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CREDIT AGREEMENT
Dated as of January 31, 2000
among
RB ASSET, INC. and
260 WEST SUNRISE CORP.,
Borrowers
and
HSBC BANK USA
Lender
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TABLE OF CONTENTS
Page
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I. DEFINITIONS........................................................................2
SECTION 1.01. Certain Defined Terms..........................................2
SECTION 1.02. Accounting Terms..............................................13
II. THE LOANS........................................................................13
SECTION 2.01. Severance of Original Xxxxx Xxxx Loan.........................13
SECTION 2.02. Loans Advanced................................................13
SECTION 2.03. Notes; Repayment of Loans.....................................13
SECTION 2.04. Interest on Loans.............................................13
SECTION 2.05. Alternate Rate of Interest....................................15
SECTION 2.06. Payments and Computations.....................................15
SECTION 2.07. Overdue Amounts...............................................15
SECTION 2.08. Prepayment of Loans; Amortization.............................16
SECTION 2.09. Original Credit Agreement Interest............................17
SECTION 2.10. Change in Circumstances.......................................17
SECTION 2.11. Indemnity.....................................................18
SECTION 2.12. Taxes.........................................................18
III. COLLATERAL SECURITY.............................................................19
SECTION 3.01. In General....................................................19
SECTION 3.02. Filing and Recording..........................................19
IV. REPRESENTATIONS AND WARRANTIES...................................................20
SECTION 4.01. General.......................................................20
SECTION 4.02. Controlled Properties.........................................24
SECTION 4.03. Pledged Loans.................................................27
SECTION 4.04. No Defenses....................................................28
SECTION 4.05. Co-operatives and Condominiums Generally......................28
VI. AFFIRMATIVE COVENANTS............................................................30
SECTION 6.01. Legal Existence...............................................30
SECTION 6.02. Businesses and Properties.....................................30
SECTION 6.03. Insurance.....................................................30
SECTION 6.04. Taxes.........................................................32
SECTION 6.05. Financial Statements, Reports, etc............................33
SECTION 6.06. [Intentionally Left Blank......................................35
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SECTION 6.07. ERISA.........................................................35
SECTION 6.08. Maintaining Records; Access to Properties and Inspections;
Right to Audit.........................................36
SECTION 6.09. [Intentionally Left Blank]....................................36
SECTION 6.10. Environmental Laws............................................36
SECTION 6.11. Pay Obligations to Lender and Perform Other Covenants.........38
SECTION 6.12. Termination of Property Managers..............................38
SECTION 6.13. Co-operatives and Condominiums................................38
SECTION 6.14. Further Assurances............................................38
VII. NEGATIVE COVENANTS..............................................................39
SECTION 7.01. Liens.........................................................39
SECTION 7.02. Indebtedness..................................................40
SECTION 7.03. Sales or Transfers of Assets..................................40
SECTION 7.04. Consolidations and Mergers....................................41
SECTION 7.05. Investments...................................................41
SECTION 7.06. Sales of Receivables..........................................41
SECTION 7.07. Use of Proceeds...............................................41
SECTION 7.08. ERISA.........................................................41
SECTION 7.09. Accounting Changes............................................42
SECTION 7.10. Dividends.....................................................42
SECTION 7.11. Transactions with Affiliates..................................42
SECTION 7.12. Modification of Documents.....................................42
SECTION 7.13. Property Management...........................................42
VIII. EVENTS OF DEFAULT..............................................................42
IX. MISCELLANEOUS....................................................................45
SECTION 9.01. Notices.......................................................45
SECTION 9.02. Survival of Agreement.........................................46
SECTION 9.03. Successors and Assigns; Participations........................46
SECTION 9.04. Expenses; Indemnity...........................................46
SECTION 9.05. Applicable Law................................................47
SECTION 9.06. Right of Setoff...............................................48
SECTION 9.07. Payments on Business Days.....................................48
SECTION 9.08. Waivers; Amendments...........................................48
SECTION 9.09. Severability..................................................48
SECTION 9.10. Entire Agreement; Waiver of Jury Trial, etc...................48
SECTION 9.11. Submission to Jurisdiction....................................49
SECTION 9.12. Counterparts..................................................50
SECTION 9.13. Headings......................................................50
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SECTION 9.14. Exercise of Cure Rights.......................................50
SECTION 9.15. Consents......................................................50
SECTION 9.16 Prior Loan Documents..........................................50
X. CROSS-GUARANTEES..................................................................50
XI. RELEASE OF CERTAIN COLLATERAL....................................................52
SECTION 11.1. Release of Certain Collateral.................................52
XII. ESTABLISHMENT OF CERTAIN ACCOUNTS...............................................52
SECTION 12.1 Establishment of Accounts .....................................52
SECTION 12.2 Grant of Security Interest......................................53
XIII POST CLOSING OBLIGATIONS.......................................................53
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SCHEDULES
1.1 Collateral Properties, Owned Properties, Controlled Properties, Pledged
Loans
2.01 Original Principal Amounts
2.08(b) Amortization Schedule
4.01(f) Litigation
4.02(b) Exceptions to Legal Compliance
4.02(c) Exceptions to Environmental Compliance
4.02(f) Rent Roll
4.02(g) Management and Leasing Agreements
4.03(b) Pledged Loan Documents
4.03(c) Defaults under Pledged Loan Documents
4.05(a) York Offering Plans
4.05(c) York Unsold Units
7.03 Release Price Schedules
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated
as of January 31, 2000, among RB ASSET, INC. (together with its successors and
assigns, "RBA"), a Delaware corporation and the successor to River Bank America,
260 WEST SUNRISE CORP. (together with its successors and assigns,"Sunrise"), a
New York corporation, XXXXXXX XXXXX, INC. ("Xxxxxxx"), a California corporation,
XXXXXX PROPERTY CORP. ("Xxxxxx"), a New York corporation, ACACIAS-MURRIETA, INC.
("Acacias"), a California corporation, OLD CROW CANYON OFFICE, INC. ("Crow"), a
California corporation, and R.R. IRVINGTON ASSOCIATES, L.P.("Irvington"), a New
York limited partnership, each having offices c/o RB Management Company, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (each individually, an "Original
Borrower" and, collectively, the "Original Borrowers"); and HSBC BANK USA, a
bank organized under the laws of the State of New York having an office at Xxx
XXXX Xxxxxx, Xxxxxxx, Xxx Xxxx 00000 (together with its successors and
assigns,"Lender").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Lender and the Original Borrowers entered into a
Credit Agreement dated as of June 28, 1996 (the "Original Credit Agreement")
pursuant to which Lender made loans to the respective Original Borrowers in an
aggregate principal amount of $99,060,000.
WHEREAS, the loans made by Lender to Kirkham, Hester, Acacias,
Crow, and Irvington pursuant to the Original Credit Agreement have been repaid.
WHEREAS, the AJM Loan, the FHLB Loan and the Xxxxxx Loan (as
defined in the Original Credit Agreement) made by Lender to RBA pursuant to the
Original Credit Agreement have been repaid.
WHEREAS, the Xxxxx Xxxx Loan and the Royal York Loan (as
defined in the Original Credit) have outstanding principal balances as of the
date hereof of $40,000,000 and $7,781,680.22, respectively.
WHEREAS, the loan made by Lender to Sunrise pursuant to the
Original Credit Agreement (the "Original Sunrise Loan") has an outstanding
principal balance as of the date hereof of $2,775,000.
WHEREAS, RBA and Sunrise (collectively, "Borrowers") and
Lender have agreed to restructure the Xxxxx Xxxx Loan, the Royal York Loan and
the Sunrise Loan as described in this Agreement.
NOW THEREFORE, in consideration of the premises and for good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrowers and Lender hereby agree as follows:
I. DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes hereof, the
following terms shall have the meanings specified below:
"Adjusted LIBOR" shall mean, with respect to any Interest
Period for any Loan, a rate per annum (rounded to the nearest 1/10 of 1%)
determined by Lender to be equal to sum of (i) the quotient of (x) LIBOR for
such Interest Period, divided by (y) one minus the LIBOR Reserve Requirement;
plus (ii) two percent (2%).
"Adjusted Prime Rate" shall mean a rate per annum equal to the
Prime Rate.
"Affiliate" shall mean, with respect to any person, any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For the purposes of this definition, the term
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
"Xxxxx Xxxx Loan" shall mean the portion of the Original Xxxxx
Xxxx Loan evidenced by Substitute Xxxxx Xxxx Note A and secured by, among other
things, the Pledged Loan relating to the Xxxxx Xxxx Property.
"Xxxxx Xxxx Property" shall mean the real property owned by
Eastview and commonly known as the Xxxxx Xxxx Apartments, 5500 Wissahickon
Avenue, Philadelphia, Pennsylvania.
"Applicable Laws" shall have the meaning assigned to such term
in Section 4.02(b) hereof.
"Asset Swap Agreement" shall mean that certain Asset Swap and
Indemnification Settlement Agreement dated as of the Closing Date between RBA
and Lender.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
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"Borrowers" shall have the meaning assigned to such term in
the recitals to this Agreement.
"Business Day" shall mean any day, other than a Saturday,
Sunday or legal holiday in the State of New York, on which banks are open for
substantially all their banking business in New York City except that, if any
determination of a "Business Day" shall relate to an Adjusted LIBOR Loan, the
term "Business Day" shall in addition exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Proceeds" shall mean (i) the cash proceeds received
by, or paid to or for the benefit of, a Loan Party or Subsidiary in connection
with a sale of an Unsold Unit or Unsold Space after payment of all reasonable
costs and expenses which are approved in writing by Lender and are payable in
connection with such sale, including (a) all approved brokers' commissions, loan
fees, loan payments, repayments of indebtedness, other closing costs, (b) the
cost of any alteration, improvement, restoration, or repair necessitated by or
incurred in connection with such sale and (c) the funding of any reserves
required to be funded pursuant to applicable Pledged Loan Documents or a
Collateral Property Lockbox Agreement; or (ii) the cash proceeds paid to or for
the benefit of a Borrower pursuant to any transaction (other than a sale
described in the preceding clause (i)) in which any Collateral Property or
portion thereof or interest therein is directly or indirectly transferred
(including without limitation, any transfer by reason or in lieu of a
condemnation proceeding).
"Cash Available for Principal Reduction" shall have the
meaning assigned to such term in the Master Account Agreement.
"Certificate of Occupancy" shall have the meaning assigned to
such term in Section 4.02(b) hereof.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all collateral and security as
described in the Security Documents.
"Collateral Assignment of Loan" shall mean a pledge and
security agreement, dated (or amended and/or restated) as of the date hereof,
and granted to Lender by RBA, together with such other documents as Lender may
require in order to grant to Lender a perfected security interest in a Pledged
Loan, as amended, modified or supplemented from time to time. Each Collateral
Assignment of Loan secures the obligations of RBA under its Notes and this
Agreement, and requires that RBA irrevocably direct its Ultimate Borrower to pay
all amounts due to RBA directly into the applicable Collateral Property Lockbox
Account.
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"Collateral Properties" shall mean, collectively, the
properties listed on Schedule 1.1 hereto.
"Collateral Property Lockbox Accounts" shall mean the blocked
account for each Collateral Property established and maintained pursuant to the
Collateral Property Lockbox Agreement for such Collateral Property.
"Collateral Property Lockbox Agreement" shall mean a cash
collateral account and security agreement dated (or amended and/or restated) as
of the date hereof and granted to Lender by a Borrower, as amended, modified or
supplemented from time to time. Each Collateral Property Lockbox Agreement
secures the applicable Borrower's obligations under its Note and this Agreement.
"Condominiums" shall mean the York Condo.
"Controlled Owners" shall mean, collectively, the Owner
Borrowers, Eastview and Royal York Associates, L.P., a New York limited
partnership.
"Controlled Properties" shall mean, collectively, the
properties listed as "controlled" on Schedule 1.1 hereto.
"Co-op and Condo Laws" shall mean all governmental laws, rules
and regulations pertaining, directly or indirectly, to the operation,
maintenance and sale of co-operatives and condominium units, including without
limitation, any filings with or pursuant to the rules, regulations or
requirements of the Department of Law, Bureau of Real Estate Finance, State of
New York in effect on the date hereof.
"Co-operative Corporations" shall mean the residential unit of
the York Condo.
"Default" shall mean any condition, act or event which, with
notice or lapse of time or both, would constitute an Event of Default.
"Default Rate" shall mean the lesser of (a) a rate per annum
equal to four percent (4%) in excess of the Adjusted Prime Rate, and (b) the
maximum rate permitted by law.
"Deposit" shall mean all deposits and downpayments, together
with interest thereon, made by a purchaser in connection with a Purchase
Agreement or other document delivered in connection therewith, including without
limitation, any payment for special work or items.
"dollars" or the symbol "$" shall mean dollars in lawful
currency of the United States of America.
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"Eastview" shall mean Eastview Realty Associates, L.P., a New
Jersey limited partnership.
"Environmental Claim" shall mean any written notice received
by a Borrower of violation, claim, demand, abatement or other order by any
governmental authority or any person for bodily injury (including sickness,
disease or death), tangible or intangible property damage, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or deed or use restrictions, resulting from
or based upon (i) the existence, or the continuation of the existence, of a
Release (including, without limitation, sudden or non-sudden, accidental or
nonaccidental Releases), of, or exposure to, any Hazardous Material at, in, by
or from any of the Controlled Properties, (ii) the transportation, storage,
treatment or disposal of Hazardous Materials in connection with the operation of
any of the Controlled Properties (other than Routine Uses in compliance with
Environmental Laws) or (iii) the violation, or alleged violation by Borrowers or
any of the Subsidiaries, of any statutes, ordinances, orders, rules,
regulations, Permits or licenses of or from any governmental authority, agency
or court relating to environmental matters connected with any of the Controlled
Properties, under any applicable Environmental Law.
"Environmental Laws" shall mean the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.ss.9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C.ss.1801 et seq.), the
Resource Conservation and Recovery Act (42 X.X.X.xx. 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C.ss.1251 et seq.), the Oil Pollution Act of
1990 (33 U.S.C.ss.2701 et. seq.), the Safe Drinking Water Act (42 X.X.X.xx.
300f, et seq.), the Clean Air Act (42 X.X.X.xx. 7401 et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C.ss.2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C.ss.651 et seq.), as such laws have
been and hereafter may be amended or supplemented, and any related or analogous
present or future Federal, state or local, statutes, rules, regulations,
ordinances, licenses, permits and interpretations and orders of regulatory and
administrative bodies.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which together with any of Borrowers or any subsidiary of any
thereof would be treated as a single employer under the provisions of Title I or
Title IV of ERISA.
"Events of Default" shall have the meaning assigned to such
term in Article VIII hereof.
"First Mortgage" shall mean a first mortgage and/or deed of
trust, dated (or amended and/or restated) as of the date hereof, and granted to
or for the benefit of Lender by an
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Owner Borrower, as amended, modified or supplemented from time to time. Each
First Mortgage granted by an Owner Borrower secures such Owner Borrower's Note.
"GAAP" shall have the meaning assigned to such term in Section
1.02 hereof.
"Guarantee" shall mean any obligation, contingent or
otherwise, of any person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or obligation of any other person in any manner,
whether directly or indirectly, and shall include, without limitation, any
obligation of such person, direct or indirect, to (i) purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness or obligation, (ii) purchase
property, securities or services for the purpose of assuring the owner of such
Indebtedness or obligation of the payment of such Indebtedness or obligation, or
(iii) maintain working capital, equity capital, available cash or other
financial condition of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or obligation.
"Hazardous Material" shall mean any pollutant, contaminant,
chemical, or industrial or hazardous, toxic or dangerous waste, substance or
material, defined or regulated as such in (or for purposes of) any Environmental
Law and any other toxic, reactive, or flammable chemicals, including (without
limitation) any asbestos, any petroleum (including crude oil or any fraction),
any radioactive substance and any polychlorinated biphenyls; provided, in the
event that any Environmental Law is amended so as to broaden the meaning of any
term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment.
"Impositions" shall mean all real estate taxes, personal
property taxes, betterments, assessments (general and special), imports, levies,
water, utility and sewage charges, any and all income, franchise, withholding,
profits and gross receipts taxes, all other taxes and public charges, imposed
upon or assessed against a Controlled Owner or a Controlled Property or upon the
revenues, rents, issues, income and profits of use or possession thereof, any
stamp or other taxes which may be required to be paid with respect to any of the
Loan Documents, any of which might, if unpaid, result in a Lien on the
Controlled Properties, regardless to whom paid or assessed, any assessment,
license fee, license tax, business license fee or tax, commercial rental tax,
levy, charge, penalty, tax or similar imposition, imposed by any governmental
authority having the direct power to tax, or any school, architectural,
lighting, drainage or other improvement or special assessment district thereof,
against any legal or equitable interest in the Controlled Properties.
"Indebtedness" shall mean, with respect to any person, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest charges
are customarily paid, (c) all obligations of such person for the deferred
purchase price of property or services, except current accounts payable arising
in the
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ordinary course of business and not overdue beyond such period as is
commercially reasonable for such person's business, (d) all obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real and/or personal property which obligation is
required to be classified and accounted for as a capital lease on a balance
sheet prepared in accordance with GAAP, (e) all payment obligations of such
person with respect to interest rate or currency protection agreements, (f) all
obligations of such person as an account party under any letter of credit or in
respect of bankers' acceptances, (g) all obligations of any third party secured
by property or assets of such person (regardless of whether or not such person
is liable for repayment of such obligations), (h) all Guarantees of such person
and (i) the redemption price of all redeemable preferred stock of such person
(other than redeemable preferred stock of RBA existing on the date hereof).
"Indemnitees" shall have the meaning assigned to such term in
Section 9.04(b) hereof.
"Interest Payment Date" shall mean the first Business Day of
each calendar month, commencing March 1, 2000.
"Interest Period" shall have the meaning assigned to such term
in Section 2.04(c).
"Leases" shall have the meaning assigned to such term in
Section 4.02(f) hereof.
"Lender" shall have the meaning assigned to such term in the
preamble to this Agreement.
"LIBOR" shall mean the rate of interest that Lender, on the
first day of the applicable Interest Period, pays at its London office, on
Eurodollar deposits from leading banks in London interbank market in principal
amounts of $1,000,000 or more.
"LIBOR Reserve Requirement" shall mean the daily average of
the stated maximum rate (expressed as a decimal) at which reserves (including
any marginal, supplemental, or emergency reserves) are required to be maintained
by Lender, if any, during such time period under Regulation D against
"Eurocurrency Liabilities" (as such term is used in Regulation D), but without
benefit of or credit for proration, exemptions or offsets that might otherwise
be available to Lender from time to time under Regulation D. Without limiting
the affect of the foregoing, the LIBOR Reserve Requirement shall reflect any
other reserves required to be maintained by Lender against (i) any category of
liabilities that includes deposits by reference to which Adjusted LIBOR is to be
determined or (ii) any category of extension of credit or other assets that
include loans where interest is determined at LIBOR.
"Lien" shall mean, with respect to any asset, (i) any
mortgage, lien, pledge, encumbrance, charge or security interest in or on such
asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or other title retention agreement
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relating to such asset, (iii) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities or (iv)
any other right of or arrangement with any creditor to have such creditor's
claim satisfied out of such assets, or the proceeds therefrom, prior to the
general creditors of the owner thereof.
"Loans" shall mean, collectively, the Xxxxx Xxxx Loan, the
Rotal York Loan, the Sunrise Loan and the Split Off Loan. "Loan" shall mean one
of the Loans.
"Loan Documents" shall mean this Agreement, each Security
Document, each Guarantee executed and delivered at any time with respect to the
Obligations, the Notes and each other document, instrument, or agreement now or
hereafter delivered to Lender in connection herewith or therewith.
"Loan Parties" shall mean, collectively, RBA, Sunrise and any
other subsidiary or affiliate of RBA that is now or hereafter becomes a party to
a Loan Document.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Master Account" shall have the meaning assigned to such term
in the Master Account Agreement.
"Master Account Agreement" shall mean the master cash
collateral agreement, dated (or amended and/or restated) as of the date hereof,
among Borrowers and Lender, as amended, modified or supplemented from time to
time.
"Material Adverse Effect" shall mean a material adverse effect
on (i) the business, assets, prospects, operations or financial or other
condition of any Borrower, (ii) the ability of any Borrower to perform or pay
the Obligations in accordance with the terms hereof or of any other Loan
Document, (iii) the rights of, or benefits available to, Lender under any Loan
Document or (iv) Lender's Lien on any material portion of the Collateral or the
priority of such Lien.
"Maturity Date" shall mean January 31, 2005.
"Mortgages" shall mean, collectively, the First Mortgages and
the Second Mortgages.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.
"New Xxxxx Xxxx Building Loan Agreement" shall mean Building
Loan Agreement between Eastview and RBA dated as June 28, 1996.
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"Notes" shall mean, collectively, the Amended and Restated
Note dated the date hereof made by RBA in the principal amount of $7,725,000
evidencing the Royal York Loan; the Amended and Restated Note dated the date
hereof made by Sunrise in the principal amount of $2,775,000 evidencing the
Sunrise Loan; Substitute Xxxxx Xxxx Note A evidencing the Xxxxx Xxxx Loan; and
Substitute Xxxxx Xxxx Note B evidincing the Split Off Loan, as any of such notes
may hereafter be amended, modified, severed, consolidated, restated,
supplemented or otherwise modified from time to time.
"Obligations" shall mean all obligations, liabilities and
Indebtedness of Borrowers to Lender, whether now existing or hereafter created,
direct or indirect, due or not, whether created directly or acquired by
assignment, participation or otherwise, including, without limitation, all
obligations, liabilities and Indebtedness of the Loan Parties with respect to
the Security Documents and other Loan Documents, the principal of and interest
on the Loans and the payment or performance of all other obligations,
liabilities, and Indebtedness of Borrowers to Lender hereunder or under any one
or more of the other Loan Documents, including, without limitation, all fees,
costs, expenses and indemnity obligations hereunder and thereunder.
"Offering Plans" shall mean the offering plans for the
Condominiums and the Co- operative Corporations, as amended.
"Original Xxxxx Xxxx Loan" shall mean the loan in the maximum
principal amount of $42,750,000 made by Lender to RBA pursuant to the Original
Credit Agreement.
"Other Taxes" shall have the meaning assigned to such term in
Section 2.12(b) hereof.
"Owned Properties" shall mean, collectively, the properties
listed as "owned" on Schedule 1.1 hereto.
"Owner Borrowers" shall mean Sunrise.
"Partnership Pledge" shall mean a partnership pledge and
security agreement, dated as of June 28, 1996, and granted to Lender by XX Xxxxx
Corp. with respect to its general partnership interest in Eastview, as now or
hereafter amended, modified or supplemented from time to time. The Partnership
Pledge secures Borrowers' obligations under this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any Plan which is subject to the
provisions of Title IV of ERISA.
"Permits" shall have the meaning assigned to such term in
Section 4.02(b) hereof.
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"person" shall mean any natural person, corporation, business
trust, association, company, joint venture, partnership, limited liability
company or government or any agency or political subdivision thereof.
"Plan" shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA and which is maintained (in whole or in part) for
employees of Borrowers or any ERISA Affiliate.
"Pledged Loans" shall mean, collectively, the loans secured by
the Collateral Properties, which Pledged Loans are pledged to Lender pursuant to
the Collateral Assignments of Loan and are more particularly described in
Schedule 1.1 hereto.
"Pledged Loan Documents" shall mean, collectively, the Pledged
Notes and the other documents evidencing or securing the Pledged Loans, which
Pledged Loan Documents are pledged to Lender pursuant to the Collateral
Assignments of Loan and are listed on Schedule 4.03(b) annexed hereto.
"Prime Rate" shall mean the rate of interest publicly
announced by Lender from time to time as its prime rate and being a base rate
for calculating interest on certain loans. The Prime Rate shall mean such rate
as Lender announces periodically as its prime rate and may not necessarily be
the lowest rate charged by Lender.
"Regulations D, G, T, U and X" shall mean Regulations D, G, T,
U and X, respectively, of the Board, as the same are from time to time in
effect, and all official rulings and interpretations thereunder or thereof.
"Release" shall mean any releasing, spilling, leaking,
seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping, in each case as defined in any Environmental
Laws, and shall include any "Threatened Release," as defined in any
Environmental Laws.
"Release Price Schedule" shall have the meaning assigned to
such term in Section 7.03 hereof.
"Remedial Work" shall mean any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of any kind or
nature with respect to any Controlled Property, including, without limitation,
with respect to Hazardous Materials and the Release thereof.
"Rent Rolls" shall have the meaning assigned to such term in
Section 4.02(f) hereof.
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"Reportable Event" shall mean a Reportable Event as defined in
Section 4043(c) of ERISA.
"RBA" is defined in the preamble to this Agreement.
"Routine Use" shall mean the use of Hazardous Materials at a
Collateral Property in connection with the routine operation thereof, including
cleaning and maintenance fluids, office supplies and other similar items, in
each case used in accordance with, and so as not to cause a violation of,
Environmental Laws, and in quantities and in a manner which are consistent with
such routine use and do not violate Environmental Laws.
"Royal York Loan" shall mean the Royal York Loan made by
Lender to RBA pursuant to the Original Credit Agreement as amended and restated
pursuant to this Agreement. As of the date hereof the outstanding principal
amount of the Royal York Loan is $7,775,000 (having been paid down by $6,680.22
simultaneously with the execution and delivery of this Agreement). The Royal
York Loan is secured by, among other things, the Pledged Loan relating to the
York Condo.
"Royal York Property" shall mean (i) the unsold shares and
related proprietary leases owned by York Associates and (ii) the garage
condominium unit in the York Condo.
"RYP" shall mean Royal York Properties, Inc.
"Second Mortgage" shall mean a second mortgage and/or deed of
trust, dated as of the date hereof, and granted to or for the benefit of Lender
by an Owner Borrower, as amended, modified or supplemented from time to time.
Each Second Mortgage granted by an Owner Borrower secures such Owner Borrower's
obligations under this Agreement (other than its obligations under its Note).
"Security Documents" shall mean the Mortgages, the Collateral
Assignments of Loan, the Collateral Property Lockbox Agreements, the Partnership
Pledge, the Stock Pledge, the Master Account Agreement and each other agreement
now existing or hereafter created providing security for the payment or
performance of any Obligations.
"Senior Executive" shall mean any vice president or president,
chief financial officer, controller or other senior executive of RBA or RB
Management Company, in their capacity as an officer and not as an individual.
"Similarly Situated Borrowers" shall mean other borrowers of
Lender with loans from Lender having LIBOR-based pricing options.
"Split Off Loan" shall mean the portion of the Original Xxxxx
Xxxx Loan now evidenced by Substitute Xxxxx Xxxx Note B.
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"Stock Pledge" shall mean a stock pledge and security
agreement, dated as of the date hereof, and granted to Lender by Rivercity
Realty Corp. with respect to its stock in Royal York Properties, Inc., as
amended, modified or supplemented from time to time. The Stock Pledge secures
Borrowers' obligations under this Agreement.
"Subsidiaries" shall mean, collectively, the direct and
indirect subsidiaries of RBA that own any material assets.
"Substitute Xxxxx Xxxx Note A" is defined in Section 2.02.
"Substitute Xxxxx Xxxx Note B" is defined in Section 2.02.
"Sunrise Loan" shall mean the loan in the principal amount of
$2,775,000 made by Lender to Sunrise pursuant to the Original Credit Agreement
as amended and restated pursuant to this Agreement. As of the date hereof the
outstanding principal amount of the Sunrise Loan is $2,775,000. The Sunrise Loan
is secured by, among other things, the Sunrise Property.
"Sunrise Property" shall mean the ground leasehold owned by
260 West Sunrise Corp. and commonly known as 000 Xxxx Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxxx, Xxx Xxxx.
"Taxes" shall have the meaning assigned to such term in
Section 2.13(a) hereof.
"Transactions" shall mean, collectively (a) the transactions
contemplated by this Agreement, and (b) the transactions contemplated by the
Asset Swap Agreement.
"Ultimate Borrower" shall mean a borrower under a Pledged
Loan.
"Unsold Spaces" shall mean the unsold parking spaces in the
Co-operative Corporations or the Condominiums owned by an Owner Borrower or
pledged to a Borrower in connection with a Pledge Loan.
"Unsold Units" shall mean the unsold cooperative units and
unsold co-operative apartments owned by an Owner Borrower or pledged to secure a
Pledged Loan.
"York Associates" shall mean Royal York Associates, L.P.
"York Condo" shall mean The Royal York Condominium, a
condominium located at 000 Xxxx 00xx Xxxxxx and 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx.
"York Co-op" shall mean the residential unit (consisting of
86,865 shares allocated to 496 apartments) of the York Condo.
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SECTION 1.02. Accounting Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under generally accepted accounting principles in effect from time to time in
the United States applied on a basis consistent with those used in preparing the
financial statements referred to in Section 6.05 hereof ("GAAP"); provided,
however, that each reference in Article VII hereof, or in the definition of any
term used in Article VII hereof, to GAAP shall mean GAAP as in effect on the
date hereof.
II. THE LOANS
SECTION 2.01. Severance of Original Xxxxx Xxxx Loan. The
Original Xxxxx Xxxx Loan in the original maximum principal amount of $42,500,000
had an outstanding principal balance of $40,000,000 as of immediately prior to
the execution of this Agreement, which principal balance is being paid down to
$39,500,000 (the "Aggregate Xxxxx Xxxx Indebtedness") simultaneously with the
execution and delivery of this Agreement . Also simultaneously with the
execution and delivery of this Agreement, Lender and RBA are severing the
promissory note evidencing the original Xxxxx Xxxx Loan into two substitute
notes, one of which ("Substitute Xxxxx Xxxx Note A") will henceforth evidence
$32,000,000 of the Aggregate Xxxxx Xxxx Indebtedness, and the other of which
("Substitute Xxxxx Xxxx Note B") will henceforth evidence $7,500,000 of the
Aggregate Xxxxx Xxxx Indebtedness.
SECTION 2.02. Loans Advanced. The Loans have been fully
advanced. The outstanding principal amount of each of the Loans as of the date
hereof (and after giving effect to the principal repayments described in Section
2.01 and the definition of Royal York Loan) is set forth on Schedule 2.01
annexed hereto.
SECTION 2.03. Notes; Repayment of Loans. (a) Each Loan shall
be evidenced by a single Note, duly executed on behalf of the applicable
Borrower, dated the Closing Date.
(b) To the extent not previously paid, the principal balance
of, and all accrued and unpaid interest on, the Loans, and all other sums
payable under the Loan Documents, shall become due and payable on the Maturity
Date. Each Note shall bear interest from its date on the outstanding principal
balance thereof, as provided in Section 2.04.
SECTION 2.04. Interest on Loans. (a) Borrowers may from time
to time elect to have either of the following pricing options apply to the
outstanding principal balance of the Loans: (i) Adjusted LIBOR (if available to
Lender) or (ii) the Adjusted Prime Rate; provided, however, that during the
continuance of an Event of Default, Borrowers shall not have the right to select
the Adjusted LIBOR pricing option. If at any time more than one pricing option
is in effect, then, notwithstanding any contrary request or direction by
Borrower, each pricing option shall be allocated among all Loans on a pro rata
basis, so that the principal balance of any particular Loan to which such
pricing option applies shall bear the same proportion to the entire outstanding
principal balance of that Loan as the principal balance of the Loans (in the
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aggregate) to which such pricing option applies bears to the outstanding
principal balance of the Loans (in the aggregate). For convenience, an example
of such application of pricing options to the Loans is set forth in Schedule
2.04 of the Original Credit Agreement (it being agreed that to the extent such
example is inconsistent with the terms of this Agreement, whether such
inconsistencies are due to differences between this Agreement and the Original
Credit Agreement or otherwise, the terms of this Agreement shall control).
(b) Borrowers shall elect to have one of the foregoing pricing
options apply to the outstanding principal balance of the Loans by providing
written notice of such election to Lender. In the case of an election to have
all or any portion of the Loans bear interest at Adjusted LIBOR, Borrowers shall
notify Lender (by telephone followed by prompt written confirmation of such
election), such notice to be received by Lender by 11:00 a.m. (Eastern time) not
less than two (2) Business Days prior to the effective date of such rate in the
principal amount of the Loan.
(c) If Borrowers elect to have all or any portion of the Loans
bear interest at Adjusted LIBOR, Borrowers shall also select an interest period
(an "Interest Period") of 30, 60, 90 or 180 days and, during that period, any
prepayment of the affected portion of the Loans shall be made subject to the
provisions of Section 2.11. At the expiration of such Interest Period, Borrowers
may, by notice to Lender (by telephone followed by prompt written confirmation),
such notice to be received by Lender by 11:00 a.m. (Eastern time) not less than
two (2) Business Days prior to the expiration of such Interest Period, select
either Adjusted LIBOR for an additional time period or a rate equal to the
Adjusted Prime Rate from time to time. In no event shall any Interest Period
selected for the application of Adjusted LIBOR extend beyond the Maturity Date.
If Borrowers fail to make timely selection (or continuation) of a pricing option
or Interest Period with respect to all or any portion of the Loans, then,
subject to Section 2.05 and the other provisions of this Section 2.04, Borrower
shall be deemed to have selected that such portion bear interest at Adjusted
LIBOR for a 30-day Interest Period.
(d) No more than three pricing options for the Loans (in the
aggregate) shall be available at any one time.
(e) Whenever the Adjusted Prime Rate option is in effect, the
Interest Rate payable by the undersigned shall change simultaneously with each
change in the Prime Rate.
(f) Following an Event of Default, the outstanding principal
balance of each Loan shall bear interest at the Default Rate.
(g) Notwithstanding anything to the contrary contained in this
Section 2.04, Borrowers shall select pricing options in a manner that assures
that principal amortization payments required under Section 2.08(b) can be made
when due without Borrowers having to make such payments from principal bearing
interest at Adjusted LIBOR with respect to which the relevant Interest Period
has not expired.
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(h) [Intentionally Left Blank]
(i) Notwithstanding anything to the contrary contained in this
Section 2.04 or elsewhere in this Agreement, but subject to the provisions of
Section 2.04(h), Lender and Borrowers acknowledge that, pursuant to a letter
agreement dated the date hereof between Lender and Borrowers, the interest rate
on a portion of the Loans shall, subject to and in accordance with the terms and
conditions of such letter agreement, bear interest at a rate lower than is
provided in this Agreement.
SECTION 2.05. Alternate Rate of Interest. If any change in any
law or regulation or in the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof shall make it unlawful
for Lender to make or maintain any Loan at Adjusted LIBOR, or if Adjusted LIBOR
is not available to Lender when selected by Borrowers, then, by written notice
to Borrowers, Lender may require that all outstanding Loans bear interest at the
Adjusted Prime Rate, in which event all Loans shall bear interest at the
Adjusted Prime Rate until further notice to Borrowers; provided, however, that
such requirement may not be imposed against Borrowers by Lender in a
discriminatory manner vis-a-vis other Similarly Situated Borrowers. Each
determination by Lender made hereunder shall be conclusive absent manifest
error.
SECTION 2.06. Payments and Computations. Interest on each Loan
shall be payable in arrears on the first Business Day of each calendar month and
on the Maturity Date. Each payment hereunder and under any instrument delivered
hereunder (other then payments made by application of amounts on deposit in the
Master Account or any Collateral Property Lockbox Account) shall be made not
later than 2:00 p.m. (New York City time) for credit on the day when due in
lawful money of the United States to Lender at its offices at Xxx XXX Xxxxx,
Xxxxxxx, Xxx Xxxx 00000 in immediately available funds. All rates of interest
shall be computed on the basis of a 360-day year, applied to the actual number
of days elapsed.
SECTION 2.07. Overdue Amounts. (a) If Borrowers shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder or under any other Loan Document, by acceleration or
otherwise, Borrowers shall on demand from time to time pay interest, to the
extent permitted by law, on all Obligations outstanding up to the date of actual
payment of such defaulted amount (after as well as before judgment) at the
Default Rate.
(b) If any payment to be made by Borrowers under the Notes or
any other Loan Document is not made within ten (10) days after written notice
from Lender, Borrowers shall pay to Lender a late charge equal to four percent
(4%) of such late payment; provided, however, that such late payment charge
shall not apply to (i) payments of interest where there are sufficient funds
available to Lender pursuant to Section 4(a) of the Master Account Agreement to
pay same when due or (ii) the principal repayment required on the Maturity Date.
15
SECTION 2.08. Prepayment of Loans; Amortization. (a) The Loans
may be prepaid in full or part at any time without advance written notice,
penalty or premium except as otherwise provided in Section 2.11.
(b) On March 1, 2000 and on the first Business Day of each
calendar month thereafter during the term of this Agreement, Borrowers shall pay
to Lender installments of principal for each calendar month in an amount equal
to the amount set forth for such calendar month on Schedule 2.08(b) hereto. The
monthly installments of principal set forth on Schedule 2.08(b) are based on the
monthly principal amortization payments on a hypothetical, fully amortizing loan
in the amount of $34,775,000, having a fixed interest rate of 7.5% per annum and
a term of 20 years, with equal monthly installments of principal and interest.
Such principal prepayments shall be applied to pay down the outstanding
principal balances of the Sunrise Loan and the Xxxxx Xxxx Loan in accordance
with the amortization schedules for such Loans attached as part of Schedule
2.08(b), provided that if such Loans or either of them have been repaid, such
monthly payments shall be applied in accordance with Section 2.08(e).
Prepayments of principal (whether voluntary or involuntary) made pursuant to any
other provision of this Agreement or pursuant to any other Loan Document shall
be applied to the principal amount of the Loans in inverse order of maturity
and, accordingly, such payments shall not reduce the monthly principal payments
required under this Section 2.08.
(c) In instances of insured casualty or condemnation,
Borrowers shall make a mandatory prepayment of the Loans to the extent required
by the Security Documents.
(d) In addition to the payments of principal required under
Sections 2.08(b) and (c), Borrowers shall prepay the principal amount of the
Royal York Loan by at least $800,000 during 2000 (it being agreed that such
principal repayment obligation shall be reduced by the amount of principal, if
any, repaid under the Original Credit Agreement between November 1, 1999 and
December 31, 1999), by at least $800,000 during 2001 and by at least $800,000
during 2002. To the extent that such principal payments by Borrowers in any such
year exceed the amount required to be paid by under this Section 2.08(d) for
such year, the excess shall be credited towards Borrowers' obligations under
this Section 2.08(d) in the subsequent year(s). Prepayments of principal of the
Royal York Loan made during any such years resulting from prepayments of the
Pledged Loan secured by the Royal York Property shall be counted towards
Borrowers' obligations under this Section 2.08.
(e) Notwithstanding any contrary direction or request by
Borrowers, prepayments shall be applied to all of the Loans on a pro rata basis
and otherwise in such order and manner as Lender may determine in its sole
discretion (subject to the provisions of Section 2.08(b)) and, in determining
such order and manner of application, Lender shall have no obligation to
minimize Borrowers' liability under Section 2.11; provided, however, that so
long as no Default or Event of Default is continuing, (i) prepayments shall
first be applied to portions of the Loans to which the Adjusted Prime pricing
option applies, and then to portions for which the Interest Period is expiring
(except that (x) any prepayments resulting from the application of casualty or
16
condemnation proceeds pertaining to the Xxxxx Xxxx Property, the Sunrise
Property or the Royal York Property shall first be applied to repay the
principal amounts of the Xxxxx Xxxx Loan, the Sunrise Loan and the Royal York
Loan, respectively, before being applied to prepay the other Loans in accordance
with this clause (i), and (y) any prepayments resulting from the prepayment of
the Pledged Loans secured by the Xxxxx Xxxx Property or the Royal York Property
shall be applied to prepay the Xxxxx Xxxx Loan and the Royal York Loan,
respectively, before being applied to prepay the other Loans in accordance with
this clause (i)), and (ii) except with respect to amortization payments due
pursuant to Section 2.08(b), to the extent Lender would apply any such
prepayment to Loans bearing interest at Adjusted LIBOR with respect to which the
relevant Interest Periods have not expired, Lender shall, at Borrower's request,
defer such prepayment until the expiration of such Interest Period(s) (or until
the occurrence of a Default or Event of Default, whichever first occurs) and,
pending such prepayment, the amounts to be prepaid shall be held in the Master
Account and/or the applicable Collateral Property Lockbox Account(s).
(f) Amounts prepaid may not be reborrowed.
SECTION 2.09. Original Credit Agreement Interest. All accrued
and unpaid interest under the Original Credit Agreement through and including
the date immediately preceding the date of this Agreement shall be paid by
Borrowers on the first Business Day of the first full calendar month following
the date hereof (or, if the date hereof is the first day of a calendar month,
shall be paid on the date hereof).
SECTION 2.10. Change in Circumstances. (a) Notwithstanding any
other provision herein, if after the date of this Agreement any change in
applicable law or regulation or in the interpretation or administration thereof
by any governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law), or any change in GAAP or
regulatory accounting principles applicable to Lender, shall: (i) subject Lender
(which shall for the purpose of this Section 2.10 include any lending office of
Lender) to any charge, fee, deduction or withholding of any kind or to any tax
with respect to any amount paid or to be paid by Lender with respect to any
Loans (other than (x) taxes imposed on the overall net income of Lender and (y)
franchise taxes imposed on Lender, in either case by the jurisdiction in which
Lender has its principal office or its lending office with respect to the Loans
or any political subdivision or taxing authority of either thereof); (ii) change
the basis of taxation of payments to Lender of the principal of or interest on
any Loan or otherwise hereunder (other than taxes imposed on the overall net
income of Lender by the jurisdiction in which Lender has its principal office or
by any political subdivision or taxing authority therein); (iii) impose, modify
or deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or loans or loan commitments
extended by, Lender; or (iv) impose on Lender or the London interbank market any
other condition affecting this Agreement or the Loans made by Lender; and the
result of any of the foregoing shall be to increase the cost to Lender of making
or maintaining any Loan, or to reduce the amount of any payment (whether of
principal, interest, fee, compensation or otherwise) receivable by Lender or to
require Lender to make any payment in respect of any Loan, then Borrowers shall
pay to Lender, upon Lender's demand,
17
such additional amount or amounts as will compensate Lender for such additional
costs or reduction; provided, however, that such requirement may not imposed
against Borrowers by Lender in a discriminatory manner vis-a-vis other Similarly
Situated Borrowers.
(b) A statement of Lender setting forth such amount or
amounts, supported by calculations in reasonable detail, as shall be necessary
to compensate Lender as specified in paragraph (a) shall be delivered to
Borrowers and shall be conclusive absent manifest error. Borrowers shall pay
Lender the amount shown as due on any such statement within ten (10) days after
its receipt of the same.
(c) Failure on the part of Lender to demand compensation for
any increased costs, reduction in amounts received or receivable for any period
or reduction in the rate of return earned on Lender's capital, shall not
constitute a waiver of Lender's rights to demand compensation for any increased
costs or reduction in amounts received or receivable or reduction in rate of
return in such period. The protection under this Section 2.10 shall be available
to Lender regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by Lender for compensation. Borrowers' obligations under this
Section 2.10 shall survive the repayment of the Loans and the expiration or
termination of this Agreement; provided that any claims based thereon shall be
made on or prior to the second anniversary of the repayment in full of the
Loans.
SECTION 2.11. Indemnity. Borrowers shall indemnify Lender
against any loss or reasonable expense which Lender may sustain or incur as a
consequence of any one or more of the following events (regardless of whether
such events occur as a result of the occurrence of an Event of Default or the
exercise of any right or remedy of Lender under this Agreement or any other
agreement, or at law): any payment or prepayment of Loan on a date other than
the last day of the relevant Interest Period; and/or any failure of Borrowers to
convert to an Adjusted Libor pricing option after notice has been given or after
an election is deemed to have been made. Lender shall provide to Borrowers a
statement explaining any loss or expense, and such statement shall be conclusive
absent manifest error. Borrowers shall pay Lender the amount shown as due on any
such statement within ten (10) days after the receipt of the same. The
indemnities contained herein shall survive the repayment of the Loans and the
expiration or termination of this Agreement; provided that any claims based
thereon shall be made on or prior to the second anniversary of the repayment in
full of the Loans.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrowers
hereunder shall be made, in accordance with Section 2.06 hereof, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings in any such case imposed by the
United States or any political subdivision thereof, excluding taxes imposed or
based on its net income, and franchise or capital taxes imposed on it under the
laws of the United States or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If Borrowers shall be
required by law to deduct any Taxes from or in respect of any
18
sum payable hereunder to Lender, (x) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including without
limitation deductions applicable to additional sums payable under this Section
2.12) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (y) Borrowers shall make such deductions and (z)
Borrowers shall pay the full amount deducted to the relevant tax authority or
other authority in accordance with applicable law; provided, however, that such
requirement may not imposed against Borrowers by Lender in a discriminatory
manner vis-a-vis other Similarly Situated Borrowers.
(b) In addition, Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes or the Obligations (hereinafter referred to as "Other
Taxes").
(c) Borrowers will indemnify Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.12) paid by
Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date Lender makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by Borrowers in respect of any payment to Lender, Borrowers
will furnish to Lender such certificates, receipts and other documents as may be
reasonably required to evidence payment thereof.
(e) The agreements and obligations contained in this Section
2.12 shall survive the repayment of the Loans and the expiration or termination
of this Agreement; provided that any claims based thereon shall be made on or
prior to the second anniversary of the repayment in full of the Loans.
III. COLLATERAL SECURITY
SECTION 3.01. In General. The Obligations shall be secured by
the Owned Properties and the Pledged Loans as described in the Security
Documents and are entitled to the benefits thereof. Borrowers shall duly execute
and deliver the Security Documents, financing statements pursuant to the Uniform
Commercial Code and other documents, all in form and substance satisfactory to
Lender, as may be reasonably required by Lender to grant to Lender a valid,
perfected and enforceable first priority Lien on and security interest in
(subject only to the Liens permitted under Section 7.01 hereof) the Owned
Properties and the Pledged Loans.
SECTION 3.02. Filing and Recording. Borrowers shall, at their
sole cost and expense, cause all instruments and documents given as evidence of
security pursuant to this
19
Agreement to be duly recorded and/or filed or otherwise perfected in all places
necessary, in the opinion of Lender, and take such other actions as Lender may
reasonably request, in order to perfect and protect the Liens of Lender in the
Collateral. Borrowers, to the extent permitted by law, hereby authorize Lender
to file any financing statement in respect of any Lien created pursuant to the
Security Documents which may at any time be required or which, in the opinion of
Lender, may at any time be desirable although the same may have been executed
only by Lender or, at the option of Lender, to sign such financing statement on
behalf of Borrowers and file the same, and Borrowers hereby irrevocably
designate Lender, its agents, representatives and designees as its agent and
attorney-in-fact, coupled with an interest, for this purpose. In the event that
any re-recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is required to protect
and preserve such Lien, Borrowers shall, at Borrowers' cost and expense, cause
the same to be recorded and/or refiled at the time and in the manner requested
by Lender.
IV. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Lender (which
representations and warranties shall survive execution and delivery of this
Agreement and the making of all Loans) that, as of the date hereof, both before
and after giving effect to the consummation of the Transactions on the Closing
Date:
SECTION 4.01. General.
(a) Organization and Legal Existence. Each Borrower and each
of the Loan Parties is a legal entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has the
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as currently proposed to be conducted and is
qualified to do business in every jurisdiction where such qualification is
required. Each Borrower has the corporate power to execute, deliver and perform
its obligations under this Agreement and the other Loan Documents to which it is
a party, and to borrow hereunder and to execute and deliver the Notes.
(b) Authorization. The execution, delivery and performance by
each Borrower of this Agreement and each of the other Loan Documents to which it
is a party, the borrowings hereunder by Borrowers, the execution and delivery by
Borrowers of the Notes, and the grant of security interests in the Collateral
created by the Security Documents (i) have been duly authorized by all requisite
corporate action and (ii) will not violate (A) any provision of law, statute,
rule or regulation or the certificate or articles of incorporation or other
applicable constitutive documents or the by-laws of Borrowers or the Loan
Parties, as the case may be, (B) any order of any court, or any rule, regulation
or order of any other agency of government binding upon Borrowers, or the Loan
Parties, or (C) any provisions of any material indenture, agreement or other
instrument to which Borrowers, the Loan Parties, or any of their respective
20
properties or assets are or may be bound, (iii) will not be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any material indenture, agreement or other instrument
referred to in (ii)(C) above, or (iv) result in the creation or imposition of
any Lien of any nature whatsoever (other than in favor of Lender as contemplated
by this Agreement and the Security Documents) upon any property or assets of
Borrowers or the Loan Parties.
(c) Governmental Approvals. No registration or filing (other
than the filings necessary to perfect the Liens created by the Security
Documents) with consent or approval of, or other action by, any Federal, state
or other governmental agency, authority or regulatory body is or will be
required in connection with the Loans, other than any which have been made or
obtained.
(d) Binding Effect. This Agreement and each of the other Loan
Documents to which it is a party constitutes, and each of the Notes when duly
executed and delivered will constitute, a legal, valid and binding obligation of
Borrowers enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, or similar debtor/creditor laws and general principals
of equity and public policy.
(e) Material Adverse Change. There has been no material
adverse change in the business, assets, operations or financial condition of RBA
since September 30, 1999.
(f) Litigation; Compliance with Laws; etc. (i) Except for
claims fully covered by insurance or as set forth in Schedule 4.01(f) annexed
hereto, there are no actions, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory authority
now pending or, to the knowledge of any Senior Executive, threatened against or
affecting any Borrower or the Loan Parties or the businesses, assets or rights
of any Borrower or any Loan Parties (A) which involve any of the Transactions,
(B) which relate, directly or indirectly, to any Collateral Property or (C) as
to which it is probable (within the meaning of Statement of Financial Accounting
Standards No. 5) that there will be an adverse determination and which, if
adversely determined, would, individually or in the aggregate, materially impair
the ability of any Borrower to conduct business substantially as now conducted,
or have a Material Adverse Effect.
(ii) No Loan Party is in violation of any law, or in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court or governmental agency or instrumentality which has a
Material Adverse Effect.
(g) Financial Statements. Borrowers have heretofore furnished
to Lender balance sheets and statements of income and cash flows of Borrowers
dated as of September 30, 1999. Such balance sheets and statements of income and
cash flows present fairly the financial condition and results of operations of
Borrowers and the Loan Parties as of the dates and for the periods indicated,
and such balance sheets and the notes thereto disclose all material liabilities,
21
direct or contingent, of Borrowers and the Loan Parties, as of the dates thereof
in accordance with the reporting requirements of GAAP.
(h) Federal Reserve Regulations. (i) No Loan Party is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
(ii) No part of the proceeds of the Loans will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (A) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (B) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of the Regulations
of the Board, including, without limitation, Regulation G, T, U or X thereof. If
requested by Lender, Borrowers or any Loan Party shall furnish to Lender a
statement on Federal Reserve Form U-1 referred to in said Regulation U.
(i) Taxes. Borrowers and each of the Loan Parties has filed or
caused to be filed (or requested an extension for filing of) all Federal, state,
local and foreign tax returns which are required to be filed by it, on or prior
to the date hereof. Each Borrower and each of the Loan Parties has paid or
caused to be paid all taxes shown to be due and payable on such filed returns or
on any assessments received by it.
(j) Employee Benefit Plans. With respect to the provisions of
ERISA:
(i) No Reportable Event has occurred or is continuing
with respect to any Pension Plan.
(ii) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to
any Plan subject to Part 4 of Subtitle B of Title I of ERISA.
(iii) None of Borrowers or any ERISA Affiliate is now, or
has been during the preceding five years, obligated to contribute to a
Multiemployer Plan. None of Borrowers or any ERISA Affiliate has (A) ceased
operations at a facility so as to become subject to the provisions of Section
4062(e) of ERISA, (B) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA, (C) ceased making
contributions to any Pension Plan subject to the provisions of Section 4064(a)
of ERISA to which Borrowers or any ERISA Affiliate made contributions, (D)
incurred or caused to occur a "complete withdrawal" (within the meaning of
Section 4203 of ERISA) or a "partial withdrawal" (within the meaning of Section
4205 of ERISA) from a Multiemployer Plan that is a Pension Plan so as to incur
withdrawal liability under Section 4201 of ERISA (without regard to subsequent
reduction or waiver of such liability under Section 4207 or 4208 of ERISA), or
(E) been a party
22
to any transaction or agreement under which the provisions of Section 4204 of
ERISA were Applicable.
(iv) No notice of intent to terminate a Pension Plan has
been filed, nor has any Plan been terminated pursuant to the provisions of
Section 4041(e) of ERISA.
(v) The PBGC has not instituted proceedings to terminate
(or appoint a trustee to administer) a Pension Plan and no event has occurred or
condition exists which might constitute grounds under the provisions of Section
4042 of ERISA for the termination of (or the appointment of a trustee to
administer) any such Plan.
(vi) With respect to each Pension Plan that is subject to
the provisions of Title I, Subtitle B, Part 3 of ERISA, the funding method used
in connection with such Plan is acceptable under ERISA, and the actuarial
assumptions and methods used in connection with funding such Pension Plan
satisfy the requirements of Section 302 of ERISA. The present value of neither
(A) accrued benefits (both vested and non-vested) under each such Pension Plan
(other than the Multiemployer Plans), nor (B) the "benefit liabilities" (within
the meaning of Section 4001(a)(16) of ERISA) under such Plan, in each case as of
the latest actuarial valuation date for such Plan (determined in accordance with
the same actuarial assumptions and methods as those used by the Plan's actuary
in its valuation of such Plan as of such valuation date), exceeds the assets of
such Pension Plan by more than $1,200,000. No such Pension Plan has incurred any
"accumulated funding deficiency" (as defined in Section 412 of the Code),
whether or not waived.
(vii) There are no actions, suits or claims pending
(other than routine claims for benefits) or, to the knowledge of Borrowers or
any ERISA Affiliate, which are likely to be asserted, against any Plan or the
assets of any such Plan. No civil or criminal action brought pursuant to the
provisions of Title I, Subtitle B, Part 5 of ERISA is pending or threatened
against any fiduciary or any Plan. None of the Plans or any fiduciary thereof
(in its capacity as such) has been the direct or indirect subject of any audit,
investigation or examination by any governmental or quasi-governmental agency.
(viii) All of the Plans in all material respects comply
currently, and have complied in the past, both as to form and operation, with
their terms and with the provisions of ERISA and the Code, and all other
applicable laws, rules and regulations; all necessary governmental approvals for
the Plans have been obtained and a favorable determination as to the
qualification under Section 401(a) of the Code of each of the Plans which is an
employee pension benefit plan (within the meaning of Section 3(2) of ERISA) has
been made by the Internal Revenue Service and a recognition of exemption from
federal income taxation under Section 501(c) of the Code of each of the funded
employee welfare benefit plans (within the meaning of Section 3(1) of ERISA) has
been made by the Internal Revenue Service, and nothing has occurred since the
date of each such determination or recognition letter that would adversely
affect such qualification.
23
(k) No Material Misstatements. No information, report,
financial statement, exhibit or schedule prepared or furnished by or on behalf
of Borrowers to Lender in connection with this Agreement, the Security
Documents, the Notes or any other Loan Documents or included therein contained
or contains any material misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Investment Company Act; Public Utility Holding Company
Act. No Loan Party is an "investment company" as defined in, or is otherwise
subject to regulation under, the Investment Company Act of 1940. No Loan Party
is a "holding company" as that term is defined in or is otherwise subject to
regulation under, the Public Utility Holding Company Act of 1935.
(m) Security Interest. To the best knowledge of Borrowers,
each of the Security Documents creates and grants to Lender a legal, valid and
perfected first (except as permitted pursuant to Section 7.01 hereof) priority
security interest in the collateral identified therein. Such collateral or
property is not subject to any other Liens whatsoever, except Liens permitted by
Section 7.01 hereof.
SECTION 4.02. Controlled Properties.
(a) Title. The Controlled Owners hold the fee simple or
leasehold estate in and to the Controlled Properties, for their own account, not
as an agent or trustee for another party, and the Owned Properties are free and
clear of all agreements, liens and encumbrances except those specifically set
forth in Schedule B of the Lender's title insurance policies. No notice of any
mechanic's or materialmen's Lien or similar Lien, or of any claim or right to
any such lien has been received, asserted and/or, to the best knowledge of
Borrowers, threatened in writing in connection with the Controlled Properties.
No material default, breach or violation exists under any covenants, conditions,
restrictions, rights of way, easements or encumbrances affecting the Controlled
Properties.
(b) Compliance with Law. Except as disclosed in the violation
searches and municipal letters delivered to Lender and/or Lender's counsel and
those additional items set forth on Schedule 4.02(b), the Controlled Properties
are in compliance in all material respects with all applicable building codes,
zoning regulations, subdivision requirements and other applicable laws,
ordinances, directions, rules, regulations and orders (collectively, "Applicable
Laws") and such compliance is not dependent upon any land and/or improvements
not a part of the Controlled Properties, and the requirements of the local,
state and federal governmental authorities having jurisdiction over the
Controlled Properties have been met and Borrowers have received no written
notice of any violation of any Applicable Laws which has not been cured. Without
limitation of the foregoing, neither the Controlled Properties nor any part
thereof constitute a nonconforming use under any Applicable Laws. Permanent
certificates of occupancy (the "Certificates of Occupancy"), permitting the full
and complete use and occupancy of the Controlled Properties as and to the extent
required by Applicable Laws have
24
been issued and are in full force and effect. Each Controlled Owner possesses
all other licenses, permits, approvals and consents, including, without
limitation, all environmental, health and safety licenses, permits, approvals
and consents (collectively, "Permits") of all Federal, state and local
governmental authorities as required to conduct properly its business, each such
Permit is in full force and effect, each Controlled Owner is in compliance in
all material respects with all such Permits, and no event (including, without
limitation, any violation of any law, rule or regulation) has occurred which
allows the revocation or termination of any such Permit or any restriction
thereon.
(c) Compliance with Environmental Laws. Except as disclosed in
the environmental reports listed in Schedule 4.02(c) hereto: (i) the operations
of the Controlled Owners comply in all material respects with all applicable
Environmental Laws; (ii) the Controlled Owners and the Loan Parties and all of
their present facilities or operations and, to the best knowledge of Borrowers,
their past facilities or operations, are not subject to any judicial proceeding
or administrative proceeding or any outstanding written order or agreement with
any governmental authority or private party respecting (A) any Environmental
Law, (B) any Remedial Work, or (C) any Environmental Claims arising from the
Release of a Hazardous Material into the environment; (iii) to the best of the
knowledge of Borrowers, none of the Controlled Owners' operations is the subject
of any Federal or state investigation evaluating whether any Remedial Work is
needed to respond to a Release of any Contaminant into the environment; (iv)
none of the Controlled Owners has filed any notice under any Environmental Law
indicating past or present treatment, storage, or disposal of a Hazardous
Material or reporting a spill or Release of a Hazardous Material into the
environment; (v) to the best of the knowledge of Borrowers, none of the
Controlled Owners has any contingent liability in connection with any Release of
any Hazardous Material into the environment; (vi) none of the operations of the
Controlled Owners involve the generation, transportation, treatment or disposal
of Hazardous Materials; (vii) none of the Controlled Owners has disposed of any
Hazardous Material by placing it in or on the ground or waters of any premises
owned, leased or used by any of them and, to the best knowledge of Borrowers,
neither has any lessee, prior owner, or other person; (viii) no underground
storage tanks or surface impoundments are on any property of the Controlled
Owners; and (ix) no Lien in favor of any governmental authority for (A) any
liability under any Environmental Law or regulations, or (B) damages arising
from or costs incurred by such governmental authority in response to a Release
of a Hazardous Material into the environment, has been filed or attached to the
property of the Controlled Owners.
(d) Eminent Domain. There are no pending or concluded
condemnation or similar proceedings affecting the Controlled Properties, and
Borrowers have received no written notice and have no knowledge of any such
proceedings that are threatened.
(e) Casualty Damage; Insurance. No unrestored fire or other
casualty damage affects the Controlled Properties, and all insurance policies
required by Section 6.03(a) are in full force and effect.
25
(f) Leases. Attached hereto as Schedule 4.02(f) are rent rolls
(the "Rent Rolls") for each of the Controlled Properties. The Rent Rolls are
true, correct and complete with respect to the subject matter thereof. The only
leases, subleases, licenses or other occupancy agreements affecting the
Controlled Properties are those leases (the "Leases") reflected in the Rent
Rolls. As to the commercial leases, except as set forth in Schedule 4.02(f): (i)
all improvements in the spaces demised pursuant to the Leases which are required
to be performed by the landlord have been completed in accordance with the terms
of such Leases, (ii) the terms of the Leases have commenced and each Lease is in
full force and effect; (iii) the tenants under the Leases have accepted
possession of and are in occupancy of all of their respective demised premises
and have commenced the conduct of their business therein; (iv) the tenants under
the Leases have commenced the payment of rent under such Leases and there are no
offsets, claims or defenses to the enforcement thereof; (v) all rents due and
payable under the Leases have been paid and no portion thereof has been paid for
any period more than thirty (30) days in advance; (vi) the rent payable under
each Lease is the amount of fixed rent provided for in such Lease and there is
no claim or basis for a claim by the tenant thereunder for an adjustment to the
rent; (vii) no tenant has made any claim against the landlord under the Leases
which remains outstanding and there are no defaults on the part of the landlord
under any Lease and no event has occurred which, with the giving of notice or
passage of time, or both, would constitute such default; (viii) to the best
knowledge of Borrowers, there is no present material default by any tenant under
any Lease, nor do any facts exist which with the giving of notice and/or the
passage of time, would constitute a default; (ix) the Controlled Owners do not
hold (and no person holds on behalf of any Controlled Owner) any security
deposits under the Leases; and (x) the Controlled Owners have not assumed or
agreed to assume the obligations of any tenant of the Controlled Properties (or
any affiliate of such tenant) under any lease, sublease or occupancy agreement
for space in the Controlled Properties or elsewhere. True and complete copies of
the Leases have been delivered to Lender. The Leases for the Sunrise Property
have not been modified, extended or renewed except as set forth on Schedule
4.02(f) and are in full force and effect in accordance with their terms. The
Leases are the only agreements between the Controlled Owners and the tenants
thereunder affecting the Controlled Properties and all material agreements and
understandings between the tenants and the landlord under the Leases with
respect to the Controlled Properties and the use and occupancy thereof are set
forth therein. None of the Leases contains any option to purchase or right of
first refusal to purchase the Controlled Properties or any part thereof. The
Leases have not been assigned or pledged except to Lender or RBA, and no other
person whatsoever has any interest therein except the tenants thereunder.
(g) Property Management and Leasing. Except as set forth in
Schedule 4.02(g), there are no outstanding contracts or agreements with respect
to the management, operation or leasing of the Controlled Properties. A true,
correct and complete copy of each agreement set forth on Schedule 4.02(g),
including all amendments thereto, if any, have been delivered to Lender.
(h) Access; Utilities. The Controlled Properties are directly
served by public streets. The sewer, water and utility services of the
Controlled Properties are directly connected
26
with sources or systems serving the general public, without traversing property
owned by others, or, if not directly connected, valid perpetual recorded
easements have been established for rights of way over intervening property.
(i) No Claims. No claim exists against the Controlled Owners
for brokerage or leasing commissions, or for any participation in the income
from, or ownership of, the Controlled Properties, and, except for real estate
taxes which are not yet due and payable, and to the best knowledge of Borrowers,
no liens or claims for money exist which are or may be superior to the lien and
charge of the Security Documents and Borrowers have received no notice of any
such claim or lien.
(j) Taxes and Assessments. The Controlled Properties are taxed
separately from all property which is not subject to the Security Documents. All
taxes relating to the Controlled Properties, to the extent due, have been paid
in full. Borrowers have received no written notice and have no knowledge of any
pending or proposed special or other assessments for public improvements
affecting the Controlled Properties or any contemplated improvements to the
Controlled Properties that may result in such special or other assessments,
except for any increase in the assessed valuation of the Controlled Properties
resulting from improvements to be made in the premises demised to tenants under
Leases.
(k) Flood Hazard Area. The Controlled Properties are not
located in an area identified by the Secretary of Housing and Urban Development
as an area having special flood hazards pursuant to the terms of the National
Flood Insurance Act of 1968, or the Flood Disaster Protection Act of 1973, as
amended. If after the date hereof the area in which the Controlled Properties
are located is identified or designated as such an area, Borrowers will obtain
and maintain insurance against damage or loss by flood on such basis and in such
amounts as shall be required from time to time by Lender.
SECTION 4.03. Pledged Loans.
(a) Title. RBA is and will be the legal and beneficial owner
of, and has good and indefeasible title to, the Pledged Loans, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except the lien and security interest created by
the Security Documents. Except as expressly set forth in the Pledged Loan
Documents securing the Royal York Loan, none of the Pledged Loans are subject to
any options to purchase or similar rights of any person.
(b) Pledged Loan Documents. Schedule 4.03(b) is true, correct
and complete list of the Pledged Loan Documents. Except as set forth on Schedule
4.03(b), all of the Pledged Loan Documents (1) to the best knowledge of RBA,
have been duly executed and delivered by the parties thereto, (2) to the best
knowledge of RBA, have been made in compliance with all requirements of
applicable laws and regulations, (3) to the best knowledge of RBA, are and will
continue to be valid, binding and enforceable in accordance with their terms,
without offset or
27
defense of any kind against RBA, and (4) have not been modified, amended or
supplemented, except in writing, which writing is part of the instruments
constituting the Pledged Loan Documents. Each of the Pledged Notes is due and
payable in accordance with its terms.
(c) No Default. To the best knowledge of RBA, except as
disclosed in Schedule 4.03(c), no default, nor any event which, with notice or
lapse of time or both, would become a default, has occurred and is continuing
under any of the instruments constituting the Pledged Loan Documents on the part
of any party to any of such instruments.
(d) No further Advances. RBA has no further obligation to make
any advances under any of the Pledged Loans to any of the borrowers thereunder.
(e) Outstanding Balances. As of December 31, 1999 the
outstanding balance of the Pledged Loan securing the Royal York Loan was
$57,755,413.64 and as of December 31, 1999 the outstanding balance of the
Pledged Loan securing the Xxxxx Xxxx Loan was $70,820,228.98.
SECTION 4.04. No Defenses. Each of the Borrowers represents
and warrants that it has no defenses, set-offs or counterclaims with respect to
any of the Obligations.
SECTION 4.05. Co-operatives and Condominiums Generally.
(a) To the best knowledge of RBA, Schedule 4.05(a) attached
hereto sets forth a complete and accurate list of the Offering Plans with
respect to the York Co-op and York Condo. To the best knowledge of RBA, no
amendments to any of such Offering Plans has been made, except as set forth on
Schedule 4.05(a). The amendments to such Offering Plans filed by an Owner
Borrower or Controlled Owner contain no material misrepresentations.
(b) All filings required to be made and all approvals required
to be obtained under all Co-op and Condo Laws with regard to the sale by an
Owner Borrower or a Controlled Owner of Unsold Units or Unsold Space in the York
Co-op and York Condo have been made or obtained.
(c) Schedule 4.05(c) attached hereto is a true, complete and
accurate list of all of the Unsold Units and Unsold Spaces in the York Co-op.
(d) RYP as the general partner of York Associates has the full
right, power and authority under the Royal York Associates Limited Partnership
Agreement to cause York Associates to designate Lender and its designees as a
Holder of Unsold Shares as such phrase is defined in its Offering Plan.
28
(e) Other than X.X. Xxxxx and Xxxxx Xxx, there are no members
of the board of directors of Royal York Owners Corporation or members of the
Board of Managers of Royal York Condominium that were designated by RBA or any
of its affiliates.
(f) The remaining balance of the additional $2,500,000
contribution to the Reserve Fund for York Co-op required to be funded by Royal
York Associates, L.P. is $957,881 as of 1/22/00, and such amount is required to
be funded only if, as and when the Unsold Units are sold.
(g) The sponsor is not obligated to cause any work or
improvements to be completed pursuant to the Offering Plans for the York Co-op
or York Condo the aggregate cost of which would exceed $100,000.
(h) [Intentionally Left Blank]
(i) The sponsors have relinquished control of the Board of
Directors of the York Co-op and the Board of Managers of the York Condo.
(j) No alterations have been performed with respect to any
Unsold Units in the York Co-op that would require an amendment to the respective
certificates of occupancy therefor that has not been obtained, except
alterations affecting not more than 11 units in the aggregate.
(k) All sums due to any Condominium or Co-operative
Corporation by York Associates are now, and at the time of Closing will be,
fully paid to the end of the payment period in effect at such time.
(l) The remaining amount of the $2,000,000 "Sales Reserve" as
such term is defined in the Agreement of Limited Partnership of Royal York
Associates, L.P. is approximately $2,000,000.
(m) The Maintenance Reimbursement Program, as defined in the
Offering Plan for York Co-op, has been fully funded and the "Escrow Fund"
described in the Ninth Amendment to such Plan has been fully disbursed. There is
no new maintenance rebate or other rebate program in effect for the York Co-op,
except such rebate, if any, which may be negotiated specifically for an
individual contract of sale.
(n) As of the date hereof, the principal balance of the
outstanding loans made by RYP to York Associates is zero.
29
VI. AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees with Lender that,
so long as this Agreement shall remain in effect or the principal of or interest
on any Note, or any fee, expense or other Obligation payable hereunder or in
connection with any of the Transactions shall be unpaid:
SECTION 6.01. Legal Existence. Each Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence.
SECTION 6.02. Businesses and Properties. Each Borrower shall
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect the rights, licenses and Permits material to the conduct of its
businesses; comply with all laws, rules, regulations and governmental orders
(whether Federal, state or local) applicable to the operation of such businesses
whether now in effect or hereafter enacted (including, without limitation, all
applicable laws, rules, regulations and governmental orders relating to public
and employee health and safety and all Environmental Laws) and with any and all
other applicable laws, rules, regulations and governmental orders, the lack of
compliance with which would have a Material Adverse Effect; take all actions
which may be required to obtain, preserve, renew and extend all Permits and
other authorizations which are material to the operation of such businesses; and
at all times maintain, preserve and protect all property material to the conduct
of such businesses and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replace ments thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 6.03. Insurance. (a) Borrowers shall provide, maintain
and keep in force (or shall cause the Controlled Owners to be provide, maintain
and keep in force) the following policies of insurance:
(i) Property insurance against loss or damage to the
Improvements by fire and all other risks of physical loss or damage with
coverage known as "all risk" in an amount not less than the full replacement
cost of the Controlled Properties (other than the York Co-op and the York
Condo), without deduction for depreciation and including, without limitation,
sprinkler leakage, demolition cost, cost of debris removal, increased cost of
construction arising from operation or enforcement of building laws and
ordinances, and such additional endorsements as Lender may reasonably require,
with not more than $10,000 deductible from the loss payable for any casualty,
and total coverage of not less than $20,000,000 per occurrence, and containing
an "agreed amount endorsement" or other endorsement to eliminate application of
the coinsurance clause;
(ii) If any of the Controlled Properties is located in an
area designated as a Federal "flood zone", flood insurance in an amount not less
than the full replacement cost of the
30
Improvements (without deduction for depreciation) or such lesser amounts, and
with such deductibles, as are required by Lender;
(iii) If Lender determines that any of the Controlled
Properties is in an earthquake zone, insurance against loss or damage to the
Improvements from earthquake and/or earth movement, in such amounts and with
such deductibles as are required by Lender;
(iv) Insurance against loss of rental income caused by
the perils required to be insured against in (i), (ii), (iii), and (v) of this
Section, on an "actual loss sustained" basis, in an amount not less than one (1)
year's gross rental income, excluding only non-continuing expenses;
(v) Boiler and machinery insurance covering damage to
pressure vessels, air tanks, boilers, machinery, pressure piping, electrical,
heating, ventilation and air conditioning equipment, and elevator and escalator
equipment, provided the Controlled Properties contain equipment of such nature,
in such amounts as are required by Lender;
(vi) Commercial public liability insurance, on an
"occurrence" basis, without deductible, against claims for bodily injury
including death, property damage and "Personal Injury" occurring in, on or about
the Controlled Properties and the adjoining streets, sidewalks and passageways,
such insurance to name Lender as an additional insured and to be in such amounts
as are required by Lender;
(vii) Workers' compensation insurance (including
Employers' Liability) in accordance with the laws of the state in which the
Controlled Properties is situated for all employees of the Controlled Owners
engaged on or with respect to the Controlled Properties;
(viii) During the course of any construction, alteration or
repair of the Controlled Properties or any portion thereof:
(A) Workers' compensation insurance
(including Employers' Liability) in accordance with the laws of the state in
which the Land is situated on all employees of contractors, sub-contractors,
consultants and vendors engaged on or with respect to the Controlled Properties;
(B) Commercial general liability insurance
naming Lender as additional insured covering operations of all contractors and
sub-contracts, including completed operations coverage for two (2) years after
construction of such Improvements, with such other endorsements and in such
amounts as Lender may require; and
(C) Builders' risk completed value insurance
against "all risks of physical loss," including collapse, transit and, if
required by Lender, "soft costs" coverage, with deductibles not to exceed
$10,000, in nonreporting form, covering the total value of work
31
performed and equipment, supplies and materials furnished, and containing the
"permission to occupy before completion of work" endorsement;
(ix) Such other insurance and any replacements or
substitutions therefor or additions thereto as may at any time and from time to
time be required by Lender against other insurable hazards or casualties,
including, but not limited to, war, nuclear reaction or radioactive
contamination, each in such amount as Lender shall determine.
Borrowers shall not carry separate or additional insurance concurrent in form or
contributing, in the event of loss, with that required hereunder unless endorsed
in favor of Lender as loss payee or additional insured, as applicable,
designating that such insurance shall contain endorsements providing coverage
secondary to the insurance required to be carried hereunder and otherwise
acceptable to Lender in all respects.
(b) All policies of insurance shall be issued by companies
satisfactory to Lender which are authorized to do business in the states in
which the Controlled Properties are situated and shall have a Best's rating of
not less than A/XIII (or are otherwise reasonably acceptable to Lender). All
policies of insurance shall show Lender as mortgagee and shall have attached
thereto a lender's loss payable endorsement for the benefit of Lender in form
satisfactory to Lender. Borrowers shall furnish Lender with originals of all
policies of insurance. If Lender consents to Borrowers providing any of the
required insurance through blanket policies carried by Mortgagor and covering
more than one location, then Borrowers shall furnish Lender with a certified
copy of each such policy and a certificate of insurance for each such policy
setting forth the coverage as to each Controlled Property, including the
exclusive allocation of the insured amount, the limits of liability, the name of
the carrier, the policy number, the expiration date and such additional
information as Lender may require.
(c) Every policy of insurance required by this Agreement shall
contain (i) the endorsement or agreement of the insurer thereunder to waive all
rights of setoff, counterclaims or deductions against Lender and to pay all
losses payable in accordance with the terms of such policy notwithstanding any
act, omission or negligence of Lender which might otherwise result in forfeiture
of such insurance, and (ii) a provision that such policies will not be canceled
or materially amended, which term shall include any reduction in the scope or
limits of coverage, without at least thirty (30) days' prior written notice to
Lender.
(d) At least thirty (30) days prior to the expiration of each
insurance policy, Borrowers shall furnish Lender with evidence satisfactory to
Lender of the payment of the premium and arrangements for the reissuance of a
policy continuing insurance in force as required by this Agreement.
SECTION 6.04. Taxes. Borrowers will pay all Impositions and
other prior charges and liens now or hereafter assessed or liened on or levied
against the Controlled Properties or any part thereof or interest therein when
and as the same become due and payable.
32
Upon request of Lender, Borrowers will exhibit to Lender receipts for the
payment of Impositions and all other prior charges and liens before the date
when the same shall become delinquent. Borrowers shall have the right to contest
or object to the amount or validity of any Impositions imposed against the
Controlled Properties by appropriate legal proceedings, but no such contest
shall be deemed or construed in any way to relieve, modify or extend Borrowers'
covenant to pay such Impositions unless (x) Borrowers have given written notice
to Lender of Borrowers' intent to so contest or object to the imposition of such
Impositions not less than thirty (30) days prior to the date on which such
Impositions are due and payable and (y) Borrowers have demonstrated to Lender's
satisfaction in its sole and absolute discretion that (a) payment of the
Impositions Borrowers intend to contest or object to would by operation of law
constitute a waiver of Borrowers' right to contest the same and (b) the conduct
of legal proceedings to contest or object to such Impositions will conclusively
operate to prevent the sale of the Controlled Properties or any part thereof or
interest therein in payment of such Impositions prior to final determination of
such proceedings. In no event shall Borrowers' decision to contest the
imposition of any Impositions affect Borrowers' obligation to continue to make
payments on account of Impositions into escrow with Lender or its designee as
elsewhere provided herein. If the conditions set forth in the foregoing clauses
(x) and (y) are satisfied, neither Lender nor its designee shall pay any
Impositions being contested out of such escrow as long as (1) Borrowers promptly
commence and thereafter continue to conduct such contest with due diligence and
in good faith, (2) Borrowers provide evidence of the same satisfactory to
Lender, in its sole and absolute discretion, from time to time within ten (10)
days after written request therefor, (3) Borrowers deposit into escrow with
Lender or its designee, in addition to all Impositions which would, absent such
contest, be due and payable, such additional sums as Lender or its designee
shall determine from time to time in its sole and absolute discretion as
sufficient to pay all interest, late payment fees, penalties and other charges
which may be imposed for nonpayment of such Impositions as if the same were not
being contested, and (4) Lender is satisfied in its sole and absolute discretion
that neither the Controlled Properties nor any part thereof is in danger of
sale, foreclosure or forfeiture by reason of the nonpayment of such Impositions
or any interest, late payment fees, penalties and other charges imposed in
connection therewith.
SECTION 6.05. Financial Statements, Reports, etc. In addition
to all other deliveries which Borrowers are required to make to Lender elsewhere
in this Agreement and without limiting Borrowers' obligations with respect
thereto, Borrowers shall deliver the following to Lender, all of which shall be
prepared at Borrowers' sole cost and expense and shall be in such form and
contain such detail as Lender may at any time and from time to time require in
its sole and absolute discretion:
(a) No later than February 1st of each calendar year, a
current rent roll for each of the Controlled Properties, certified as true,
complete and correct by a Senior Executive. The rent roll shall include, without
limitation, the name of every tenant, the space demised thereby, the expiration
date of such tenant's Lease (taking into account all periods, if any, covered by
extension or renewal options granted to such tenant which have been theretofore
33
exercised), any extension and/or renewal periods covered by options granted such
tenant which have not yet been exercised, the amounts of all current rents and
arrearages, and such other information as Lender may reasonably request at any
time and from time to time.
(b) Promptly upon filing thereof, copies of any public filings
required by law with respect to any of the Loan Parties.
(c) [Intentionally Left Blank]
(d) No later than forty-five days after the end of each
calendar quarter, with respect to each of the Collateral Properties, an
operating statement reasonably satisfactory to Lender in form and substance.
(e) No later than ten (10) Business Days following Lender's
request therefor, a current rent roll for the Controlled Properties and a status
report on the leasing program, in each case certified as true, complete and
correct by a Senior Executive.
(f) No later than thirty (30) days following Lender's demand
therefor, copies of all Leases and other agreements relating to or affecting
Borrowers or the Controlled Properties, certified as true and complete by a
Senior Executive.
(g) No later than November 30th of each calendar year, a
proposed operating and capital budget for each of the Controlled Properties for
the following calendar year.
(h) No later than ten (10) Business Days following Lender's
demand therefor, a certificate of Borrowers in form satisfactory to Lender
stating the amount of the then unpaid principal balance of each Loan, the amount
of any unpaid interest accrued thereon, the interest rate then being earned on
the outstanding principal balance of each Loan, the date to which the last
installment of interest or principal and interest has been paid, whether or not,
to the best of Borrowers' knowledge, any Event of Default then exists or any
event has occurred which, with the giving of notice or passage of time or both,
would constitute an Event of Default and that no offsets, counterclaims or
defenses exist with respect to the Obligations.
(i) No later than ten (10) Business Days after Borrowers'
receipt thereof, true and complete copies of (1) all notices of default given to
Borrowers by any tenant under a Lease (other than a Lease for a residential
apartment), by any Ultimate Borrower under a Pledged Loan or other agreement
with respect to or affecting Borrowers or the Controlled Properties, (2) all
notices issued by any governmental or quasi governmental authority or
corporation having jurisdiction over Borrowers or the Controlled Properties of
any violation of law at the Controlled Properties and (3) all notices,
correspondence, legal papers or other documents relating to any suits,
proceedings or other actions threatened, being commenced or pending against
Borrowers or the Controlled Properties before any court of law, administrative
agency, arbitration panel or other adjudicating body.
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(j) notice of any Default of Event of Default, specifying the
nature and extent thereof and the action (if any) which is proposed to be taken
with respect thereto.
(k) notice of any development in the business or affairs of
any Borrower or any of the Loan Parties which has had or which is likely, in the
reasonable judgment of any Senior Executive, to have, a Material Adverse Effect.
(l) such other information as Lender may reasonably request.
SECTION 6.06. [Intentionally Left Blank]
SECTION 6.07. ERISA. Borrowers shall, and shall cause their
ERISA Affiliates to:
(a) Pay and discharge promptly any liability imposed upon it
pursuant to the provisions of Title IV of ERISA; provided, however, that neither
Borrowers nor any ERISA Affiliate shall be required to pay any such liability if
(1) the amount, applicability or validity thereof shall be diligently contested
in good faith by appropriate proceedings, and (2) such person shall have set
aside on its books reserves which, in the opinion of the independent certified
public accountants of such person, are adequate with respect thereto.
(b) Deliver to the Lender, promptly, and in any event within
30 days, after (i) the occurrence of any Reportable Event, a copy of the
materials that are filed with the PBGC, or the materials that would have been
required to be filed if the 30-day notice requirement to the PBGC was not
waived, (ii) any Borrower or any ERISA Affiliate or an administrator of any
Pension Plan files with participants, beneficiaries or the PBGC a notice of
intent to terminate any such Plan, a copy of any such notice, (iii) the receipt
of notice by any Borrower or any ERISA Affiliate or an administrator of any
Pension Plan from the PBGC of the PBGC's intention to terminate any Pension Plan
or to appoint a trustee to administer any such Plan, a copy of such notice, (iv)
the filing thereof with the Internal Revenue Service, copies of each annual
report that is filed on Treasury Form 5500 with respect to any Plan, together
with certified financial statements (if any) for the Plan and any actuarial
statements on Schedule B to such Form 5500, (v) any Borrower or any ERISA
Affiliate knows or has reason to know of any event or condition which might
constitute grounds under the provisions of Section 4042 of ERISA for the
termination of (or the appointment of a trustee to administer) any Pension Plan,
an explanation of such event or condition, (vi) the receipt by any Borrower or
any ERISA Affiliate of an assessment of withdrawal liability under Section 4201
of ERISA from a Multiemployer Plan, a copy of such assessment, (vii) any
Borrower or any ERISA Affiliate knows or has reason to know of any event or
condition which might cause any one of them to incur a liability under Section
4062, 4063, 4064 or 4069 of ERISA or Section 412(n) or 4971 of the Code, an
explanation of such event or condition, and (viii) any Borrower or any ERISA
Affiliate knows or has reason to know that an application is to be, or has been,
made to the Secretary of the Treasury for a waiver of the minimum funding
standard under the provisions of Section 412 of the Code, a
35
copy of such application, and in each case described in clauses (i) through
(iii) and (v) through (vii) together with a statement signed by a Senior
Executive setting forth details as to such Reportable Event, notice, event or
condition and the action which such Borrower or such ERISA Affiliate proposes to
take with respect thereto.
SECTION 6.08. Maintaining Records; Access to Properties and
Inspections; Right to Audit. Borrowers shall keep or cause to be kept full, true
and complete records and books of account in accordance with income tax
accounting principles. Borrowers' fiscal year shall be the calendar year (or a
fiscal year ending June 30), and its accounts shall be kept on such basis.
Borrowers' accounts shall be kept current at all times, and all transactions
shall be promptly and accurately entered therein. All Borrowers' records and
books of account, originals of all documents with respect to its organization,
all minute books and other records relating to its continued existence, complete
and accurate records of all persons, directly or indirectly through one or more
intermediary persons, owning a legal or beneficial interest in a Borrower as
shareholders, partners or otherwise, originals of all Leases, contracts,
insurance policies and any and all other agreements relating to or affecting the
Controlled Properties and the Pledged Loans, all correspondence and other files
relating thereto, originals of all licenses and Permits, all plans and
specifications with respect to the Controlled Properties, all environmental
reports, financial analyses, engineering reports, appraisals and other studies
undertaken by, for or at the direction of Borrowers with respect to the
Collateral Properties and all other documents and materials of any kind
whatsoever relating to Borrowers, the Controlled Properties and/or the business
of Borrowers conducted thereat normally and usually maintained by owners of
similar properties shall be kept and maintained by Borrowers at the Controlled
Properties or at Borrowers' principal office.
SECTION 6.09. [Intentionally Left Blank]
SECTION 6.10. Environmental Laws. (a) Borrowers shall comply,
and cause each of the Controlled Owners to comply, in all material respects with
the provisions of all Environmental Laws, and shall keep the Controlled
Properties free of any Lien imposed pursuant to any Environmental Law. Borrowers
shall not cause or suffer or permit the Controlled Properties to be used for the
generation, production, processing, handling, storage, transporting or disposal
of any Hazardous Material, except for Hazardous Materials used in the ordinary
course of business of the Controlled Owners, in which case such Hazardous
Materials shall be used, stored, generated, treated and disposed of only in
compliance with Environmental Law.
(b) Borrowers shall supply to Lender copies of all submissions
by Borrowers or the Controlled Owners to any governmental body pursuant to the
Environmental Laws and of the reports of all environmental audits and of all
other environmental tests, studies or assessments (including the data derived
from any sampling or survey of asbestos, soil, or subsurface or other materials
or conditions) that may be conducted or performed (by or on behalf of Borrowers
or the Controlled Owners) on or regarding the Controlled Properties or regarding
any conditions that might have been affected by Hazardous Materials on or
Released or removed from the
36
Controlled Properties. Borrowers shall also permit and authorize the
consultants, attorneys or other persons that prepare such submissions or reports
or perform such audits, tests, studies or assessments to discuss such
submissions, reports or audits with Lender.
(c) Promptly (and in no event more than two Business Days
after Borrowers become aware or are otherwise informed of such event) provide
oral and written notice to Lender upon the happening of any of the following:
(i) any Borrower, any Controlled Owner, or any tenant or
other occupant of any property of such Borrower or Controlled Owner receives
written notice of any claim, complaint, charge or notice of a violation or
potential violation of any Environmental Law;
(ii) there has been a spill or other Release of Hazardous
Materials upon, under or about or affecting any of the Controlled Properties in
amounts that may have to be reported under Environmental Law, or Hazardous
Materials at levels or in amounts that may have to be reported, remedied or
responded to under Environmental Law are detected on or in the soil or
groundwater;
(iii) any Borrower or Controlled Owner is or may be
liable for any costs of cleaning up or otherwise responding to a Release of
Hazardous Materials;
(iv) any part of the Controlled Properties is or may be
subject to a Lien under any Environmental Law; or
(v) any Borrower or Controlled Owner undertakes any
Remedial Work with respect to any Hazardous Materials.
(d) Without in any way limiting the scope of Section 9.04(c)
and in addition to any obligations thereunder, each Borrower hereby indemnifies
and agrees to hold Lender harmless from and against any liability, loss, damage,
suit, action or proceeding arising out of its business or the business of the
Subsidiaries pertaining to Hazardous Materials, including, but not limited to,
claims of any governmental body or any third person arising under any
Environmental Law or under tort, contract or common law. To the extent laws of
the United States or any applicable state or local law in which a Controlled
Property is located provide that a Lien upon such Controlled Property may be
obtained for the removal of Hazardous Materials which have been or may be
Released, no later than sixty days after notice that a Release has occurred is
given by Lender to such Borrower, such Borrower shall deliver to Lender a report
issued by a qualified third party engineer assessing the existence and extent of
any Hazardous Materials located upon or beneath the specified property. To the
extent any Hazardous Materials located therein or thereunder either subject the
Controlled Property to Lien or require removal to safeguard the health of any
persons, the removal thereof shall be an affirmative covenant of Borrowers
hereunder.
37
(e) In the event that any Remedial Work is required to be
performed by any Borrower or any Controlled Owner under any applicable
Environmental Law, any judicial order, or by any governmental entity, such
Borrower or Controlled Owner shall commence all such Remedial Work at or prior
to the time required therefor under such Environmental Law or applicable
judicial orders and thereafter diligently prosecute to completion all such
Remedial Work in accordance with and within the time allowed under such
applicable Environmental Laws or judicial orders.
SECTION 6.11. Pay Obligations to Lender and Perform Other
Covenants. Borrowers shall (a) make full and timely payment of their respective
Obligations, whether now existing or hereafter arising, (b) duly comply with all
the terms and covenants contained in this Agreement (including, without
limitation, the borrowing limitations and mandatory prepayments in accordance
with Article II hereof) in each of the other Loan Documents, all at the times
and places and in the manner set forth therein, and (c) except for the filing of
continuation statements and the making of other filings by Lender as secured
party or assignee, at all times take all actions necessary to maintain the Liens
and security interests provided for under or pursuant to this Agreement and the
Security Documents as valid and perfected first Liens on the property intended
to be covered thereby (subject only to Liens expressly permitted hereunder) and
supply all information to Lender necessary for such maintenance.
SECTION 6.12. Termination of Property Managers. During the
continuance of an Event of Default, Lender may instruct Borrowers to remove the
property manager with respect to any or all of the Controlled Properties and to
designate a replacement property manager acceptable to Lender and Borrowers
shall so remove the property manager(s) and so designate replacement(s).
SECTION 6.13. Co-operatives and Condominiums. At Lender's
request, Borrowers shall designate, or shall cause the designation of, Lender or
Lender's designee as a holder of Unsold Shares or holder of Unsold Units.
Promptly after the appointment of any officer or member of the boards of
directors or boards of managers of any of the Co-operatives or Condominiums
which had been appointed by RBA, any Owner Borrower or any Controlled Owner, RBA
shall deliver to Lender an original undated executed resignation from such
director, manager or officer. In addition, at Lender's request after the
occurrence and during the continuance of an Event of Default, RBA shall direct
the resignation of any director, manager or officer appointed by RBA, any Owner
Borrower or any Controlled Owner. If RBA receives any undated executed
resignations of officers or members of the boards of directors or boards of
managers with respect to any of the Co-operatives or Condominiums, RBA shall
deliver same to Lender promptly upon receipt thereof.
SECTION 6.14. Further Assurances. Borrowers shall execute any
and all further documents and take all further actions which may be required
under applicable law, or which Lender may reasonably request, to grant,
preserve, protect and perfect the first priority security interest created by
the Security Documents in the Collateral.
38
VII. NEGATIVE COVENANTS
Each of the Borrowers covenants and agrees with Lender that,
so long as this Agreement shall remain in effect or the principal of or interest
on any Note, or any fee, expense or other Obligation payable hereunder or in
connection with any of the Transactions shall be unpaid:
SECTION 7.01. Liens. Borrowers shall not, and Borrowers shall
not cause or permit any of the Controlled Owners to, directly or indirectly,
incur, create, assume or permit to exist any Lien on any of the Collateral
Properties or any portion thereof or interest therein, whether owned at the date
hereof or hereafter acquired, or assign or convey any rights to or security
interests in any future revenues from any of the Collateral Properties or any
portion thereof, except for the following:
(a) Liens incurred and pledges and deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance, old-age pensions and other social security benefits (not
including any lien described in Section 412(m) of the Code);
(b) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens and other similar liens, incurred
in good faith in the ordinary course of business and securing obligations which
are not overdue for a period of more than 15 days or which are being contested
in good faith by appropriate proceedings as to which any Borrower or any of the
Controlled Owners, as the case may be, shall, to the extent required by GAAP,
have set aside on its books adequate reserves;
(c) Liens securing the payment of taxes, assessments and
governmental charges or levies, that are not delinquent or are being diligently
contested in good faith by appro priate proceedings and as to which adequate
reserves have been established in accordance with GAAP; provided, however, that
in no event shall the aggregate amount of such reserves be less than the
aggregate amount secured by such Liens;
(d) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of property
which are excepted in Lender's title insurance policies or do not in the
aggregate materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business; or
(e) Liens created in favor of Lender.
Borrowers shall also not permit any stop notice or claim to be asserted against
Lender by any person or entity furnishing labor, services, equipment or
materials to the Collateral Properties. In the event that any such claim is
asserted against Lender, without limiting any other rights or
39
remedies Lender may have at law or in equity, Borrowers shall take such action
as Lender may reasonably require to release Lender from any obligation or
liability with respect to such stop notice or claim, including (i) if the claim
is being contested in good faith by appropriate proceedings, obtaining a bond or
other security in form, substance and amount satisfactory to Lender, or (ii)
payment of such claim. If Borrowers fail to take such action, Lender may, in its
sole discretion, file an interpleader action requiring all claimants to
interplead and litigate their respective claims, and in any such action Lender
shall be released and discharged from all obligations with respect to any funds
deposited in court.
SECTION 7.02. Indebtedness.
(a) Sunrise shall not, directly or indirectly, incur, create,
assume or otherwise have any Indebtedness other than (i) Indebtedness secured by
Liens permitted under Section 7.01, (ii) Indebtedness incurred hereunder, (iii)
Indebtedness to trade creditors incurred in the ordinary course of business, and
(iv) Guarantees of the Obligations, without the prior written consent of Lender
in each instance.
(b) Borrowers shall not, and Borrowers shall not cause or
permit any of the Controlled Owners to, directly or indirectly, incur, create,
assume or permit to exist any Indebtedness with respect to any of the Collateral
Properties or any portion thereof or interest therein other than (i)
Indebtedness secured by Liens permitted under Section 7.01, (ii) Indebtedness
incurred hereunder, (iv) Indebtedness to trade creditors incurred in the
ordinary course of business, and (v) Guarantees of the Obligations, without the
prior written consent of Lender in each instance.
SECTION 7.03. Sales or Transfers of Assets. (a) Except as set
forth in Section 7.03(b), Borrowers shall not, and shall not cause or permit any
of the Controlled Owners, XX Xxxxx Corp., or Rivercity Realty Corp. to, directly
or indirectly, sell, lease, transfer or assign to any persons or otherwise
dispose of (whether in one transaction or a series of transactions) any of the
Collateral Properties or any portion thereof or interest therein (whether now
owned or hereafter acquired), without the prior written consent of Lender in
each instance.
(b) Annexed hereto as Schedule 7.03 are the initial approved
schedules of minimum sales prices and closing expenses for the Unsold Units and
Unsold Spaces (such schedules, together with any revisions thereto proposed by
Borrowers and approved by Lender, are referred to herein as the "Release Price
Schedules"). Borrowers may, without the prior consent of Lender, enter into
agreements to sell individual Unsold Units and individual Unsold Spaces;
provided, that (i) the sales price thereof is at least equal to the minimum
sales price therefor as set forth on the applicable Release Price Schedule, and
(ii) the purchaser under such agreement is an unrelated third party. Provided
that Lender is paid 75% of the Capital Proceeds in respect of any such sale,
Lender agrees to release the Lien of the Security Documents from the property
sold at the time of closing thereof; provided, however, that, during the
continuance of an
40
Event of Default or a monetary Default, Lender shall receive 100% of the Capital
Proceeds in respect of any such sale.
SECTION 7.04. Consolidations and Mergers. Borrowers shall not,
and shall not cause or permit any of the Controlled Owners to, consolidate with
or merge into any other person, or permit another person to merge into it, or
acquire all or substantially all the capital stock or assets of any other
person.
SECTION 7.05. Investments. Sunrise shall not, and Borrowers
shall not cause or permit any of the Controlled Owners to, own, purchase or
acquire any stock, obligations, assets (not in the ordinary course of business)
or securities of, or any interest in, or make any capital contribution or loan
or advance to, any other person.
SECTION 7.06. Sales of Receivables. Except as expressly
permitted by the Loan Documents, Sunrise shall not, and Borrowers shall not
cause or permit any of the Controlled Owners to, sell, assign, discount,
transfer, or otherwise dispose of any accounts receivable, promissory notes,
drafts or trade acceptances or other rights to receive payment held by it, with
or without recourse, except for the purpose of collection or settlement in the
ordinary course of business.
SECTION 7.07. Use of Proceeds. Borrowers shall not permit the
proceeds of the Loans to be used for any purpose which entails a violation of,
or is inconsistent with, Regulation G, T, U or X of the Board, or for any
purpose other than those set forth in Section 4.01(n) hereof.
SECTION 7.08. ERISA. Borrowers shall not, and shall not cause
or permit any of their ERISA Affiliates to:
(a) Engage in any transaction in connection with which any
Borrowers or any ERISA Affiliate could be subject to either a material civil
penalty assessed pursuant to the provisions of Section 502 of ERISA or a
material tax imposed under the provisions of Section 4975 of the Code.
(b) Terminate any Pension Plan in a "distress termination"
under Section 4041 of ERISA, or take any other action which could result in a
material liability of any Borrower or any ERISA Affiliate to the PBGC.
(c) Fail to make payment when due of all amounts which, under
the provisions of any Plan, Borrowers or any ERISA Affiliate is required to pay
as contributions thereto, or, with respect to any Pension Plan, permit to exist
any material "accumulated funding deficiency" (within the meaning of Section 302
of ERISA and Section 412 of the Code), whether or not waived, with respect
thereto.
41
(d) Adopt an amendment to any Pension Plan requiring the
provision of security under Section 307 of ERISA or Section 401(a)(29) of the
Code.
SECTION 7.09. Accounting Changes. Borrowers shall not, and
shall not cause or permit any of the Controlled Owners to, make any change in
their accounting treatment or financial reporting practices except as required
or permitted by GAAP.
SECTION 7.10. Dividends. Borrowers shall not, without the
prior written consent of Lender in each instance, directly or indirectly, make
any distributions or dividends on, or repurchases or redemptions of, capital
stock.
SECTION 7.11. Transactions with Affiliates. Sunrise shall not,
and Borrowers shall not with respect to any of the Pledged Loans or any of the
Collateral Properties, directly or indirectly purchase, acquire or lease any
property from, or sell, transfer or lease any property to, or enter into any
other transaction with, any stockholder, Affiliate or agent of any Borrower,
except at prices and on terms not less favorable to it than that which would
have been obtained in an arm's-length transaction with a non-affiliated third
party.
SECTION 7.12. Modification of Documents. Borrowers shall not,
and shall not cause or permit any Loan Party to, modify, amend or alter (a)
their certificates or articles of incorporation in any material respect, (b) the
Pledged Loan Documents except as permitted by the Collateral Assignments of Loan
or (c) all loan agreements, notes and other documentation evidencing
Indebtedness for borrowed money of any Loan Party.
SECTION 7.13. Property Management. Except as provided in
Section 6.12, Borrowers shall not, and shall not cause or permit any Loan Party
to (a) surrender, terminate or cancel the property management agreement for any
of the Collateral Properties, or (b) otherwise modify, change, supplement, alter
or amend, or waive or release any of its rights and remedies under any such
property management agreement, without the prior written consent of Lender in
each instance, which consent shall not be unreasonably withheld, delayed or
conditioned.
VIII. EVENTS OF DEFAULT
In case of the happening of any of the following events
(herein called "Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with this Agreement, any of the Security Documents, the Notes or
other Loan Documents or any borrowing hereunder, shall prove to have been
incorrect in any material respect when made and results in a material adverse
effect on (i) the ability of Borrowers, in the aggregate, to perform or pay the
Obligations in accordance with the terms hereof or of any other Loan Document,
or (ii) Lender's Lien on any material portion of the Collateral or the priority
of such Lien;
42
(b) default shall be made in the payment of any principal of
any Note when and as such principal shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise (provided that no Event of Default shall exist under this
clause (b) to the extent that there are sufficient funds available to Lender
pursuant to Section 4(a) of the Master Account Agreement to pay the same when
due and there is no legal impediment to Lender applying such funds to such
payment);
(c) default shall be made in the payment of any interest on
any Note, or any fee or any other amount payable hereunder, or under the Notes,
or any other Loan Document when and as the same shall become due and payable,
and such default shall continue for 10 days after notice from Lender or for 20
days, whichever is later (provided that no Event of Default shall exist under
this clause (c) to the extent that there are sufficient funds available to
Lender pursuant to Section 4(a) of the Master Account Agreement to pay same when
due and there is no legal impediment to Lender applying such funds to such
payment);
(d) default (other than a default enumerated in any other
paragraph of this Article VIII) shall be made in the due observance or
performance of any covenant, condition or agreement to be observed or performed
on the part of any Loan Party pursuant to the terms of this Agreement, any of
the Notes, any of the Security Documents or any other Loan Document and such
default continues for twenty (20) days after notice from Lender; provided, that,
if such default cannot with the exercise of reasonable diligence by cured within
such twenty (20) day period, then such period shall be extended for so long as
is reasonably necessary with the exercise of reasonable diligence to cure such
default provided that Borrower commences such cure within such twenty day period
and thereafter diligently prosecutes such cure to completion, and provided,
further, that in no event shall such cure period exceed a total of ninety (90)
days from the date notice of such default is first given by Lender to Borrower;
(e) any Loan Party shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other Federal, state or foreign bankruptcy, insolvency,
liquidation or similar law, (ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner, any such proceeding or the filing
of any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for any Loan
Party or for a substantial part of its property or assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (vii) take corporate action for the purpose of effecting
any of the foregoing;
(f) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of any Loan Party, or of a substantial part of the
property or assets of any Loan Party, under Title 11 of the United States Code
or any other Federal state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for any
43
Loan Party or for a substantial part of the property of any Loan Party, or (iii)
the winding-up or liquidation of any Loan Party; and such proceeding or petition
shall continue undismissed for 120 days or an order or decree approving or
ordering any of the foregoing shall continue unstayed and in effect for 120
days;
(g) default shall be made with respect to Indebtedness of the
Loan Parties in excess of $10,000,000 in the aggregate (excluding Indebtedness
outstanding hereunder) if the effect of any such default shall be to accelerate,
or to permit the holder or obligee of any such Indebtedness (or any trustee on
behalf of such holder or obligee) at its option to accelerate, the maturity of
such Indebtedness;
(h) (i) a Reportable Event shall have occurred with respect to
a Pension Plan, (ii) the filing by any Loan Party, any ERISA Affiliate, or an
administrator of any Plan of a notice of intent to terminate such a Plan in a
"distress termination" under the provisions of Section 4041 of ERISA, (iii) the
receipt of notice by any Loan Party, any ERISA Affiliate, or an administrator of
a Plan that the PBGC has instituted proceedings to terminate (or appoint a
trustee to administer) such a Pension Plan, (iv) any other event or condition
exists which might, in the opinion of Lender, constitute grounds under the
provisions of Section 4042 of ERISA for the termination of (or the appointment
of a trustee to administer) any Pension Plan by the PBGC, (v) a Pension Plan
shall fail to maintain the minimum funding standard required by Section 412 of
the Code for any plan year or a waiver of such standard is sought or granted
under the provisions of Section 412(d) of the Code, (vi) any Loan Party or any
ERISA Affiliate has incurred, or is likely to incur, a liability under the
provisions of Section 4062, 4063, 4064 or 4201 of ERISA, (vii) any Loan Party or
any ERISA Affiliate fails to pay the full amount of an installment required
under Section 412(m) of the Code, (viii) the occurrence of any other event or
condition with respect to any Plan which would constitute an event of default
under any other agreement entered into by any Loan Party or any ERISA Affiliate,
and in each case in clauses (i) through (viii) of this subsection (h), such
event or condition, together with all other such events or conditions, if any,
could subject any Loan Party or any ERISA Affiliate to any taxes, penalties or
other liabilities which, in the opinion of Lender, could have a Material Adverse
Effect;
(i) an Event of Default (as defined in any of the Loan
Documents) shall occur;
(j) any Loan Party or any ERISA Affiliate (i) shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred any
material withdrawal liability to such Multiemployer Plan, and (ii) does not have
reasonable grounds for contesting such withdrawal liability and is not in fact
contesting such withdrawal liability in a timely and appropriate manner;
(k) a judgment (not reimbursed by insurance policies of any
Loan Party) or decree for the payment of money, a fine or penalty shall be
rendered by a court or other tribunal against any Borrower or Controlled Owner
which, when taken together with all other such
44
judgments, decrees, fines and penalties, exceeds $100,000 ($250,000 for Eastview
and Royal York Associates, L.P. and $5,000,000 for RBA), or and (i) shall remain
undischarged or unbonded for a period of 30 consecutive days during which the
execution of such judgment, decree, fine or penalty shall not have been stayed
effectively or (ii) any judgment creditor or other person shall legally commence
actions to collect on or enforce such judgment, decree, fine or penalty;
(l) this Agreement, any Note, any of the Security Documents,
any Guarantee or other Loan Documents shall for any reason cease to be, or shall
be asserted by any Loan Party not to be, a legal, valid and binding obligation
of any Loan Party, enforceable in accordance with its terms, or the security
interest or Lien purported to be created by any of the Security Documents shall
for any reason cease to be, or be asserted by any Loan Party not to be, a valid,
first priority perfected security interest in any Collateral (except to the
extent otherwise permitted under this Agreement or any of the Security
Documents);
(m) an event or series of events shall occur after which (i)
Xxxxx Xxxxxxx ceases to own at least 39% of the common stock of RBA or (ii) RB
Management Co. LLC ceases to be actively involved in the oversight and general
management of Borrowers' affairs and assets, and, in case of Xx. Xxxxxxx'x death
or disability, Borrowers shall have failed to appoint a substitute chief
executive officer reasonable acceptable to lender within six months after the
occurrence thereof;
(n) default shall be made in the due observance or performance
of any covenant or agreement to be observed or performed by either Borrower
under Sections 7.01, 7.02, 7.03, 7.04 and 7.13 of this Agreement; or
(o) RBA shall default under the Asset Swap Agreement and such
default shall continue after the expiration of any applicable grace period set
forth therein.
IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices, consents and other
communications provided for herein shall be in writing and shall be delivered or
mailed (or in the case of telex or facsimile communication, delivered by telex,
graphic scanning, telecopier or other telecommunications equipment, with receipt
confirmed) addressed,
(a) if to all or any Loan Parties, c/o RB Management Company,
8th Floor, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx.
Xxxxx Xxxxxxx, with a copy to Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.;
(b) if to Lender, at Marine Midland Bank, Xxx XXX Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxx Xxxx 00000, Attention: General Counsel, with a copy
to Kaye, Scholer,
45
Fierman, Xxxx & Handler, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxx, Esq.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if hand delivered or three days after being sent by registered
or certified mail, postage prepaid, return receipt requested, if by mail, or
upon receipt if by any telex, facsimile or other telecommuni cations equipment,
in each case addressed to such party as provided in this Section 9.01 or in
accordance with the latest unrevoked direction from such party.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Borrower or Loan Party
herein and in the certificates or other instruments prepared or delivered in
connection with this Agreement, any of the Security Documents, any Guarantee or
any other Loan Document, shall be considered to have been relied upon by Lender
and shall survive the making by Lender of the Loans and the execution and
delivery to Lender of the Notes and shall continue in full force and effect as
long as the principal of or any accrued interest on the Notes or any other fee
or amount payable under the Notes or this Agreement or any other Loan Document
is outstanding and unpaid and so long as the Commitment has not been terminated.
SECTION 9.03. Successors and Assigns; Participations. Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Loan Party or any
ERISA Affiliate, or Lender, that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns. No Borrower may
assign or transfer any of its rights or obligations hereunder without the
written consent of Lender. Lender may not assign or transfer any of its rights
or obligations hereunder or under the Loans to an unaffiliated third party
without the written consent of Borrowers; provided, however, that Lender may,
without the consent of Borrowers, assign or transfer any of its rights or
obligations hereunder to a successor by virtue of the merger or consolidation of
Lender with or into an unaffiliated third party.
SECTION 9.04. Expenses; Indemnity. (a) Each Borrower agrees to
pay all reasonable out-of-pocket expenses incurred by Lender in connection with
the preparation of this Agreement and the other Loan Documents or with any
amendments, modifications, waivers, extensions, renewals, renegotiations or
"workouts" of the provisions hereof or thereof (whether or not the transactions
thereby contemplated shall be consummated) or incurred by Lender in connection
with the enforcement or protection of its rights in connection with this
Agreement or any of the other Loan Documents or with the Loans made or the
Notes, or in connection with any pending or threatened action, proceeding, or
investigation relating to the foregoing, including but not limited to the
reasonable fees and disbursements of counsel for Lender and ongoing field
examination expenses and charges, and, in connection with such enforcement or
protection, the reasonable fees and disbursements of counsel for Lender. Each
Borrower further indemnifies
46
Lender from and agrees to hold Lender harmless against any documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.
(b) Each Borrower indemnifies Lender and its directors,
officers, employees and agents (collectively, the "Indemnitees") against, and
agrees to hold the Indemnitees harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against the Indemnitees arising out of, in any
way connected with, or as a result of (i) the use of any of the proceeds of the
Loans, (ii) this Agreement, the Guarantees, any of the Security Documents or the
other documents contemplated hereby or thereby, (iii) the performance by the
parties hereto and thereto of their respective obligations hereunder and
thereunder (including but not limited to the making of the Commitment) and
consummation of the Transactions, (iv) breach of any representation or warranty,
or (v) any claim, litigation, investigation or proceedings relating to any of
the foregoing, whether or not Lender or any such person is a party thereto;
provided, however, that such indemnity shall not, as to Lender, apply to any
such losses, claims, damages, liabilities or related expenses to the extent that
they result from the gross negligence or willful misconduct of Lender.
(c) Each Borrower indemnifies, and agrees to defend and hold
harmless the Indemnitees from and against any loss, cost, damage, liability,
lien, deficiency, fine, penalty or expense (including, without limitation,
reasonable attorneys' fees and reasonable expenses for investigation, removal,
cleanup and remedial costs and modification costs incurred to permit, continue
or resume normal operations of any property or assets or business of Borrowers
or any Subsidiary) arising from a violation of, or failure to comply with any
Environmental Law and to remove any Lien arising therefrom except to the extent
caused by the gross negligence or willful misconduct of any Indemnitee, which
any of the Indemnitees may incur or which may be claimed or recorded against any
of the Indemnitees by any person.
(d) The provisions of this Section 9.04 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the Transactions, the repayment of any of the
Loans, the invalidity or unenforceability of any term or provision of this
Agreement or the Notes, or any investigation made by or on behalf of Lender. The
indemnities contained herein shall survive the repayment of the Loans and the
expiration or termination of this Agreement; provided that any claims based
thereon shall be made on or prior to the second anniversary of the repayment in
full of the Loans. All amounts due under this Section 9.04 shall be payable on
written demand therefor.
SECTION 9.05. Applicable Law. THIS AGREEMENT AND THE NOTES
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED IN NEW YORK.
47
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, Lender shall and is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by Lender to
or for the credit or the account of any Borrower against any and all of the
obligations of Borrowers now or hereafter existing under this Agreement and the
Notes, irrespective of whether or not Lender shall have made any demand under
this Agreement or the Notes and although such obligations may be unmatured. The
rights of Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which may be available
to Lender.
SECTION 9.07. Payments on Business Days. Should the principal
of or interest on the Notes or any fee or other amount payable hereunder become
due and payable on other than a Business Day, payment in respect thereof may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in computing interest, if any, in connection with such
payment.
SECTION 9.08. Waivers; Amendments. (a) No failure or delay of
Lender in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of Lender hereunder are cumulative and
not exclusive of any rights or remedies which they may otherwise have. No waiver
of any provision of this Agreement or the Notes nor consent to any departure by
any Borrower therefrom shall in any event be effective unless the same shall be
authorized as provided in paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Borrower in any case shall entitle it to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by Borrowers and Lender.
SECTION 9.09. Severability. In the event any one or more of
the provisions contained in this Agreement or in the Notes should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby.
SECTION 9.10. Entire Agreement; Waiver of Jury Trial, etc. (a)
This Agreement, the Notes and the other Loan Documents constitute the entire
contract between the parties hereto relative to the subject matter hereof. Any
previous agreement among the parties hereto with respect to the Transactions is
superseded by this Agreement, the Notes and the other Loan Documents. Nothing in
this Agreement, the Notes or in the other Loan Documents,
48
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, the Notes or the other Loan Documents.
(b) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS.
(c) Except as prohibited by law, each party hereto hereby
waives any right it may have to claim or recover in any litigation referred to
in paragraph (b) of this Section 9.10 any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.
(d) Each party hereto (i) certifies that no representative,
agent or attorney of Lender has represented, expressly or otherwise, that Lender
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that it has been induced to enter into this Agreement, the
Notes or the other Loan Documents, as applicable, by, among other things, the
mutual waivers and certifications herein.
SECTION 9.11. Submission to Jurisdiction. (a) Any legal action
or proceeding with respect to this Agreement or the Notes or any other Loan
Document may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, each Borrower hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.
(b) Each Borrower hereby irrevocably waives, in connection
with any such action or proceeding, any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(c) Each Borrower hereby irrevocably consents to the service
of process of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to each such person, as the case may be, at its address set forth in
Section 9.01 hereof.
(d) Nothing herein shall affect the right of Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Borrower in any other jurisdiction.
49
SECTION 9.12. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective
when copies hereof which, when taken together, bear the signatures of each of
the parties hereto shall be delivered to Lender.
SECTION 9.13. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 9.14. Exercise of Cure Rights. Wherever in any
provision of any Loan Document Lender is granted the right to advance money for
the account of any Loan Party and such provision makes reference to this Section
9.14, Lender shall, before expending such sum, give RBA 10 days prior notice
(unless an Event of Default is then continuing, in which case lender shall have
no obligation to give such notice); provided, however, that if Lender in good
faith believes that it may be materially prejudiced (e.g., without limitation,
lapse of insurance, emergencies, impairment of any lien or the priority thereof,
etc.) if it does not act prior to the expiration of such ten day period, then
Lender need only give RBA such prior notice, if any, as Lender in good faith
determines to be feasible under the circumstances and notice thereof shall be
delivered to Borrowers thereafter.
SECTION 9.15. Consents. 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 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 and absolute discretion of Lender.
SECTION 9.16 Prior Loan Documents. All Loan Documents (as such
term is defined in the Original Credit Agreement) relating to the Original
Sunrise Loan, the Original Xxxxx Xxxx Loan and the Royal York Loan (as defined
in the Original Credit Agreement), as any of the same may be amended and/or
restated as of the date hereof (collectively, as so amended and/or restated, the
"Original Loan Documents"), shall remain in full force and effect and RBA hereby
assumes all of the obligations of River Bank America under the Original Loan
Documents.
X. CROSS-GUARANTEES
Each Borrower absolutely, irrevocably and unconditionally
guarantees the due and punctual payment of the principal of and interest on each
of the Notes (other than the Note or Notes that it is the maker of), when and as
due, whether at maturity, by acceleration, by notice of prepayment or otherwise,
and the due and punctual performance of all other Obligations of the
50
other Borrower. Each Borrower further agrees that the Obligations, or any of
them, may be extended and renewed, in whole or in part, without notice to or
further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligations.
Each Borrower waives presentment to, demand of payment from
and protest to Borrowers of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. The
obligations of a Borrower hereunder shall not be affected by (a) the failure of
Lender to assert any claim or demand or to enforce any right or remedy against
the other Borrower under the provisions of this Agreement, the Notes or any of
the other Loan Documents or otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Agreement, the Notes, any
of the other Loan Documents, any guarantee or any other agreement; (c) the
release of any security held by Lender for the Obligations or any of them; or
(d) the failure of Lender to exercise any right or remedy against the other
Borrower in respect of the Obligations.
Each Borrower further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by Lender to any security held for payment of the
Obligations or to any balance of any deposit account or credit on the books of
Lender in favor of any Borrower or any other person.
The obligations of each Borrower hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Borrower hereunder
shall not be discharged or impaired or otherwise affected by the failure of
Lender to assert any claim or demand or to enforce any remedy under this
Agreement, the Notes or under any other Loan Document, any guarantee or any
other agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission which may or might in any manner or
to any extent vary the risk of such Borrower or otherwise operate as a discharge
of such Borrower as a matter of law or equity.
Each Borrower further agrees that its guarantee shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be returned by Lender upon the bankruptcy or reorganization of
any other Borrower or otherwise.
Until the Obligations have been paid and satisfied in full,
each Borrower hereby waives and releases all rights of subrogation,
indemnification, contribution and/or reimbursement from or against the other
Borrower or its properties in connection with this guarantee and any
51
payments made hereunder, and regardless of whether such rights arise by
operation of law, pursuant to contract or otherwise.
Each Borrower hereby waives all rights and defenses arising
out of an election of remedies by Lender, even if that election of remedies,
such as nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed the guarantor's right of subrogation and reimbursement
against the principal.
XI. RELEASE OF CERTAIN COLLATERAL
SECTION 11.1. Release of Certain Collateral. Simultaneously with the
execution and delivery of this Agreement, Lender is releasing its liens (to the
extent still held by Lender) on the assets described in Schedule 11.1 hereto.
Lender agrees to execute such instruments and documents as may be reasonably
necessary to effect such releases provided that Borrowers pay any and all out-of
pocket costs and expenses (including reasonable attorneys' fees) incurred by
Lender in connection therewith.
XII. ESTABLISHMENT OF CERTAIN ACCOUNTS
SECTION 12.1 Establishment of Accounts. (a) RBA has established a
restricted, non- interest-bearing deposit account no. 750201690 in the name of
RBA at Lender (the "Special Collateral Account"). Borrowers shall have no right
to make withdrawals from the Special Collateral Account. Subject to the terms of
this Agreement, Lender shall have the sole right to make withdrawals from the
Special Collateral Account and to exercise all rights with respect to the cash
from time to time therein. The amount on deposit in the Special Collateral
Account as of the date hereof is $7,500,000.
(b) RBA has also established non-interest-bearing deposit account no.
750201681 in the name of RBA at Lender (the "Unrestricted Account"). All sums
transferred out of the Master Account pursuant to paragraph 4(a)(4) of the
Master Account Agreement shall be transferred to the Unrestricted Account. The
Unrestricted Account is not pledged to Lender and RBA shall not be restricted
from withdrawing funds therefrom; provided, however, that during the term of
this Agreement RBA shall not withdraw funds from the Unrestricted Account except
as necessary to pay or satisfy bona-fide corporate obligations of RBA
(including, without limitation, corporate obligations and investments entered
into, made or arising after the date hereof (other than deposit accounts, money
market accounts or similar accounts which serve the same function as the
Unrestricted Account)).
SECTION 12.2 Grant of Security Interest. As security for the prompt
payment by Borrowers, as and when due and payable, of all of the Obligations,
RBA hereby pledges, transfers and assigns to Lender, and grants to Lender, as
additional security for the payment and performance of the Notes and the
obligations of Borrowers under this Agreement and the other Loan Documents, a
continuing perfected security interest in and to, and a general first lien upon:
52
(a) the Special Collateral Account and all of RBA's right, title and interest in
and to all cash, property or rights transferred to or deposited in the Special
Collateral Account from time to time by or on behalf of either of the Borrowers
or pursuant to the Master Account Agreement, (ii) all earnings, investments and
securities held in the Special Collateral Account and (iii) any and all proceeds
of the foregoing.
SECTION XIII. Post Closing Obligations.
Notwithstanding anything to the contrary contained in any of the Loan
Documents, $100,000 shall be kept in the Xxxxx Xxxx property level cash
collateral account until (i) the consent of Xxxxx Xxxxxxxxx has been executed
and delivered to Lender and (ii) RBA shall have delivered to Lender evidence
reasonably satisfactory to Lender that there are no outstanding notices of
material building code violations at the Xxxxx Xxxx Property.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
53
IN WITNESS WHEREOF, Borrowers and Lender have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
RB ASSET, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
000 XXXX XXXXXXX XXXX.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
XXXXXXX XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
XXXXXX PROPERTY CORP.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
ACACIAS-MURRIETA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
00
XXX XXXX XXXXXX XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
RR IRVINGTON ASSOCIATES, L.P.
By: RR Irvington Development Corp., general
partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
HSBC BANK USA
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
55
SCHEDULE 1.1
Collateral Properties
A. Collateral Properties:
Sunrise Property
Xxxxx Xxxx Property
York Condo
B. Owned Properties:
Sunrise Property
C. Controlled Properties:
Sunrise Property
Xxxxx Xxxx Property
York Condo
D. Pledged Loans:
The loans held by RBA and secured by the following Collateral
Properties:
Xxxxx Xxxx Property
York Condo
The documents evidencing and securing the Pledged Loans are more
particularly described in Schedule 4.03(b).
56
SCHEDULE 2.01
Maximum Principal Amount of Loans
Loan Maximum Principal Amount Borrower
---- ------------------------ --------
Xxxxx Xxxx Loan $32,000,000 RBA
Sunrise Loan $2,775,000 000 Xxxx Xxxxxxx Xxxx.
Xxxxx Xxxx Loan $7,725,000 RBA
Split Off Loan $7,500,000 RBA
57
SCHEDULE 2.08(b)
Amortization Schedule
58
