environmental Laws (collectively, "Hazardous Substances"); (iii)
after due inquiry, no Hazardous Substances are or have been (including the
period prior to Borrower's acquisition of the Property), discharged, generated,
treated, disposed of or stored on, incorporated in, or removed or transported
from the Property other than in compliance with all Environmental Laws; (iv) to
the best of Borrower's knowledge, after due inquiry, no Hazardous Substances are
present in, on or under any nearby real property which could migrate to or
otherwise affect the Property; (v) no Toxic Mold is on or about the Property
which requires remediation; (vi) no underground storage tanks exist on the
Property and the Property has never been used as a landfill; and (vii) there
have been no environmental investigations, studies, audits, reviews or other
analyses conducted by or on behalf of Borrower which have not been provided to
Lender.
4.22 Name; Principal Place of Business. Borrower does not use and will not
use any trade name and has not done and will not do business under any name
other than its actual name set forth herein. The principal place of business of
Borrower is its primary address for notices as set forth in Section 6.1 hereof,
and Borrower has no other place of business.
4.23 Other Debt. There is no indebtedness with respect to the Property or
any excess cash flow or any residual interest therein, whether secured or
unsecured, other than Permitted Encumbrances and Permitted Indebtedness.
4.24 XXX Lease.
4.24.1 Recording; Modification. A memorandum of the XXX Lease has
been duly recorded. The XXX Lease permits the interest of Borrower to be
encumbered by a mortgage or Fee Owner thereunder has approved and consented to
the encumbrance of the Property by the Mortgage. There have not been amendments
or modifications to the terms of the XXX Lease since its recordation, with the
exception of written instruments identified in the Mortgage.
4.24.2 No Liens. Except for the Permitted Encumbrances, Borrower's
interest in the XXX Lease is not subject to any Liens or encumbrances superior
to, of equal priority with, or subordinate to the Mortgage.
4.24.3 XXX Lease Assignable. Borrower's interest in the XXX Lease is
assignable to Lender or its designee without the consent of Fee Owner. The XXX
Lease is further assignable by Lender, its successors and assigns without the
consent of Fee Owner.
4.24.4 Term. The XXX Lease has a term which expires on December 31,
2013. Upon the expiration of the XXX Lease, the lessor thereunder is obligated
to convey good, marketable and indefeasible title to the Fee Estate to the
Borrower by bargain and sale deed with covenant against grantor's acts.
4.24.5 Default. As of the date hereof, the XXX Lease is in full
force and effect and no default on the part of Borrower and, to the best of
Borrower's knowledge, (i) no default exists on the part of Fee Owner and (ii)
there is no existing condition which, but for the passage of time or the giving
of notice, could result in a default under the terms of the XXX Lease. Fee
Owner's sole remedy upon a default under the XXX Lease by Borrower is the
termination of the XXX Lease and the simultaneous conveyance by bargain and sale
deed with covenant against grantor's acts of the Fee Estate by Fee Owner to
Borrower for consideration not to exceed $10.00.
36
4.24.6 Notice. The XXX Lease requires Fee Owner to give notice of
any default by Borrower thereunder to Lender (provided that Lender has sent Fee
Owner notice of the Mortgage as required under the XXX Lease).
4.24.7 Cure. Lender is permitted the opportunity to cure any default
under the XXX Lease which is curable after the receipt of notice of any default
before Fee Owner may terminate the XXX Lease.
4.24.8 Subleasing. The XXX Lease does not impose any material
restrictions on subleasing.
4.24.9 Insurance Proceeds. Under the terms of the XXX Lease and the
Loan Documents, taken together, any Proceeds and Awards will be applied either
to the repair or restoration of all or part of the Property, with Lender having
the right to hold and disburse the proceeds as the repair or restoration
progresses, or to the payment of the outstanding Debt.
All of the representations and warranties in this Article 4 and elsewhere in the
Loan Documents (i) shall survive for so long as any portion of the Debt remains
owing to Lender and (ii) shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf, provided, however, that the representations, warranties and
covenants set forth in Section 4.21 above shall survive in perpetuity.
5. COVENANTS
Until the end of the Term, Borrower hereby covenants and agrees with Lender
that:
5.1 Existence. Borrower shall (i) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, and franchises, (ii) continue to engage in the business presently
conducted by it, (iii) obtain and maintain (or for so long as the Xxxxxx Micro
Lease is in full force and effect, shall cause Xxxxxx Micro to obtain and
maintain) all Licenses, and (iv) qualify to do business and remain in good
standing under the laws of each jurisdiction, in each case as and to the extent
required for the ownership, maintenance, management and operation of the
Property.
5.2 Taxes and Other Charges. (a) Borrower shall (or shall cause Xxxxxx
Micro to) pay all Taxes and Other Charges as the same become due and payable,
and deliver to Lender receipts for payment or other evidence satisfactory to
Lender that the Taxes and Other Charges have been so paid no later than thirty
(30) days before they would be delinquent if not paid (provided, however, that
Borrower need not pay such Taxes nor furnish such receipts for payment of Taxes
paid by Lender pursuant to Section 3.3 hereof). Borrower shall not suffer and
shall promptly cause to be paid and discharged any Lien against the Property,
and shall promptly pay for all utility services provided to the Property. After
prior notice to Lender, Borrower, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application of any Taxes or Other Charges,
provided that (i) no Default or Event of Default has occurred and is continuing,
37
(ii) such proceeding shall suspend the collection of the Taxes or such Other
Charges, (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (iv) no part of or
interest in the Property will be in danger of being sold, forfeited, terminated,
canceled or lost, (v) Borrower shall have furnished such security as may be
required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon, which shall not be less than 125% of the Taxes and Other
Charges being contested, and (vi) Borrower shall promptly upon final
determination thereof pay the amount of such Taxes or Other Charges, together
with all costs, interest and penalties. Lender may pay over any such security or
part thereof held by Lender to the claimant entitled thereto at any time when,
in the judgment of Lender, the entitlement of such claimant is established.
(b) Notwithstanding anything to the contrary contained in Section
5.2(a), so long as the Xxxxxx Micro Lease is in full force and effect, the
requirements of Section 5.2(a) shall be deemed to be satisfied so long as Xxxxxx
Micro shall be in compliance with the provisions of Sections 2.2 and 2.6
thereof.
5.3 Access to Property. Subject to the rights of Xxxxxx Micro under the
Xxxxxx Micro Lease, Borrower shall permit agents, representatives, consultants
and employees of Lender to inspect the Property or any part thereof at
reasonable hours upon reasonable advance notice.
5.4 Repairs; Maintenance and Compliance; Alterations.
5.4.1 Repairs; Maintenance and Compliance. (a) Borrower shall at all
times maintain, preserve and protect all franchises and trade names, and
Borrower shall cause the Property to be maintained in a good and safe condition
and repair and shall not remove, demolish or alter the Improvements or Equipment
(except for alterations performed in accordance with Section 5.4.2 below and
normal replacement of Equipment with Equipment of equivalent value and
functionality). Borrower shall (or shall cause Xxxxxx Micro to) promptly comply
with all Legal Requirements and immediately cure properly any violation of a
Legal Requirement. Borrower shall notify Lender in writing within one (1)
Business Day after Borrower first receives notice of any such non-compliance.
Borrower shall (or shall cause Xxxxxx Micro to) promptly repair, replace or
rebuild any part of the Property that becomes damaged, worn or dilapidated and
shall complete and pay for any Improvements at any time in the process of
construction or repair.
(b) Notwithstanding anything to the contrary contained in Section
5.4.1(a), so long as the Xxxxxx Micro Lease is in full force and effect, the
requirements of Section 5.4.1(a) shall be deemed to be satisfied so long as
Xxxxxx Micro shall be in compliance with the provisions of Section 2.5 thereof;
provided, that Borrower shall have obtained the consent of Lender (not to be
unreasonably withheld or delayed) with respect to any Material Alteration (as
defined in the Xxxxxx Micro Lease) prior to giving its consent thereto to Xxxxxx
Micro.
5.4.2 Alterations. (a) Borrower may (and may permit Xxxxxx Micro
to), without Lender's consent, perform alterations to the Improvements and
Equipment which (i) do not constitute a Material Alteration, (ii) do not
38
adversely affect Borrower's financial condition or the value or Net Operating
Income of the Property and (iii) are in the ordinary course of Borrower's
business. Borrower shall not (and shall not permit Xxxxxx Micro to) perform any
Material Alteration without Lender's prior written consent, which consent shall
not be unreasonably withheld or delayed; provided, however, that Lender may, in
its sole and absolute discretion, withhold consent to any alteration the cost of
which is reasonably estimated to exceed $1,000,000 or which is likely to result
in a decrease of Net Operating Income by two and one-half percent (2.5%) or more
for a period of thirty (30) days or longer. Lender may, as a condition to giving
its consent to a Material Alteration, require that Borrower deliver to Lender
security for payment of the cost of such Material Alteration in an amount equal
to 125% of the cost of the Material Alteration as estimated by Lender. Upon
substantial completion of the Material Alteration, Borrower shall provide
evidence satisfactory to Lender that (i) the Material Alteration was constructed
in accordance with applicable Legal Requirements and substantially in accordance
with plans and specifications approved by Lender (which approval shall not be
unreasonably withheld or delayed), (ii) all contractors, subcontractors,
materialmen and professionals who provided work, materials or services in
connection with the Material Alteration have been paid in full and have
delivered unconditional releases of lien and (iii) all material Licenses
necessary for the use, operation and occupancy of the Material Alteration (other
than those which depend on the performance of tenant improvement work) have been
issued. Borrower shall reimburse Lender upon demand for all out-of-pocket costs
and expenses (including the reasonable fees of any architect, engineer or other
professional engaged by Lender) incurred by Lender in reviewing plans and
specifications or in making any determinations necessary to implement the
provisions of this Section 5.4.2.
(b) Notwithstanding anything to the contrary contained in Section
5.4.2(a), so long as the Xxxxxx Micro Lease is in full force and effect, the
requirements of Section 5.4.2(a) shall be deemed to be satisfied so long as
Xxxxxx Micro shall be in compliance with the provisions of Section 3.4 thereof;
provided, that Borrower shall have obtained the consent of Lender (not to be
unreasonably withheld or delayed) with respect to any Material Alteration (as
defined in the Xxxxxx Micro Lease) prior to giving its consent thereto to Xxxxxx
Micro.
5.5 Performance of Other Agreements. Borrower shall observe and perform
each and every term to be observed or performed by it pursuant to the terms of
any agreement or instrument affecting or pertaining to the Property, including
the Loan Documents.
5.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with
Lender with respect to, and permit Lender, at its option, to participate in, any
proceedings before any Governmental Authority which may in any way affect the
rights of Lender under any Loan Document.
5.7 Further Assurances. Borrower shall, at Borrower's sole cost and
expense, (i) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the Debt and/or for the better and more effective
carrying out of the intents and purposes of the Loan Documents, as Lender may
reasonably require from time to time; and (ii) upon Lender's request therefor
given from time to time after the occurrence of any Default or Event of Default
39
pay for (a) reports of UCC, federal tax lien, state tax lien, judgment and
pending litigation searches with respect to Borrower and (b) searches of title
to the Property, each such search to be conducted by search firms reasonably
designated by Lender in each of the locations reasonably designated by Lender.
5.8 Environmental Matters.
5.8.1 Hazardous Substances. So long as Borrower owns or is in
possession of the Property, (i) Borrower shall (or shall cause Xxxxxx Micro to)
keep the Property free from Hazardous Substances and in compliance with all
Environmental Laws, (ii) Borrower shall (or shall cause Xxxxxx Micro to)
promptly notify Lender if Borrower shall become aware that (A) any Hazardous
Substance is on or near the Property, (B) the Property is in violation of any
Environmental Laws or (C) any condition on or near the Property shall pose a
threat to the health, safety or welfare of humans and (iii) Borrower shall (or
shall cause Xxxxxx Micro to) remove such Hazardous Substances and/or cure such
violations and/or remove such threats, as applicable, as required by law (or as
shall be required by Lender in the case of removal which is not required by law,
but in response to the opinion of a licensed hydrogeologist, licensed
environmental engineer or other qualified environmental consulting firm engaged
by Lender ("Lender's Consultant")), promptly after Borrower becomes aware of
same, at Borrower's sole expense. Nothing herein shall prevent Borrower from
recovering such expenses from any other party that may be liable for such
removal or cure.
5.8.2 Environmental Monitoring.
(a) Borrower shall give prompt written notice to Lender of (i) any
proceeding or inquiry by any party (including any Governmental Authority) with
respect to the presence of any Hazardous Substance on, under, from or about the
Property, (ii) all claims made or threatened by any third party (including any
Governmental Authority) against Borrower or the Property or any party occupying
the Property relating to any loss or injury resulting from any Hazardous
Substance, and (iii) Borrower's discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Property that could cause the
Property to be subject to any investigation or cleanup pursuant to any
Environmental Law. Upon becoming aware of the presence of mold or fungus at the
Property, (i) Borrower shall undertake an investigation to identify the
source(s) of such mold or fungus and shall develop and implement an appropriate
remediation plan to eliminate the presence of any Toxic Mold, (ii)Borrower shall
(or shall cause Xxxxxx Micro to) perform or cause to be performed all acts
reasonably necessary for the remediation of any Toxic Mold (including taking any
action necessary to clean and disinfect any portions of the Property affected by
Toxic Mold, including providing any necessary moisture control systems at the
Property), and (iii) Borrower shall provide evidence reasonably satisfactory to
Lender of the foregoing. Borrower shall permit Lender to join and participate
in, as a party if it so elects, any legal or administrative proceedings or other
actions initiated with respect to the Property in connection with any
Environmental Law or Hazardous Substance, and Borrower shall pay all reasonable
attorneys' fees and disbursements incurred by Lender in connection therewith.
(b) Upon Lender's request, at any time and from time to time,
Borrower shall provide an inspection or audit of the Property prepared by a
licensed hydrogeologist, licensed environmental engineer or qualified
environmental consulting firm approved by Lender assessing the presence or
absence of Hazardous Substances on, in or near the Property, and if Lender in
40
its good faith judgment determines that reasonable cause exists for the
performance of such environmental inspection or audit, then the cost and expense
of such audit or inspection shall be paid by Borrower. Such inspections and
audit may include soil borings and ground water monitoring. If Borrower fails to
provide any such inspection or audit within thirty (30) days after such request,
Lender may order same, and Borrower hereby grants to Lender and its employees
and agents access to the Property (subject to the rights of Xxxxxx Micro under
the Xxxxxx Micro Lease) and a license to undertake such inspection or audit.
(c) If any environmental site assessment report prepared in
connection with such inspection or audit recommends that an operations and
maintenance plan be implemented for any Hazardous Substance, whether such
Hazardous Substance existed prior to the ownership of the Property by Borrower,
or presently exists or is reasonably suspected of existing, Borrower shall cause
such operations and maintenance plan to be prepared and implemented at its
expense upon request of Lender, and with respect to any Toxic Mold, Borrower
shall take all action necessary to clean and disinfect any portions of the
Improvements affected by Toxic Mold in or about the Improvements, including
providing any necessary moisture control systems at the Property. If any
investigation, site monitoring, containment, cleanup, removal, restoration or
other work of any kind is reasonably necessary under an applicable Environmental
Law ("Remedial Work"), Borrower (or shall cause Xxxxxx Micro to) shall commence
all such Remedial Work within thirty (30) days after written demand by Lender
and thereafter diligently prosecute to completion all such Remedial Work within
such period of time as may be required under applicable law. All Remedial Work
shall be performed by licensed contractors approved in advance by Lender and
under the supervision of a consulting engineer approved by Lender. All costs of
such Remedial Work shall be paid by Borrower, including Lender's reasonable
attorneys' fees and disbursements incurred in connection with the monitoring or
review of such Remedial Work. If Borrower does not timely commence and
diligently prosecute to completion the Remedial Work, Lender may (but shall not
be obligated to) cause such Remedial Work to be performed at Borrower's expense.
Notwithstanding the foregoing, Borrower shall not be required to commence such
Remedial Work within the above specified time period: (x) if prevented from
doing so by any Governmental Authority, (y) if commencing such Remedial Work
within such time period would result in Borrower or such Remedial Work violating
any Environmental Law, or (z) if Borrower or Xxxxxx Micro, at its expense and
after prior written notice to Lender, is contesting by appropriate legal,
administrative or other proceedings, conducted in good faith and with due
diligence, the need to perform Remedial Work. Borrower shall have the right to
contest the need to perform such Remedial Work, provided that, (1) Borrower or
Xxxxxx Micro is permitted by the applicable Environmental Laws to delay
performance of the Remedial Work pending such proceedings, (2) neither the
Property nor any part thereof or interest therein will be sold, forfeited or
lost if Borrower or Xxxxxx Micro fails to promptly perform the Remedial Work
being contested, and if Borrower fails to prevail in contest, Borrower or Xxxxxx
Micro would thereafter have the opportunity to perform such Remedial Work, (3)
Lender would not, by virtue of such permitted contest, be exposed to any risk of
any civil liability for which Borrower or Xxxxxx Micro has not furnished
additional security as provided in clause (4) below, or to any risk of criminal
liability, and neither the Property nor any interest therein would be subject to
41
the imposition of any Lien for which Borrower or Xxxxxx Micro has not furnished
additional security as provided in clause (4) below, as a result of the failure
to perform such Remedial Work and (4) Borrower or Xxxxxx Micro shall have
furnished to Lender additional security in respect of the Remedial Work being
contested and the loss or damage that may result from Borrower's failure to
prevail in such contest in such amount as may be reasonably requested by Lender
but in no event less than 125% of the cost of such Remedial Work as estimated by
Lender or Lender's Consultant and any loss or damage that may result from
Borrower's or Xxxxxx Micro's failure to prevail in such contest.
(d) Borrower shall not install or permit to be installed on the
Property any underground storage tank.
5.9 Title to the Property. Borrower will warrant and defend the title to
the Property, and the validity and priority of all Liens granted or otherwise
given to Lender under the Loan Documents, subject only to Permitted
Encumbrances, against the claims of all Persons.
5.10 Leases.
5.10.1 Generally. Borrower has delivered a true and correct copy of
the Xxxxxx Micro Lease and all subleases to Lender. Upon request, Borrower shall
furnish Lender with executed copies of all other Leases then in effect. Borrower
shall not enter into a Lease or a proposed renewal, extension or modification of
an existing Lease without the prior written consent of Lender.
5.10.2 Additional Covenants with respect to Leases. Borrower (i)
shall observe and perform the material obligations imposed upon the lessor under
the Leases and shall not do or permit anything to impair the value of the Leases
as security for the Debt; (ii) shall deliver to Lender a copy of any material
notice, plan, report or other written communication delivered to Borrower by or
on behalf of Xxxxxx Micro under the Xxxxxx Micro Lease, within three business
days after receipt by Borrower; (iii) shall give Lender a copy of any written
notice given by Borrower to Xxxxxx Micro as tenant under the Xxxxxx Micro Lease
simultaneously with the giving of such notice to Xxxxxx Micro; (iv) shall
promptly send copies to Lender of all notices of default that Borrower shall
send or receive under any Lease; (v) shall enforce, in accordance with
commercially reasonable practices for properties similar to the applicable
Property, the terms, covenants and conditions in the Leases to be observed or
performed by the lessees, short of termination thereof; (vi) shall not collect
any of the Rents more than one month in advance (other than security deposits);
(vii) shall not execute any other assignment of lessor's interest in the Leases
or the Rents (except as contemplated by the Loan Documents); (viii) shall not
modify any Lease; (ix) shall not convey or transfer or suffer or permit a
conveyance or transfer of any Property so as to effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, lessees
under Leases; (x) shall not consent to any assignment of or subletting under any
Lease unless required in accordance with its terms without the prior consent of
Lender; and (xi) shall not cancel or terminate any Lease.
5.11 Estoppel Statement. After request by Lender, Borrower shall (a)
within ten days furnish Lender with a statement addressed to Lender, its
successors and assigns, duly acknowledged and certified, setting forth (i) the
unpaid Principal, (ii) the Interest Rate, (iii) the date installments of
interest and/or Principal were last paid, (iv) any offsets or defenses to the
payment of the Debt, and (v) that the Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving
42
particulars of such modification and (b) use commercially reasonable efforts to
cause Xxxxxx Micro to furnish Lender with a statement addressed to Lender, its
successors and assigns, duly acknowledged and certified, setting forth (i) the
date installments of fixed rent and/or additional rent were last paid, (ii) any
offsets or defenses to the payment of rent; (iii) that the Xxxxxx Micro Lease is
the valid, legal and binding obligation of Xxxxxx Micro and has not been
modified or if modified, giving particulars of such modification and (iv) that
no actions, whether voluntary or otherwise, are pending against Xxxxxx Micro (or
any Affiliate of thereof which Controls Xxxxxx Micro) under the bankruptcy laws
of the United States or any state.
5.12 Property Management.
5.12.1 Management Agreement. Borrower shall not enter into any
agreement with respect to the management of the Property without the prior
written consent of Lender. Upon the execution of any Management Agreement
approved by Lender, Borrower shall (i) cause the Property to be managed pursuant
to the Management Agreement; (ii) promptly perform and observe all of the
covenants required to be performed and observed by it under the Management
Agreement and do all things necessary to preserve and to keep unimpaired its
rights thereunder; (iii) promptly notify Lender of any default under the
Management Agreement of which it is aware; (iv) promptly deliver to Lender a
copy of each financial statement, business plan, capital expenditure plan, and
property improvement plan and any other notice, report and estimate received by
Borrower under the Management Agreement; and (v) promptly enforce the
performance and observance of all of the covenants required to be performed and
observed by Manager under the Management Agreement. Without Lender's prior
written consent, Borrower shall not (a) surrender, terminate, cancel, extend or
renew the Management Agreement or otherwise replace the Manager or enter into
any other management agreement (except pursuant to Section 5.12.2 below); (b)
reduce or consent to the reduction of the term of the Management Agreement; (c)
increase or consent to the increase of the amount of any charges under the
Management Agreement; (d) otherwise modify, change, supplement, alter or amend
in any material respect, or waive or release any of its rights and remedies
under, the Management Agreement; (e) suffer or permit the occurrence and
continuance of a default beyond any applicable cure period under the Management
Agreement (or any successor management agreement) if such default permits the
Manager to terminate the Management Agreement (or such successor management
agreement); or (f) suffer or permit the ownership, management or control of the
Manager to be transferred to a Person other than an Affiliate of Borrower.
5.12.2 Termination of Manger. If during a period that a Management
Agreement is in effect (i) as of any Calculation Date, Borrower fails to
maintain a Debt Service Coverage Ratio of at least 0.95:1 or (ii) an Event of
Default shall be continuing, or (iii) Manager is in default under the Management
Agreement, or (iv) upon the gross negligence, malfeasance or willful misconduct
of the Manager, Borrower shall, at the request of Lender, terminate the
Management Agreement and replace Manager with a replacement manager acceptable
to Lender in Lender's discretion and the applicable Rating Agencies on terms and
conditions satisfactory to Lender and the applicable Rating Agencies. All
calculations of the Debt Service Coverage Ratio for purposes of this Section
5.12.2 shall be subject to verification by Lender. Borrower's failure to appoint
an acceptable manager within thirty (30) days after Lender's request of Borrower
to terminate the Management Agreement shall constitute an immediate Event of
Default. Borrower may from time to time appoint a successor manager to manage
43
the Property, provided that such successor manager and Management Agreement
shall be approved in writing by Lender in Lender's discretion and the applicable
Rating Agencies (and Lender's approval may be conditioned upon Borrower
delivering a Rating Comfort Letter as to such successor manager and Management
Agreement). If at any time Lender consents to the appointment of a new manager,
such new manager and Borrower shall, as a condition of Lender's consent, execute
a consent and subordination of management agreement substantially in the form of
the Consent and Subordination of Manager of even date herewith executed and
delivered by Manager to Lender.
5.13 Special Purpose Bankruptcy Remote Entity. Borrower shall at all times
be a Special Purpose Bankruptcy Remote Entity. Borrower shall directly or
indirectly make any change, amendment or modification to its organizational
documents, or otherwise take any action which could result in Borrower not being
a Special Purpose Bankruptcy Remote Entity. A "Special Purpose Bankruptcy Remote
Entity" shall have the meaning set forth on Schedule 5 hereto.
5.14 Intentionally Deleted.
5.15 Change in Business or Operation of Property. Borrower shall not
purchase or own any real property other than the Property and shall not enter
into any line of business other than the ownership and operation of the
Property, or make any material change in the scope or nature of its business
objectives, purposes or operations, or undertake or participate in activities
other than the continuance of its present business or otherwise cease to operate
the Property as a an office property or terminate such business for any reason
whatsoever (other than temporary cessation in connection with renovations to the
Property).
5.16 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to Borrower by any Person, except for adequate consideration and
in the ordinary course of Borrower's business.
5.17 Affiliate Transactions. Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the members of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm's-length transaction with
an unrelated third party.
5.18 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender.
5.19 No Joint Assessment. Borrower shall not suffer, permit or initiate
the joint assessment of the Property (i) with any other real property
constituting a tax lot separate from the Property, and (ii) with any portion of
the Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.
44
5.20 Principal Place of Business. Borrower shall not change its principal
place of business or chief executive office without first giving Lender thirty
(30) days' prior notice.
5.21 Change of Name, Identity or Structure. Borrower shall not change its
name, identity (including its trade name or names) or Borrower's corporate,
partnership or other structure without notifying Lender of such change in
writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower's structure, without first obtaining
the prior written consent of Lender. Borrower shall execute and deliver to
Lender, prior to or contemporaneously with the effective date of any such
change, any financing statement or financing statement change required by Lender
to establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which
Borrower intends to operate the Property, and representing and warranting that
Borrower does business under no other trade name with respect to the Property.
5.22 Indebtedness. Borrower shall not directly or indirectly create, incur
or assume any indebtedness other than (i) the Debt and (ii) unsecured trade
payables incurred in the ordinary course of business relating to the ownership
and operation of the Property which (A) are not evidenced by a note, (B) do not
exceed, at any time, a maximum aggregate amount of two percent (2%) of the
original amount of the Principal and (C) are paid within sixty (60) days of the
date incurred (collectively, "Permitted Indebtedness").
5.23 Licenses. Borrower shall not Transfer any License required for the
operation of the Property.
5.24 Compliance with Restrictive Covenants, Etc. Borrower will not enter
into, modify, waive in any material respect or release any Easements,
restrictive covenants or other Permitted Encumbrances, or suffer, consent to or
permit the foregoing, without Lender's prior written consent, which consent may
be granted or denied in Lender's sole discretion.
5.25 ERISA.
(1) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
(2) Borrower shall not maintain, sponsor, contribute to or become
obligated to contribute to, or suffer or permit any ERISA Affiliate of Borrower
to, maintain, sponsor, contribute to or become obligated to contribute to, any
Plan or any Welfare Plan or permit the assets of Borrower to become "plan
assets," whether by operation of law or under regulations promulgated under
ERISA.
(i) Borrower shall deliver to Lender such certifications or
other evidence from time to time throughout the Term, as requested by Lender in
its sole discretion, that (A) Borrower is not and does not maintain an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a "governmental plan" within the meaning of Section 3(32) of ERISA;
(B) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) the assets of
Borrower do not constitute "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101.
45
5.26 Prohibited Transfers.
5.26.1 Generally.
(a) Borrower shall not directly or indirectly make, suffer or permit
the occurrence of any Transfer other than a Permitted Transfer.
(b) In connection with a Permitted Transfer described in clause (v)
of the definition of Permitted Transfer, Lender will release Key Principal from
its obligations under the Guaranty with respect to obligations arising and
accruing from and after the date of such Permitted Transfer; provided that (i) a
replacement guarantor reasonably acceptable to Lender delivers to Lender a
guaranty in the same form as the Guaranty, pursuant to which the replacement
guarantor agrees to be liable under such guaranty for all obligations arising or
accruing from and after the date of such transfer and (ii) such replacement
guarantor has a minimum net worth of $10,000,000.
5.26.2 Transfer and Assumption.
(a) Notwithstanding the foregoing and subject to the terms and
satisfaction of all the conditions precedent set forth in this Section 5.26.2,
Borrower shall have a the right to Transfer the Property from time to time to
another party (the "Transferee Borrower") and have the Transferee Borrower
assume all of Borrower's obligations under the Loan Documents, and have
replacement guarantors and indemnitors assume all of the obligations of the
indemnitors and guarantors of the Loan Documents (collectively, a "Transfer and
Assumption"). Borrower may make a written application to Lender for Lender's
consent to the Transfer and Assumption, subject to the conditions set forth in
paragraphs (b) and (c) of this Section 5.26.2. Together with such written
application, Borrower will pay to Lender the reasonable review fee then required
by Lender. Borrower also shall pay on demand all of the reasonable costs and
expenses incurred by Lender, including reasonable attorneys' fees and expenses,
and including the fees and expenses of Rating Agencies and other outside
entities, in connection with considering any proposed Transfer and Assumption,
whether or not the same is permitted or occurs.
(b) Lender's consent, which may be withheld in Lender's reasonable
discretion, to a Transfer and Assumption shall be subject to the following
conditions:
(i) No Default or Event of Default has occurred and is
continuing;
(ii) Borrower has submitted to Lender true, correct and
complete copies of any and all information and documents of any kind requested
by Lender concerning the Property, Transferee Borrower, replacement guarantors
and indemnitors and Borrower;
(iii) Evidence satisfactory to Lender has been provided
showing that the Transferee Borrower and such of its Affiliates as shall be
designated by Lender comply and will comply with Section 5.13 hereof, as those
provisions may be modified by Lender taking into account the ownership structure
of Transferee Borrower and its Affiliates;
46
(iv) If the Loan, by itself or together with other loans, has
been the subject of a Secondary Market Transaction, then Lender shall have
received a Rating Comfort Letter from the applicable Rating Agencies;
(v) If the Loan has not been the subject of a Secondary Market
Transaction, then Lender shall have determined in its reasonable discretion
(taking into consideration such factors as Lender may determine, including the
attributes of the loan pool in which the Loan might reasonably be expected to be
securitized) that no rating for any securities that would be issued in
connection with such securitization will be diminished, qualified, or withheld
by reason of the Transfer and Assumption;
(vi) Borrower shall have paid all of Lender's reasonable costs
and expenses in connection with considering the Transfer and Assumption, and
shall have paid the amount requested by Lender as a deposit against Lender's
costs and expenses in connection with the effecting the Transfer and Assumption;
(vii) Borrower, the Transferee Borrower, and the replacement
guarantors and indemnitors shall have indicated in writing in form and substance
reasonably satisfactory to Lender their readiness and ability to satisfy the
conditions set forth in subsection (c) below;
(viii) The identity, experience, financial condition and
creditworthiness of the Transferee Borrower and the replacement guarantors and
indemnitors shall be satisfactory to Lender; and
(ix) The proposed property manager and proposed Management
Agreement shall be satisfactory to Lender and the applicable Rating Agencies.
(c) If Lender consents to the Transfer and Assumption, the
Transferee Borrower and/or Borrower as the case may be, shall immediately
deliver the following to Lender:
(i) Borrower shall deliver to Lender an assumption fee in the
amount of $25,000, with respect to the first Transfer and Assumption, and
one-half percent (0.5%) of the then unpaid Principal, with respect to each
subsequent Transfer and Assumption;
(ii) Borrower, Transferee Borrower and the original and
replacement guarantors and indemnitors shall execute and deliver to Lender any
and all documents required by Lender, in form and substance required by Lender,
in Lender's sole discretion;
(iii) Counsel to the Transferee Borrower and replacement
guarantors and indemnitors shall deliver to Lender opinions in form and
substance satisfactory to Lender as to such matters as Lender shall require,
which may include opinions as to substantially the same matters and were
required in connection with the origination of the Loan (including a new
substantive non-consolidation opinion with respect to the Transferee Borrower);
(iv) Borrower shall cause to be delivered to Lender, an
endorsement (relating to the change in the identity of the vestee and execution
and delivery of the Transfer and Assumption documents) to the Title Insurance
Policies in form and substance acceptable to Lender, in Lender's reasonable
discretion (the "Endorsement"); and
47
(v) Borrower shall deliver to Lender a payment in the amount
of all remaining unpaid costs incurred by Lender in connection with the Transfer
and Assumption, including but not limited to, Lender's reasonable attorneys fees
and expenses, all recording fees, and all fees payable to the title company for
the delivery to Lender of the Endorsement.
5.27 Liens. Without Lender's prior written consent, Borrower shall not
create, incur, assume, permit or suffer to exist any Lien on all or any portion
of the Property or any direct or indirect legal or beneficial ownership interest
in Borrower, except Liens in favor of Lender and Permitted Encumbrances, unless
such Lien is bonded or discharged within thirty (30) days after Borrower first
receives notice of such Lien.
5.28 Dissolution. Borrower shall not (i) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(ii) engage in any business activity not related to the ownership and operation
of the Property or (iii) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially all of the property or assets
of Borrower except to the extent expressly permitted by the Loan Documents.
5.29 Expenses. Borrower shall reimburse Lender upon receipt of notice for
all reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by Lender or Servicer in connection with the
Loan, including (i) the preparation, negotiation, execution and delivery of the
Loan Documents and the consummation of the transactions contemplated thereby and
all the costs of furnishing all opinions by counsel for Borrower; (ii)
Borrower's and Lender's ongoing performance under and compliance with the Loan
Documents, including confirming compliance with environmental and insurance
requirements; (iii) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications of or
under any Loan Document and any other documents or matters requested by Lender;
(iv) filing and recording of any Loan Documents; (v) title insurance, surveys,
inspections and appraisals; (vi) the creation, perfection or protection of
Lender's Liens in the Property and the Cash Management Accounts (including fees
and expenses for title and lien searches, intangibles taxes, personal property
taxes, Mortgage, recording taxes, due diligence expenses, travel expenses,
accounting firm fees, costs of appraisals, environmental reports and Lender's
Consultant, surveys and engineering reports); (vii) enforcing or preserving any
rights in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, the Loan Documents, the Property, or any other security
given for the Loan; (viii) fees charged by Servicer or the Rating Agencies in
connection with the Loan or any modification thereof and (ix) enforcing any
obligations of or collecting any payments due from Borrower under any Loan
Document or with respect to the Property or in connection with any refinancing
or restructuring of the Loan in the nature of a "work-out", or any insolvency or
bankruptcy proceedings. Any costs and expenses due and payable by Borrower
hereunder which are not paid by Borrower within ten (10) days after demand may
be paid from any amounts in the Deposit Account, with notice thereof to
Borrower. The obligations and liabilities of Borrower under this Section 5.29
shall survive the Term and the exercise by Lender of any of its rights or
remedies under the Loan Documents, including the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.
48
5.30 Indemnity. Borrower shall defend, indemnify and hold harmless Lender
and each of its Affiliates and their respective successors and assigns,
including the directors, officers, partners, members, shareholders,
participants, employees, professionals and agents of any of the foregoing
(including any Servicer) and each other Person, if any, who Controls Lender, its
Affiliates or any of the foregoing (each, an "Indemnified Party"), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for an Indemnified Party in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Lender shall be
designated a party thereto, court costs and costs of appeal at all appellate
levels, investigation and laboratory fees, consultant fees and litigation
expenses), that may be imposed on, incurred by, or asserted against any
Indemnified Party (collectively, the "Indemnified Liabilities") in any manner,
relating to or arising out of or by reason of the Loan, including: (i) any
breach by Borrower of its obligations under, or any misrepresentation by
Borrower contained in, any Loan Document; (ii) the use or intended use of the
proceeds of the Loan; (iii) any information provided by or on behalf of
Borrower, or contained in any documentation approved by Borrower; (iv) ownership
of the Mortgage, the Property or any interest therein, or receipt of any Rents;
(v) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (vi) any use,
nonuse or condition in, on or about the Property or on adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (vii)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property; (viii) the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release, or threatened release
of any Hazardous Substance on, from or affecting the Property; (ix) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Substance; (x) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Substance; (xi) any violation of the Environmental Laws which is based upon or
in any way related to such Hazardous Substance, including the costs and expenses
of any Remedial Work; (xii) any failure of the Property to comply with any Legal
Requirement; (xiii) any claim by brokers, finders or similar persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof, or any liability asserted against
Lender with respect thereto; and (xiv) the claims of any lessee of any portion
of the Property or any Person acting through or under any lessee or otherwise
arising under or as a consequence of any Lease; provided, however, that Borrower
shall not have any obligation to any Indemnified Party hereunder to the extent
that it is finally judicially determined that such Indemnified Liabilities arise
from the gross negligence, illegal acts, fraud or willful misconduct of such
Indemnified Party. Any amounts payable to any Indemnified Party by reason of the
application of this paragraph shall be payable on demand and shall bear interest
at the Default Rate from the date loss or damage is sustained by any Indemnified
Party until paid. The obligations and liabilities of Borrower under this Section
5.30 shall survive the Term and the exercise by Lender of any of its rights or
remedies under the Loan Documents, including the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.
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5.31 Patriot Act Compliance. (a) Borrower will use its good faith and
commercially reasonable efforts to comply with the Patriot Act (as defined
below) and all applicable requirements of governmental authorities having
jurisdiction over Borrower and the Property, including those relating to money
laundering and terrorism. Lender shall have the right to audit Borrower's
compliance with the Patriot Act and all applicable requirements of governmental
authorities having jurisdiction over Borrower and the Property, including those
relating to money laundering and terrorism. In the event that Borrower fails to
comply with the Patriot Act or any such requirements of governmental
authorities, then Lender may, at its option, cause Borrower to comply therewith
and any and all reasonable costs and expenses incurred by Lender in connection
therewith shall be secured by the Mortgage and the other Loan Documents and
shall be immediately due and payable. For purposes hereof, the term "Patriot
Act" means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as
the same may be amended from time to time, and corresponding provisions of
future laws.
(b) Neither Borrower nor any partner in Borrower or member of such
partner nor any owner of a direct or indirect interest in Borrower (a) is listed
on any Government Lists (as defined below), (b) is a person who has been
determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar
prohibitions contained in the rules and regulations of OFAC (as defined below)
or in any enabling legislation or other Presidential Executive Orders in respect
thereof, (c) has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any Patriot Act Offense
(as defined below), or (d) is currently under investigation by any governmental
authority for alleged criminal activity. For purposes hereof, the term "Patriot
Act Offense" means any violation of the criminal laws of the United States of
America or of any of the several states, or that would be a criminal violation
if committed within the jurisdiction of the United States of America or any of
the several states, relating to terrorism or the laundering of monetary
instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
the (e) Patriot Act. "Patriot Act Offense" also includes the crimes of
conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense. For purposes hereof, the term "Government Lists" means (i) the
Specially Designated Nationals and Blocked Persons Lists maintained by Office of
Foreign Assets Control ("OFAC"), (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that Lender notified Borrower in writing is now included
in "Governmental Lists", or (iii) any similar lists maintained by the United
States Department of State, the United States Department of Commerce or any
other government authority or pursuant to any Executive Order of the President
of the United States of America that Lender notified Borrower in writing is now
included in "Governmental Lists".
5.32 Required Repairs. Borrower shall use commercially reasonable efforts
to cause Xxxxxx Micro to perform and complete each item of the repairs and
environmental remedial work at the Property described on Schedule 1 hereto (the
"Required Repairs") within six (6) months of the date hereof or such shorter
period of time for such item set forth on Schedule 1 hereto.
50
5.33 XXX Lease.
(a) Borrower shall (i) pay all sums required to be paid by Borrower,
as lessee under and pursuant to the provisions of the XXX Lease as and when such
sums are payable, (ii) diligently perform and observe all of the terms,
covenants and conditions of the XXX Lease on the part of Borrower, as lessee
thereunder, to be performed and observed prior to the expiration of any
applicable grace period therein provided, and (iii) promptly notify Lender of
the giving of any written notice by the lessor under the XXX Lease to Borrower
of any default by Borrower in the performance or observance of any of the terms,
covenants or conditions of the XXX Lease on the part of Borrower, as lessee
thereunder, to be performed or observed and deliver to Lender a true copy of
each such notice.
(b) Except as otherwise set forth in Section 5.33(d) below or except
as permitted under the XXX Lease, Borrower shall not, without the prior written
consent of Lender, surrender the leasehold estate created by the XXX Lease or
terminate or cancel the XXX Lease or modify, change, supplement, alter or amend
the XXX Lease, either orally or in writing.
(c) If Borrower shall default in the performance or observance of
any term, covenant or condition of the XXX Lease on the part of Borrower, as
lessee thereunder, to be performed or observed, then, without limiting the
generality of the other provisions of the applicable Mortgage and this Agreement
and without waiving or releasing Borrower from any of its obligations hereunder,
Lender shall have the right, but shall be under no obligation, to pay any sums
and to perform any act or take any action as may be appropriate to cause all of
the terms, covenants and conditions of the XXX Lease on the part of Borrower, as
lessee thereunder, to be performed or observed or to be promptly performed or
observed on behalf of Borrower, to the end that the rights of Borrower in, to
and under the XXX Lease shall be kept unimpaired as a result thereof and free
from default, even though the existence of such event of default or the nature
thereof be questioned or denied by Borrower or by any party on behalf of
Borrower. If Lender shall make any payment or perform any act or take action in
accordance with the preceding sentence, Lender will notify Borrower of the
making of any such payment, the performance of any such act, or the taking of
any such action. In any such event, subject to the rights of any lawful
occupants, Lender and any person designated as Lender's agent by Lender shall
have, and are hereby granted, the right to enter upon the Property at any
reasonable time, on reasonable notice and from time to time for the purpose of
taking any such action. Lender may pay and expend such sums of money as Lender
reasonably deems necessary for any such purpose. Borrower hereby agrees to pay
to Lender within ten (10) days after demand, all such sums so paid and expended
by Lender, together with interest thereon from the day of such payment by Lender
at the Default Rate. All sums so paid and expended by Lender and the interest
thereon shall be secured by the legal operation and effect of the Mortgages. If
the lessor under the XXX Lease shall deliver to Lender a copy of any notice of
default sent by said lessor to Borrower, as lessee under the XXX Lease, such
notice shall constitute full protection to Lender for any action taken or
omitted to be taken by Lender, in good faith, in reliance thereon. Borrower
shall not subordinate or consent to the subordination of the XXX Lease to any
mortgage, security deed, lease or other interest on or in the lessor's interest
in all or any part of the Property, unless, in each such case, the written
consent of Lender shall have been first had and obtained, which approval shall
not unreasonably be withheld.
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(d) Notwithstanding anything to the contrary contained in this
Section 5.33, Borrower shall upon expiration or earlier termination of the XXX
Lease, (i) (A) accept fee simple title to the premises leased pursuant to the
XXX Lease (the "Fee Estate") or (B) deliver written notice to the Fee Owner
indicating that the Fee Owner is required pursuant to the XXX Lease to convey
the Fee Estate to Borrower and that Borrower is electing to accept the same and
(ii) simultaneously with, or prior to, the actual conveyance of the Fee Estate
to Borrower, satisfy the following conditions:
(1) Borrower shall deliver to Lender copies of an executed
purchase agreement, deed and other written agreements, if any, between the
Borrower and the lessor under the XXX Lease with respect to purchase of
the Fee Estate;
(2) Borrower shall have delivered to Lender evidence
satisfactory to Lender that (a) Borrower (and not an Affiliate of Borrower
or any other third-party) is the entity taking title to the Fee Estate at
the closing of the purchase of the Fee Estate and (b) that Borrower has
(or will) acquire title to the Fee Estate without any financing (i.e., on
an "all cash" basis);
(3) If requested by Lender or the Rating Agencies, Borrower
shall execute and deliver to Lender such documentation reasonably required
by Lender to (a) spread the Lien of the Mortgage to include Borrower's
interest in the Fee Estate and (b) amend the other Loan Documents to
reflect the addition of Borrower's interest in the Fee Estate to the Lien
of the Mortgage prior to the closing of the purchase of the Fee Estate;
(4) Borrower shall have delivered to Lender, simultaneously
with the purchase of the Fee Estate:
(A) an endorsement to the Title Insurance Policy (or, in
lieu of an endorsement, such other assurances from the title
insurance company acceptable to Lender) confirming no change in the
priority of the applicable Mortgage on the applicable portion of the
Property (i.e., insuring the first priority Lien of the applicable
Mortgage on the Fee Estate) or in the amount of the insurance or the
coverage of the Title Insurance Policy relating to the Fee Estate;
and
(B) if the Fee Estate is acquired prior to the
termination date under, or prior to the termination of, the XXX
Lease, documentation reasonably satisfactory to Lender evidencing
the merger of the leasehold estate created by the XXX Lease with the
Fee Estate and the termination or cancellation of the XXX Lease.
(6) Borrower shall have satisfied such other conditions as may
be reasonably required by Lender or the Servicer; and
(7) Borrower shall pay all reasonable out-of-pocket expenses
incurred by Lender (including reasonable attorneys' fees) in connection
with the purchase of the Fee Estate.
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6. NOTICES AND REPORTING
6.1 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document (a "Notice") shall be given
in writing and shall be effective for all purposes if either hand delivered with
receipt acknowledged, or by a nationally recognized overnight delivery service
(such as Federal Express), or by certified or registered United States mail,
return receipt requested, postage prepaid, or by facsimile and confirmed by
facsimile answer back, in each case addressed as follows (or to such other
address or Person as a party shall designate from time to time by notice to the
other party): If to Lender: Greenwich Capital Financial Products, Inc., 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Mortgage Loan
Department, Telecopier (000) 000-0000, with a copy to: Xxxx Xxxxxxx LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx, Esq.,
Telecopier: (000) 000-0000; if to Borrower: c/o First Union REIT L.P., Two
Xxxxxxx Xxxxx, Xxxx X, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxx,
Telecopier: (000) 000-0000, with a copy to: Post Xxxxxx & Xxxxxxx LLP, Xxx
Xxxxxxx Xxxxx, Xxxx X, Xxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Post,
Telecopier: (000) 000-0000. A notice shall be deemed to have been given: in the
case of hand delivery, at the time of delivery; in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business
Day; in the case of overnight delivery, upon the first attempted delivery on a
Business Day; or in the case of facsimile, upon the confirmation of such
facsimile transmission.
6.2 Borrower Notices and Deliveries. Borrower shall (a) give prompt
written notice to Lender of: (i) any litigation, governmental proceedings or
claims or investigations pending or threatened against Borrower which might
materially adversely affect Borrower's condition (financial or otherwise) or
business or the Property; (ii) any material adverse change in Borrower's
condition, financial or otherwise, or of the occurrence of any Default or Event
of Default of which Borrower has knowledge; and (b) furnish and provide to
Lender: (i) any Securities and Exchange Commission or other public filings, if
any, of Borrower or any Affiliate of Borrower within two (2) Business Days of
such filing and (ii) all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, appraisals, title
and other insurance reports and agreements, reasonably requested, from time to
time, by Lender. In addition, after request by Lender (but no more frequently
than twice in any year), Borrower shall furnish to Lender (x) within ten (10)
days, a certificate addressed to Lender, its successors and assigns reaffirming
all representations and warranties of Borrower set forth in the Loan Documents
as of the date requested by Lender or, to the extent of any changes to any such
representations and warranties, so stating such changes, and (y) within thirty
(30) days, tenant estoppel certificates addressed to Lender, its successors and
assigns from each tenant at the Property in form and substance reasonably
satisfactory to Lender.
6.3 Financial Reporting.
6.3.1 Bookkeeping. Borrower shall keep on a calendar year basis, in
accordance with GAAP, proper and accurate books, records and accounts reflecting
all of the financial affairs of Borrower and all items of income and expense and
any services, Equipment or furnishings provided in connection with the operation
of the Property, whether such income or expense is realized by Borrower, Manager
or any Affiliate of Borrower. Lender shall have the right from time to time
during normal business hours upon reasonable notice to examine such books,
53
records and accounts at the office of Borrower or other Person maintaining them,
and to make such copies or extracts thereof as Lender shall desire. After an
Event of Default, Borrower shall pay any costs incurred by Lender to examine
such books, records and accounts, as Lender shall determine to be necessary or
appropriate in the protection of Lender's interest.
6.3.2 Annual Reports. Borrower shall furnish to Lender annually,
within 120 days after each calendar year, a complete copy of Borrower's annual
financial statements certified by Borrower, or, if the Xxxxxx Micro Lease shall
no longer be in effect or if an Event of Default shall then exist, audited by a
"big four" accounting firm or another independent certified public accountant
(accompanied by an unqualified opinion from such accounting firm or other
independent certified public accountant) reasonably acceptable to Lender, each
in accordance with GAAP and containing balance sheets and statements of profit
and loss for Borrower and the Property in such detail as Lender may request.
Each such statement (x) shall be in form and substance satisfactory to Lender,
(y) shall set forth the financial condition and the income and expenses for the
Property for the immediately preceding calendar year, including statements of
annual Net Operating Income and, if the Xxxxxx Micro Lease shall no longer be in
effect, (1) a list of tenants, if any, occupying more than twenty percent (20%)
of the rentable space of the Property, (2) a breakdown showing (a) the year in
which each Lease then in effect expires, (b) the percentage of rentable space
covered by such Lease, (c) the percentage of base rent with respect to which
Leases shall expire in each such year, expressed both on a per year and a
cumulative basis and (z) shall be accompanied by an Officer's Certificate
certifying (1) that such statement is true, correct, complete and accurate and
presents fairly the financial condition of the Property and has been prepared in
accordance with GAAP and (2) whether there exists a Default or Event of Default,
and if so, the nature thereof, the period of time it has existed and the action
then being taken to remedy it.
6.3.3 Monthly/Quarterly Reports. (a) Borrower shall, so long as the
Xxxxxx Micro Lease remains in full force and effect, shall furnish to Lender
within thirty (30) days after the end of each calendar month or calendar quarter
(as indicated below) the following items: (i) monthly and year-to-date operating
statements, in form satisfactory to Lender; (ii) a statement that Borrower has
not incurred any indebtedness other than indebtedness permitted hereunder and
(iii) an aged receivables report. Each such statement shall be accompanied by an
Officer's Certificate certifying (1) that such items are true, correct,
accurate, and complete and fairly present the financial condition and results of
the operations of Borrower and the Property in accordance with GAAP (subject to
normal year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and
the action then being taken to remedy it.
(b) Borrower shall, at any time as the Xxxxxx Micro Lease is no
longer in full force and effect, furnish to Lender within thirty (30) days after
the end of each calendar month or calendar quarter (as indicated below) the
following items: (i) monthly and year-to-date operating statements, noting Net
Operating Income and other information necessary and sufficient under GAAP to
fairly represent the financial position and results of operation of the Property
during such calendar month, all in form satisfactory to Lender; (ii) a balance
sheet for such calendar month; (iii) a comparison of the budgeted income and
expenses and the actual income and expenses for each month and year-to-date for
the Property, together with a detailed explanation of any variances of ten
54
percent (10%) or more between budgeted and actual amounts for such period and
year-to-date; (iv) a statement of the actual Capital Expenses made by Borrower
during each calendar quarter as of the last day of such calendar quarter; (v) a
statement that Borrower has not incurred any indebtedness other than
indebtedness permitted hereunder; (vi) an aged receivables report and (vii) rent
rolls identifying the leased premises, names of all tenants, units leased,
monthly rental and all other charges payable under each Lease, date to which
paid, term of Lease, date of occupancy, date of expiration, (material special
provisions, concessions or inducements granted to tenants, and a year-by-year
schedule showing by percentage the rentable area of the Improvements and the
total base rent attributable to Leases expiring each year) and a delinquency
report for the Property. Each such statement shall be accompanied by an
Officer's Certificate certifying (1) that such items are true, correct,
accurate, and complete and fairly present the financial condition and results of
the operations of Borrower and the Property in accordance with GAAP (subject to
normal year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and
the action then being taken to remedy it.
6.3.4 Other Reports. Borrower shall furnish to Lender, within ten
(10) Business Days after request, such further detailed information with respect
to the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender or any applicable Rating Agency; provided that
any such information with respect to Xxxxxx Micro under the Xxxxxx Micro Lease
or the Property is reasonably available to Borrower.
6.3.5 Annual Budget. Borrower shall prepare and submit (or shall
cause Manager to prepare and submit) to Lender within thirty (30) days after a
Cash Management Period and by November 30th of each year thereafter during the
Term until such Cash Management Period has ended, for approval by Lender, which
approval shall not be unreasonably withheld or delayed, a proposed pro forma
budget for the Property for the succeeding calendar year (the "Annual Budget",
and each Annual Budget approved by Lender is referred to herein as the "Approved
Annual Budget")), and, promptly after preparation thereof, any revisions to such
Annual Budget. The Annual Budget shall consist of (i) an operating expense
budget showing, on a month-by-month basis, in reasonable detail, each line item
of the Borrower's anticipated operating income and operating expenses (on a cash
and accrual basis), including amounts required to establish, maintain and/or
increase any monthly payments required hereunder (and once such Annual Budget
has been approved by Lender, such operating expense budget shall be referred to
herein as the "Approved Operating Budget"), and (ii) a Capital Expense budget
showing, on a month-by-month basis, in reasonable detail, each line item of
anticipated Capital Expenses (and once such Annual Budget has been approved by
Lender, such Capital Expense budget shall be referred to herein as the "Approved
Capital Budget"). Until such time that any Annual Budget has been approved by
Lender, the prior Approved Annual Budget shall apply for all purposes hereunder
(with such adjustments as reasonably determined by Lender (including increases
for any non-discretionary expenses)).
6.3.6 Breach. If Borrower fails to provide to Lender or its designee
any of the financial statements, certificates, reports or information (the
"Required Records") required by this Article 6 within thirty (30) days after the
date upon which such Required Record is due, Borrower shall pay to Lender, at
Lender's option and in its discretion, an amount equal to $2,500 for each
Required Record that is not delivered; provided Lender has given Borrower at
least fifteen (15) days prior notice of such failure. In addition, thirty (30)
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days after Borrower's failure to deliver any Required Records, Lender shall have
the option, upon fifteen (15) days notice to Borrower to gain access to
Borrower's books and records and prepare or have prepared at Borrower's expense,
any Required Records not delivered by Borrower.
7. INSURANCE; CASUALTY; AND CONDEMNATION
7.1 Insurance.
7.1.1 Coverage. Borrower shall, so long as the Xxxxxx Micro Lease
remains in full force and effect, cause Xxxxxx Micro, for the mutual benefit of
Borrower and Lender, to obtain and maintain such insurance as required under
Section 3.3 of the Xxxxxx Micro Lease in accordance with the provisions set
forth therein. At any time that the Xxxxxx Micro Lease is no longer in full
force and effect with respect to one or more Properties, Borrower shall obtain
and maintain during the Term the following policies of insurance with respect to
each such Property:
(a) Property insurance insuring against loss or damage customarily
included under so called "all risk" or "special form" policies including fire,
lightning, vandalism, and malicious mischief, boiler and machinery and, if
required by Lender, flood and/or earthquake coverage and subject to subsection
(j) below, coverage for damage or destruction caused by the acts of "Terrorists"
(or such policies shall have no exclusion from coverage with respect thereto)
and such other insurable hazards as, under good insurance practices, from time
to time are insured against for other property and buildings similar to the
premises in nature, use, location, height, and type of construction. Such
insurance policy shall also insure for ordinance of law coverage, costs of
demolition and increased cost of construction in amounts satisfactory to Lender.
Each such insurance policy shall (i) be in an amount equal to 100% of the then
replacement cost of the Improvements without deduction for physical
depreciation, (ii) have deductibles no greater than the lesser of $50,000 or
five percent (5%) of Net Operating Income per occurrence, (iii) be paid annually
in advance and (iv) be on a replacement cost basis and contain either no
coinsurance or, if coinsurance, an agreed amount endorsement, and shall cover,
without limitation, all tenant improvements and betterments that Borrower is
required to insure on a replacement cost basis. Lender shall be named Mortgagee
and Loss Payee on a Standard Mortgagee Endorsement.
(b) Flood insurance if any part of the Property is located in an
area now or hereafter designated by the Federal Emergency Management Agency as a
Zone "A" & "V" Special Hazard Area, or such other Special Hazard Area if Lender
so requires in its sole discretion. Such policy shall (i) be in an amount equal
to (A) 100% of the full replacement cost of the Improvements on the Property
(without any deduction for depreciation) or (B) such other amount as agreed to
by Lender and (ii) have a maximum permissible deductible of $3,000.
(c) Public liability insurance, including (i) "Commercial General
Liability Insurance", (ii) "Owned", "Hired" and "Non Owned Auto Liability"; and
(iii) umbrella liability coverage for personal injury, bodily injury, death,
accident and property damage, such insurance providing in combination no less
than containing minimum limits per occurrence of $1,000,000 and $2,000,000 in
the aggregate for any policy year with a deductible or self insured retention
not to exceed $50,000; together with at least $25,000,000 excess and/or umbrella
liability insurance for any and all claims. The policies described in this
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subsection shall also include coverage for elevators, escalators, independent
contractors, "Contractual Liability" (covering, to the maximum extent permitted
by law, Borrower's obligation to indemnify Lender as required under this
Agreement and the other Loan Documents), "Products" and "Completed Operations
Liability" coverage.
(d) Rental loss and/or business interruption insurance (i) with
Lender being named as "Lender Loss Payee", (ii) in an amount equal to 100% of
the projected Rents from the Property during the period of restoration; and
(iii) containing an extended period of indemnity endorsement which provides that
after the physical loss to the Property has been repaired, the continued loss of
income will be insured until such income either returns to the same level it was
at prior to the loss, or the expiration of eighteen (18) months from the date
that the Property is repaired or replaced and operations are resumed, whichever
first occurs, and notwithstanding that the policy may expire prior to the end of
such period. The amount of such insurance shall be increased from time to time
during the Term as and when the estimated or actual Rents increase.
(e) Comprehensive boiler and machinery insurance covering all
mechanical and electrical equipment against physical damage, rent loss and
improvements loss and covering, without limitation, all tenant improvements and
betterments that Borrower is required to insure pursuant to the lease on a
replacement cost basis and in an amount equal to the lesser of (i) $2,000,000
and (ii) 100% of the full replacement cost of the Improvements on such Property
(without any deduction for depreciation).
(f) Worker's compensation and disability insurance with respect to
any employees of Borrower, as required by any Legal Requirement.
(g) During any period of repair or restoration, builder's "all-risk"
insurance on the so called completed value basis in an amount equal to not less
than the full insurable value of the Property, against such risks (including
fire and extended coverage and collapse of the Improvements to agreed limits) as
Lender may request, in form and substance acceptable to Lender.
(h) Coverage to compensate for ordinance of law, the cost of
demolition and the increased cost of construction in an amount satisfactory to
Lender.
(i) Such other insurance (including environmental liability
insurance, earthquake insurance, mine subsidence insurance and windstorm
insurance) as may from time to time be reasonably required by Lender in order to
protect its interests.
(j) Notwithstanding anything in subsection (a) above to the contrary
and notwithstanding that Xxxxxx Micro is not required to maintain such coverage
under the Xxxxxx Micro Lease, Borrower shall be required to obtain and maintain
at all times (including during such times as the Xxxxxx Micro Lease is in full
force and effect) coverage in its property insurance Policy (or by a separate
Policy) against loss or damage by terrorist acts in an amount equal to 100% of
the "Full Replacement Cost" of the Property; provided that such coverage is
available. In the event that such coverage with respect to terrorist acts is not
included as part of the "all risk" property policy required by subsection (a)
above, Borrower shall, nevertheless be required to obtain coverage for terrorism
(as stand alone coverage) in an amount equal to 100% of the "Full Replacement
Cost" of the Property; provided that such coverage is available. Borrower shall
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obtain the coverage required under this subsection (j) from a carrier which
otherwise satisfies the rating criteria specified in Section 7.1.2 below (a
"Qualified Carrier") or in the event that such coverage is not available from a
Qualified Carrier, Borrower shall obtain such coverage from the highest rated
insurance company providing such coverage.
7.1.2 Policies. All policies of insurance (the "Policies") required
pursuant to Section 7.1.1 shall comply with the requirements of the Xxxxxx Micro
Lease; provided that Lender approves the existing insurance company issuing the
all-risk property insurance required under the Xxxxxx Micro Lease so long as it
maintains its current claims paying ability rating of "BBB" by S&P. At any time
that the Xxxxxx Micro Lease is no longer in full force and effect with respect
to one or more Properties, the Policies with respect to any such Properties
shall (i) be issued by companies approved by Lender and licensed to do business
in the State, with a claims paying ability rating of "A" or better by S&P (and
the equivalent by any other Rating Agency), and a rating of A:VIII or better in
the current Best's Insurance Reports; (ii) name Lender and its successors and/or
assigns as their interest may appear as the mortgagee (in the case of property
insurance), loss payee (in the case of business interruption/loss of rents
coverage) and an additional insured (in the case of liability insurance); (iii)
contain (in the case of property insurance) a Non-Contributory Standard
Mortgagee Clause and a Lender's Loss Payable Endorsement, or their equivalents,
naming Lender as the person to which all payments made by such insurance company
shall be paid; (iv) contain a waiver of subrogation against Lender; (v) be
assigned and the originals (or certified copies) thereof delivered to Lender;
(vi) contain such provisions as Lender deems reasonably necessary or desirable
to protect its interest, including (A) endorsements providing that neither
Borrower, Lender nor any other party shall be a co-insurer under the Policies,
(B) that Lender shall receive at least thirty (30) days' prior written notice of
any modification, reduction or cancellation of any of the Policies, (C) an
agreement whereby the insurer waives any right to claim any premiums and
commissions against Lender, provided that the policy need not waive the
requirement that the premium be paid in order for a claim to be paid to the
insured and (D) providing that Lender is permitted to make payments to effect
the continuation of such policy upon notice of cancellation due to non-payment
of premiums; (vii) in the event any insurance policy (except for general public
and other liability and workers compensation insurance) shall contain breach of
warranty provisions, such policy shall provide that with respect to the interest
of Lender, such insurance policy shall not be invalidated by and shall insure
Lender regardless of (A) any act, failure to act or negligence of or violation
of warranties, declarations or conditions contained in such policy by any named
insured, (B) the occupancy or use of the premises for purposes more hazardous
than permitted by the terms thereof, or (C) any foreclosure or other action or
proceeding taken by Lender pursuant to any provision of the Loan Documents; and
(viii) be satisfactory in form and substance to Lender and approved by Lender as
to amounts, form, risk coverage, deductibles, loss payees and insureds. Borrower
shall pay the premiums for such Policies (the "Insurance Premiums") as the same
become due and payable and furnish to Lender evidence of the renewal of each of
the Policies together with (unless such Insurance Premiums have been paid by
Lender pursuant to Section 3.3 hereof) receipts for or other evidence of the
payment of the Insurance Premiums reasonably satisfactory to Lender. If Borrower
does not furnish such evidence and receipts at least thirty (30) days prior to
the expiration of any expiring Policy, then Lender may, but shall not be
obligated to, procure such insurance and pay the Insurance Premiums therefor,
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and Borrower shall reimburse Lender for the cost of such Insurance Premiums
promptly on demand, with interest accruing at the Default Rate. Borrower shall
deliver to Lender a certified copy of each Policy within thirty (30) days after
its effective date. Within thirty (30) days after request by Lender, Borrower
shall obtain such increases in the amounts of coverage required hereunder as may
be reasonably requested by Lender, taking into consideration changes in the
value of money over time, changes in liability laws, changes in prudent customs
and practices, and the like.
7.2 Casualty.
7.2.1 Notice; Restoration. If the Property is damaged or destroyed,
in whole or in part, by fire or other casualty (a "Casualty"), Borrower shall
give prompt notice thereof to Lender. Following the occurrence of a Casualty,
Borrower, regardless of whether insurance proceeds are available, shall promptly
proceed to restore, repair, replace or rebuild the Property in accordance with
Legal Requirements to be of at least equal value and of substantially the same
character as prior to such damage or destruction.
7.2.2 Settlement of Proceeds. If a Casualty covered by any of the
Policies (an "Insured Casualty") occurs where the loss does not exceed $500,000,
provided no Default or Event of Default has occurred and is continuing, Borrower
may settle and adjust any claim without the prior consent of Lender; provided
such adjustment is carried out in a competent and timely manner, and Borrower is
hereby authorized to collect and receipt for the insurance proceeds (the
"Proceeds"). In the event of an Insured Casualty where the loss equals or
exceeds $250,000 (a "Significant Casualty"), Lender may, in its sole discretion,
settle and adjust any claim without the consent of Borrower and agree with the
insurer(s) on the amount to be paid on the loss, and the Proceeds shall be due
and payable solely to Lender and held by Lender in the Casualty/Condemnation
Subaccount and disbursed in accordance herewith. If Borrower or any party other
than Lender is a payee on any check representing Proceeds with respect to a
Significant Casualty, Borrower shall immediately endorse, and cause all such
third parties to endorse, such check payable to the order of Lender. Borrower
hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to endorse such check payable to the order of Lender. The reasonable
expenses incurred by Lender in the settlement, adjustment and collection of the
Proceeds shall become part of the Debt and shall be reimbursed by Borrower to
Lender upon demand. Notwithstanding anything to the contrary contained herein,
if in connection with a Casualty any insurance carrier makes a payment under a
property insurance Policy that Borrower proposes be treated as business or
rental interruption insurance, then, notwithstanding any designation (or lack of
designation) by the insurance carrier as to the purpose of such payment, as
between Lender and Borrower, such payment shall not be treated as business or
rental interruption insurance proceeds unless Borrower has demonstrated to
Lender's satisfaction that the remaining net Proceeds that will be received from
the property insurance carriers are sufficient to pay 100% of the cost of fully
restoring the Improvements or, if such net Proceeds are to be applied to repay
the Debt in accordance with the terms hereof, that such remaining net Proceeds
will be sufficient to pay the Debt in full.
7.2.3 Xxxxxx Micro Lease. Notwithstanding anything to the contrary
contained in this Section 7.2, in the event of any conflict between the
provisions of this Section 7.2 and the Xxxxxx Micro Lease with respect to the
payment or application of Proceeds, the provisions of the Xxxxxx Micro Lease
shall control; provided, however, that if Borrower or its Affiliate should
hereafter acquire the sublessee's interest in the Xxxxxx Micro Lease, the
provisions of this Section 7.2.3 shall automatically cease to be of any force or
effect.
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7.3 Condemnation.
7.3.1 Notice; Restoration. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding affecting the Property (a "Condemnation") and shall deliver to
Lender copies of any and all papers served in connection with such Condemnation.
Following the occurrence of a Condemnation, Borrower, regardless of whether an
Award is available, shall promptly proceed to restore, repair, replace or
rebuild the Property in accordance with Legal Requirements to the extent
practicable to be of at least equal value and of substantially the same
character (and to have the same utility) as prior to such Condemnation.
7.3.2 Collection of Award. Lender is hereby irrevocably appointed as
Borrower's attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain any award or payment in respect of a Condemnation
(an "Award") and to make any compromise, adjustment or settlement in connection
with such Condemnation. Notwithstanding any Condemnation (or any transfer made
in lieu of or in anticipation of such Condemnation), Borrower shall continue to
pay the Debt at the time and in the manner provided for in the Loan Documents,
and the Debt shall not be reduced unless and until any Award shall have been
actually received and applied by Lender to expenses of collecting the Award and
to discharge of the Debt. Lender shall not be limited to the interest paid on
the Award by the condemning authority but shall be entitled to receive out of
the Award interest at the rate or rates provided in the Note. If the Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of such
Award, Lender shall have the right, whether or not a deficiency judgment on the
Note shall be recoverable or shall have been sought, recovered or denied, to
receive all or a portion of the Award sufficient to pay the Debt. Borrower shall
cause any Award that is payable to Borrower to be paid directly to Lender.
Lender shall hold such Award in the Casualty/Condemnation Subaccount and
disburse such Award in accordance with the terms hereof.
7.3.3 Xxxxxx Micro Lease. Notwithstanding anything to the contrary
contained in this Section 7.3, in the event of any conflict between the
provisions of this Section 7.3 and the Xxxxxx Micro Lease with respect to the
payment or application of Proceeds, the provisions of the Xxxxxx Micro Lease
shall control; provided, however, that if Borrower or its Affiliate should
hereafter acquire the sublessee's interest in the Xxxxxx Micro Lease, the
provisions of this Section 7.3.3 shall automatically cease to be of any force or
effect.
7.4 Application of Proceeds or Award.
7.4.1 Application to Restoration. If an Insured Casualty or
Condemnation occurs where (i) the loss is in an aggregate amount less than the
fifteen percent (15%) of the unpaid Principal; (ii) in the reasonable judgment
of Lender, the Property can be restored within nine (9) months, and prior to six
(6) months before the Stated Maturity Date and prior to the expiration of the
rental or business interruption insurance with respect thereto, to the
Property's pre-existing condition and utility as existed immediately prior to
such Insured Casualty or Condemnation and to an economic unit not less valuable
and not less useful than the same was immediately prior to the Insured Casualty
60
or Condemnation, and after such restoration will adequately secure the Debt;
(iii) less than (x) thirty percent (30%), in the case of an Insured Casualty or
(y) fifteen percent (15%), in the case of a Condemnation, of the rentable area
of the Improvements has been damaged, destroyed or rendered unusable as a result
of such Insured Casualty or Condemnation; (iv) Leases demising in the aggregate
at least sixty-five percent (65%) of the total rentable space in the Property
and in effect as of the date of the occurrence of such Insured Casualty or
Condemnation remain in full force and effect during and after the completion of
the Restoration (hereinafter defined); and (v) no Default or Event of Default
shall have occurred and be then continuing, then the Proceeds or the Award, as
the case may be (after reimbursement of any expenses incurred by Lender), shall
be applied to reimburse Borrower for the cost of restoring, repairing, replacing
or rebuilding the Property (the "Restoration"), in the manner set forth herein.
Borrower shall commence and diligently prosecute such Restoration.
Notwithstanding the foregoing, in no event shall Lender be obligated to apply
the Proceeds or Award to reimburse Borrower for the cost of Restoration unless,
in addition to satisfaction of the foregoing conditions, both (x) Borrower shall
pay (and if required by Lender, Borrower shall deposit with Lender in advance)
all costs of such Restoration in excess of the net amount of the Proceeds or the
Award made available pursuant to the terms hereof; and (y) Lender shall have
received evidence reasonably satisfactory to it that during the period of the
Restoration, the Rents will be at least equal to the sum of the operating
expenses and Debt Service and other reserve payments required hereunder, as
reasonably determined by Lender.
7.4.2 Application to Debt. Except as provided in Section 7.4.1
above, any Proceeds and/or Award may, at the option of Lender in its discretion,
be applied to the payment of (i) accrued but unpaid interest on the Note, (ii)
the unpaid Principal and (iii) other charges due under the Note and/or any of
the other Loan Documents, or applied to reimburse Borrower for the cost of any
Restoration, in the manner set forth in Section 7.4.3 below. Any such prepayment
of the Loan shall be without any Yield Maintenance Premium, unless an Event of
Default has occurred and is continuing at the time the Proceeds are received
from the insurance company or the Award is received from the condemning
authority, as the case may be, in which event Borrower shall pay to Lender an
additional amount equal to the Yield Maintenance Premium, if any, that may be
required with respect to the amount of the Proceeds or Award applied to the
unpaid Principal.
7.4.3 Procedure for Application to Restoration. If Borrower is
entitled to reimbursement out of the Proceeds or an Award held by Lender, such
Proceeds or Award shall be disbursed from time to time from the
Casualty/Condemnation Subaccount upon Lender being furnished with (i) evidence
satisfactory to Lender of the estimated cost of completion of the Restoration,
(ii) a fixed price or guaranteed maximum cost construction contract for
Restoration satisfactory to Lender, (iii) prior to the commencement of
Restoration, all immediately available funds in addition to the Proceeds or
Award that in Lender's judgment are required to complete the proposed
Restoration, (iv) such architect's certificates, waivers of lien, contractor's
sworn statements, title insurance endorsements, bonds, plats of survey, permits,
approvals, licenses and such other documents and items as Lender may reasonably
require and approve in Lender's discretion, and (iv) all plans and
61
specifications for such Restoration, such plans and specifications to be
approved by Lender prior to commencement of any work. Lender may, at Borrower's
expense, retain a consultant to review and approve all requests for
disbursements, which approval shall also be a condition precedent to any
disbursement. No payment made prior to the final completion of the Restoration
shall exceed ninety percent (90%) of the value of the work performed from time
to time; funds other than the Proceeds or Award shall be disbursed prior to
disbursement of such Proceeds or Award; and at all times, the undisbursed
balance of such Proceeds or Award remaining in the hands of Lender, together
with funds deposited for that purpose or irrevocably committed to the
satisfaction of Lender by or on behalf of Borrower for that purpose, shall be at
least sufficient in the reasonable judgment of Lender to pay for the cost of
completion of the Restoration, free and clear of all Liens or claims for Lien.
Provided no Default or Event of Default then exists, any surplus that remains
out of the Proceeds held by Lender after payment of such costs of Restoration
shall be paid to Borrower. Any surplus that remains out of the Award received by
Lender after payment of such costs of Restoration shall, in the discretion of
Lender, be retained by Lender and applied to payment of the Debt or returned to
Borrower.
7.4.4 Xxxxxx Micro Lease. Notwithstanding anything to the contrary
contained in this Section 7.4, in the event of any conflict between the
provisions of this Section 7.4 and the Xxxxxx Micro Lease with respect to the
payment or application of Proceeds, the provisions of the Xxxxxx Micro Lease
shall control; provided, however, that if Borrower or its Affiliate should
hereafter acquire the sublessee's interest in the Xxxxxx Micro Lease, the
provisions of this Section 7.4.4 shall automatically cease to be of any force or
effect.
8. DEFAULTS
8.1 Events of Default. An "Event of Default" shall exist with respect to
the Loan if any of the following shall occur:
(a) any portion of the Debt is not paid when due or Borrower shall
fail to pay when due any payment required under Sections 3.3, 3.4, 3.5, 3.6, 3.7
or 3.9 hereof ;
(b) any of the Taxes are not paid when due (unless Lender is paying
such Taxes pursuant to Section 3.3 hereof), subject to Borrower's right to
contest Taxes in accordance with Section 5.2 hereof and Xxxxxx Micro's right to
contest Taxes in accordance with Section 2.6 of the Xxxxxx Micro Lease;
(c) the Policies are not kept in full force and effect, or are not
delivered to Lender upon request;
(d) a Transfer other than a Permitted Transfer occurs;
(e) any representation or warranty made by Borrower or Guarantor or
in any Loan Document, or in any report, certificate, financial statement or
other instrument, agreement or document furnished by Borrower or Guarantor in
connection with any Loan Document, shall be false or misleading in any material
respect as of the date the representation or warranty was made;
(f) Borrower or Guarantor shall make an assignment for the benefit
of creditors, or shall generally not be paying its debts as they become due;
62
(g) a receiver, liquidator or trustee shall be appointed for
Borrower or Guarantor; or Borrower or Guarantor shall be adjudicated a bankrupt
or insolvent; or any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower or
Guarantor, as the case may be; or any proceeding for the dissolution or
liquidation of Borrower or Guarantor shall be instituted; provided, however, if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower or Guarantor, as the case may be, only upon the same
not being discharged, stayed or dismissed within ninety (90) days;
(h) Borrower breaches any covenant contained in Sections 5.12.1 (a)
- (f), 5.13, 5.15, 5.22, 5.25,5.28 or 5.33 hereof;
(i) except as expressly permitted hereunder, the actual or
threatened alteration, improvement, demolition or removal of all or any portion
of the Improvements without the prior written consent of Lender;
(j) an Event of Default as defined or described elsewhere in this
Agreement or in any other Loan Document occurs; or any other event shall occur
or condition shall exist, if the effect of such event or condition is to
accelerate or to permit Lender to accelerate the maturity of any portion of the
Debt;
(k) a default occurs under any term, covenant or provision set forth
herein or in any other Loan Document which specifically contains a notice
requirement or grace period and such notice has been given and such grace period
has expired;
(l) if (A) Borrower shall fail in the payment of any sums payable
under the XXX Lease by Borrower, as and when such sums are payable (after taking
into account any available grace period, if any, set forth in the XXX Lease)
(unless as a result of any failure to pay, Borrower acquires good, marketable
and indefeasible title to the Fee Estate and satisfies each of the conditions
set forth in Section 5.33(d) hereof), (B) there shall occur any default by
Borrower, as lessee under the XXX Lease, in the observance or performance of any
term, covenant or condition of the XXX Lease, as applicable, on the part of
Borrower, to be observed or performed (after taking into account any available
grace period, if any, set forth in the XXX Lease), (C) if any one or more of the
events referred to in the XXX Lease shall occur which would cause the XXX Lease
to terminate, (D) if the leasehold estate created by the XXX Lease shall be
surrendered or the XXX Lease shall be terminated or canceled for any reason or
under any circumstances whatsoever, or (E) if any of the terms, covenants or
conditions of the XXX Lease shall in any manner be modified, changed,
supplemented, altered, or amended without the written consent of Lender; or
(m) a default shall be continuing under any of the other terms,
covenants or conditions of this Agreement or any other Loan Document not
otherwise specified in this Section 8.1, for ten (10) days after notice to
Borrower (and Guarantor, if applicable) from Lender, in the case of any default
which can be cured by the payment of a sum of money, or for thirty (30) days
after notice from Lender in the case of any other default; provided, however,
that if such non-monetary default is susceptible of cure but cannot reasonably
63
be cured within such thirty (30)-day period, and Borrower (or Guarantor, if
applicable) shall have commenced to cure such default within such thirty
(30)-day period and thereafter diligently and expeditiously proceeds to cure the
same, such thirty (30)-day period shall be extended for an additional period of
time as is reasonably necessary for Borrower (or Guarantor, if applicable) in
the exercise of due diligence to cure such default, such additional period not
to exceed ninety (90) days.
8.2 Remedies.
8.2.1 Acceleration. Upon the occurrence of an Event of Default
(other than an Event of Default described in paragraph (f) or (g) of Section 8.1
above) and at any time and from time to time thereafter, in addition to any
other rights or remedies available to it pursuant to the Loan Documents or at
law or in equity, Lender may take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower and in
and to the Property; including declaring the Debt to be immediately due and
payable (including unpaid interest), Default Rate interest, Late Payment
Charges, Yield Maintenance Premium and any other amounts owing by Borrower),
without notice or demand; and upon any Event of Default described in paragraph
(f) or (g) of Section 8.1 above, the Debt (including unpaid interest, Default
Rate interest, Late Payment Charges, Yield Maintenance Premium and any other
amounts owing by Borrower) shall immediately and automatically become due and
payable, without notice or demand, and Borrower hereby expressly waives any such
notice or demand, anything contained in any Loan Document to the contrary
notwithstanding.
8.2.2 Remedies Cumulative. Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under the Loan Documents or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared, or be automatically,
due and payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth in the Loan Documents. Without limiting the
generality of the foregoing, Borrower agrees that if an Event of Default is
continuing, (i) to the extent permitted by applicable law, Lender is not subject
to any "one action" or "election of remedies" law or rule, and (ii) all Liens
and other rights, remedies or privileges provided to Lender shall remain in full
force and effect until Lender has exhausted all of its remedies against the
Property, the Mortgage has been foreclosed, the Property has been sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in
full. To the extent permitted by applicable law, nothing contained in any Loan
Document shall be construed as requiring Lender to resort to any portion of the
Property for the satisfaction of any of the Debt in preference or priority to
any other portion, and Lender may seek satisfaction out of the entire Property
or any part thereof, in its discretion.
8.2.3 Severance. Lender shall have the right from time to time to
sever the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents in such denominations and priorities of
payment and liens as Lender shall determine in its discretion for purposes of
evidencing and enforcing its rights and remedies. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
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effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect such severance, Borrower ratifying all that such attorney
shall do by virtue thereof.
8.2.4 Delay. No delay or omission to exercise any remedy, right or
power accruing upon an Event of Default, or the granting of any indulgence or
compromise by Lender shall impair any such remedy, right or power hereunder or
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim in connection with the foreclosure of the Mortgage to the extent necessary
to foreclose on all or any portion of the Property, the Rents, the Cash
Management Accounts or any other collateral.
8.2.5 Lender's Right to Perform. If Borrower fails to perform any
covenant or obligation contained herein and such failure shall continue for a
period of ten (10) Business Days after Borrower's receipt of written notice
thereof from Lender, without in any way limiting Lender's right to exercise any
of its rights, powers or remedies as provided hereunder, or under any of the
other Loan Documents, Lender may, but shall have no obligation to, perform, or
cause performance of, such covenant or obligation, and all costs, expenses,
liabilities, penalties and fines of Lender incurred or paid in connection
therewith shall be payable by Borrower to Lender upon demand and if not paid
shall be added to the Debt (and to the extent permitted under applicable laws,
secured by the Mortgage and other Loan Documents) and shall bear interest
thereafter at the Default Rate. Notwithstanding the foregoing, Lender shall have
no obligation to send notice to Borrower of any such failure.
9. SPECIAL PROVISIONS
9.1 Sale of Note and Secondary Market Transaction.
9.1.1 General; Borrower Cooperation. Lender shall have the right at
any time and from time to time (i) to sell or otherwise transfer the Loan or any
portion thereof or the Loan Documents or any interest therein to one or more
investors, (ii) to sell participation interests in the Loan to one or more
investors or (iii) to securitize the Loan or any portion thereof in a single
asset securitization or a pooled loan securitization of rated single or
multi-class securities (the "Securities") secured by or evidencing ownership
interests in the Note and the Mortgage (each such sale, assignment,
participation and/or securitization is referred to herein as a "Secondary Market
Transaction"). In connection with any Secondary Market Transaction, Borrower
shall, at no material out-of-pocket expense to Borrower, use all reasonable
efforts and cooperate fully and in good faith with Lender and otherwise assist
Lender in satisfying the market standards to which Lender customarily adheres or
which may be reasonably required in the marketplace or by the Rating Agencies in
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connection with any such Secondary Market Transactions, including: (a) to (i) to
provide such financial and other information with respect to the Property,
Borrower and its Affiliates, Manager and any tenants of the Property, (ii)
provide business plans and budgets relating to the Property and (iii) perform or
permit or cause to be performed or permitted such site inspection, appraisals,
surveys, market studies, environmental reviews and reports, engineering reports
and other due diligence investigations of the Property, as may be reasonably
requested from time to time by Lender or the Rating Agencies or as may be
necessary or appropriate in connection with a Secondary Market Transaction or
Exchange Act requirements (the items provided to Lender pursuant to this
paragraph (a) being called the "Provided Information"), together, if customary,
with appropriate verification of and/or consents to the Provided Information
through letters of auditors or opinions of counsel of independent attorneys
acceptable to Lender and the Rating Agencies; (b) Borrower shall, at no material
out-of-pocket expense to Borrower,, cause counsel to render opinions as to
non-consolidation and any other opinion customary in securitization transactions
with respect to the Property, Borrower and its Affiliates, which counsel and
opinions shall be reasonably satisfactory to Lender and the Rating Agencies; (c)
make such representations and warranties as of the closing date of any Secondary
Market Transaction with respect to the Property, Borrower and the Loan Documents
as are customarily provided in such transactions and as may be reasonably
requested by Lender or the Rating Agencies and consistent with the facts covered
by such representations and warranties as they exist on the date thereof,
including the representations and warranties made in the Loan Documents; (d)
provide current certificates of good standing and qualification with respect to
Borrower from appropriate Governmental Authorities; and (e) execute such
amendments to the Loan Documents and Borrower's organizational documents, as may
be requested by Lender or the Rating Agencies or otherwise to effect a Secondary
Market Transaction, provided that nothing contained in this subsection (e) shall
result in a material economic change in the transaction. Except with respect to
its indemnification obligations set forth in this Article 9, Borrower shall not
be require to incur any material out-of-pocket expense in connection with a
Secondary Market Transaction. Borrower's cooperation obligations set forth
herein shall continue until the Loan has been paid in full.
9.1.2 Use of Information. Borrower understands that all or any
portion of the Provided Information and the Required Records may be included in
disclosure documents in connection with a Secondary Market Transaction,
including a prospectus or private placement memorandum (each, a "Disclosure
Document") and may also be included in filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), or provided or made available to investors or prospective investors in
the Securities, the Rating Agencies, and service providers or other parties
relating to the Secondary Market Transaction. If the Disclosure Document is
required to be revised, Borrower shall cooperate with Lender in updating the
Provided Information or Required Records for inclusion or summary in the
Disclosure Document or for other use reasonably required in connection with a
Secondary Market Transaction by providing all current information pertaining to
Borrower, Manager and the Property necessary to keep the Disclosure Document
accurate and complete in all material respects with respect to such matters.
9.1.3 Borrower Obligations Regarding Disclosure Documents. In
connection with a Disclosure Document, Borrower shall: (a) if requested by
Lender, certify in writing that Borrower has carefully examined those portions
of such Disclosure Document, pertaining to Borrower, the Property, Manager and
the Loan, and that such portions do not contain any untrue statement of a
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material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading; and (b) indemnify (in a separate instrument of indemnity, if so
requested by Lender) (i) any underwriter, syndicate member or placement agent
(collectively, the "Underwriters") retained by Lender or its issuing company
affiliate (the "Issuer") in connection with a Secondary Market Transaction, (ii)
Lender and (iii) the Issuer that is named in the Disclosure Document or
registration statement relating to a Secondary Market Transaction (the
"Registration Statement"), and each of the Issuer's directors, each of its
officers who have signed the Registration Statement and each person or entity
who controls the Issuer or the Lender within the meaning of Section 15 of the
Securities Act or Section 30 of the Exchange Act (collectively within (iii), the
"GCM Group"), and each of its directors and each person who controls each of the
Underwriters, within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act (collectively, the "Underwriter Group") for any losses,
claims, damages or liabilities (the "Liabilities") to which Lender, the GCM
Group or the Underwriter Group may become subject (including reimbursing all of
them for any legal or other expenses actually incurred in connection with
investigating or defending the Liabilities) insofar as the Liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any of the Provided Information or in any of the
applicable portions of such sections of the Disclosure Document applicable to
Borrower, Manager, the Property or the Loan, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated in the applicable portions of such sections or necessary in order to make
the statements in the applicable portions of such sections in light of the
circumstances under which they were made, not misleading; provided, however,
that Borrower shall not be required to indemnify Lender for any Liabilities
relating to untrue statements or omissions which Borrower identified to Lender
in writing at the time of Borrower's examination of such Disclosure Document.
9.1.4 Borrower Indemnity Regarding Filings. In connection with
filings under the Exchange Act, Borrower shall (i) indemnify Lender, the GCM
Group and the Underwriter Group for any Liabilities to which Lender, the GCM
Group or the Underwriter Group may become subject insofar as the Liabilities
arise out of or are based upon the omission or alleged omission to state in the
Provided Information a material fact required to be stated in the Provided
Information in order to make the statements in the Provided Information, in
light of the circumstances under which they were made not misleading and (ii)
reimburse Lender, the GCM Group or the Underwriter Group for any legal or other
expenses actually incurred by Lender, GCM Group or the Underwriter Group in
connection with defending or investigating the Liabilities.
9.1.5 Indemnification Procedure. Promptly after receipt by an
indemnified party under Section 9.1.3 above or Section 9.1.4 above of notice of
the commencement of any action for which a claim for indemnification is to be
made against Borrower, such indemnified party shall notify Borrower in writing
of such commencement, but the omission to so notify Borrower will not relieve
Borrower from any liability that it may have to any indemnified party hereunder
except to the extent that failure to notify causes prejudice to Borrower. If any
action is brought against any indemnified party, and it notifies Borrower of the
commencement thereof, Borrower will be entitled, jointly with any other
indemnifying party, to participate therein and, to the extent that it (or they)
may elect by written notice delivered to the indemnified party promptly after
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receiving the aforesaid notice of commencement, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party in its
discretion. After notice from Borrower to such indemnified party under this
Section 9.1.5, Borrower shall not be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both Borrower and an indemnified party,
and any indemnified party shall have reasonably concluded that there are any
legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to Borrower, then the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Borrower shall not be
liable for the expenses of more than one separate counsel unless there are legal
defenses available to it that are different from or additional to those
available to another indemnified party.
9.1.6 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 9.1.3 above or Section 9.1.4 above is for any reason held to be
unenforceable by an indemnified party in respect of any Liabilities (or action
in respect thereof) referred to therein which would otherwise be indemnifiable
under Section 9.1.3 above or Section 9.1.4 above, Borrower shall contribute to
the amount paid or payable by the indemnified party as a result of such
Liabilities (or action in respect thereof); provided, however, that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person not guilty
of such fraudulent misrepresentation. In determining the amount of contribution
to which the respective parties are entitled, the following factors shall be
considered: (i) the GCM Group's and Borrower's relative knowledge and access to
information concerning the matter with respect to which the claim was asserted;
(ii) the opportunity to correct and prevent any statement or omission; and (iii)
any other equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it may not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
9.1.7 Intentionally Deleted.
9.1.8 Severance of Loan. Lender shall have the right, at any time
(whether prior to, in connection with, or after any Secondary Market
Transaction), with respect to all or any portion of the Loan, to modify, split
and/or sever all or any portion of the Loan as hereinafter provided. Without
limiting the foregoing, Lender may (i) cause the Note and the Mortgage to be
split into a first and second mortgage loan, (ii) create one more senior and
subordinate notes (i.e., an A/B or A/B/C structure), (iii) create multiple
components of the Note or Notes (and allocate or reallocate the principal
balance of the Loan among such components) or (iv) otherwise sever the Loan into
two (2) or more loans secured by mortgages and by a pledge of partnership or
membership interests (directly or indirectly) in Borrower (i.e., a senior
loan/mezzanine loan structure), in each such case, in whatever proportion and
whatever priority Lender determines; provided, however, in each such instance
the outstanding principal balance of all the Notes evidencing the Loan (or
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components of such Notes) immediately after the effective date of such
modification equals the outstanding principal balance of the Loan immediately
prior to such modification and the weighted average of the interest rates for
all such Notes (or components of such Notes) immediately after the effective
date of such modification equals the interest rate of the original Note
immediately prior to such modification. If requested by Lender, Borrower (and
Borrower's constituent members, if applicable, and Guarantor) shall execute
within two (2) Business Days after such request, such documentation as Lender
may reasonably request to evidence and/or effectuate any such modification or
severance.
10. MISCELLANEOUS
10.1 Exculpation. Subject to the qualifications below, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Loan Documents by any action or proceeding wherein
a money judgment shall be sought against Borrower, except that Lender may bring
a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest and rights under the Loan Documents, or in the Property, the Rents
or any other collateral given to 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 and in any other
collateral given to Lender, and Lender 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 any Loan Document. The provisions of
this Section 10.1 shall not, however, (i) constitute a waiver, release or
impairment of any obligation evidenced or secured by any Loan Document; (ii)
impair the right of Lender to name Borrower as a party defendant in any action
or suit for foreclosure and sale under the Mortgage; (iii) affect the validity
or enforceability of any of the Loan Documents or any guaranty made in
connection with the Loan or any of the rights and remedies of Lender thereunder;
(iv) impair the right of Lender to obtain the appointment of a receiver; (v)
impair the enforcement of the Assignment of Leases; (vi) constitute a
prohibition against Lender to commence any other appropriate action or
proceeding in order for Lender to fully realize the security granted by the
Mortgage or to exercise its remedies against the Property; or (vii) constitute a
waiver of the right of Lender to enforce the liability and obligation of
Borrower, by money judgment or otherwise, to the extent of any loss, damage,
cost, expense, liability, claim or other obligation incurred by Lender
(including attorneys' fees and costs reasonably incurred) arising out of or in
connection with the following (all such liability and obligation of Borrower for
any or all of the following being referred to herein as "Borrower's Recourse
Liabilities"):
(a) fraud or intentional misrepresentation by Borrower or
Guarantor or any of their Affiliates in connection with obtaining the
Loan;
(b) physical waste of the Property or any portion thereof by
Borrower or Guarantor or any of their Affiliates, or after an Event of
Default the removal or disposal of any portion of the Property by Borrower
or Guarantor or any of their Affiliates;
(c) any Proceeds paid by reason of any Insured Casualty or any
Award received in connection with a Condemnation or other sums or payments
attributable to the Property not applied in accordance with the provisions
of the Loan Documents (except to the extent that Borrower did not have the
legal right, because of a bankruptcy, receivership or similar judicial
proceeding, to direct disbursement of such sums or payments);
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(d) all Rents of the Property received or collected by or on
behalf of the Borrower after an Event of Default and not applied to
payment of Principal and interest due under the Note, and to the payment
of actual and reasonable operating expenses of the Property, as they
become due or payable (except to the extent that such application of such
funds is prevented by bankruptcy, receivership, or similar judicial
proceeding in which Borrower is legally prevented from directing the
disbursement of such sums);
(e) misappropriation (including failure to turn over to Lender
on demand following an Event of Default) of tenant security deposits and
rents collected in advance, or of funds held by Borrower for the benefit
of another party;
(f) the failure to pay Taxes, provided Borrower shall not be
liable (A) to the extent funds to pay such amounts are available in the
Tax and Insurance Subaccount and Lender failed to pay same or (B) from and
after Borrower having offered to Lender a deed-in-lieu of foreclosure;
(g) the breach of any representation, warranty, covenant or
indemnification in any Loan Document concerning Environmental Laws or
Hazardous Substances, including Sections 4.21 and 5.8, and clauses (viii)
through (xi) of Section 5.30 hereof;
(h) at any time that the Xxxxxx Micro Lease is no longer in
effect (i) a deductible or self insured retention with respect to any
policy required under Section 7.1.1(c) and (ii) a deductible in excess of
$10,000 with respect to any Policy required under Section 7.1.1(a).
Notwithstanding anything to the contrary in this Agreement or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which 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 in
accordance with the Loan Documents, and (B) Lender's agreement not to pursue
personal liability of Borrower as set forth 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 that one or more of the following occurs (each, a
"Springing Recourse Event"): (i) an Event of Default described in Section 8.1(d)
hereof shall have occurred or (ii) a breach of the covenants set forth in
Section 5.13 hereof, or (iii) the occurrence of any condition or event described
in either Section 8.1(f) hereof or Section 8.1(g) hereof and, with respect to
such condition or event described in Section 8.1(g) hereof, either Borrower,
Guarantor or any Person owning an interest (directly or indirectly) in Borrower
or Guarantor consents to, aids, solicits, supports, or otherwise cooperates or
colludes to cause such condition or event or fails to contest such condition or
event. Notwithstanding the foregoing, a breach of any of the covenants described
in clauses (ix)(D), (x), (xviii) and (xxi) set forth on Schedule 5, shall not
trigger the foregoing recourse to the extent that the applicable covenant is
breached as a result of insufficient Rents or a decline in the value of the
Property due to market conditions, as reasonably determined by Lender.
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10.2 Brokers and Financial Advisors. (a) Borrower hereby represents that
it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the Loan. Borrower shall indemnify
and hold Lender harmless from and against any and all claims, liabilities, costs
and expenses (including attorneys' fees, whether incurred in connection with
enforcing this indemnity or defending claims of third parties) of any kind in
any way relating to or arising from a claim by any Person that such Person acted
on behalf of Borrower in connection with the transactions contemplated herein.
The provisions of this Section 10.2 shall survive the expiration and termination
of this Agreement and the repayment of the Debt.
10.3 Retention of Servicer. Lender reserves the right to retain the
Servicer to act as its agent hereunder with such powers as are specifically
delegated to the Servicer by Lender, whether pursuant to the terms of this
Agreement, any pooling and servicing agreement or similar agreement entered into
as a result of a Secondary Market Transaction, the Deposit Account Agreement or
otherwise, together with such other powers as are reasonably incidental thereto.
Borrower shall pay any reasonable fees and expenses of the Servicer (i) in
connection with a release of the Property (or any portion thereof), (ii) from
and after a transfer of the Loan to any "master servicer" or "special servicer"
for any reason, including without limitation, as a result of a decline in the
occupancy level of the Property, (iii) in connection with an assumption or
modification of the Loan, (iv) in connection with the enforcement of the Loan
Documents or (v) in connection with any other action or approval taken by
Servicer hereunder on behalf of Lender.
10.4 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as any of the Debt is unpaid or such longer period if expressly set
forth in this Agreement. All Borrower's covenants and agreements in this
Agreement shall inure to the benefit of the respective legal representatives,
successors and assigns of Lender.
10.5 Lender's Discretion. Whenever pursuant to this Agreement or any other
Loan Document, Lender exercises any right given to it to approve or disapprove,
or consent or withhold consent, or any arrangement or term is to be satisfactory
to Lender or is to be in Lender's discretion, the decision of Lender to approve
or disapprove, to consent or withhold consent, or to decide whether arrangements
or terms are satisfactory or not satisfactory, or acceptable or unacceptable or
in Lender's discretion shall (except as is otherwise specifically herein
provided) be in the sole discretion of Lender and shall be final and conclusive.
10.6 Governing Law.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO ss.
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL
OR STATE COURT IN NEW YORK COUNTY, NEW YORK AND BORROWER WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT XXXXXXX X. POST, ESQ., C/O POST XXXXXX & XXXXXXX
LLP, TWO XXXXXXX XXXXX, XXXX X, XXXXXXX, XXX XXXX 00000, AS ITS AUTHORIZED AGENT
TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY
BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT
IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT
SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF BORROWER MAILED OR DELIVERED
TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER
METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW
YORK. BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF
ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND
(iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES
TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
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10.7 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or of any other Loan Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to or
demand on Borrower shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances. Neither any failure nor any
delay on the part of Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under any other Loan Document, shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under any Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due under the Loan Documents, or to declare an
Event of Default for failure to effect prompt payment of any such other amount.
10.8 Trial by Jury. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER.
10.9 Headings/Exhibits. The Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose. The Exhibits attached hereto, are
hereby incorporated by reference as a part of the Agreement with the same force
and effect as if set forth in the body hereof.
10.10 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10.11 Preferences. Upon the occurrence and continuance of an Event of
Default, Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the Debt.
To the extent Borrower makes a payment to Lender, or Lender receives proceeds of
any collateral, which is in whole or part subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
73
common law or equitable cause, then, to the extent of such payment or proceeds
received, the Debt or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received by Lender. This provision shall survive the expiration or termination
of this Agreement and the repayment of the Debt.
10.12 Waiver of Notice. Borrower shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or any other Loan Document specifically and expressly requires the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. Borrower hereby expressly waives the right to
receive any notice from Lender with respect to any matter for which no Loan
Document specifically and expressly requires the giving of notice by Lender to
Borrower.
10.13 Remedies of Borrower. If a claim or adjudication is made that Lender
or any of its agents, including Servicer, has acted unreasonably or unreasonably
delayed acting in any case where by law or under any Loan Document, Lender or
any such agent, as the case may be, has an obligation to act reasonably or
promptly, Borrower agrees that neither Lender nor its agents, including
Servicer, shall be liable for any monetary damages, and Borrower's sole remedy
shall be to commence an action seeking injunctive relief or declaratory
judgment. Any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Borrower specifically waives any claim against Lender and its agents, including
Servicer, with respect to actions taken by Lender or its agents on Borrower's
behalf.
10.14 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements,
understandings and negotiations among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan
Documents.
10.15 Offsets, Counterclaims and Defenses. Borrower hereby waives the
right to assert a counterclaim, other than a compulsory counterclaim, in any
action or proceeding brought against it by Lender or its agents, including
Servicer, or otherwise offset any obligations to make payments required under
the Loan Documents. Any assignee of Lender's interest in and to the Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which Borrower may otherwise have against any assignor of such
documents, and no such offset, counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon such documents, and any such right to interpose or assert any such offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.
10.16 Publicity. All news releases, publicity or advertising by Borrower
or its Affiliates through any media intended to reach the general public, which
refers to the Loan Documents, the Loan, Lender or any member of the GCM Group, a
Loan purchaser, the Servicer or the trustee in a Secondary Market Transaction,
shall be subject to the prior written approval of Lender. Lender shall have the
right to issue any of the foregoing without Borrower's approval.
74
10.17 No Usury. Borrower and Lender intend at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under state law) and that this Section 10.17 shall
control every other agreement in the Loan Documents. If the applicable law
(state or federal) is ever judicially interpreted so as to render usurious any
amount called for under the Note or any other Loan Document, or contracted for,
charged, taken, reserved or received with respect to the Debt, or if Lender's
exercise of the option to accelerate the maturity of the Loan or any prepayment
by Borrower results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is Borrower's and Lender's express intent
that all excess amounts theretofore collected by Lender shall be credited
against the unpaid Principal and all other Debt (or, if the Debt has been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Loan Documents immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with applicable law, but so as to permit the
recovery of the fullest amount otherwise called for thereunder. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of the Loan
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Debt does not
exceed the maximum lawful rate from time to time in effect and applicable to the
Debt for so long as the Debt is outstanding. Notwithstanding anything to the
contrary contained in any Loan Document, it is not the intention of Lender to
accelerate the maturity of any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the time of such acceleration.
10.18 Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and any of the other Loan Documents,
the provisions of this Agreement shall control. The parties hereto acknowledge
that each is represented by separate counsel in connection with the negotiation
and drafting of the Loan Documents and that the Loan Documents shall not be
subject to the principle of construing their meaning against the party that
drafted them.
10.19 No Third Party Beneficiaries. The Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in any Loan Document shall
be deemed to confer upon anyone other than the Lender and Borrower any right to
insist upon or to enforce the performance or observance of any of the
obligations contained therein.
10.20 Yield Maintenance Premium. Borrower acknowledges that (a) Lender is
making the Loan in consideration of the receipt by Lender of all interest and
other benefits intended to be conferred by the Loan Documents and (b) if
payments of Principal are made to Lender prior to the Stated Maturity Date, for
any reason whatsoever, whether voluntary, as a result of Lender's acceleration
of the Loan after an Event of Default, by operation of law or otherwise, Lender
will not receive all such interest and other benefits and may, in addition,
incur costs. For these reasons, and to induce Lender to make the Loan, Borrower
agrees that, except as expressly provided in Section 2.3.4 and Article 7 hereof,
all prepayments, if any, whether voluntary or involuntary, will be accompanied
by the Yield Maintenance Premium. Such Yield Maintenance Premium shall be
required whether payment is made by Borrower, by a Person on behalf of Borrower,
75
or by the purchaser at any foreclosure sale, and may be included in any bid by
Lender at such sale. Borrower further acknowledges that (A) it is a
knowledgeable real estate developer and/or investor; (B) it fully understands
the effect of the provisions of this Section 10.20, as well as the other
provisions of the Loan Documents; (C) the making of the Loan by Lender at the
Interest Rate and other terms set forth in the Loan Documents are sufficient
consideration for Borrower's obligation to pay a Yield Maintenance Premium (if
required); and (D) Lender would not make the Loan on the terms set forth herein
without the inclusion of such provisions. Borrower also acknowledges that the
provisions of this Agreement limiting the right of prepayment and providing for
the payment of the Yield Maintenance Premium and other charges specified herein
were independently negotiated and bargained for, and constitute a specific
material part of the consideration given by Borrower to Lender for the making of
the Loan except as expressly permitted hereunder.
10.21 Assignment. The Loan, the Note, the Loan Documents and/or Lender's
rights, title, obligations and interests therein may be assigned by Lender and
any of its successors and assigns to any Person at any time in its discretion,
in whole or in part, whether by operation of law (pursuant to a merger or other
successor in interest) or otherwise. Upon such assignment, all references to
Lender in this Loan Agreement and in any Loan Document shall be deemed to refer
to such assignee or successor in interest and such assignee or successor in
interest shall thereafter stand in the place of Lender. Borrower may not assign
its rights, title, interests or obligations under this Loan Agreement or under
any of the Loan Documents.
10.22 Intentionally Deleted.
10.23 Certain Additional Rights of Lender. Notwithstanding anything to the
contrary which may be contained in this Agreement, Lender shall have:
(i) the right to routinely consult with Borrower's management
regarding the significant business activities and business and financial
developments of Borrower, provided, however, that such consultations shall not
include discussions of environmental compliance programs or disposal of
hazardous substances;
(ii) the right, in accordance with the terms of this
Agreement, to examine the books and records of Borrower at any time upon
reasonable notice;
(iii) the right, in accordance with the terms of this
Agreement, to receive monthly, quarterly and year-end financial reports,
including balance sheets, statements of income, shareholder's equity and cash
flow, a management report and schedules of outstanding indebtedness;
(iv) the right, without restricting any other rights of Lender
under this Agreement (including any similar right), to restrict financing to be
obtained with respect to the Property so long as any portion of the Debt remains
outstanding;
(v) the right, without restricting any other right of Lender
under this Agreement or the other Loan Documents (including any similar right),
to restrict, upon the occurrence of an Event of Default, Borrower's payments of
management, consulting, director or similar fees to Affiliates of Borrower from
the Rents;
76
(vi) the right, without restricting any other rights of Lender
under this Agreement (including any similar right), to approve any operating
budget and/or capital budget of Borrower;
(vii) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to approve any
acquisition by Borrower of any other significant property (other than personal
property required for the day to day operation of the Property); and
(viii) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to restrict the
transfer of interests in Borrower held by its members, and the right to restrict
the transfer of interests in such member, except for any transfer that is a
Permitted Transfer.
The rights described above may be exercised directly or indirectly by any Person
that owns substantially all of the ownership interests in Lender. The provisions
of this Section are intended to satisfy the requirement of management rights for
purposes of the Department of Labor "plan assets" regulation 29 C.F.R., Section
2510.3-101.
10.24 Set-Off. In addition to any rights and remedies of Lender provided
by this Loan Agreement and by law, Lender shall have the right, without prior
notice to Borrower, any such notice being expressly waived by Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.25 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
77
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.
FT-AMHERST PROPERTY LLC, a Delaware limited
liability company
By: FT-Amherst Property Manager LLC, a Delaware
limited liability company, Its managing
member
By:
----------------------------------------
Name: Xxxx Xxxx
Title: Senior Vice President
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a
Delaware corporation
By:
--------------------------------------------
Name:
Title:
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Schedule 1
Required Repairs
Install three signs in parking lot identifying handicap parking spaces
Schedule 2
Exceptions to Representations and Warranties
With respect to the representation set forth in Section 4.6, Borrower has
informed Lender of the proposed widening of Xxxxxx Drive, the result of which
would be the conveyance of the Road Widening Parcel.
Schedule 3
Rent Roll
Schedule 4
Organization of Borrower
Schedule 5
Definition of Special Purpose Bankruptcy Remote Entity
A "Special Purpose Bankruptcy Remote Entity" means a (y) a corporation, limited
partnership or limited liability company which at all times since its formation
and at all times thereafter (i) was and will be organized solely for the purpose
of owning the Property; (ii) has not engaged and will not engage in any business
unrelated to the ownership of the Property; (iii) has not had and will not have
any assets other than those related to the Property; (iv) has not engaged,
sought or consented to and will not engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation, merger, asset sale (except
as expressly permitted by this Agreement), transfer of partnership or membership
interests or the like, or amendment of its limited partnership agreement,
articles of incorporation, articles of organization, certificate of formation or
operating agreement (as applicable); (v) [intentionally deleted]; (vi)
[intentionally deleted]; (vii) [intentionally deleted]; (viii) if such entity is
a limited liability company, has and will have articles of organization, a
certificate of formation and/or an operating agreement, as applicable, providing
that (A) such entity will dissolve only upon the bankruptcy of the managing
member, (B) the vote of a majority-in-interest of the remaining members is
sufficient to continue the life of the limited liability company in the event of
such bankruptcy of the managing member and (C) if the vote of a
majority-in-interest of the remaining members to continue the life of the
limited liability company following the bankruptcy of the managing member is not
obtained, the limited liability company may not liquidate the Property without
the consent of the applicable Rating Agencies for as long as the Loan is
outstanding; (ix) has not, and without the unanimous consent of all of its
partners, directors or members, as applicable, will not, with respect to itself
or to any other entity in which it has a direct or indirect legal or beneficial
ownership interest (A) file, or consent to the filing of, a bankruptcy,
insolvency or reorganization petition or otherwise institute insolvency
proceedings or otherwise seek any relief under any laws relating to the relief
from debts or the protection of debtors generally, (B) seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for such entity or for all or any portion of
such entity's properties, (C) make any assignment for the benefit of such
entity's creditors, (D) admit in writing its inability to pay its debts
generally as they become due or (E) take any action that might cause such entity
to become insolvent; (x) has remained and will remain solvent and has maintained
and will maintain adequate capital in light of its contemplated business
operations; (xi) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity; (xii) has
maintained and will maintain its accounts, books and records separate from any
other Person; (xiii) has maintained and will maintain its books, records,
resolutions and agreements as official records; (xiv) has not commingled and
will not commingle its funds or assets with those of any other Person; (xv) has
held and will hold its assets in its own name; (xvi) has conducted and will
conduct its business in its name, (xvii) has maintained and will maintain its
financial statements, accounting records and other entity documents separate
from any other Person; (xviii) has paid and will pay its own liabilities,
including the salaries of its own employees, out of its own funds and assets;
(xix) has observed and will observe all partnership, corporate or limited
liability company formalities, as applicable; (xx) has maintained and will
maintain an arm's-length relationship with its Affiliates; (xxi) has and will
have no indebtedness other than the Loan and unsecured trade payables in the
ordinary course of business relating to the ownership and operation of Property
which (1) do not exceed, at any time, a maximum amount of 2% of the original
amount of the Principal and (2) are paid within sixty (60) days of the date
incurred; (xxii) has not and will not assume or guarantee or become obligated
for the debts of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person except for the Loan; (xxiii) has not
and will not acquire obligations or securities of its partners, members or
shareholders; (xxiv) has allocated and will allocate fairly and reasonably
shared expenses, including shared office space, and uses separate stationery,
invoices and checks; (xxv) except in connection with the Loan, has not pledged
and will not pledge its assets for the benefit of any other Person; (xxvi) has
held itself out and identified itself and will hold itself out and identify
itself as a separate and distinct entity under its own name and not as a
division or part of any other Person; (xxvii) has maintained and will maintain
its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any other
Person; (xxviii) has not made and will not make loans to any Person; (xxix) has
not identified and will not identify its partners, members or shareholders, or
any Affiliate of any of them, as a division or part of it; (xxx) has not entered
into or been a party to, and will not enter into or be a party to, any
transaction with its partners, members, shareholders or Affiliates except in the
ordinary course of its business and on terms which are intrinsically fair and
are no less favorable to it than would be obtained in a comparable arm's-length
transaction with an unrelated third party; (xxxi) has and will have no
obligation to indemnify its partners, officers, directors, members, as the case
may be, or has such an obligation that is fully subordinated to the Debt and
will not constitute a claim against it if cash flow in excess of the amount
required to pay the Debt is insufficient to pay such obligation; and (xxxii)
will consider the interests of its creditors in connection with all corporate,
partnership or limited liability actions, as applicable.
2
Schedule 6
Road Widening Parcel
(See attached)
3
