SENIOR MEZZANINE LOAN AGREEMENT Dated as of April 21, 2008 Between MAGUIRE PROPERTIES - GRIFFIN TOWERS SENIOR MEZZANINE, LLC as Borrower And GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., as Lender
Exhibit
99.2
Dated as
of April 21, 2008
Between
XXXXXXX
PROPERTIES - XXXXXXX TOWERS SENIOR MEZZANINE, LLC
as
Borrower
And
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC.,
as
Lender
Page
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ARTICLE
1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION
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5
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Section 1.1
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Specific
Definitions
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5
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Section 1.2
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Index
of Other Definitions
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19
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Section 1.3
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Principles
of Construction
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21
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ARTICLE
2 GENERAL LOAN TERMS
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22
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Section 2.1
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The
Loan
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22
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Section 2.2
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Interest;
Monthly Payments
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22
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Section 2.3
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Loan
Repayment
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23
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Section 2.4
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Release
of Collateral on Payment in Full
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25
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Section 2.5
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Payments
and Computations
|
25
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Section 2.6
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Yield
Maintenance Premium
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25
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ARTICLE
3 CASH MANAGEMENT AND RESERVES
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26
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Section 3.1
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Cash
Management Arrangements
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26
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Section 3.2
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Reserves
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26
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Section 3.3
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Grant
of Security Interest; Application of Funds
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26
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Section 3.4
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Cash
Flow Allocation
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27
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ARTICLE
4 REPRESENTATIONS AND WARRANTIES
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28
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|
Section 4.1
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Organization;
Special Purpose
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28
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Section 4.2
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Authorization;
Valid Execution and Delivery; Enforceability
|
28
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Section 4.3
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No
Conflict/Violation of Law
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28
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Section 4.4
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No
Litigation
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29
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Section 4.5
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No
Defenses
|
29
|
Section 4.6
|
Title
|
29
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Section 4.7
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No
Insolvency or Judgment; No Bankruptcy Filing
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29
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Section 4.8
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Misstatements
of Fact
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30
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Section 4.9
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Tax
Filings
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30
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Section 4.10
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ERISA
|
30
|
Section 4.11
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Compliance
with Applicable Laws and Regulations
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30
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Section 4.12
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Contracts
|
31
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Section 4.13
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Federal
Reserve Regulations; Investment Company Act
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31
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Section 4.14
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Access/Utilities
|
32
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Section 4.15
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Condition
of Improvements
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32
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Section 4.16
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Leases
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32
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Section 4.17
|
Fraudulent
Transfer
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33
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Section 4.18
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Ownership
of Borrower and Owner
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33
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Section 4.19
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No
Purchase Options
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33
|
i
Section 4.20
|
Management
Agreement
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33
|
Section 4.21
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Hazardous
Substances
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34
|
Section 4.22
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Name;
Principal Place of Business
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34
|
Section 4.23
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No
Other Obligations
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35
|
Section 4.24
|
Defense
of Usury
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35
|
Section 4.25
|
Pledged
Collateral
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35
|
Section 4.26
|
Single
Tax Lot
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36
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Section 4.27
|
Special
Assessments
|
36
|
Section 4.28
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No
Condemnation
|
36
|
Section 4.29
|
No
Labor or Materialmen Claims
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36
|
Section 4.30
|
Boundary
Lines
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36
|
Section 4.31
|
Survey
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36
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Section 4.32
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Forfeiture
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37
|
Section 4.33
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Borrower
Entity Representations
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37
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Section 4.34
|
Senior
Loan
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39
|
Section 4.35
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Perfection
of Accounts
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39
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Section 4.36
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No
Contractual Obligations
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40
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ARTICLE
5 COVENANTS
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40
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Section 5.1
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Existence
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40
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Section 5.2
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Taxes
and Other Charges
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40
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Section 5.3
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Access
to Property
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41
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Section 5.4
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Repairs;
Maintenance and Compliance; Alterations
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41
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Section 5.5
|
Performance
of Other Agreements
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43
|
Section 5.6
|
Cooperate
in Legal Proceedings
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43
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Section 5.7
|
Further
Assurances
|
43
|
Section 5.8
|
Environmental
Matters
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43
|
Section 5.9
|
Title
to the Pledged Collateral
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46
|
Section 5.10
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Leases
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46
|
Section 5.11
|
Estoppel
Statement
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48
|
Section 5.12
|
Property
Management
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48
|
Section 5.13
|
Special
Purpose Bankruptcy Remote Entity
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49
|
Section 5.14
|
Assumption
in Non-Consolidation Opinion
|
49
|
Section 5.15
|
Change
in Business or Operation of Property
|
49
|
Section 5.16
|
Debt
Cancellation
|
49
|
Section 5.17
|
Affiliate
Transactions
|
50
|
Section 5.18
|
Zoning
|
50
|
Section 5.19
|
No
Joint Assessment
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50
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Section 5.20
|
Principal
Place of Business
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50
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Section 5.21
|
Change
of Name, Identity or Structure
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50
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Section 5.22
|
Indebtedness
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51
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Section 5.23
|
Licenses
|
51
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Section 5.24
|
Compliance
with Restrictive Covenants, Etc.
|
51
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Section 5.25
|
ERISA
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51
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Section 5.26
|
Transfers
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52
|
Section 5.27
|
Liens
|
60
|
ii
Section 5.28
|
Dissolution
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60
|
Section 5.29
|
Expenses
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60
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Section 5.30
|
Indemnity
|
61
|
Section 5.31
|
Patriot
Act Compliance
|
62
|
Section 5.32
|
Limitation
on Securities Issuances
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63
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Section 5.33
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Limitation
on Distributions
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63
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Section 5.34
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Contractual
Obligations
|
63
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ARTICLE
6 NOTICES AND REPORTING
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63
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|
Section 6.1
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Notices
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63
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Section 6.2
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Borrower
Notices and Deliveries
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65
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Section 6.3
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Financial
Reporting
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65
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ARTICLE
7 INSURANCE; CASUALTY; AND CONDEMNATION
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68
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Section 7.1
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Insurance
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68
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Section 7.2
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Casualty
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72
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Section 7.3
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Condemnation
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73
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ARTICLE
8 DEFAULTS
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74
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Section 8.1
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Events
of Default
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74
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Section 8.2
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Remedies
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76
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ARTICLE
9 SPECIAL PROVISIONS
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78
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Section 9.1
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Sale
of Note and Securitization
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78
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ARTICLE
10 MISCELLANEOUS
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83
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Section 10.1
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Exculpation
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83
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Section 10.2
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Brokers
and Financial Advisors
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86
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Section 10.3
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Retention
of Servicer
|
86
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Section 10.4
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Survival
|
86
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Section 10.5
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Lender’s
Discretion
|
86
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Section 10.6
|
Governing
Law
|
87
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Section 10.7
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Modification,
Waiver in Writing
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88
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Section 10.8
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Trial
by Jury
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88
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Section 10.9
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Headings/Exhibits
|
88
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Section 10.10
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Severability
|
89
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Section 10.11
|
Preferences
|
89
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Section 10.12
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Waiver
of Notice
|
89
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Section 10.13
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Remedies
of Borrower
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89
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Section 10.14
|
Prior
Agreements
|
90
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Section 10.15
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Offsets,
Counterclaims and Defenses
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90
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Section 10.16
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Publicity
|
90
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Section 10.17
|
No
Usury
|
90
|
iii
Section 10.18
|
Conflict;
Construction of Documents
|
91
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Section 10.19
|
No
Third Party Beneficiaries
|
91
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Section 10.20
|
Yield
Maintenance Premium
|
91
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Section 10.21
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Assignment
|
92
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Section 10.22
|
Certain
Additional Rights of Lender
|
92
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Section 10.23
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Set-Off
|
93
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Section 10.24
|
Counterparts
|
93
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Section 10.25
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Proofs
of Claim
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93
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Section 10.26
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Waiver
of Stay
|
94
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ARTICLE
11 SENIOR LOAN
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94
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|
Section 11.1
|
Compliance
with Senior Loan Documents
|
94
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Section 11.2
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Senior
Loan Defaults
|
94
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Section 11.3
|
Senior
Loan Estoppels
|
96
|
Section 11.4
|
No
Amendments to Senior Loan Documents
|
96
|
Section 11.5
|
Acquisition
of the Senior Loan
|
96
|
Section 11.6
|
Deed
in Lieu of Foreclosure
|
96
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Section 11.7
|
Refinancing
or Prepayment of the Senior Loan
|
97
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Section 11.8
|
Intercreditor
Agreement
|
97
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Schedule 1 - | Intentionally Omitted |
Schedule 2 - | Exceptions to Representations and Warranties |
Schedule 3 - | Rent Roll |
Schedule 4 - | Organization of Borrower |
Schedule 5 - | Definition of Special Purpose Bankruptcy Remote Entity |
iv
SENIOR MEZZANINE LOAN AGREEMENT
dated as of April 21, 2008 (as the same may be modified, supplemented,
amended or otherwise changed, this “Agreement”) between XXXXXXX PROPERTIES - XXXXXXX TOWERS SENIOR MEZZANINE ,
LLC, a Delaware limited liability company (together with its permitted
successors and assigns, “Borrower”), and GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation (together with its successors and assigns,
“Lender”).
ARTICLE
1
DEFINITIONS;
PRINCIPLES OF CONSTRUCTION
Section
1.1 Specific
Definitions
. The
following terms have the meanings set forth below:
Affiliate: as to any Person, any
other Person that, directly or indirectly, is in Control of, is Controlled by or
is under common Control with such Person or is a director or officer of such
Person or of an Affiliate of such Person.
Affiliated
Manager: any
managing agent of the Property (other than Xxxxxxx Property Services, Inc.) in
which Borrower or Guarantor has, directly or indirectly, any legal, beneficial
or economic interest.
Approved Junior
Mezzanine Lender: (i) GCM, (ii) a “Qualified Transferee” (as such term is
defined in the applicable intercreditor agreements executed in connection with
an Approved Junior Mezzanine Loan), (iii) a successor holder of the Junior
Mezzanine Loan that (A) has been approved by each of (x) Lender acting
reasonably and (y) the holder of any Senior Loan that is then outstanding and
(B) after the occurrence of a Securitization, has obtained a Rating Comfort
Letter (if required pursuant to a Pooling and Servicing Agreement from and after
the occurrence of a Securitization) with respect to the transfer of the Junior
Mezzanine Loan to such holder or (iv) the lender under any other Approved Junior
Mezzanine Loan that has been approved by each of (x) Lender, acting reasonably,
and (y) the holder of any Senior Loan that is then outstanding and (z) the
applicable Rating Agencies.
Approved Junior
Mezzanine Loan: (i) the Junior Mezzanine Loan and (ii) a loan
from an Approved Junior Mezzanine Lender to Junior Mezzanine Loan Borrower, the
proceeds of which are used to refinance the Junior Mezzanine Loan, provided
that: (i) such loan shall be secured by the same collateral as the Junior
Mezzanine Loan; (ii) the loan documents evidencing and securing such loan shall
have been approved by each of (x) Lender in its reasonable discretion and (y)
the holder of any Senior Loan that is then outstanding; (iii) such loan shall be
in an amount and have an interest rate that does not exceed the original
principal amount and the maximum potential interest rate of the Junior Mezzanine
Loan, and shall have an amortization schedule no longer than the remaining
amortization schedule of the Junior Mezzanine Loan (if applicable), and shall
otherwise be on terms and conditions that are not materially less favorable to
the Junior Mezzanine Loan Borrower than the terms and conditions of the Junior
Mezzanine Loan; (iv) the term of such Approved Junior Mezzanine Loan shall
expire on the Stated Maturity
Date; (v)
the Approved Junior Mezzanine Lender shall enter into one or more intercreditor
agreements in form and content substantially similar to the applicable
intercreditor agreements executed in connection with the Junior Mezzanine Loan;
(vi) if such refinancing of the Junior Mezzanine Loan occurs after a
Securitization, no such refinancing shall be permitted which would result in a
downgrade, qualification or withdrawal of any of the ratings of any of the
Securities issued in such Securitization; and (vii) the holder of such loan
shall not be an Affiliate of Borrower or the Junior Mezzanine Loan
Borrower.
Bankruptcy
Action: means with respect to any Person (a) such Person filing a
voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or soliciting or causing to be solicited petitioning
creditors for any involuntary petition against such Person, which is not
dismissed within ninety (90) days; (c) such Person filing an answer consenting
to or otherwise acquiescing in or joining in any involuntary petition filed
against it, by any other Person under the Bankruptcy Code or any other Federal
or state bankruptcy or insolvency law, or soliciting or causing to be solicited
petitioning creditors for any involuntary petition from any Person; (d) such
Person consenting to or acquiescing in or joining in an application for the
appointment of a custodian, receiver, trustee, or examiner for such Person or
any portion of the Property; or (e) such Person making an assignment for the
benefit of creditors, or admitting, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due.
Bankruptcy
Code: means Title 11 of the United States Code entitled “Bankruptcy”, as
amended from time to time, and any successor statute or statutes and all rules
and regulations from time to time promulgated thereunder, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’
rights.
Business
Day: any day
other than a Saturday, Sunday or any day on which commercial banks in New York,
New York are authorized or required to close.
Code: the Internal Revenue
Code of 1986, as amended and as it may be further amended from time to time, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.
Collateral: all
collateral securing the Debt, including the Pledged Collateral.
Contractual
Obligation: as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which
such Person is a party or by which it or any of its property is
bound.
Control or
Controlled: with respect to any
Person, (i) ownership, directly or indirectly, in the aggregate of 49% or more
of the beneficial ownership interest of such Person or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ability to exercise
voting power, by contract or otherwise (subject only to customary reservations
of rights in favor of other partners or members to approve the sale and/or
refinancing of all or substantially all of the entity’s assets and other major
decisions).
6
Debt: the unpaid Principal,
all interest accrued and unpaid thereon, any Yield Maintenance Premium and all
other sums due to Lender in respect of the Loan or under any Loan
Document.
Debt
Service: with respect to any
particular period, the scheduled Principal and interest payments due under the
Note and the Senior Note in such period.
Debt Service
Coverage Ratio: as of any date, the
ratio calculated by Lender of (i) the Net Operating Income for the twelve
(12)-month period during the Term of the Loan ending with the most recently
completed calendar month to (ii) the Debt Service with respect to such
period.
Default: the occurrence of any
event under any Loan Document which, with the giving of notice or passage of
time, or both, would be an Event of Default.
Default
Rate: a rate
per annum equal to the lesser of (i) the maximum rate permitted by
applicable law, or (ii) five percent (5%) above the Interest Rate,
compounded monthly.
Deposit
Bank: Wachovia Bank, National
Association, a national banking association, or such other bank or depository
selected by Lender in its discretion.
Eligible
Account: a separate and identifiable account from all other
accounts held by the holding institution that is either (i) an account or
accounts (A) maintained with a federal or state-chartered depository institution
or trust company which complies with the definition of Eligible Institution or
(B) as to which Lender has received a Rating Comfort Letter from each of
the applicable Rating Agencies with respect to holding funds in such account, or
(ii) a segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations §9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other
instrument.
Eligible
Institution: a depository institution
insured by the Federal Deposit Insurance Corporation the short term unsecured
debt obligations or commercial paper of which are rated at least A-1 by S&P,
P-1 by Xxxxx’x and F-1+ by Fitch in the case of accounts in which funds are held
for thirty (30) days or less or, in the case of Letters of Credit or accounts in
which funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least “AA” by Fitch and S&P and “Aa2”
by Xxxxx’x. Notwithstanding the foregoing, Lender acknowledges that
Bank of the West (Borrower’s current Clearing Bank) is deemed an Eligible
Institution.
Eligibility
Requirements: with respect to any Person, that such Person (i) has
total assets (in name or under management) in excess of $750,000,000 (excluding
the Property) and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder’s equity of $300,000,000
(excluding the Property), (ii) is regularly engaged in the
7
business
of owning and operating commercial real estate properties of the type, size and
quality comparable to the Property, (iii) has not, and is not Controlled by any
Person that has, been a debtor in any Bankruptcy Action in the past ten (10)
years or has ever been convicted of fraud or any crimes with respect to
securities or banking laws and (iv) that has not been involved in any prior
disputes with Lender, and is not Controlled by any Person that has been involved
in any prior disputes with Lender.
ERISA: the Employee Retirement
Income Security Act of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder.
ERISA
Affiliate: all members of a
controlled group of corporations and all trades and business (whether or not
incorporated) under common control and all other entities which, together with
Borrower and/or Owner, are treated as a single employer under any or all of
Section 414(b), (c), (m) or (o) of the Code.
Existing
Leases: Leases of the Property or the Improvements existing on
the date hereof.
GAAP: generally accepted
accounting principles in the United States of America as of the date of the
applicable financial report or the method used in connection with the financial
statements of Borrower delivered to Lender in connection with the closing of the
Loan, consistently applied.
GCM: Greenwich
Capital Financial Products, Inc.
Governmental
Authority: any court, board,
agency, commission, office or authority of any nature whatsoever for any
governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) now or hereafter in existence.
Guarantor: the OP or any other
Person that now or hereafter guarantees any of Borrower’s obligations hereunder
or any other Loan Document.
Interest
Period: (i)
the period from the date hereof through the first (1st) day
thereafter that is the last day of a calendar month (the “Initial Interest Period”) and
(ii) each period thereafter from the 1st day of each calendar month through the
last day of such calendar month; except that the Interest Period, if any, that
would otherwise commence before and end after the Maturity Date shall end on the
Maturity Date. Notwithstanding the foregoing, if Lender exercises its
right to change the Payment Date to a New Payment Date in accordance with Section 2.2.4 hereof,
then from and after such election, each Interest Period shall be the period from
the New Payment Date (as defined in Section 2.2.4 hereof)
in each calendar month through the day in the next succeeding calendar month
immediately preceding the New Payment Date in such calendar month.
Interest
Rate: a rate of interest equal to 13% per annum (or, when
applicable pursuant to this Agreement or any other Loan Document, the Default
Rate).
8
Junior Mezzanine
Loan: that certain mezzanine loan in the principal amount of $55,000,000
made on the date hereof by GCM to Junior Mezzanine Loan Borrower, and evidenced
and secured by the Junior Mezzanine Loan Documents.
Junior Mezzanine
Loan Borrower: Xxxxxxx Properties-Xxxxxxx Towers Junior
Mezzanine, LLC, a Delaware limited liability company.
Junior Mezzanine
Loan Documents: (i) that certain Junior Mezzanine Loan Agreement of even
date herewith between GCM and Junior Mezzanine Loan Borrower, (ii) that certain
Promissory Note of even date herewith in the original principal amount of the
Junior Mezzanine Loan made by Junior Mezzanine Loan Borrower and payable to GCM
(and any successor holder of the Junior Mezzanine Loan), (iii) that certain
Pledge and Security Agreement of even date herewith made by Junior Mezzanine
Loan Borrower in favor of GCM, (iv) each UCC Financing Statement naming Junior
Mezzanine Loan Borrower, as debtor, and GCM, as secured party, in connection
with the foregoing and (v) any other “Loan Document”, as defined in the Junior
Mezzanine Loan Agreement referred to in clause (i) above, as each of the
foregoing may be modified, amended and restated from time to time in accordance
with the terms and provisions of the applicable intercreditor agreements
executed in connection with the Junior Mezzanine Loan. Without
limiting the foregoing, the term Junior Mezzanine Loan Documents shall also
include all documents, agreements or instruments evidencing, securing or
delivered to an Approved Junior Mezzanine Lender in connection with any Approved
Junior Mezzanine Loan.
Junior Mezzanine
Loan Liens: (i) the Liens in favor of the holder of the Junior Mezzanine
Loan created pursuant to the Junior Mezzanine Loan Documents and (ii) Liens on
the limited liability company interests held by Junior Mezzanine Loan Borrower
in Senior Mezzanine Loan Borrower pursuant to any other Approved Junior
Mezzanine Loan.
Key
Principals: the OP, the REIT and Xxxxxx X. Xxxxxxx
III.
Leases: all leases, subleases of
any tier, and other agreements or arrangements heretofore or hereafter entered
into for the use, enjoyment or occupancy of, or the conduct of any activity upon
or in, the Property or the Improvements, including any guarantees, extensions,
renewals, modifications or amendments thereof and all additional remainders,
reversions and other rights and estates appurtenant thereunder.
Letter of
Credit: an
irrevocable, unconditional, transferable, clean sight draft letter of credit
acceptable to Lender and the Rating Agencies (either an evergreen letter of
credit or one which does not expire until at least thirty (30) days after the
Maturity Date) for which Borrower shall have no reimbursement obligation and
which reimbursement obligation is not secured by the Property, the Collateral,
or any other property pledged to secure the Note in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a domestic
Eligible Institution or the U.S. agency or branch of a foreign Eligible
Institution.
Legal
Requirements: statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting Borrower, Owner, any Loan Document or all or
part of the Collateral or the Property or the construction, ownership,
9
use,
alteration or operation thereof, whether now or hereafter enacted and in force,
and all permits, licenses and authorizations and regulations relating thereto,
and all covenants, agreements, restrictions and encumbrances contained in any
instrument, either of record or known to Borrower, at any time in force
affecting all or part of the Property.
Lien: any mortgage, deed of
trust, lien (statutory or otherwise), pledge, hypothecation, easement,
restrictive covenant, preference, assignment, security interest or any other
encumbrance, charge or transfer of, or any agreement to enter into or create any
of the foregoing, on or affecting (i) all or any part of the Property or
any interest therein, (ii) any direct or indirect interest in Owner or
Borrower, or (iii) all or part of the Collateral, including any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic’s, materialmen’s and other similar liens
and encumbrances.
Liquidation
Event: (i) any Casualty to the Property or any material
portion thereof, (ii) any Condemnation of the Property or any material portion
thereof, (iii) a Transfer of the Property in connection with realization thereon
following an Event of Default under the Senior Loan, including without
limitation a foreclosure sale, or (iv) any refinancing or payoff of the Property
or the Senior Loan permitted hereunder (including any refund of reserves on
deposit with Senior Lender (but not disbursements therefrom)).
Loan
Documents: this Agreement and all other documents, agreements
and instruments now or hereafter evidencing, securing or delivered to Lender in
connection with the Loan, including the following, each of which is dated as of
the date hereof: (i) the Promissory Note or Promissory Notes
made by Borrower to Lender in the aggregate principal amount equal to the Loan
(the “Note”),
(ii) the Pledge and Security Agreement (Senior Mezzanine) (the “Pledge”)
made by Borrower in favor of Lender which creates a security interest in the
100% ownership interest of Borrower in Owner (the “Pledged
Collateral”), (iii) the Senior Subordinate Deposit Account Agreement
(the “Senior
Subordinate
Deposit Account Agreement”) among Borrower, Lender, Manager and the
Deposit Bank, (iv) the Non-Recourse Guaranty made by Guarantor, (v) the
Environmental and Hazardous Substance Indemnification Agreement made by
Borrower, and (vi) the Consent of Manager among Borrower, Owner and Manager; as
each of the foregoing may be (and each of the foregoing defined terms shall
refer to such documents as they may be) amended, restated, replaced, severed,
split, supplemented or otherwise modified from time to time (including pursuant
to Section
9.1.5 hereof).
Management
Agreement: the management agreement
between Owner and Manager, pursuant to which Manager is to manage the Property,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time in accordance with Section 5.12
hereof.
Manager: the OP or any successor,
assignee or replacement manager appointed by Borrower in accordance with Section 5.12
hereof.
Material
Lease: all
Leases which individually or in the aggregate with respect to the same tenant
and its Affiliates (i) cover more than the greater of 37,389 square feet of
the
10
Improvements
or a full floor of the Improvements or (ii) have a gross annual rent of
more than ten percent (10%) of the total annual Rents.
Maturity
Date: the
date on which the final payment of principal of the Note becomes due and payable
as therein provided, whether at the Stated Maturity Date, by declaration of
acceleration, or otherwise.
Minor
Lease: any
Lease that is not a Material Lease.
Net Liquidation
Proceeds After Debt Service: with respect to any Liquidation
Event, all amounts paid to or received by or on behalf of Owner in connection
with such Liquidation Event, including, without limitation, proceeds of any
sale, refinancing or other disposition or liquidation, less (i) Lender’s and/or
Senior Lender’s reasonable costs incurred in connection with the recovery
thereof, (ii) in the case of Casualty or Condemnation, the costs incurred by
Owner in connection with a restoration of the Property made in accordance with
the Senior Loan Documents, (iii) amounts required or permitted to be deducted
therefrom and amounts paid pursuant to the Senior Loan Documents to Senior
Lender, (iv) in the case of a foreclosure sale, disposition or Transfer of
the Property in connection with realization thereon following an Event of
Default under the Senior Loan, such reasonable and customary costs and expenses
of sale or other disposition (including attorneys’ fees and brokerage
commissions), (v) in the case of a foreclosure sale, such costs and
expenses incurred by Senior Lender under the Senior Loan Documents as Senior
Lender shall be entitled to receive reimbursement for under the terms of the
Senior Loan Documents and (vi) in the case of a refinancing of the Senior
Loan, such costs and expenses (including reasonable attorneys’ fees) of such
refinancing as shall be reasonably approved by Lender.
Net Operating
Income: shall have the meaning
set forth in the Senior Loan Agreement.
Net
Worth: shall mean, as of a given date, (x) the total assets of
a Person as of such date less (y) such Person’s total liabilities as of such
date, determined in accordance with GAAP.
Officer’s
Certificate: a certificate delivered
to Lender by Borrower which is signed by a senior executive officer of the
Borrower.
OP: Xxxxxxx Properties,
L.P., a Maryland limited partnership.
Operating
Agreements: any covenants,
restrictions or agreements of record relating to the construction, operation or
use of the Property, excluding any Lease.
Other
Charges: all
ground rents, maintenance charges, impositions other than Taxes, and any other
charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Property (other than Taxes), now or hereafter
levied or assessed or imposed against the Property or any part
thereof.
Owner: Xxxxxxx
Properties-Xxxxxxx Towers, LLC, a Delaware limited liability
company.
11
Payment
Date: the
first (1st) day of each calendar month or, upon Lender’s exercise of its right
to change the Payment Date in accordance with Section 2.2.4 hereof,
the New Payment Date (in either case, if such day is not a Business Day, the
Payment Date shall be the first Business Day thereafter). The first
Payment Date hereunder shall be June 1, 2008.
Permitted
Encumbrances: (i) the Liens
created by the Loan Documents, (ii) all Liens and other matters disclosed
in the Title Insurance Policy, (iii) Liens, if any, for Taxes or Other
Charges not yet due and payable or not delinquent, (iv) any workers’,
mechanics’ or other similar Liens on the Property provided that any such Lien is
bonded or discharged within thirty (30) days after Borrower or Owner first
receives notice of such Lien, (v) such other title and survey exceptions as
Lender approves in writing in Lender’s discretion, (vi) Liens which constitute a
Permitted Transfer, (vii) the Liens created by the Senior Loan Documents and
(viii) the Junior Mezzanine Loan Liens.
Permitted Fund
Manager: any nationally-recognized manager of investment funds which (i)
invests in debt or equity interests relating to commercial real estate,
(ii) invests through a fund with committed capital of at least $300,000,000
and (iii) is not the subject of a bankruptcy proceeding.
Permitted
Investments: (a) subject to the provisions of
subparagraph (b) of this definition, any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Servicer, the trustee under any Securitization or any
of their respective affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first Payment Date
following the date of acquiring such investment (and in no event having
maturities of more than 365 days) and meeting one of the appropriate standards
set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
agency or instrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI financing),
the Small Business Administration (guaranteed participation certificates and
guaranteed pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan Area Transit
Authority (guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (ii) Federal
Housing Administration debentures; (iii) obligations of the following
United States government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System (consolidated system
wide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations), the Federal National Mortgage Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter
12
affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (defined herein)
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency in
the highest short term rating category and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities issued in connection
with a Securitization or any class thereof); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (v) fully
Federal Deposit Insurance Corporation insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances issued by, any bank or trust
company, savings and loan association or savings bank, the short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities or any class thereof); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (vi) debt
obligations with maturities of not more than 365 days and at all times rated by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in
a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities or any class thereof) in its highest
long term unsecured rating category; provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change,
(B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;
(vii) commercial paper (including both non interest bearing discount
obligations and interest bearing obligations payable on demand or on a specified
date not more than one (1) year after the date of issuance thereof) with
maturities of not more than 365 days and that at all times is rated by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in
13
a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities or any class thereof) in its highest
short term unsecured debt rating; provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; and
(viii) other security, obligation or investment which has been approved as
a Permitted Investment in writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written a Rating Comfort Letter with respect to that
the designation of such security, obligation or investment as a Permitted
Investment; provided, however, that no
obligation or security shall be a Permitted Investment if (A) such
obligation or security evidences a right to receive only interest payments or
(B) the right to receive principal and interest payments on such obligation
or security are derived from an underlying investment that provides a yield to
maturity in excess of 120% of the yield to maturity at par of such underlying
investment. Notwithstanding anything to the contrary contained
herein, the Permitted Investments (i) through (ix) above must have a Xxxxx’x
rating of (a) “A2 or P-1” if such investment has a maximum maturity of one
(1) month, (b) “A1 and P-1” if such investment has a maximum maturity of
three (3) months, (c) “Aa3 and P-1” if such investment has a maximum
maturity of six (6) months and (d) “AAA and P-1” if such investment has a
maximum maturity of more than six (6) months.
At any
time when Borrower is not permitted under the Loan Documents to select Permitted
Investments, “Permitted
Investments” shall mean any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, including those
issued by Servicer (defined herein), the trustee under any Securitization or any
of their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first Payment Date
following the date of acquiring such investment (and in no event having
maturities of more than 365 days) and meeting one of the appropriate standards
set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
Person controlled or supervised by and acting as an instrumentality of the
United States pursuant to authority granted by the Congress of the United States
provided such obligations are backed by the full faith and credit of the United
States of America and are one of the following: obligations
of: the U.S. Treasury (all direct or fully guaranteed obligations),
the General Services Administration (participation certificates), the Small
Business Administration (guaranteed participation certificates and guaranteed
pool certificates) or the U.S. Department of Housing and Urban Development
(local authority bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (ii) Federal
Housing Administration debentures; and (iii) obligations of the following
United States government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System (consolidated system
wide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations) and the Federal National Mortgage Association (debt obligations);
provided, however, that the
investments
14
described
in this clause must (A) have a predetermined fixed dollar of principal due
at maturity that cannot vary or change, (B) if rated by S&P, must not
have an “r” highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; provided, however, that no
obligation or security shall be a Permitted Investment if (A) such
obligation or security evidences a right to receive only interest payments or
(B) the right to receive principal and interest payments on such obligation
or security are derived from an underlying investment that provides a yield to
maturity in excess of 120% of the yield to maturity at par of such underlying
investment. Notwithstanding anything to the contrary contained
herein, the Permitted Investments (i) through (ix) above must have a Xxxxx’x
rating of (a) “A2 or P-1” if such investment has a maximum maturity of one
(1) month, (b) “A1 and P-1” if such investment has a maximum maturity of
three (3) months, (c) “Aa3 and P-1” if such investment has a maximum
maturity of six (6) months and (d) “AAA and P-1” if such investment has a
maximum maturity of more than six (6) months.
Person: any individual,
corporation, partnership, limited liability company, joint venture, estate,
trust, unincorporated association, any other person or entity, and any federal,
state, county or municipal government or any bureau, department or agency
thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
Plan: an employee pension
benefit plan as defined in Section 3(2) of ERISA, (i) established or maintained
by Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions and (ii) which is covered by
Title IV of ERISA or Section 302 of ERISA or Section 412 of the
Code.
Pooling and
Servicing Agreement: any pooling and servicing agreement or
similar agreement entered into as a result of a Securitization.
Prescribed
Laws: collectively,
(i) the Patriot Act, (ii) Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism, (iii) the International Emergency Economic Power Act, 50 U.S.C.
§1701 et seq. and (iv) all other legal requirements relating to money
laundering or terrorism.
Property: the parcels of real
property and Improvements thereon owned by Owner and at such time encumbered by
the Mortgage; together with all rights pertaining to such real property and
Improvements. The Property is known as Xxxxxxx Towers and is located
at 5 and 0 Xxxxxx Xxxxxx Xxxxx, Xxxx of Santa Xxx, Orange County,
California.
Qualified Loan
Transferee:
(i) a
real estate investment trust, bank, saving and loan association, investment
bank, insurance company, trust company, commercial credit corporation, pension
plan, pension fund or pension advisory firm, mutual fund, government entity or
plan, provided that any such Person referred to in this clause (i) satisfies the
Eligibility Requirements;
15
(ii) an
investment company, money management firm or “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, as amended, or
an institutional “accredited investor” within the meaning of Regulation D under
the Securities Act of 1933, as amended, provided that any such Person referred
to in this clause (ii) satisfies the Eligibility Requirements;
(iii) an
institution substantially similar to any of the foregoing entities described in
clauses (i) or (ii) that satisfies the Eligibility Requirements;
(iv) any
entity Controlled (which for purposes of this definition means the ownership,
directly or indirectly, in the aggregate of more than fifty percent (50%) of the
beneficial ownership interests of an entity and the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of an entity, whether through the ability to exercise voting power, by
contract or otherwise) by any of the entities described in clauses (i) (ii) or
(iii) above or (v) below;
(v) an
investment fund, limited liability company, limited partnership or general
partnership where a Permitted Fund Manager or an entity that is otherwise a
Qualified Loan Transferee under clauses (i) (ii), (iii) or (iv) of this
definition investing through a fund with committed capital of at least
$300,000,000 acts as the general partner, managing member or fund manager and at
least fifty percent (50%) of the equity interests in such investment vehicle are
owned, directly or indirectly, by one or more entities that are otherwise
Qualified Loan Transferees under clauses (i) (ii), (iii) or (iv) of this
definition; or
(vi) a
Person (i) with a long-term unsecured debt rating from each of the Rating
Agencies rating the Securities of at least “investment grade” that (ii) owns,
controls or operates, with its Affiliates, office buildings totaling at least
4,000,000 square feet of gross leasable area (exclusive of the Property), has
with its Affiliates a Net Worth, as of a date no more than three (3) months
prior to the date of such Transfer; of at least $300,000,000 (exclusive of the
Property), and immediately prior to such Transfer, controls with its Affiliates
real estate equity assets of at least $750,000,000 (exclusive of the
Property).
Qualified
Manager: any of (a) the OP (provided the OP Controls the
Borrower and Owner at the time in question), (b) an Affiliated Manager, (c) any
property manager Controlled (within the sense of clause (ii) of the defined term
“Control”) by the REIT (provided the REIT Controls the Borrower and Owner at the
time in question) or (d) in the reasonable judgment of Lender, a reputable and
experienced management company which (i) is a reputable national (or
regional) major management company having at least five (5) years’ experience in
the management of commercial properties of comparable quality to the Property,
with similar uses as the Property and in the jurisdiction in which the Property
is located, (ii) at the time of its engagement has managed, for at least
five (5) years prior to its engagement as property manager, at least five (5)
commercial office buildings of comparable quality to the Property, (iii) at
the time of its engagement as property manager is managing leasable square
footage of office buildings of comparable quality to the Property equal to five
(5) times the leasable square feet of the Property or such lesser amount as is
approved by the applicable Rating Agencies and (iv) is not the subject of a
Bankruptcy Action; provided that Borrower or Owner shall have obtained prior
written confirmation from the applicable Rating Agencies that management of the
Property
16
by such
Person will not cause a downgrade, withdrawal or qualification of the then
current ratings of the Securities or any class thereof (provided that no such
written confirmation from the Rating Agencies in connection with such Qualified
Manager will be required in connection with Permitted Transfers under Section 5.26.5 hereof
and the Transfer and Assumption under Section 5.26.6 hereof
not requiring such prior written confirmation from the Rating
Agencies).
Rating
Agency: each
of Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. (“S&P”), Xxxxx’x Investors
Service, Inc. (“Xxxxx’x”), and Fitch, Inc., a
division of Fitch Ratings Ltd. (“Fitch”) or any other
nationally recognized statistical rating organization to the extent any of the
foregoing have been engaged by Lender or its designee in connection with or in
anticipation of any Securitization.
Rating Comfort
Letter: a
letter issued by each of the applicable Rating Agencies which confirms that the
taking of the action referenced to therein will not result in any qualification,
withdrawal or downgrading of any existing ratings of Securities created in a
Securitization or, if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization.
REIT: Xxxxxxx Properties,
Inc., a Maryland corporation.
Rents: all rents, rent
equivalents, moneys payable as damages (including payments by reason of the
rejection of a Lease in a Bankruptcy Proceeding) or in lieu of rent or rent
equivalents, royalties (including all oil and gas or other mineral royalties and
bonuses), income, fees, receivables, receipts, revenues, deposits (including
security, utility and other deposits), accounts, cash, issues, profits, charges
for services rendered, and other payment and consideration of whatever form or
nature received by or paid to or for the account of or benefit of Owner, Manager
or any of their agents or employees from any and all sources arising from or
attributable to the Property, and the Improvements, including all receivables,
customer obligations, installment payment obligations and other obligations now
existing or hereafter arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of the use and occupancy of the
Property or rendering of services by Owner, Manager or any of their agents or
employees and proceeds, if any, from business interruption or other loss of
income insurance.
Restricted
Party: (i)
Owner, Borrower, the OP, the Guarantor, or any Affiliated Manager, and (ii) any
shareholder, general partner, member, non-member manager, direct or indirect
legal or beneficial owner of, Owner, Borrower, the OP, Guarantor, any Affiliated
Manager or any non-member manager; provided, however, that the term “Restricted
Party” shall not include any limited partner of the OP, Guarantor, or any
Affiliated Manager, or any shareholders of the REIT, or any person owning direct
or indirect interests in or through such limited partners or
shareholders.
Sale or
Pledge: a
voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance or
pledge of a legal or beneficial interest.
Security
Documents: collectively, (i) the Pledge, (ii) all Uniform
Commercial Code financing statements required by this Agreement to be filed with
respect to the security
17
interests
in personal property created pursuant to the Pledge, and (iii) all other
documents and agreements executed or delivered to Lender by Borrower in order to
grant, protect or perfect Liens on any assets of Borrower as security for the
Debt.
Senior Deposit
Account: the “Deposit Account” (as such term is defined in Section 3.1 of
the Senior Loan Agreement) established pursuant to the terms of the Senior Loan
Agreement .
Senior Deposit
Account Agreement: the Deposit Account Agreement dated the
date hereof among Owner, Senior Lender, Manager and the Deposit
Bank.
Senior
Lender: Greenwich Capital Financial Products, Inc., or any
successor holder of the Senior Loan.
Senior
Loan: the $125,000,000 mortgage loan made by Senior Lender to
Owner in accordance with the Senior Loan Agreement.
Senior Loan
Agreement: the Loan Agreement dated as of the date hereof
between Senior Lender and Owner, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, with the consent of
Lender.
Senior Loan
Documents: the “Loan Documents” as defined in the Senior Loan
Agreement.
Senior
Note: the “Note” as defined in the Senior Loan
Agreement.
Senior
Subordinate Deposit Account: an Eligible Account at the
Deposit Bank controlled by Lender.
Servicer: a servicer selected by
Lender to service the Loan, including any “master servicer” or “special
servicer” appointed under the terms of any Pooling and Servicing Agreement or
similar agreement entered into as a result of a Securitization.
Sole
Member: Xxxxxxx Properties-Xxxxxxx Towers Junior Mezzanine,
LLC, a Delaware limited liability company, the sole member of
Borrower
State: the state in which the
Premises (as defined in the Mortgage) is located.
Stated Maturity
Date: May 1, 2011, as such date may be changed in accordance
with Section
2.2.4 hereof.
Survey:
the survey of the Property and Improvements delivered to Lender prior to the
date hereof.
Taxable REIT
Subsidiary: a taxable REIT subsidiary within the meaning of
Section 856(1) of the Code and of which the OP owns, directly or indirectly, no
less than a fifty-one percent (51%) interest.
18
Taxes: all real estate and
personal property taxes, assessments, water rates or sewer rents, maintenance
charges, impositions, vault charges and license fees, now or hereafter levied or
assessed or imposed against all or part of the Property.
Term: the entire term of this
Agreement, which shall expire upon repayment in full of the Debt and full
performance of each and every obligation to be performed by Borrower pursuant to
the Loan Documents.
UCC: the Uniform Commercial
Code as in effect in the State of formation of Borrower.
U.S.
Obligations: obligations that are “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as
amended that are not subject to prepayment, call or early redemption and that
are acceptable to the applicable Rating Agencies.
Yield Maintenance
Premium: an amount which, when added to the outstanding
Principal, would be sufficient to purchase U.S. Obligations which provide
payments (a) on or prior to, but as close as possible to, all successive
scheduled payment dates under this Agreement through the Stated Maturity Date
and (b) in amounts equal to the Monthly Debt Service Payment Amount required
under this Agreement through the Stated Maturity Date together with the
outstanding principal balance of the Note as of the Stated Maturity Date
assuming all such Monthly Debt Service Payment Amounts are made (including any
servicing costs associated therewith). In no event shall the Yield
Maintenance Premium be less than zero.
Section
1.2 Index of Other
Definitions
. The
following terms are defined in the sections or Loan Documents or the Senior Loan
Agreement indicated below:
“Act” - Schedule 5 (Definition
of Single Member Bankruptcy Remote LLC)
“Annual Budget” -
6.3.4
“Approved Annual Budget” -
6.3.4
“Applicable Taxes” -
2.2.3
“Asbestos” -
5.8.2
“Assignment of Leases and
Rents” - Senior Loan Agreement
“Award” - 7.3.2
“Bankruptcy Proceeding” -
4.7
“Blanket Insurance Premium Financing
Arrangement” - 7.1.4
“Borrower Parties” -
10.1
“Cash Management Accounts” -
3.3
“Casualty” -
7.2.1
“Casualty Restoration” -
7.2.1
“Clearing Account Agreement” -
Senior Loan Agreement
“Condemnation” -
7.3.1
“Condemnation Restoration” -
7.3.1
“Consent of Manager” -
5.12.1
19
“Delinquency Date” -
5.2
“Disclosure Document” -
9.1.3
“Endorsement” -
5.26.6
“Environmental Indemnity” -
1.1 (Definition of Loan Documents)
“Environmental Laws” -
4.21
“Environmental Reports” -
4.21
“Equipment” -
Mortgage
“Event of Default” -
8.1
“Exchange Act” -
9.1.3
“Excluded Costs” -
5.4.2
“Financing Installment” -
7.1.4
“Fitch” - 1.1 (Definition of Rating
Agency)
“Foreign Lender” -
2.2.3
“Full Replacement Cost” -
7.1.1(a)
“Government Lists” - 5.31
“Hazardous Substances” -
4.21
“Improvements” -
Mortgage
“Indemnified Liabilities” -
5.30
“Indemnified Party” -
5.30
“Indemnified Group” -
9.1.3
“Independent Director” -
Schedule 5
“Initial Interest Period” -
1.1 (Definition of Interest Period)
“Insolvent” - 4.7
“Insurance Premiums” -
7.1.3
“Insurance Proceeds” - Senior
Loan Agreement
“Insured Casualty” -
7.2.2
“Intercreditor Agreement” -
11.7
“Investor” -
9.1.1
“Late Payment Charge” -
2.5.3
“Lender’s Consultant” -
5.8.1
“Liabilities” -
9.1.3
“Licenses” - 4.11
“Loan” - 2.1
“Monthly Debt Service Payment
Amount” - 2.2.1
“Moody’s” - 1.1 (Definition of
Rating Agency)
“Mortgage” - Senior Loan
Agreement
“New Payment Date” -
2.2.4
“Non-Recourse Guaranty” - 1.1
(Definition of Loan Documents)
“Note” - 1.1 (Definition of
Loan Documents)
“Notice” - 6.1
“OFAC” - 5.31
“Other Fees” -
5.2
“Parent” -
9.1.1(a)
“Patriot Act” - 5.31
“Patriot Act Offense” - 5.31
20
“Permitted Transfers” -
5.26.5
“Pledge” - Section 1.1
(Definition of Loan Documents)
“Pledged Collateral” - Section
1.1 (Definition of Loan Documents)
“Pledged Securities” -
Pledge
“Policies” or “Policy” - 7.1.2
“Principal” - 2.1
“Provided Information” -
9.1.1
“Public Releases” -
10.16
“Related Party” or “Related Parties -
4.33(d)
“Remedial Work” -
5.8.3
“Rent Roll” -
4.16
“Restoration” -
7.3.1
“S&P” - 1.1 (Definition of Rating
Agency)
“Securities” -
9.1.1
“Securities Act” -
9.1.3
“Securitization” -
9.1.1
“Securitization Information -
9.1.3(b)
“Senior Subordinate Deposit Account
Agreement” - 1.1 (Definition of Loan Documents)
“Significant Casualty” -
7.2.2
“Single Member Bankruptcy Remote
LLC” - Schedule 5
“Special Member” - Schedule 5
(Definition of Single Member Bankruptcy Remote LLC)
“Special Purpose Bankruptcy Remote
Entity” - 5.13
“Subaccounts” -
3.1
“Subordinate Pledge” -
Schedule 5
“Taking” - 7.3.2
“Tenant Estoppels” -
4.16
“Terrorism Acts” -
7.1.1(j)
“Terrorism Premium Cap” -
7.1.1(j)
“Threshold Amount” -
5.4.2
“Title Insurance Policy” -
Senior Loan Agreement
“Toxic Mold” -
4.21
“Traded Equity” -
5.26.5
“Transfer” -
5.26.3
“Transfer and Assumption” -
5.26.6
“Transferee Senior Borrower” -
5.26.6
“Transferee Senior Mezzanine
Borrower” - 5.26.6
Section
1.3 Principles of
Construction
. Unless
otherwise specified, (i) all references to sections and schedules are to
those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder”
and words of similar import refer to this Agreement as a whole and not to any
particular provision, (iii) all definitions are equally applicable to the
singular and plural forms of the terms defined, (iv) the word “including”
means “including but not limited to,” (v) accounting terms not specifically
defined herein shall be construed in accordance with GAAP and (vi) all
references to the Senior Loan Agreement, the
21
Senior
Note or any other Senior Loan Document shall mean the Senior Loan Agreement, the
Senior Note or such other Senior Loan Document as in effect on the date hereof,
as each of the same may hereafter be amended, restated, replaced, supplemented
or otherwise modified, but only to the extent that Lender has consented to the
foregoing pursuant to Section 11.4 of this
Agreement. With respect to terms defined by cross-reference to the
Senior Loan Documents, such defined terms shall have the definitions set forth
in the Senior Loan Documents as of the date hereof, and no modifications to the
Senior Loan Documents shall have the effect of changing such definitions for the
purposes of this Agreement unless Lender expressly agrees that such definitions
as used in this Agreement have been revised. To the extent that the
definition of Net Operating Income deviates from GAAP, the definitions of such
terms contained herein shall govern.
ARTICLE
2
GENERAL
LOAN TERMS
Section
2.1 The Loan
. Lender
is making a loan (the “Loan”) to Borrower on the date
hereof, in the original principal amount (the “Principal”) of $20,000,000
which shall mature on the Stated Maturity Date. Borrower acknowledges
receipt of the Loan, the proceeds of which shall be used solely to make a
capital contribution to Owner. No amount repaid in respect of the Loan may be
reborrowed.
Section
2.2 Interest; Monthly
Payments
.
2.2.1 Generally. From
and after the date hereof, interest on the unpaid Principal shall accrue at the
Interest Rate and be payable as hereinafter provided. On the date
hereof, Borrower shall pay interest on the unpaid Principal from the date hereof
through and including April 30, 2008. On June 1, 2008 and each
Payment Date thereafter through and including the Maturity Date, the interest on
the Principal at the Interest Rate shall be payable in monthly installments
(each such installment, the “Monthly Debt Service Payment
Amount”). The Monthly Debt Service Payment Amount due on any
Payment Date shall be applied to the payment of interest accrued during the
preceding Interest Period. All accrued and unpaid interest shall be
due and payable on the Maturity Date. If the Loan is repaid on any
date other than on a Payment Date (whether prior to or after the Stated Maturity
Date), Borrower shall also pay interest that would have accrued on such repaid
Principal to but not including the next Payment Date.
2.2.2 Default
Rate. After the occurrence and during the continuance of an
Event of Default, the entire unpaid Debt shall bear interest at the Default
Rate, and shall be payable, to the extent permitted by applicable
law.
2.2.3 Taxes. Any
and all payments by Borrower hereunder and under the other Loan Documents shall
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on Lender’s income,
and franchise and other similar taxes
22
imposed
on Lender by the law or regulation of any Governmental Authority (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to in this Section 2.2.3 as
“Applicable
Taxes”). If Borrower shall be required by law to deduct any
Applicable Taxes from or in respect of any sum payable hereunder to Lender, the
following shall apply: (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.2.3),
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable
law. Payments pursuant to this Section 2.2.3 shall
be made within ten (10) days after the date Lender makes written demand
therefor. Notwithstanding the foregoing, if the Loan is transferred
to a transferee, assignee or purchaser, which, in each case, is organized under
the laws of any jurisdiction other than the United States of America or any
state thereof (a “Foreign
Lender”), the transferor shall cause such Foreign Lender, concurrently
with the effectiveness of such transfer, to furnish to the transferor and
Borrower either a United States Internal Revenue Service Form W-8BEN, United
States Internal Revenue Service Form W-8ECI or United States Internal Revenue
Service Form W-8IMY, including applicable attachments (in each case, wherein
such Foreign Lender claims entitlement to complete exemption from United States
federal withholding tax on all interest payments hereunder); provided, however,
that in the event that the transferor fails to cause the Foreign Lender to
furnish any such Form or such Foreign Lender is not entitled to a complete
exemption from United States withholding tax, Borrower shall deduct any
Applicable Taxes to the extent required by law and payments shall be made net of
any Applicable Taxes without regard to the provisions of clause (i) of the
second sentence of this Section 2.2.3. In
each case, if a specified form is no longer in use, the delivery obligation
specified in this Section 2.2.3 shall
apply to the applicable successor form. In addition, each Foreign
Lender, if any, shall deliver such forms within a reasonable period of time
following the obsolescence, expiration or invalidity of any form previously
delivered by such Foreign Lender. Each Foreign Lender shall within a
reasonable period of time notify Borrower at any time it determines that it is
no longer in a position to provide any previously delivered form or certificate
to Borrower (or any other form of certification adopted by a taxing authority
for such purpose).
2.2.4 New Payment
Date. Lender shall have the right, to be exercised not more
than once during the term of the Loan, to change the Payment Date to a date
later than the first (1st) day of each month (a “New Payment Date”), on thirty
(30) days’ written notice to Borrower; provided, however, that any
such change in the Payment Date: (i) shall not modify the amount
of regularly scheduled monthly principal (if any) and interest payments, except
that the first payment of principal (if any) and interest payable on the New
Payment Date shall be accompanied by interest at the interest rate herein
provided for the period from the Payment Date in the month in which the New
Payment Date first occurs to the New Payment Date and (ii) shall extend the
Stated Maturity Date to the New Payment Date occurring in the month set forth in
the definition of Stated Maturity Date.
Section
2.3 Loan
Repayment
.
23
2.3.1 Repayment. Borrower
shall repay the entire outstanding principal balance of the Note in full on the
Maturity Date, together with interest thereon to (but excluding) the date of
repayment and any other amounts due and owing under the Loan
Documents. Except during the continuance of an Event of Default, all
proceeds of any repayment, including any prepayments of the Loan, shall be
applied by Lender as follows in the following order of
priority: First, accrued and unpaid
interest at the Interest Rate; second, to Principal; and
third, to and any other
amounts then due and owing under the Loan Documents. If the Debt is
accelerated by reason of an Event of Default, then Lender shall be entitled to
receive, in addition to the unpaid Principal and accrued interest and other sums
due under the Loan Documents, an amount equal to the Yield Maintenance Premium,
if any, applicable to such Principal so accelerated. During the
continuance of an Event of Default, all proceeds of repayment, including any
payment or recovery on the Collateral (or any portion thereof) (whether through
foreclosure or otherwise) shall, unless otherwise provided in the Loan
Documents, be applied in such order and in such manner as Lender shall elect in
Lender’s discretion.
2.3.2 Mandatory
Prepayments.
(a) In
the event of any Liquidation Event, Borrower shall cause the related Net
Liquidation Proceeds After Debt Service to be deposited directly into the Senior
Subordinate Deposit Account, which shall then be applied by Lender on the next
succeeding Payment Date towards the amount necessary to fully repay the Loan
including all interest accrued to the date of prepayment and any other sums then
due and payable by Borrower to Lender. Any amounts of Net Liquidation
Proceeds After Debt Service in excess of the Debt shall be paid to
Borrower.
(b) Borrower
shall notify Lender of any Liquidation Event not later than one Business Day
following the first date on which Borrower has knowledge of such
event. Borrower shall be deemed to have knowledge of (i) a sale
(other than a foreclosure sale) of the Property on the date on which a contract
of sale for such sale is entered into, and a foreclosure sale, on the date
notice of such foreclosure sale is given, and (ii) a refinancing of the
Property, on the date on which a commitment for such refinancing has been
entered into. The provisions of this Section 2.3.2 shall
not be construed to contravene in any manner the restrictions and other
provisions regarding refinancing of the Senior Loan or Transfer of the Property
set forth in this Agreement and the other Loan Documents.
(c) The
Loan is subject to a mandatory prepayment in the event that any portion of the
Senior Loan is prepaid pursuant to Section 2.3.4 of the
Senior Loan Agreement. Such mandatory prepayment shall be in an
amount equal to the product of (x) the outstanding Principal balance of the Loan
times (y) a fraction (1) the numerator of which is the amount prepaid under the
Senior Loan and (2) the denominator of which is the outstanding principal
balance of the Senior Loan prior to such prepayment. If any such
prepayment is not made on a Payment Date, Borrower shall also pay interest that
would have accrued on such prepaid Principal to, but not including, the next
Payment Date.
2.3.3 Intentionally
Omitted
.
24
2.3.5 Prepayments After
Default. If after the occurrence and during the continuance of
an Event of Default, payment of all or any part of the principal of the Loan is
tendered by Borrower, a purchaser at foreclosure or any other Person, such
purchaser at foreclosure or other Person shall pay the Yield Maintenance
Premium, in addition to the outstanding principal balance, all accrued and
unpaid interest and other amounts payable under the Loan Documents.
Section
2.4 Release of Collateral on
Payment in Full
.
Lender
shall, upon the written request and at the expense of Borrower, upon payment in
full of the Debt in accordance herewith, release, the Liens of the Pledge and
other Security Documents if not theretofore released.
Section
2.5 Payments and
Computations
.
2.5.1 Making of
Payments. Each payment by Borrower shall be made in funds
settled through the New York Clearing House Interbank Payments System or other
funds immediately available to Lender by 4:00 p.m., New York City time, on the
date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any such payment
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the first Business Day thereafter. All such payments
shall be made irrespective of, and without any deduction, set-off or
counterclaim whatsoever and are payable without relief from valuation and
appraisement laws and with all costs and charges incurred in the collection or
enforcement thereof, including attorneys’ fees and court costs.
2.5.2 Computations. Interest
payable under the Loan Documents shall be computed on the basis of the actual
number of days elapsed over a 360-day year.
2.5.3 Late Payment
Charge. If any Principal, interest or other sum due under any
Loan Document is not paid by Borrower on the date on which it is due, Borrower
shall pay to Lender an amount equal to the lesser of five percent (5%) of such
unpaid sum or the maximum amount permitted by applicable law (the “Late Payment Charge”), in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Such amount shall be secured by the Loan
Documents.
Section
2.6 Yield Maintenance
Premium
25
ARTICLE
3
CASH
MANAGEMENT AND RESERVES
Section
3.1 Cash Management
Arrangements
. Borrower
shall cause Owner to cause all Rents to be deposited and, upon release of same
to Owner, applied in accordance with the Senior Loan Documents. All
funds deposited by the Deposit Bank into the Senior Subordinate Deposit Account
shall be deemed to be a distribution from Owner to Borrower and shall be applied
and disbursed in accordance with this Agreement and the Senior Subordinate
Deposit Account Agreement. The Senior Subordinate Deposit Account and
all subaccounts established by Lender therein (which may be ledger or book entry
accounts and not actual accounts) shall at all times be Eligible Accounts (such
subaccounts are referred to herein as “Subaccounts”). The
Senior Subordinate Deposit Account and any Subaccount will be under the sole
control and dominion of Lender, and Borrower shall have no right of withdrawal
therefrom. Borrower shall pay for all expenses of opening and
maintaining all of the above accounts. If, at any time during the
Term, Senior Lender is not requiring Owner to comply with the cash management
arrangements set forth in Section 3.1 of the
Senior Loan Agreement and the Clearing Account Agreement and the Senior Deposit
Account Agreement (or the Senior Loan has been refinanced or otherwise repaid in
full in accordance with the terms of this Agreement), then Lender shall have the
right, at its option, to require such cash management arrangements,
substantially in accordance with the provisions of the foregoing.
Section
3.2 Reserves
. If,
at any time during the Term, Senior Lender is not requiring Owner to make the
required deposits required under Article 3 of the Senior Loan Agreement (or the
Senior Loan has been refinanced or otherwise repaid in full in accordance with
the terms of this Agreement), including pursuant to Sections 3.3, 3.4, 3.5,
3.6 or 3.9 of the Senior Loan Agreement, then Lender shall have the right, at
its option, to require Borrower to make such required deposits to Lender, in
which case such deposits shall be made by Borrower and held in Subaccounts and
disbursed by Lender substantially in accordance with the provisions of such
applicable sections of the Senior Loan Agreement (including Section 3.11(a) of
the Senior Loan Agreement governing priority and order of
application).
Section
3.3 Grant of Security Interest;
Application of Funds
. As
security for payment of the Debt and the performance by Borrower of all other
terms, conditions and provisions of the Loan Documents, Borrower hereby pledges
and assigns to Lender, and grants to Lender a security interest in, all
Borrower’s right, title and interest in and to all payments to or monies held in
the Senior Subordinate Deposit Account and all Subaccounts created pursuant to
this Agreement (collectively, the “Cash
Management
26
Accounts”). Borrower
shall not, without obtaining the prior written consent of Lender, further
pledge, assign or grant any security interest in any Cash Management Account, or
permit any Lien to attach thereto, or any levy to be made thereon, or any UCC
Financing Statements, except those naming Lender as the secured party, to be
filed with respect thereto. This Agreement is, among other things,
intended by the parties to be a security agreement for purposes of the
UCC. Upon the occurrence and during the continuance of an Event of
Default, Lender may apply any sums in any Cash Management Account in any order
and in any manner as Lender shall elect in Lender’s discretion without seeking
the appointment of a receiver and without adversely affecting the rights of
Lender to foreclose the Lien of the Pledge or exercise its other rights under
the Loan Documents. Cash Management Accounts shall not constitute
trust funds and may be commingled with other monies held by
Lender. All interest which accrues on the funds in any Cash
Management Account shall accrue for the benefit of Borrower and shall be taxable
to Borrower and shall be added to and disbursed in the same manner and under the
same conditions as the principal sum on which said interest
accrued. Upon repayment in full of the Debt, all remaining funds in
the Subaccounts, if any, shall be promptly disbursed to Borrower.
Section
3.4 Cash Flow
Allocation
.
(a) All
amounts deposited into the Senior Subordinate Deposit Account during the
immediately preceding Interest Period shall be applied on each Payment Date as
follows in the following order of priority:
(i) First,
to pay the monthly portion of the fees charged by the Deposit Bank in accordance
with the Senior Subordinate Deposit Account Agreement;
(ii) Second,
to Lender to pay the Monthly Debt Service Payment Amount due on such Payment
Date (plus, if applicable, interest at the Default Rate and all other amounts,
other than those described under other clauses of this Section 3.4,
then due to Lender under the Loan Documents);
(iii) Third,
to Lender, for purposes of funding any reserves, if required under Section 3.2;
and
(iv) Lastly,
(A) if any Approved Junior Mezzanine Loan (or any portion thereof) is
outstanding, all remaining amounts shall be deposited into the subordinate
deposit account established pursuant to the Junior Mezzanine Loan Documents and
(B) if no Approved Junior Mezzanine Loan (or any portion thereof) is then
outstanding, to make payments to Borrower of any remaining amounts.
(b) The
failure of Borrower to make all of the payments required under clauses (i)
through (iii) of Section 3.4(a)
in full on each Payment Date shall constitute an Event of Default under this
Agreement; provided, however, if adequate funds are available in the Senior
Subordinate Deposit Account for such payments, the failure by the Deposit Bank
to allocate such funds into the appropriate Subaccounts shall not constitute an
Event of Default.
27
(c) Notwithstanding
anything to the contrary contained in this Section 3.4,
after the occurrence and during the continuance of an Event of Default, Lender
may apply all amounts deposited into the Senior Subordinate Deposit Account to
the Debt in such order and in such manner as Lender shall elect in Lender’s sole
and absolute discretion. Lender’s right to so apply such funds shall
be in addition to all other rights and remedies provided to Lender under the
Loan Documents.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
Borrower
represents and warrants to Lender as of the date hereof that, except to the
extent (if any) disclosed on Schedule 2 hereto
with reference to a specific Section of this Article
4:
Section
4.1 Organization; Special
Purpose
. Each
of Borrower and Owner has been duly organized and is validly existing and in
good standing under the laws of the state of its formation, with requisite power
and authority, and all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to own its properties and to transact the
business in which it is now engaged. Each of Borrower and Owner is
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in connection with its properties, business
and operations. Each of Borrower and Owner is a Special Purpose
Bankruptcy Remote Entity.
Section
4.2 Authorization; Valid
Execution and Delivery; Enforceability
. Borrower
has taken all necessary actions for the authorization of the borrowing on
account of the Loan and for the execution and delivery of the Loan Documents,
including, without limitation, that those members of Borrower whose approval is
required by the terms of Borrower’s organizational documents have duly approved
the transactions contemplated by the Loan Documents and have authorized
execution and delivery thereof by the respective signatories. To the
best of Borrower’s knowledge, no other consent by any local, state or federal
agency is required in connection with the execution and delivery of the Loan
Documents. All of the Loan Documents requiring execution by Borrower
have been duly and validly executed and delivered by Borrower. All of the Loan
Documents constitute valid, legal and binding obligations of Borrower and are
fully enforceable against Borrower in accordance with their terms by Lender and
its successors, transferees and assigns, subject only to bankruptcy laws, and
general principles of equity, insolvency, reorganization, arrangement,
moratorium, receivership or other similar laws relating to or affecting the
rights of creditors. All consents, approvals, authorizations, orders
or filings with any court or governmental agency or body, if any, required for
the execution, delivery and performance of the Loan Documents by Borrower have
been obtained or made.
Section
4.3 No Conflict/Violation of
Law
. The
execution, delivery and performance of the Loan Documents by Borrower will not
cause or constitute a default under or conflict with the organizational
documents of Owner, Borrower,
28
Guarantor
or any general partner or managing member of Owner, Borrower or
Guarantor. The execution, delivery and performance of the obligations
imposed on Borrower under the Loan Documents will not cause Owner or Borrower to
be in default, including after due notice or lapse of time or both, under the
provisions of any agreement, judgment or order to which Owner, Borrower is a
party or by which Owner or Borrower is bound.
Section
4.4 No
Litigation
. Except
as otherwise disclosed on Schedule 2 hereto, to
the best of Borrower’s knowledge there are no pending actions, suits or
proceedings, arbitrations or governmental investigations against the Property or
the Collateral, an adverse outcome of which would materially affect Borrower’s
performance under the Note, this Agreement or the other Loan
Documents.
Section
4.5 No
Defenses
. The
Note, this Agreement, the Pledge and the other Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense, nor would the
operation of any of the terms of the Note, this Agreement, the Pledge or any of
the other Loan Documents, or the exercise of any right thereunder, render this
Agreement or the Pledge unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury.
Section
4.6 Title
. Owner
has good and marketable fee simple title to the Property constituting real
property (other than the beneficial interests), and good title to the Equipment,
subject to no liens, charges or encumbrances other than the Permitted
Encumbrances and liens, charges or encumbrances otherwise expressly permitted by
the Loan Documents and Senior Loan Documents. The possession of the
Property has been peaceful and undisturbed and title thereto has not been
disputed or questioned to the best of Borrower’s knowledge. Upon
execution by Borrower of the Pledge, delivery of the membership certificate of
Owner and upon the filing of any UCC-1 Financing Statements required to be filed
in connection therewith, Lender will have a valid, perfected first priority lien
on Borrower’s interest in the Pledged Collateral, all in accordance with the
terms thereof. The Permitted Encumbrances do not and will not
materially and adversely affect (1) the ability of Borrower to pay in full
the principal and interest on the Note in a timely manner or (2) the use of
the Property for the use currently being made thereof, the operation of the
Property as currently being operated or the value of the Property.
Section
4.7 No Insolvency or Judgment;
No Bankruptcy Filing
. Neither
Owner, Borrower, nor any general partner or member of Owner, Borrower, nor
Guarantor of the Loan is currently (a) the subject of or a party to any
completed or pending bankruptcy, reorganization or insolvency proceeding; or (b)
the subject of any judgment unsatisfied of record or docketed in any court of
the state in which the Property is located or in any other court located in the
United States. The Loan will not render Owner, Borrower nor any
general partner or member of Borrower Insolvent. As used herein, the
term “Insolvent” means
that the sum total of all of an entity’s liabilities (whether secured or
unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of
the value of all such entity’s non-exempt
29
assets,
i.e., all of the assets of the entity that are available to satisfy claims of
creditors. Neither Owner nor Borrower is contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
law or the liquidation of all or a major portion of its property (a “Bankruptcy Proceeding”), and
Borrower has no knowledge of any Person contemplating the filing of any such
petition against it or Owner. In addition, except as described on
Schedule 2
attached hereto, neither Owner, Borrower nor any principal nor Affiliate of
Owner or Borrower has been a party to, or the subject of a Bankruptcy Proceeding
for the past ten (10) years.
Section
4.8 Misstatements of
Fact
. No
statement of fact made in the Loan Documents contains any untrue statement of a
material fact or omits to state any material fact known to Borrower or its
Affiliates necessary to make statements contained herein or therein not
misleading. There is no fact presently known to Borrower which has
not been disclosed which materially adversely affects, nor as far as Borrower
can reasonably foresee, might materially adversely affect the business,
operations or condition (financial or otherwise) of Borrower or
Owner.
Section
4.9 Tax
Filings
. To
the extent required, Borrower and Owner have filed (or have obtained effective
extensions for filing) all federal, state and local tax returns required to be
filed and, except as otherwise disclosed to Lender in writing, has paid or made
adequate provision for the payment of all federal, state and local taxes,
charges and assessments payable by Borrower and Owner pursuant to such returns
or any notice of assessment received by Borrower. Borrower believes
that Borrower’s and Owner’s tax returns (if any) properly reflect the income and
taxes of Borrower and Owner for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit. Borrower does not have any
knowledge of any basis for additional assessment with respect to such taxes
other than a possible reassessment of the Property for real estate tax purposes
resulting from transactions occurring in connection with the acquisition of the
Property on or prior to the date hereof.
Section
4.10 ERISA
. As
of the date hereof and throughout the Term (i) neither Borrower nor Owner is or
will be an “employee benefit plan,” as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, (ii) none of the assets of Borrower
or Owner constitutes or will constitute “plan assets” of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101 (as modified by Section
3(42) of ERISA), (iii) neither Borrower nor Owner is or will be a
“governmental plan” within the meaning of Section 3(32) of ERISA, and
(iv) transactions by or with Borrower or Owner are not and will not be
subject to state statutes regulating investment of, and fiduciary obligations
with respect to, governmental plans. As of the date hereof, neither
Borrower, nor any member of the “controlled group of corporations” (within the
meaning of Section 414 of the Code) that includes Borrower maintains, sponsors
or contributes to a “defined benefit plan” (within the meaning of Section 3(35)
of ERISA) or a “multiemployer pension plan” (within the meaning of Section
3(37)(A) of ERISA).
Section
4.11 Compliance with Applicable
Laws and Regulations
30
. To Borrower’s knowledge, except as set forth in
the Engineering Report identified on Schedule 2 attached
hereto or the Environmental Reports (hereinafter defined), all of the
Improvements and the use of the Property comply in all material respects with,
and shall remain in compliance in all material respects with, all applicable
statutes, rules, regulations and private covenants now or hereafter relating to
the ownership, construction, use or operation of the Property, including all
applicable Prescribed Laws and all applicable statutes, rules and regulations
pertaining to requirements for equal opportunity, anti-discrimination, fair
housing, environmental protection, zoning and land use and the Improvements
comply in all material respects with, and shall remain in compliance in all
material respects with, applicable health, fire and building
codes. Borrower is not aware of any illegal activities relating to
controlled substances on the Property. To Borrower’s knowledge, all
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of the Property as an office building (collectively, the
“Licenses”), have been
obtained and are in full force and effect. To Borrower’s knowledge,
all of the Improvements comply with all material requirements of any applicable
zoning and subdivision laws and ordinances. To Borrower’s knowledge,
in the event that all or any part of the Improvements are destroyed or damaged,
said Improvements can be legally reconstructed to their condition prior to such
damage or destruction, and thereafter exist for the same use without violating
any zoning or other ordinances applicable thereto and without the necessity of
obtaining any variances or special permits. No legal proceedings are
pending or, to the knowledge of Borrower, threatened with respect to the zoning
of the Property. To Borrower’s knowledge, neither the zoning nor any
other right to construct, use or operate the Property is in any way dependent
upon or related to any property other than the Property, except as set forth in
the Operating Agreements for the benefit of the Property. The use
being made of the Property is in conformity with the certificate of occupancy
issued for the Property and, to Borrower’s knowledge, all other restrictions,
covenants and conditions affecting the Property.
Section
4.12 Contracts
. Except
as set forth on Schedule 2 hereto,
there are no service, maintenance or repair contracts affecting the Property
that are not terminable on one (1) month’s notice or less without cause and
without penalty or premium. All service, maintenance or repair
contracts affecting the Property entered into by Owner have been entered into at
arms-length in the ordinary course of the business of Owner and provide for the
payment of fees in amounts and upon terms comparable to existing market
rates.
Section
4.13 Federal Reserve Regulations;
Investment Company Act
. No
part of the proceeds of the Loan will be used for the purpose of purchasing or
acquiring any “margin stock” within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or for any other purpose that would be
inconsistent with such Regulation U or any other regulation of such Board of
Governors, or for any purpose prohibited by Legal Requirements or any Loan
Document. Borrower is not (i) an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended; or (ii) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
31
. The
Property has adequate rights of access to public ways and is served by adequate
water, sewer, sanitary sewer and storm drain facilities. Other than
as disclosed on the Survey, all public utilities necessary to the continued use
and enjoyment of the Property as presently used and enjoyed are located in the
public right-of-way abutting the Property, and all such utilities are connected
so as to serve the Property without passing over other property. All
roads necessary for the full utilization of the Property for its current purpose
have been completed and dedicated to public use and accepted by all Governmental
Authorities or are the subject of access easements for the benefit of the
Property.
Section
4.15 Condition of
Improvements
. Except
as may be expressly disclosed in the Engineering Report identified on Schedule 2 attached
hereto, the Property, including all Improvements, parking facilities, systems,
Equipment and landscaping, are in good condition, order and repair in all
material respects; and there exists no structural or other material defect or
damages to the Property, whether latent or otherwise. Neither
Borrower nor Owner has received notice from any insurance company or bonding
company of any defect or inadequacy in the Property, or any part thereof, which
would adversely affect its insurability or cause the imposition of extraordinary
premiums or charges thereon or any termination of any policy of insurance or
bond. No portion of the Property is located in an area as identified
by the Federal Emergency Management Agency as an area having special flood
hazards. The Property has not been damaged by fire, water, wind or
other cause of loss which has not been fully restored in all material
respects.
Section
4.16 Leases
. The
rent roll attached hereto as Schedule 3 together
with the schedules and the exhibits attached to such rent roll (collectively,
the “Rent Roll”) is
true, complete and correct and the Property is not subject to any Leases other
than the Leases described in the Rent Roll and those additional Leases (if any)
on Schedule 2
attached hereto and any existing subleases thereunder. No Person has
any possessory interest in the Property or right to occupy the same except under
and pursuant to the provisions of the Leases (and any existing subleases
thereunder). As of the date hereof (i) Owner is the owner and
holder of the landlord’s interest under each Lease; (ii) there are no prior
assignments of the landlord’s interest by Owner (and to Borrower’s knowledge any
prior landlord) in any Lease or any portion of Rents which are presently
outstanding and have priority over the Assignment of Leases and Rents;
(iii) true and correct copies of the Leases have been delivered by Borrower
to Lender or made available to Lender and, the Leases have not been further
modified or amended, except as disclosed to Lender in writing on or prior to the
date hereof; (iv) each Lease is in full force and effect; (v) except as
disclosed on the Rent Roll or in any tenant estoppels delivered to Senior Lender
in connection with the Loan and which are dated within 60 days of the date
hereof (collectively, the “Tenant Estoppels”), neither
Owner nor, to Borrower’s knowledge, any tenant under any Lease is in default
under any of the material terms, covenants or provisions of the Lease, and,
except as disclosed to Lender in writing or in any Tenant Estoppels, Borrower
knows of no event which, but for the passage of time or the giving of notice or
both, would constitute an event of default under any Lease; (vi) except as
expressly set forth in the Leases, the Tenant Estoppels or on the
32
Rent
Roll, there are no offsets or defenses to the payment of any portion of the
Rents; and (vii) except as disclosed on the Rent Roll or in any Tenant Estoppel,
all Rents due and payable under each Lease have been paid in full and, except
for estimated payments of operating expenses and taxes made by tenants in
accordance with their Leases, no Rents have been paid more than one (1) month in
advance of the due dates thereof.
Section
4.17 Fraudulent
Transfer
. Borrower
(1) has not entered into the Loan or any Loan Document with the actual
intent to hinder, delay, or defraud any creditor and (2) has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. Giving effect to the Loan contemplated by the Loan
Documents, the fair saleable value of Borrower’s assets exceed and will,
immediately following the execution and delivery of the Loan Documents, exceed
Borrower’s total liabilities, including, without limitation, subordinated,
unliquidated, disputed or contingent liabilities. The fair market
value of Borrower’s assets is and will, immediately following the execution and
delivery of the Loan Documents, be greater than Borrower’s probable liabilities,
including the maximum amount of its contingent liabilities or its debts as such
debts become absolute and matured. Borrower’s assets do not and,
immediately following the execution and delivery of the Loan Documents will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted. Borrower does not intend to, and does
not believe that it will, incur debts and liabilities (including, without
limitation, contingent liabilities and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of Borrower).
Section
4.18 Ownership of Borrower and
Owner
. The
sole member of Owner is Borrower, whose sole member is Junior Mezzanine Loan
Borrower, whose sole member is Xxxxxxx Properties Holdings IV, LLC, whose sole
member is Xxxxxxx Properties Holdings III, LLC, whose sole member is the OP,
whose sole general partner is the REIT. The membership interests in
Borrower are owned free and clear of all Liens, warrants, options and rights to
purchase. Borrower does not have any obligation to any Person to
purchase, repurchase or issue any ownership interest in it. The
organizational chart attached hereto as Schedule 4 is complete and accurate and
illustrates all Persons who have a direct ownership interest in Owner, Borrower
and the OP.
Section
4.19 No Purchase
Options
. No
tenant, person, party, firm, corporation or other entity has an option to
purchase the Property or the Collateral, any portion of either of the foregoing
or any interest therein other than options, rights of first refusal and similar
rights to lease space in the Improvements granted to a tenant pursuant to its
respective Lease or in another writing otherwise delivered to Lender and other
than rights of first refusal contained in operating agreements of members of
Borrower in favor of members of the members of Borrower in the event of a sale
of the Property by Borrower.
Section
4.20 Management
Agreement
33
. The Management Agreement is in full force and
effect and there is no default or violation by any party
thereunder. The fee due under the Management Agreement, and the terms
and provisions of the Management Agreement, are subordinate to the
Mortgage.
Section
4.21 Hazardous
Substances
. To
Borrower’s knowledge, except as disclosed in the reports identified on Schedule 2 attached
hereto and delivered to Lender in connection with the Loan (the “Environmental
Reports”): (a) the Property is not in violation of any
local, state, federal or other governmental authority, statute, ordinance, code,
order, decree, law, rule or regulation pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination or
clean-up including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, the Resource Conservation
and Recovery Act, as amended, the Emergency Planning and Community Right-to-Know
Act of 1986, as amended, the Hazardous Substances Transportation Act, as
amended, the Solid Waste Disposal Act, as amended, the Clean Water Act, as
amended, the Clean Air Act, as amended, the Toxic Substance Control Act, as
amended, the Safe Drinking Water Act, as amended, the Occupational Safety and
Health Act, as amended, any state super-lien and environmental clean-up statutes
(including with respect to Toxic Mold) and all rules and regulations adopted in
respect to the foregoing laws (collectively, “Environmental Laws”);
(b) the Property is not subject to any private or governmental lien or
judicial or administrative notice or action or inquiry, investigation or claim
relating to hazardous and/or toxic, dangerous and/or regulated, substances,
wastes, materials, raw materials which include hazardous constituents,
pollutants or contaminants including without limitation, petroleum, tremolite,
anthlophylie, actinolite or polychlorinated biphenyls, toxic mold or fungus of a
type that may pose a risk to human health or the environment or would materially
and negatively impact the value of the Property (“Toxic Mold”) and any other
substances or materials which are included under or regulated by Environmental
Laws or which are considered by scientific opinion to be otherwise dangerous in
terms of the health, safety and welfare of humans (collectively, “Hazardous Substances”);
(c) no Hazardous Substances are or have been (including the period prior to
Owner’s acquisition of the Property) discharged, generated, treated, disposed of
or stored on, incorporated in, or removed or transported from the Property other
than in compliance with all Environmental Laws; (d) no Hazardous Substances
are present in, on or under any nearby real property which could migrate to or
otherwise affect the Property and which would reasonably be likely to result in
a requirement under applicable Environmental Laws to remediate the Property; and
(e) no underground storage tanks exist on any of the
Property. Notwithstanding anything to the contrary in this Section 4.21,
Borrower, Owner and tenants may use and store ordinary amounts of Hazardous
Substances at the Property in compliance with all applicable Environmental Laws
if such use and storage is in connection with business supplies used by
Borrower, Owner, a tenant in accordance with the terms of its Lease or in
connection with the ordinary cleaning and maintenance of the
Property.
Section
4.22 Name; Principal Place of
Business
. Borrower
does not use and will not use any trade name and has not done and will not do
business under any name other than its actual name set forth
herein. Owner does not, and Borrower will not permit Owner to, use
any trade name or do any business under any name other than its actual name set
forth in the Senior Loan Agreement. The principal place of business
of
34
Borrower
is its primary address for notices as set forth in Section 6.1 hereof
and the principal place of business of Owner is its primary address for notices
as set forth in Section 6.1 of the Senior Loan Agreement, and neither Borrower
nor Owner has any other place of business. Borrower’s federal tax
identification number is 00-0000000. Borrower is not subject to
back-up withholding taxes.
Section
4.23 No Other
Obligations
. Neither
Borrower nor Owner has any material financial obligation or contingent
liabilities under any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which Borrower or Owner is a party or by which
Borrower, Owner, the Collateral or the Property is otherwise bound, other than
obligations incurred in the ordinary course of the operation of the Property and
other than obligations under the Operating Agreements, the Leases, this
Agreement, the other Loan Documents and the Senior Loan Documents that would
materially affect Borrower’s or Owner’s performance under the Note, this
Agreement, the other Loan Documents or the Senior Loan Documents, as
applicable.
Section
4.24 Defense of
Usury
. Borrower
knows of no facts that would support a claim of usury to defeat or avoid its
obligation to repay the principal of, interest on, and other sums or amounts due
and payable under, the Loan Documents.
Section
4.25 Pledged
Collateral
.
(a) Borrower
is the sole beneficial owner of the Pledged Collateral and no Lien exists or
will exist (except the Permitted Encumbrances) upon the Pledged Collateral at
any time (and no right or option to acquire the same exists in favor of any
other Person).
(b) The
Pledged Collateral is not and will not be subject to any contractual restriction
upon the transfer thereof (except for any such restriction contained in the
Pledge).
(c) The
chief place of business of Borrower and the office where Borrower keeps its
records concerning the Pledged Collateral will be located at all times at the
address specified as Borrower’s address in Section
6.1.
(d) The
Pledged Securities have been duly authorized and validly issued and are fully
paid and non-assessable and are not subject to any options to purchase or
similar rights of any Person.
(e) The
Security Documents create a valid security interest in the Pledged Collateral,
securing the payment of the Debt, and upon the filing in the appropriate filing
offices and delivery of the membership certificate of Owner to Lender and of the
financing statements to be delivered pursuant to this Agreement, such security
interests will be perfected, first priority security interests, and all filings
and other actions necessary to perfect such security interests will have been
duly taken. Upon the exercise of its rights and remedies under the
Pledge, Lender will
35
succeed
to all of the rights, titles and interest of Borrower in Owner without the
consent of any other Person and will, without the consent of any other Person,
be admitted as the sole member in Owner.
Section
4.26 Single Tax
Lot
. The
Property consists of a single lot or multiple tax lots; no portion of said tax
lot(s) covers property other than the Property or a portion of the Property and
no portion of the Property lies in any other tax lot.
Section
4.27 Special
Assessments
. Except
as disclosed in the Title Insurance Policy, there are no pending or, to the
knowledge of Borrower, proposed special or other assessments for public
improvements or otherwise affecting the Property, nor, to the knowledge of
Borrower, are there any contemplated improvements to the Property that may
result in such special or other assessments.
Section
4.28 No
Condemnation
. No
part of any property subject to the Mortgage has been taken in condemnation or
other like proceeding to an extent which would impair the value of the Property,
the Mortgage or the Loan or the usefulness of such property for the purposes for
which it is currently being operated, nor is any proceeding pending or known to
be contemplated or, to Borrower’s knowledge, threatened, for the partial or
total condemnation or taking of the Property.
Section
4.29 No Labor or Materialmen
Claims
. Except
for those improvements and other work performed in the ordinary course of
business with respect to which any applicable payments are not more than sixty
(60) days past due, all parties furnishing labor and materials for which payment
is due and payable as of the date hereof have been paid in full and, except for
such liens or claims insured against by the policy of title insurance to be
issued in connection with the Loan, there are no mechanics’, laborers’ or
materialmens’ liens or claims outstanding for work, labor or materials affecting
the Property, whether prior to, equal with or subordinate to the lien of the
Mortgage.
Section
4.30 Boundary
Lines
. Except
as disclosed in the Survey, (i) all of the Improvements which were included
in determining the appraised value of the Property lie wholly within the
boundaries and building restriction lines of the Property, (ii) no
improvements on adjoining properties encroach upon the Property, and
(iii) no easements or other encumbrances upon the Property encroach upon
any of the Improvements, so as to materially and adversely affect the value or
marketability of the Property except those which are insured against by title
insurance.
Section
4.31 Survey
. The
Survey does not fail to reflect any material matter affecting the Property or
the Improvements or the title thereto.
36
. There
has not been and shall never be committed by Owner or, to Borrower’s knowledge,
any other person in occupancy of or involved with the operation or use of the
Property any act or omission affording the federal government or any state or
local government the right of forfeiture as against the Property or any part
thereof or any monies paid in performance of Borrower’s obligations under any of
the Loan Documents.
Section
4.33 Borrower Entity
Representations
. Borrower
hereby represents, warrants, covenants, with respect to Borrower, from the date
of formation of Borrower to the date of this Agreement as follows:
(a) Borrower’s
business has been limited solely to (i) owning 100% of the limited liability
company interests in Owner and (ii) transacting any and all lawful business that
was incident, necessary and appropriate to accomplish the
foregoing.
(b) Borrower
has not engaged in any business other than as set forth in (a)
above.
(c) Borrower
has not owned any asset or property other than (i) the Collateral, and
(ii) incidental personal property reasonably necessary for and used or to
be used in connection with the ownership or operation of the
Collateral.
(d) Borrower
has not entered into any contract or agreement with any Affiliate of Borrower,
any constituent party of Borrower, any owner of Borrower, any guarantors of the
obligations of Borrower or any Affiliate of any such constituent party, owner or
guarantor (individually, a “Related Party” and
collectively, the “Related
Parties”), except upon terms and conditions that are commercially
reasonable.
(e) Borrower
has not made any loans or advances to any Person and has not acquired
obligations or securities of any Related Party.
(f) Borrower
has paid its debts and liabilities from its assets as the same have become
due.
(g) Borrower
has done or caused to be done all things necessary to observe organizational
formalities and preserve its existence.
(h) Borrower
has maintained all of its books, records, financial statements and bank accounts
separate from those of any other Person and Borrower’s assets have not been
listed as the assets of any other Person on the financial statement of any other
Person, and without limiting the foregoing, to the extent Borrower’s financial
information was required under GAAP or tax-reporting rules to be included within
a consolidated set of financial statements, such statements has included a
footnote to the effect that Borrower is a separate legal entity and its assets
are not available to creditors of other members of the consolidated
group. Borrower has maintained its books, records, resolutions and
agreements as official records.
37
(j) Borrower
has not commingled its assets with those of any other Person and has held all of
its assets in its own name.
(k) Borrower
has not guaranteed or become obligated for the debts of any other Person and has
not held itself out as being responsible for the debts or obligations of any
other Person, other than pursuant to the Loan Documents.
(l) Borrower
has allocated fairly and reasonably any overhead expenses that have been shared
with an Affiliate, including paying for office space and services performed by
any employee of an Affiliate or Related Party.
(m) Borrower
has not pledged its assets for the benefit of any other Person other than with
respect to loans secured by the Collateral and no such pledge remains
outstanding except in connection with the Loan.
(n) Borrower
has maintained a sufficient number of employees in light of its contemplated
business operations and has paid the salaries of its own employees from its own
funds.
(o) Borrower
has not made loans to any other Person or has bought or held evidence of
indebtedness issued by any other Person.
(p) Except
as otherwise disclosed on Schedule 2 hereto,
Borrower does not have any actions, suits or proceedings at law or in equity by
or before any Governmental Authority or other agency now pending or, threatened
against or affecting Borrower, which actions, suits or proceedings, if
determined against Borrower, would materially adversely affect the financial
condition or business of Borrower.
(q) Borrower
has not incurred any indebtedness that is still outstanding other than
indebtedness that is permitted under the Loan Documents.
(r) Borrower
is not now party to any lawsuit, arbitration, summons, or legal proceeding,
except as otherwise disclosed on Schedule 2 hereto,
and any prior litigation related solely to the Property, the Collateral, or the
ownership in Borrower.
(s) Borrower
has no judgments or liens of any nature against it except for tax liens not
delinquent and liens disclosed in the title report and other Permitted
Encumbrances.
(t) To
Borrower’s knowledge, Borrower is in compliance with all laws, regulations, and
orders applicable to it and has received all permits necessary for it to
operate.
38
(v) Borrower
does not have any material contingent or actual obligations not related to the
Collateral.
(w) Borrower
is and has since its formation been duly formed, validly existing, and in good
standing in the state of its formation and in all other jurisdictions where it
is qualified to do business.
(x) Borrower
has paid all taxes which Borrower owes pursuant to Legal
Requirements.
Section
4.34 Senior
Loan
. The
Senior Loan has been fully funded in the amount of $125,000,000. The
outstanding principal balance of the Senior Loan, as of the Closing Date, is
$125,000,000. No default, breach, violation or event of default has
occurred under any Senior Loan Document which remains uncured or unwaived and no
circumstance, event or condition has occurred or exists which, with the giving
of notice and/or the expiration of the applicable period would constitute an
Event of Default under the Senior Loan Documents. Each and every
representation and warranty of Owner, made to Senior Lender contained in any one
or more of the Senior Loan Documents is true, correct, complete and accurate in
all material respects as of the date hereof and are hereby incorporated into
this Agreement and deemed made hereunder as and when made thereunder and shall
remain incorporated without regard to any waiver, amendment or other
modification thereof by the Senior Lender or to whether the related Senior Loan
Document has been repaid, defeased or otherwise terminated, unless otherwise
consented to in writing by Lender.
Section
4.35 Perfection of
Accounts
. Borrower
hereby represents and warrants to Lender that:
(a) This
Agreement, together with the other Loan Documents, create a valid and continuing
security interest (as defined in the Uniform Commercial Code) in the Senior
Subordinate Deposit Account and the Subaccounts in favor of Lender, which
security interest is prior to all other Liens, other than Permitted
Encumbrances, and is enforceable as such against creditors of and purchasers
from Borrower. Other than in connection with the Loan Documents and
except for Permitted Encumbrances, Borrower has not sold or otherwise conveyed
the Senior Subordinate Deposit Account or any of the Subaccounts;
(b) The
Senior Subordinate Deposit Account and the Subaccounts constitute “deposit
accounts” or “securities accounts” within the meaning of the Uniform Commercial
Code; and
(c) None
of the Senior Subordinate Deposit Account or any of the Subaccounts are in the
name of any Person other than Borrower, as pledgor, or Lender, as
pledgee. Borrower has not consented to the Deposit Bank’s complying
with instructions with
39
respect
to the Senior Subordinate Deposit Account or any of the Subaccounts from any
Person other than Lender.
Section
4.36 No Contractual
Obligations
. Other
than the Loan Documents, the organizational documents of Owner and Borrower and
other agreements entered into in connection with the formation of the Borrower,
including any agreement with any independent director of the Borrower, as of the
date of this Agreement, Borrower is not subject to any Contractual Obligations
and has not entered into any agreement, instrument or undertaking by which it or
its assets are bound.
All of
the representations and warranties in this Article 4 and
elsewhere in the Loan Documents (i) shall survive for so long as any
portion of the Debt remains owing to Lender and (ii) shall be deemed to
have been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf; provided, however, that, with
regard to events or conditions that occur or arise on the Property before Lender
or any other Person acquires the Property by foreclosure or deed in lieu of
foreclosure, the representations, warranties and covenants set forth in Section 4.21 above
shall survive in perpetuity.
ARTICLE
5
COVENANTS
Until the
end of the Term, Borrower hereby covenants and agrees with Lender
that:
Section
5.1 Existence
. Borrower
shall (and shall cause Owner to) (i) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, and franchises, (ii) continue to engage in the business presently
conducted by it, (iii) obtain and maintain all Licenses, and
(iv) qualify to do business and remain in good standing under the laws of
each jurisdiction, in each case as and to the extent required for the ownership,
maintenance, management and operation of the Property.
Section
5.2 Taxes and Other
Charges
. Borrower
shall (or shall cause Owner to) pay all Taxes on or before the last date prior
to which any interest, late fees or penalties would begin to accrue thereon (the
“Delinquency Date”) and
Other Charges as the same become due and payable, and deliver to Lender receipts
for payment or other evidence satisfactory to Lender that the Taxes and Other
Charges have been so paid no later than the Delinquency Date (provided, however, that
Borrower need not pay (or cause Owner to pay) such Taxes nor furnish (nor cause
Owner to furnish) such receipts for payment of Taxes paid by Senior Lender
pursuant to the Senior Loan Documents). Borrower shall promptly pay
(or cause Owner to pay) for all franchise fees, income taxes and other
impositions and taxes imposed by Governmental Authorities (collectively, the
“Other Fees”) on Owner,
Borrower and Sole Member. Borrower shall not suffer and shall
promptly cause to be paid and discharged any Lien against the Property other
than Permitted Encumbrances, and shall promptly pay (or cause
40
Owner to
pay) for all utility services provided to the Property required to be paid by
Borrower or Owner. After prior notice to Lender, Borrower may cause
Owner, at Owner’s expense, to contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or
validity or application of any Taxes, Other Charges or Other Fees, provided that
(i) no Default or Event of Default has occurred and is continuing,
(ii) such proceeding shall suspend the collection of the Taxes, such Other
Charges or such Other Fees, (iii) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any other instrument to
which Borrower or Owner is subject, including the Senior Loan Documents, and
shall not constitute a default thereunder, (iv) no part of or interest in
the Property will be in danger of being sold, forfeited, terminated, canceled or
lost, (v) Borrower or Owner shall have furnished such security as may be
required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes, Other Charges or Other Fees, together with all
interest and penalties thereon, which shall not be less than 125% of the Taxes,
Other Charges and Other Fees being contested (provided, however, that no such
security will be required if Owner has provided adequate security for the same
to Senior Lender in accordance with the Senior Loan Documents), and
(vi) Borrower shall promptly upon final determination thereof pay (or cause
Owner to pay) the amount of such Taxes, Other Charges or Other Fees, together
with all costs, interest and penalties. Lender may pay over any such
security or part thereof held by Lender to the claimant entitled thereto at any
time when, in the judgment of Lender, the entitlement of such claimant is
established.
Section
5.3 Access to
Property
. Borrower
shall permit (or cause Owner to permit) agents, representatives, consultants and
employees of Lender to inspect the Property or any part thereof at reasonable
hours upon reasonable advance notice, subject however to the rights of tenants
under their respective Leases.
Section
5.4 Repairs; Maintenance and
Compliance; Alterations
.
5.4.1 Repairs; Maintenance and
Compliance. Borrower shall cause Owner to at all times
maintain, preserve and protect all franchises and trade names, and Borrower
shall cause Owner to maintain the Property in a good and safe condition and
repair and shall not (and shall not permit Owner to) remove, demolish or alter
the Improvements or Equipment (except for alterations performed in accordance
with Section
5.4.2 below and normal replacement of Equipment with Equipment of
equivalent value and functionality). Borrower shall promptly comply
with all Legal Requirements, including, without limitation, Prescribed Laws, and
immediately cure (or cause Owner to cure) properly any violation of a Legal
Requirement, including, without limitation, Prescribed Laws; provided, however, that after
prior written notice to Lender, Borrower may cause Owner at Owner’s expense to
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, such Legal Requirement, provided that
(i) no Event of Default has occurred and is continuing; (ii) such
proceeding shall not be prohibited by the provisions of any other instrument to
which Borrower or Owner is subject and shall not constitute a default thereunder
and such proceeding shall be conducted in accordance with all applicable
statutes, laws and ordinances; (iii) neither the Property, the Collateral,
nor any part thereof or interest therein will be in danger of being sold,
41
forfeited,
terminated, cancelled or lost; (iv) Borrower and Owner shall promptly upon
final determination thereof comply with such Legal Requirement and pay all
costs, interest and penalties which may be payable in connection therewith; and
(v) such proceeding shall suspend the requirement of Borrower or Owner, as
applicable, to comply with such Legal Requirement. Borrower shall
notify Lender in writing within one (1) Business Day after Borrower first
receives notice of any such non-compliance. Borrower shall (or shall
cause Owner to) promptly repair, replace or rebuild any part of the Property
that becomes damaged, worn or dilapidated and shall complete and pay for any
Improvements at any time in the process of construction or repair.
5.4.2 Alterations. Borrower
shall obtain Lender’s prior written consent, which consent shall not be
unreasonably withheld or delayed, to any alterations to the Improvements, the
cost of which is reasonably anticipated to exceed $3,500,000 (the “Threshold Amount”) or that
will have a material adverse effect on Borrower’s or Owner’s financial
condition, the use, operation or value of the Property or the Net Operating
Income with respect to the Property, other than (a) tenant improvement work
performed pursuant to the terms of any Existing Lease, (b) tenant
improvement work performed pursuant to the terms and provisions of a Lease
executed after the date hereof and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements (it being understood that the foregoing provision shall not require
Lender’s consent to tenants’ exterior signage pursuant to any Lease approved by
Lender in accordance with the terms and provisions of this Agreement) or
(c) alterations performed in connection with the restoration of the
Property after the occurrence of a Casualty or Condemnation in accordance with
the terms and provisions of this Agreement and the Senior Loan Agreement (“Excluded
Costs”). If Lender fails to respond to a request for consent
under this Section
5.4.2 within ten (10) Business Days of receipt thereof, such consent
shall be deemed granted, provided that such request shall have been accompanied
by all information reasonably requested by Lender or reasonably necessary for
Lender to evaluate such request and shall have clearly stated, in 14 point type
or greater, that if Lender fails to respond to such request within ten (10)
Business Days, Lender’s consent shall be deemed to have been
granted. If Lender refuses to grant such consent, Lender shall
specify in writing the reasons for such refusal. Any approval by
Lender of the plans, specifications or working drawings for alterations of the
Property shall not create responsibility or liability on behalf of Lender for
their completeness, design, sufficiency or their compliance with applicable
laws. Lender may condition any such approval upon receipt of a
certificate of compliance with applicable laws from an independent architect,
engineer, or other Person reasonably acceptable to Lender. If the
total unpaid amounts due and payable with respect to alterations to the
Improvements (other than such amounts to be paid or reimbursed by tenants under
the Leases or paid from accounts established hereunder or Excluded Costs) shall
at any time exceed the Threshold Amount, Borrower shall promptly deliver to
Lender as security for the payment of such amounts and as additional security
for Borrower’s obligations under the Loan Documents any of the
following: (1) cash, (2) U.S. Treasury securities,
(3) other securities having a rating acceptable to Lender and with respect
to which the applicable Rating Agencies have delivered a Rating Comfort Letter
(if required pursuant to a Pooling and Servicing Agreement from and after the
occurrence of a Securitization), or (4) a Letter of Credit (provided,
however, that no such security will be required if Owner has provided adequate
security for the same to Senior Lender in accordance with the Senior Loan
Documents). Such security shall be in an amount equal to the excess
of the
42
total
unpaid amounts with respect to alterations to the Improvements (other than such
amounts to be paid or reimbursed by tenants under the Leases or from accounts
established hereunder or Excluded Costs) over the Threshold
Amount. Upon completion of the alterations to the satisfaction of
Lender in its reasonable discretion Lender shall promptly return to Borrower
such additional security.
Section
5.5 Performance of Other
Agreements
. Borrower
shall observe and perform and cause Owner to observe and perform each and every
term to be observed or performed by it pursuant to the terms of any agreement or
instrument affecting or pertaining to the Collateral or the Property, including
the Loan Documents.
Section
5.6 Cooperate in Legal
Proceedings
. Borrower
shall cooperate fully with Lender with respect to, and permit Lender, at its
option, to participate in, any proceedings before any Governmental Authority
which may in any way affect the value of the Collateral or the rights of Lender
under any Loan Document.
Section
5.7 Further
Assurances
. Borrower
shall, at Borrower’s sole cost and expense, (i) execute and deliver to
Lender such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence, preserve
and/or protect the Collateral and/or for the better and more effective carrying
out of the intents and purposes of the Loan Documents, as Lender may reasonably
require from time to time; and (ii) upon Lender’s request therefor given
from time to time after the occurrence and continuation of any Default or Event
of Default pay for reports of UCC, federal tax lien, state tax lien, judgment
and pending litigation searches with respect to Owner, Borrower and the OP, each
such search to be conducted by search firms reasonably designated by Lender in
each of the locations reasonably designated by Lender.
Section
5.8 Environmental
Matters
.
5.8.1 Environmental
Covenants. So long as Owner owns or is in possession of the
Property, Borrower shall (or shall cause Owner to) (i) keep or cause the
Property to be kept free from Hazardous Substances except those in compliance
with all Environmental Laws or any permits issued with respect thereto,
(ii) promptly notify Lender if Borrower shall become aware of any release
of Hazardous Substances on the Property and/or if Borrower shall become aware
that the Property is in violation of any Environmental Laws and/or if Borrower
shall become aware of any condition on the Property which shall pose a threat to
the health, safety or welfare of humans, and (iii) remove or remediate such
Hazardous Substances and/or cure such violations and/or remove or remediate such
threats, as applicable, as required by law (or as shall be reasonably required
by Lender in the case of removal or remediation which is not required by law,
but in response to the opinion of a licensed hydrogeologist, licensed
environmental engineer or other qualified consultant engaged by Lender (“Lender’s Consultant”) provided
that such removal, remediation or cure is reasonably necessary to eliminate
imminent danger to the health, safety or welfare of humans and would customarily
be performed by prudent owners of
43
properties
similar to the Property in similar circumstances), promptly after Borrower
becomes aware of same, at Borrower’s sole expense, without prejudice to any
rights Borrower may have against any responsible
parties. Notwithstanding anything to the contrary in this Section 5.8.1,
Borrower, Owner, Manager and/or tenants on the Property may use and store
ordinary amounts of Hazardous Substances at the Property if such use or storage
is in connection with business supplies used by Borrower, Owner, a tenant in
accordance with the terms of its Lease or by Manager pursuant to the Management
Agreement or is in connection with the ordinary cleaning and maintenance of the
Property so long as such use and storage (A) does not violate any
applicable Environmental Laws and (B) is not the subject of any specific
recommendations in the Environmental Reports that would prohibit such use or
storage. Nothing herein shall prevent Borrower from recovering such
expenses from any other party that may be liable for such removal or
cure. The obligations and liabilities of Borrower under this Section 5.8.1 shall
survive any termination, satisfaction, or assignment of the Pledge and the
exercise by Lender of any of its rights or remedies hereunder, including,
without limitation, the acquisition of the Collateral by foreclosure or
otherwise; provided that such obligations and liabilities of Borrower shall not
survive after the date Lender or its Affiliates take title to the Collateral
pursuant to foreclosure or otherwise.
5.8.2 Asbestos. Borrower
represents and warrants that, to Borrower’s knowledge, no asbestos or any
substance or material containing asbestos (collectively, “Asbestos”) is located on the
Property except as may have been disclosed in the Environmental Reports
delivered to Lender in connection with the Loan. Borrower shall not
install in the Property, nor permit to be installed in the Property, Asbestos
and shall remove any Asbestos to the extent required by applicable Legal
Requirements, at Borrower’s sole expense. Borrower shall in all
instances comply with (and cause Owner to comply with), and ensure compliance by
all occupants of the Property with, all applicable federal, state and local
laws, ordinances, rules and regulations with respect to Asbestos and shall keep
(and cause Owner to keep) the Property free and clear of any liens imposed
pursuant to such laws, ordinances, rules or regulations. In the event
that Borrower receives any notice or advice from any governmental agency or any
source whatsoever with respect to Asbestos on, affecting or installed on the
Property, Borrower shall promptly notify Lender.
5.8.3 Environmental
Monitoring. Except to the extent already disclosed in the
Environmental Reports, Borrower shall give prompt written notices to Lender
of: (a) any proceeding or inquiry by any party with respect to
the presence of any Hazardous Substance or Asbestos on, under, from or about the
Property, (b) all claims made or threatened by any third party against
Borrower, Owner or the Property relating to any loss or injury resulting from
any Hazardous Substance or Asbestos, and (c) Borrower’s or Owner’s
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could reasonably be expected to cause the
Property to be subject to any investigation or cleanup pursuant to any
Environmental Law. Upon becoming aware of the presence of mold or
fungus at the Property, Borrower shall (or shall cause Owner to) (a) undertake
an investigation to identify the source(s) of such mold or fungus and shall
develop and implement an appropriate remediation plan to eliminate the presence
of any Toxic Mold, (b) perform or cause to be performed all acts reasonably
necessary for the remediation of any Toxic Mold (including taking any action
necessary to clean and disinfect any portions of the Property affected by Toxic
Mold, including providing any necessary moisture control systems at the
Property), and (c) provide
44
evidence
reasonably satisfactory to Lender of the foregoing. Borrower shall
permit (and shall cause Owner to permit) Lender to join and participate in, as a
party if it so elects, any legal proceedings or actions initiated with respect
to the Property in connection with any actual or alleged violation of
Environmental Law or the presence of Hazardous Substance at the Property, and
Borrower shall pay (or shall cause Owner to pay) all reasonable attorneys’ fees
and disbursements incurred by Lender in connection therewith. Upon
Lender’s request, at any time and from time to time while the Loan is
outstanding but not more frequently than once per calendar year, unless Lender
has determined (in the exercise of its good faith judgment) that reasonable
cause exists for the performance of an environmental inspection or audit of the
Property, Borrower shall provide (or shall cause Owner to provide), at
Borrower’s sole expense, (i) an inspection or audit of the Property
prepared by a licensed hydrogeologist or licensed environmental engineer
approved by Lender indicating the presence or absence of Hazardous Substances
on, in or near the Property, and (ii) an inspection or audit of the
Property prepared by a duly qualified engineering or consulting firm approved by
Lender, indicating the presence or absence of Asbestos on the Property; provided, however, any such
inspection or audit requested by Lender, during the Term, in excess of one
(1) inspection during each three (3) year period commencing upon the date
hereof, shall be performed at Lender’s expense unless an Event of Default exists
or Lender has determined (in the exercise of its good faith judgment) that
reasonable cause exists for the performance of an environmental inspection or
audit. If Borrower (or Owner) fails to provide such inspection or
audit within sixty (60) days after such request Lender may order same, and
Borrower hereby grants to Lender and its employees and agents access to the
Property and a license to undertake such inspection or audit upon reasonable
prior notice to Borrower and in a manner that does not unreasonably interfere
with tenants or occupants thereof. The cost of such inspection or
audit obtained by Lender upon Borrower’s failure to do so shall bear interest
from the date such costs are incurred by Lender until paid at the Default Rate
and shall be due and payable by Borrower to Lender within ten (10) days after
the date Lender makes written demand therefor, and if not so paid, may be added
to the Debt. In the event that any environmental site assessment
report prepared in connection with such inspection or audit recommends that an
operations and maintenance plan be implemented for Asbestos or any Hazardous
Substance, Borrower shall (or shall cause Owner to) cause such operations and
maintenance plan to be prepared and implemented at Borrower’s expense upon
request of Lender, and with respect to any Toxic Mold, Borrower shall (or shall
cause Owner to) take all action necessary to clean and disinfect any portions of
the Improvements affected by Toxic Mold in or about the Improvements, including
providing any necessary moisture control systems at the Property. In
the event that any investigation, site monitoring, containment cleanup, removal,
restoration, or other work of any kind is reasonably necessary under an
applicable Environmental Law (the “Remedial Work”), Borrower
shall promptly commence (or shall cause Owner to commence) and thereafter
diligently prosecute to completion all such Remedial Work, provided that in any
event Borrower shall complete such Remedial Work within the time required by
applicable Environmental Law, and provided, further, that Borrower’s obligation
to perform Remedial Work shall be without prejudice to any rights Borrower may
have against responsible parties. All Remedial Work shall be
performed by contractors approved in advance by Lender, and under the
supervision of a consulting engineer approved by Lender. All costs
and expenses of such Remedial Work shall be paid by Borrower or Owner including,
without limitation, Lender’s reasonable attorneys’ fees and disbursements
incurred in connection with monitoring or review of such Remedial
Work. Nothing herein shall prevent Borrower or
45
Owner
from recovering such expenses from any other party that may be liable for such
Remedial Work. In the event Borrower shall fail (or shall fail to
cause Owner) to timely commence, or cause to be commenced, or fail to diligently
prosecute to completion, such Remedial Work, Lender may, but shall not be
required to, cause such Remedial Work to be performed, and all costs and
expenses thereof, or incurred in connection therewith, shall bear interest from
the date such costs are incurred by Lender until paid at the Default Rate and
shall be due and payable by Borrower to Lender within ten (10) days after the
date Lender makes written demand therefor, and if not so paid, may be added to
the Debt.
5.8.4 Underground Storage
Tanks. Borrower shall not install or permit to be installed on
the Property any underground storage tank.
Section
5.9 Title to the Pledged
Collateral
. Borrower
will warrant and defend the title to the Collateral (and shall cause Owner to
warrant and defend the title to the Property), and the validity and priority of
all Liens granted or otherwise given to Lender under the Loan Documents, subject
only to Permitted Encumbrances, against the claims of all Persons.
Section
5.10 Leases
.
5.10.1 Generally. None
of the Leases shall contain any option to purchase, any right of first refusal
to purchase or any right by a tenant to terminate the lease term (except for
termination rights (i) set forth in the Existing Leases or
(ii) arising from a taking or the destruction of all or substantially all
of the Property or all or substantially all of a tenant’s demised
premises). Leases executed after the date hereof shall not contain
any provisions which adversely affect the Property or which might adversely
affect the rights of any holder of the Loan without the prior written consent of
Lender. Each tenant shall conduct business only in that portion of
the Property covered by its Lease. Upon request, Borrower shall (or
shall cause Owner to) furnish Lender with executed copies of all
Leases.
5.10.2 Material
Leases. Borrower shall not permit Owner to, without the prior
consent of Lender, which consent shall not be unreasonably withheld or
conditioned (i) enter into any Material Lease of all or any part of the
Property, (ii) cancel, terminate (other than as a result of a tenant
default thereunder), abridge or otherwise modify in any material respect the
terms of any Material Lease unless such action is required by the terms thereof,
or accept a surrender thereof, (iii) consent to any assignment of or
subletting under any Material Lease not in accordance with its terms,
(iv) cancel, terminate, abridge or otherwise modify any guaranty of any
Material Lease or the terms thereof, (v) accept prepayments of installments
of Rents for a period of more than one (1) month in advance (other than
estimated payments of taxes and reimbursable expenses paid by tenants pursuant
to their Leases) or (vi) further assign the whole or any part of the Leases
or the Rents other than in connection with a Transfer and
Assumption. If Lender fails to respond to a request for consent under
this Section
5.10.2 within ten (10) Business Days of receipt thereof, such consent
shall be deemed granted, provided that such request shall have been accompanied
by all information requested by Lender or reasonably
46
necessary
for Lender to evaluate such request and shall have clearly stated, in 14 point
type or greater, that if Lender fails to respond to such request within ten (10)
Business Days, Lender’s consent shall be deemed to have been
granted. In the event that Lender refuses to grant any such consent,
Lender shall specify in writing the reasons for such refusal. In
addition, Borrower shall not permit Owner to (A) lease all or any part of
the Property, (B) cancel, terminate (other than as a result of a tenant
default thereunder), abridge or otherwise modify the terms of any Lease in any
material respect, or accept a surrender thereof, (C) consent to any
assignment of or subletting under any Lease not in accordance with its terms or
(D) cancel, terminate, abridge or otherwise modify in any material respect
any guaranty of any Lease or the terms thereof, unless such actions are
exercised for a commercially reasonable purpose in arms-length transactions for
market rate terms. The foregoing shall not apply to any Lease or
license entered into with a Taxable REIT Subsidiary.
5.10.3 Minor
Leases. Notwithstanding the provisions of Section 5.10.2
above, provided that no Event of Default is continuing, renewals, amendments and
modifications of existing Leases and proposed leases, shall not be subject to
the prior approval of Lender provided (i) the proposed lease would be a
Minor Lease or the existing Lease as amended or modified or the renewal Lease is
a Minor Lease, (ii) the proposed lease shall be written substantially in
accordance with the standard form of Lease which shall have been approved by
Lender, (iii) the Lease as amended or modified or the renewal Lease or
series of leases or proposed lease or series of leases: (a) shall provide for
net effective rental rates comparable to existing local market rates, (b) shall
have a term of not less than three (3) years or greater than ten (10) years and
(c) shall not contain any option to purchase, any right of first refusal to
purchase, any right to terminate (except in the event of the destruction or
condemnation of substantially all of the Property), or any other provision which
might adversely affect the rights of Lender under the Loan Documents in any
material respect. Borrower shall deliver (or cause Owner to deliver)
to Lender copies of all Leases which are entered into pursuant to the preceding
sentence together with Borrower’s certification that it (or Owner) has satisfied
all of the conditions of the preceding sentence within ten (10) days after the
execution of the Lease. With respect to any Lease or proposed
renewal, extension or modification of an existing Lease that requires Lender’s
consent under this Section 5.10.3,
provided that no Event of Default is continuing, if Borrower provides Lender
with a written request for approval (which written request shall specifically
refer to this Section 5.10.3
and shall explicitly state that failure by Lender to approve or disapprove
within ten (10) Business Days will constitute a deemed approval) and Lender
fails to reject the request in writing delivered to Borrower within ten (10)
Business Days after receipt by Lender of the request, the proposed Lease or
proposed renewal, extension or modification of an existing Lease shall be deemed
approved by Lender, and Owner shall be entitled to enter into such proposed
Lease or proposed renewal, extension or modification of an existing
Lease.
5.10.4 Additional Covenants with
Respect to Leases. Borrower shall cause Owner to
(i) observe and perform all the material obligations imposed upon the
lessor, grantor or licensor, as applicable, under the Leases and shall not do or
permit to be done anything to impair the value of the Leases as security for the
Debt; (ii) promptly send copies to Lender of all notices of default which
Borrower shall send or receive thereunder; (iii) enforce all the material
terms, covenants and conditions contained in the Leases upon the part of the
lessee, grantee or licensee, as applicable, thereunder to be observed or
performed, short of termination thereof (unless by reason of default
thereunder); (iv) not collect any of the Rents (other than estimated
payments of
47
taxes and
reimbursable expenses paid by tenants pursuant to their Leases) more than one
(1) month in advance; (v) not execute any other assignment of the lessor’s
interest in the Leases or the Rents except in connection with a Transfer and
Assumption; (vi) upon request of Lender, request and use commercially
reasonable efforts to obtain and deliver to Lender tenant estoppel certificates
from each commercial tenant at the Property in form and substance reasonably
satisfactory to Lender, provided that Borrower shall not be required to deliver
such certificates more frequently than two (2) times in any calendar year; and
(vii) execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Property as
Lender shall from time to time reasonably require.
5.10.5 Intentionally
Omitted.
Section
5.11 Estoppel
Statement
. After
request by Lender, Borrower shall within ten (10) days furnish Lender with a
statement addressed to Lender, its successors and assigns, duly acknowledged and
certified, setting forth (i) the unpaid Principal, (ii) the Interest
Rate, (iii) the date installments of interest and/or Principal were last
paid, (iv) any offsets or defenses to the payment of the Debt, and
(v) that the Loan Documents are valid, legal and binding obligations and
have not been modified or if modified, giving particulars of such
modification.
Section
5.12 Property
Management
.
5.12.1 Management
Agreement. Borrower shall (or shall cause Owner to) maintain,
or cause to be maintained, the Management Agreement in full force and effect and
timely perform all of Owner’s obligations thereunder and enforce performance in
all material respects of all obligations of the Manager thereunder, and except
as otherwise permitted by the Loan Documents, not permit the termination or
amendment of the Management Agreement unless the prior written consent of Lender
is first obtained, which consent shall not be unreasonably withheld, conditioned
or delayed. Borrower shall (or shall cause Owner to) cause the
Manager to enter into consent of manager in form satisfactory to Lender (the
“Consent of
Manager”). Upon an Event of Default, Borrower shall (or shall
cause Owner to), at Lender’s request made at any time while such Event of
Default continues, terminate, or cause the termination of, the Management
Agreement (subject, however, to Senior Lender’s rights under the Senior Loan
Documents). After the date hereof, Borrower shall not (and shall not
permit Owner to) enter into any agreement relating to the management of the
Property with any party without the express written consent of Lender (which
consent shall not be unreasonably withheld to the extent that such manager is an
affiliate of Borrower); provided, however, with respect
to a new manager of the Property (but not a leasing agent or subcontractor
appointed in accordance with the Management Agreement) such consent may also be
conditioned upon Borrower delivering (or causing Owner to deliver) (i) a
Rating Comfort Letter (if required pursuant to a Pooling and Servicing Agreement
from and after the occurrence of a Securitization) with respect to such new
manager and management agreement (other than a Qualified Manager that is
Controlled (in the sense of clause (ii) of the defined term “Control”) by the
REIT), and (ii) evidence satisfactory to Lender (which shall include, at
the request of Lender, a legal non-
48
consolidation
opinion acceptable to Lender) that the single purpose nature and bankruptcy
remoteness of Owner, Borrower, its shareholders, partners or members, as the
case may be, after the engagement of the new manager are in accordance with the
requirements of the Rating Agencies. If at any time Lender consents
to the appointment of a new manager, such new manager and Owner, Borrower shall,
as a condition of Lender’s consent, execute a consent of manager in the form
then used by Lender.
5.12.2 Termination of
Manager. Borrower, upon the request of Lender (subject,
however, to the rights of Senior Lender under the Senior Loan Documents), shall
(or shall cause Owner to) terminate the Manager, without penalty or fee, if at
any time during the Term (a) the Manager shall become Insolvent or a debtor
in any bankruptcy or insolvency proceeding, (b) there exists an Event of
Default for which Lender has not accepted a cure thereof, (c) the Maturity
Date has occurred and the Loan has not been repaid or (d) the Manager’s
gross negligence, malfeasance or willful misconduct or the occurrence of a
default by Manager under the Management Agreement and its continuance beyond any
applicable notice or cure period. At such time as the Manager is
removed pursuant to and in accordance with the terms and provisions of the Loan
Documents, a replacement manager and management agreement acceptable to Lender
and the applicable Rating Agencies in their sole discretion shall assume
management of the Property and shall receive a property management fee not to
exceed the then current market rates and such replacement manager, Owner and
Borrower shall, execute a consent of manager in the form then used by
Lender.
Section
5.13 Special Purpose Bankruptcy
Remote Entity
. Each
of Borrower and Owner shall at all times be a Special Purpose Bankruptcy Remote
Entity. Borrower shall not, directly or indirectly, make any change,
amendment or modification to its or Owner’s organizational documents, or
otherwise take any action which could result in Borrower or Owner not being a
Special Purpose Bankruptcy Remote Entity. A “Special Purpose Bankruptcy Remote
Entity” shall have the meaning set forth on Schedule 5
hereto.
Section
5.14 Assumption in
Non-Consolidation Opinion
. Borrower
and the Guarantor shall each conduct its business so that the assumptions (with
respect to each Person) made in that certain substantive non-consolidation
opinion letter dated the date hereof delivered by Borrower’s counsel in
connection with the Loan, shall be true and correct in all
respects.
Section
5.15 Change in Business or
Operation of Property
. Borrower
shall not enter into any line of business other than the ownership of
Owner. Borrower shall not permit Owner to purchase or own any real
property other than the Property or to enter into any line of business other
than the ownership and operation of the Property, or make any material change in
the scope or nature of its business objectives, purposes or operations, or
undertake or participate in activities other than the continuance of its present
business or otherwise cease to operate the Property as an office property or
terminate such business for any reason whatsoever (other than temporary
cessation in connection with renovations to the Property).
49
. Borrower
shall not cancel or otherwise forgive or release (or allow Owner to cancel or
otherwise forgive or release) any claim or debt (other than termination of
Leases in accordance herewith) owed to Borrower (or Owner) by any Person, except
for adequate consideration and in the ordinary course of Borrower’s (or Owner’s)
business.
Section
5.17 Affiliate
Transactions
. Borrower
shall not enter into, or be a party to (or permit Owner to enter into or be a
party to), any transaction with an Affiliate of Borrower or Owner or any of the
members of Borrower or Owner except in the ordinary course of business and on
terms which are fully disclosed to Lender in advance and are no less favorable
to Borrower or Owner or such Affiliate than would be obtained in a comparable
arm’s length transaction with an unrelated third party.
Section
5.18 Zoning
. Borrower
shall not initiate or consent to (or permit Owner to initiate or consent to) any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a non
conforming use under any zoning ordinance or any other applicable land use law,
rule or regulation, without the prior consent of Lender.
Section
5.19 No Joint
Assessment
. Borrower
shall not suffer, permit or initiate (or permit Owner to suffer, permit or
initiate) the joint assessment of the Property (i) with any other real
property constituting a tax lot separate from the Property, and (ii) with
any portion of the Property which may be deemed to constitute personal property,
or any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the
Property.
Section
5.20 Principal Place of
Business
. Borrower
shall not (and shall not permit Owner to) change its principal place of business
or chief executive office without first giving Lender thirty (30) days’ prior
notice.
Section
5.21 Change of Name, Identity or
Structure
. Borrower
shall not (and shall not permit Owner to) change its name, identity (including
its trade name or names) or Borrower’s or Owner’s corporate, partnership or
other structure without notifying Lender of such change in writing at least
thirty (30) days prior to the effective date of such change and, in the case of
a change in Borrower’s or Owner’s structure, without first obtaining the prior
written consent of Lender. Borrower shall (and shall cause Owner to)
execute and deliver to Lender, prior to or contemporaneously with the effective
date of any such change, any financing statement or financing statement change
required by Lender to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of
Lender, Borrower shall execute a certificate in form satisfactory to Lender
listing the
50
trade
names under which Owner intends to operate the Property, and representing and
warranting that Owner does business under no other trade name with respect to
the Property.
Section
5.22 Indebtedness
. Borrower
shall not permit Owner to, directly or indirectly, create, incur or assume any
indebtedness other than “Permitted Indebtedness” (as such term is defined in the
Senior Loan Agreement). Borrower shall not directly or indirectly
create, incur or assume any indebtedness other than the Debt and unsecured trade
payables incurred in the ordinary course of business relating to the ownership
and operation of the Collateral which do not exceed, at any time, a maximum
amount of $10,000 and are paid within thirty (30) days of the date incurred
(collectively, “Permitted
Indebtedness”).
Section
5.23 Licenses
. Borrower
shall not permit Owner to Transfer any License required for the operation of the
Property.
Section
5.24 Compliance with Restrictive
Covenants, Etc.
Borrower
will not permit Owner to amend, modify, supplement, waive in any material
respect, cancel, terminate or release any Operating Agreement, easements,
restrictive covenants or other Permitted Encumbrances, or suffer, consent to or
permit any of the foregoing, without Lender’s prior written consent, which
consent may be granted or denied in Lender’s sole discretion.
Section
5.25 ERISA
.
(1) Borrower
shall not engage or permit Owner to engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
(2) Borrower
shall not (and shall cause Owner not to) maintain, sponsor, contribute to or
become obligated to contribute to, or suffer or permit any ERISA Affiliate of
Borrower or Owner to, maintain, sponsor, contribute to or become obligated to
contribute to, any Plan or permit the assets of Borrower or Owner to become
“plan assets,” whether by operation of law or under regulations promulgated
under ERISA.
(3) Borrower
shall deliver to Lender such certifications or other evidence from time to time
throughout the Term, as requested by Lender in its sole discretion, that
(A) neither Borrower nor Owner is or maintains an “employee benefit plan”
as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
“governmental plan” within the meaning of Section 3(32) of ERISA;
(B) neither Borrower nor Owner is subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(C) one or more of the following circumstances is true:
51
(i) Equity
interests in Borrower are publicly offered securities, within the meaning of 29
C.F.R. § 2510.3-101(b)(2);
(ii) Less
than twenty-five percent (25%) of each outstanding class of equity interests in
Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R.
§ 2510.3-101(f)(2); or
(iii) Borrower
qualifies as an “operating company” or a “real estate operating company” within
the meaning of 29 C.F.R. § 2510.3-101(c) or (e).
Section
5.26 Transfers
.
5.26.1 Transfers
Prohibited. Borrower shall not directly or indirectly (or
allow Owner to directly or indirectly) make, suffer or permit the occurrence of
any Transfer except as expressly permitted pursuant to Section 5.26.5 below
and Section 5.26.6
below.
5.26.2 Lender’s
Reliance. Borrower acknowledges that Lender has examined and
relied on the creditworthiness and experience of Borrower and Owner in owning
and operating the Collateral and properties such as the Property in agreeing to
make the Loan, and that Lender will continue to rely on Borrower’s and Owner’s
ownership of the Collateral and the Property as a means of maintaining the value
of the Collateral and the Property as security for repayment of the
Debt. Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Collateral so as to ensure that, should Borrower
default in the repayment of the Debt, Lender can recover the Debt by a sale of
the Collateral.
5.26.3 Transfer
Defined. “Transfer” shall mean a sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, lease,
grant of options with respect to, or other transfer or disposition of (directly
or indirectly, voluntarily or involuntarily, by operation of law or otherwise,
and whether or not for consideration or of record) the Collateral or the
Property or any part thereof or any legal or beneficial interest therein, or a
Sale or Pledge of an interest in any Restricted Party, other than pursuant to
Leases of space in the Improvements to tenants in accordance with the provisions
of Section 5.10
hereof, licenses of rights to a Taxable REIT Subsidiary to operate any fitness
center, provide concierge services or in connection with parking agreements and
Permitted Encumbrances. A Transfer shall include, but not be limited
to, (i) an installment sales agreement wherein Borrower or Owner agrees to
sell the Collateral or the Property or any part thereof for a price to be paid
in installments; (ii) an agreement by Borrower or Owner leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s or Owner’s right, title and interest in and to
any Leases or any Rents; (iii) if a Restricted Party is a corporation, any
merger, consolidation or Sale or Pledge of such corporation’s stock or the
creation or issuance of new stock such that more than ten percent (10%) of such
corporation’s stock shall be vested in a party or parties who are not
stockholders as of the date hereof; (iv) if a Restricted Party is a limited
or general partnership or joint venture, any merger or consolidation of such
Restricted Party or the change, removal, resignation or addition of a general
partner thereof or the Sale or Pledge of the partnership interest of any
52
general
partner of such Restricted Party or any profits or proceeds relating to such
partnership interest, or the Sale or Pledge of limited partnership interests of
such Restricted Party or any profits or proceeds relating to such limited
partnership interests or the creation or issuance of new limited partnership
interests of such Restricted Party; (v) if a Restricted Party is a limited
liability company, any merger or consolidation of such Restricted Party or the
change, removal, resignation or addition of a managing member or non member
manager (or if no managing member, any member) of such Restricted Party or the
Sale or Pledge of the membership interest of a managing member (or if no
managing member, any member) of such Restricted Party or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non managing
membership interests of such Restricted Party or the creation or issuance of new
non managing membership interests of such Restricted Party such that more than
ten percent (10%) of such limited liability company’s non-managing membership
interest shall be vested in a party or parties who are not members as of the
date hereof; (vi) if a Restricted Party is a trust or nominee trust, any
merger, consolidation or the Sale or Pledge of the legal or beneficial interest
in a Restricted Party or the creation or issuance of new legal or beneficial
interests; or (vii) the removal or the resignation of the managing agent
(including, without limitation, an Affiliated Manager) without Lender’s consent
other than in accordance with Section 5.12
hereof.
5.26.4 No Impairment
Required. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon any Transfer in
violation of this Section 5.26 without
Lender’s consent. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer. Lender’s consent to one Transfer shall not
be deemed to be a waiver of Lender’s right to require such consent to any future
Transfer. Any Transfer made in contravention of this Section 5.26 shall be
null and void and of no force and effect. Borrower agree to bear and shall pay
or reimburse Lender on demand for all reasonable expenses (including, without
limitation, reasonable attorneys’ fees and disbursements, title search costs and
title insurance endorsement premiums) incurred by Lender in connection with the
review, approval and documentation of any such Transfer, except as provided
herein.
5.26.5 Permitted
Transfers. Notwithstanding anything to the contrary contained
in this Section
5.26, the following Transfers (“Permitted Transfers”) shall
not require the prior written consent of Lender, but in each case, shall not,
notwithstanding the provisions of this Section 5.26.5, be
construed to limit the terms and provisions set forth in, or the application of,
Section 8.1(s)
hereof, Section
8.2.1(b) hereof and/or Section 10.1
hereof:
(a) Transfers
of direct or indirect interests in any Restricted Party provided that the
following conditions are satisfied:
(i) after
taking into account any prior Transfers pursuant to this subsection, whether to
the proposed transferee or otherwise, no such Transfer (or series of Transfers)
shall result in (1) the proposed transferee (other than an Approved Junior
Mezzanine Lender), together with all members of his/her immediate family or any
Affiliates thereof, owning in the aggregate (directly, indirectly or
beneficially) more than forty-nine percent (49%) of the interests in Borrower
(or any entity directly or indirectly holding an interest in Borrower that is a
Restricted Party), or (2) a Transfer in the
53
aggregate
of more than forty-nine percent (49%) of the interests in Borrower as of the
date hereof to a Taxable REIT Subsidiary; provided that, in each case, if
reasonably requested by Lender or if requested by any Rating Agency, Borrower
shall deliver a non-consolidation opinion acceptable to Lender and the Rating
Agencies with respect to such transferee which may be relied upon by Lender, the
Rating Agencies and their successors and assigns;
(ii) after
giving effect to such Transfer, (A) the REIT shall continue to own not less than
a fifty-one percent (51%) direct general and/or limited partnership interest in
the OP, (B) the OP (or an Approved Junior Mezzanine Lender) shall continue to
own not less than a fifty-one percent (51%) direct or indirect interest in
Borrower and (C) the REIT (or an Approved Junior Mezzanine Lender) shall
continue to Control (in the sense of clause (ii) of the defined term “Control”)
Owner and Borrower and, subject to the rights of Manager under the Management
Agreement (or any replacement manager under a replacement management agreement
with respect to the Property, each as approved by Lender in accordance with
Section 5.12 of
this Agreement), the day-to-day operations of the Property;
(iii) Borrower
shall give Lender notice of such Transfer together with copies of all
instruments effecting such transfer not less than ten (10) days prior to the
date of such Transfer;
(iv) no
Event of Default or event which with the giving of notice or the passage of time
would constitute an Event of Default shall have occurred and remain uncured or
unwaived;
(v) the
single purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members after such transfer, shall satisfy Lender’s
then current applicable underwriting criteria and requirements;
(vi) Lender
shall have received payment of, or reimbursement for, all costs and expenses
incurred by Lender in connection with such Transfer (including, but not limited
to, reasonable attorneys’ fees and costs and expenses of the Rating Agencies);
and
(vii) If
an Approved Junior Mezzanine Loan is outstanding at the time of the Transfer,
the proposed Transfer shall not constitute or cause a default under the Junior
Mezzanine Loan Documents.
Notwithstanding
the foregoing, in the event that such Transfer is (A) by a limited partner of
the OP of such limited partner’s limited partnership interest in the OP, then
Borrower shall not be required to satisfy subsections (a)(iii),
(a)(iv) or (a)(vi) above so long as Borrower has satisfied subsections (a)(i), (a)(ii),
(a)(v) and (a)(vii) above or (B) is to a Taxable REIT Subsidiary, then
Borrower shall not be required to satisfy subsections (a)(iii) or
(a)(vi) (provided, that in any such case, Borrower shall continue to be a
Special Purpose Bankruptcy Remote Entity after giving effect to such Transfer)
so long as Borrower has satisfied subsections (a)(i), (a)(ii),
(a)(iv), (a)(v) and (a)(vii) above.
54
(b) the
foreclosure of an Approved Junior Mezzanine Loan in accordance with the terms
and provisions of, and to the extent permitted under, the applicable
intercreditor agreements executed in connection with such Approved Junior
Mezzanine Loan.
(c)
the Sale or Pledge of stock in the REIT (the “Traded Equity”), provided such
stock is listed on the New York Stock Exchange or such other nationally
recognized stock exchange.
(d) the
issuance of any securities, options, warrants or other interests in the REIT or
any entity owning an interest in the REIT (provided the same does not result in
a change in Control of the REIT).
(e) without
in any way limiting any other Permitted Transfers under this Section 5.26.5,
either (1) a transfer by the REIT, the OP and/or their respective Affiliates of
100% (but not less than 100%) of the direct or indirect ownership interests in
Borrower which transfer is in connection with transfers by the REIT, the OP
and/or their respective Affiliates of all or substantially all of the direct or
indirect ownership interests in each property-owning subsidiary of the REIT and
the OP to one or more Qualified Loan Transferees (or to an entity which is
Controlled by a Qualified Loan Transferee and which at least 51% of the direct
and indirect equity interests in such entity are owned by a Qualified Loan
Transferee), (2) a merger or consolidation of the REIT in connection with the
privatization of the REIT provided that the surviving entity shall be a
Qualified Loan Transferee (or an entity which is Controlled by a Qualified Loan
Transferee and which at least 51% of the direct and indirect equity interests in
such entity are owned by a Qualified Loan Transferee) or (3) a sale of all or
substantially all of the assets of the REIT or the OP to a Qualified
Loan Transferee (or an entity which is Controlled by a Qualified Loan Transferee
and which at least 51% of the direct and indirect equity interests in such
entity are owned by a Qualified Loan Transferee), provided that, in each case,
the following conditions are met:
(i) No
Event of Default or event which with the giving of notice or the passage of time
would constitute an Event of Default shall have occurred and remain
uncured;
(ii) Lender
shall have received a Rating Comfort Letter with respect to such Transfer (if
required pursuant to a Pooling and Servicing Agreement from and after the
occurrence of a Securitization);
(iii) Borrower
has submitted to Lender true, correct and complete copies of any and all
information and documents reasonably requested by Lender concerning the
Property, the Borrower, the Qualified Loan Transferee, the replacement
guarantors and indemnitors and their Affiliates;
(iv) Borrower
shall deliver to Lender a non-consolidation opinion reasonably acceptable to
Lender and the Rating Agencies which may be relied upon by Lender, the Rating
Agencies and their successors and assigns;
(v) Borrower,
the Qualified Loan Transferee and the original and replacement guarantors and
indemnitors shall execute and deliver to Lender any and all
55
documents
reasonably required by Lender, in form and substance reasonably required by
Lender;
(vi) Counsel
to Borrower, the Qualified Loan Transferee and replacement guarantors and
indemnitors shall deliver to Lender other opinions in form and substance
reasonably satisfactory to Lender as to such matters as Lender shall reasonably
require, which may include opinions as to substantially the same matters as were
required in connection with the origination of the Loan;
(vii) The
single purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members after such Transfer, shall satisfy Lender’s
then current applicable underwriting criteria and requirements;
(viii) The
property manager that shall manage the day to day operations of the Property
shall be a Qualified Manager;
(ix) Lender
shall have received payment of, or reimbursement for, all costs and expenses
incurred by Lender in connection with such transfer (including, but not limited
to, reasonable attorneys’ fees and costs and expenses of the Rating
Agencies);
(x) [Intentionally
Deleted]; and
(xi) If
an Approved Junior Mezzanine Loan is outstanding at the time of the Transfer,
the proposed Transfer shall not constitute or cause a default under the Junior
Mezzanine Loan Documents.
(f) notwithstanding
anything to the contrary contained herein (including the provisions of Section 5.27 below),
pledges (but not the foreclosure thereon) by the REIT, the OP or any entity
holding any direct or indirect interests in the REIT, the OP of their direct or
indirect ownership interest in the Junior Mezzanine Loan Borrower to any
institutional lender (including investors in syndicated loan facilities or the
agent for such investors) providing a corporate line of credit or other
financing to the REIT, the OP or any entity holding any direct or indirect
interests in the REIT or the OP or the Junior Mezzanine Loan Borrower, provided
that the value of the Property which is indirectly pledged as collateral under
such corporate line of credit or other financing constitutes no more than thirty
three percent (33%) of the total value of all assets directly or indirectly
securing such line of credit or other financing, and provided that the following
conditions are met:
(i) no
Event of Default or event which with the giving of notice or the passage of time
would constitute an Event of Default shall have occurred and remain uncured;
and
(ii) Lender
shall have received payment of, or reimbursement for, all costs and expenses
incurred by Lender in connection with such pledges (including, but not limited
to, reasonable attorneys’ fees and costs and expenses of the Rating
Agencies).
56
Lender shall respond to any requests made by Borrower pursuant
to this Section
5.26.5 in a prompt manner. In the event that Lender claims
that Borrower has not satisfied any of the requirements of this Section 5.26.5,
Lender shall specify in writing the reason why any conditions are deemed not
satisfied.
Any
provisions of this Section 5.26.5 which
require more conditions to be satisfied in connection with any particular
Permitted Transfer than other provisions under this Section 5.26.5
(relating to other Permitted Transfers) which require fewer conditions to be
satisfied shall not be deemed to be a limitation or modification on the Transfer
rights provided hereunder containing such fewer conditions.
Notwithstanding
anything to the contrary contained herein, and without limiting any of the
Transfers or rights contained in this Section 5.26.5,
Lender agrees that, provided no Event of Default has occurred and is continuing,
a Transfer of an interest in Borrower shall not require the consent of Lender
and no transfer fee shall be payable in connection therewith, provided that (i)
such Transfer is of an interest in the OP or any direct or indirect owner of the
OP that occurs by gift, devise or bequest or by operation of law upon the death
or incapacity of a natural person that was the holder of such interest to a
member of the immediate family of such interest holder or a trust established
for the benefit of such immediate family member, provided that (A) no such
Transfer shall result in a change of the day to day operations of the Property,
(B) Borrower shall give Lender notice of such Transfer together with copies of
all instruments effecting such Transfer not more than ten (10) days after the
date of such Transfer, (C) such Transfer shall not cause a default by Borrower
of the single purpose bankruptcy remote provisions set forth in Section 5.13 hereof,
(D) no such Transfer shall result in a change of Control of Owner, Borrower or
the OP, (E) [intentionally omitted], (F) [intentionally omitted], or (ii) such
Transfer is of a direct or indirect interest in the OP related to or in
connection with the estate and/or gift planning of such transferor to (A) the
immediate family members of such transferor or one or more Key Principals,
including without limitation, the spouse, children or grandchildren of such
transferor (B) a trust established for the benefit of the transferor, a Key
Principal and/or any of the parties described in the preceding clause (A)
provided that (a) after giving effect to such Transfer, one or more Key
Principals and/or family trusts or other entities Controlled by one or more Key
Principals shall continue to Control (in the sense of clause (ii) of the defined
term “Control”) Borrower, (b) Borrower shall give Lender notice of such
Transfer together with copies of all instruments effecting such Transfer not
more than ten (10) days after the date of such Transfer and (c) such
Transfer shall not cause a default by Borrower of the single purpose bankruptcy
remote provisions set forth in Section 5.13
hereof.
Notwithstanding
the foregoing, none of the foregoing Transfers shall be deemed a “Permitted
Transfer” hereunder if, as a result of any of the foregoing Transfers, the
Guarantor does not Control (in the sense of clause (ii) of the defined term
“Control” hereunder) Borrower and does not own a material direct or indirect
interests in Borrower, unless, upon Lender’s request, one or more creditworthy
Persons or entities reasonably satisfactory to Lender, that then Controls
Borrower or owns a material direct or indirect interest in Borrower, shall
execute and deliver a guaranty of recourse obligations (in the same form as the
Non-Recourse Guaranty, or in such other forms as may be acceptable to Lender, in
Lender’s sole and absolute discretion), pursuant to which the replacement
guarantor(s) agrees to be liable under such guaranty of recourse obligations
from and after the date executed (whereupon (i) the previous guarantor(s)
shall be
57
released
solely with respect to obligations first arising and accruing from and after the
date of such Transfer and (ii) such replacement guarantor(s) shall become
liable for all obligations arising or accruing from and after the date of such
Transfer and (iii) from and after the date of such Transfer, such replacement
guarantor(s) shall be a “Guarantor” for all purposes set forth in this Agreement
and the other Loan Documents (it being agreed and understood that the previous
guarantor shall remain a “Guarantor” with respect to any and all obligations
accruing prior to the date of such Transfer)).
5.26.6 Transfer and
Assumption. (a) Notwithstanding the foregoing,
Borrower shall have the right to permit Owner to Transfer the Property (or, in
lieu of a Transfer of the Property, a Transfer of 100% (but not less than 100%)
of the direct or indirect ownership interests in Owner to another party or a
subsidiary of another party (the “Transferee Senior Borrower”)
and (i) have the Transferee Senior Borrower assume all of
Owner’s obligations under the Senior Loan Documents and (ii) have all of
the entities which own direct ownership interests in the Transferee Senior
Borrower (the “Transferee
Senior Mezzanine Borrower”) assume all of Borrower’s obligations under
the Loan Documents, and have replacement guarantors and indemnitors assume all
of the obligations of the indemnitors and guarantors of the Loan Documents
(collectively, a “Transfer and
Assumption”). Borrower may make a written application to
Lender for Lender’s consent to the Transfer and Assumption, subject to the
conditions set forth in paragraphs (b) and (c) of this Section
5.26.6. Together with such written application, Borrower will
pay to Lender the reasonable review fee then required by
Lender. Borrower also shall pay on demand all of the reasonable costs
and expenses incurred by Lender, including reasonable attorneys’ fees and
expenses, and including the fees and expenses of Rating Agencies and other
outside entities, in connection with considering any proposed Transfer and
Assumption, whether or not the same is permitted or occurs.
(b) Lender’s
consent to a Transfer and Assumption, shall be subject to the following
conditions (and if all such conditions have been satisfied, Lender shall not
withhold its consent to the subject Transfer and Assumption):
(i) No
Default or Event of Default has occurred and is continuing;
(ii) The
conditions set forth in Section 5.26.6 of the Senior Loan Agreement with
respect to such Transfer and Assumption shall have been satisfied;
(iii) Borrower
has submitted to Lender true, correct and complete copies of any and all
information and documents reasonably requested by Lender concerning the
Property, Transferee Senior Borrower, Transferee Senior Mezzanine Borrower,
replacement guarantors and indemnitors and Borrower;
(iv) The
identity, experience, financial condition and creditworthiness of the Transferee
Senior Borrower, the Transferee Senior Mezzanine Borrower and the replacement
guarantors and indemnitors shall be satisfactory to Lender in its sole
discretion (not to be unreasonably withheld, conditioned or delayed, provided,
however, this condition shall be deemed satisfied if the Transfer and Assumption
is in connection with a broader transaction regarding the REIT and/or the OP as
described in Section
5.26.5(e) only (x) as to the identity of the Transferee Senior Borrower
and the Transferee
58
Senior
Mezzanine Borrower, provided that the Transferee Senior Mezzanine Borrower is a
Qualified Loan Transferee (or an entity which is Controlled by a Qualified Loan
Transferee and which at least 51% of the direct and indirect equity interests in
such entity are owned by a Qualified Loan Transferee) and (y) with respect to
the replacement Guarantor, if such replacement Guarantor is a Qualified Loan
Transferee);
(v) The
single purpose nature and bankruptcy remoteness of the Transferee Senior
Mezzanine Borrower and its shareholders, partners or members after such
Transfer, shall satisfy Lender’s then current applicable underwriting criteria
and requirements;
(vi) The
property manager that shall manage the day to day operations of the Property
shall be a Qualified Manager;
(vii) Borrower
shall have paid all of Lender’s reasonable costs and expenses in connection with
considering the Transfer and Assumption, and shall have paid the amount
requested by Lender as a deposit against Lender’s reasonable costs and expenses
in connection with effecting the Transfer and Assumption;
(viii) Borrower,
the Transferee Senior Mezzanine Borrower, and the replacement guarantors and
indemnitors shall have indicated in writing in form and substance reasonably
satisfactory to Lender their readiness and ability to satisfy the conditions set
forth in subsection
(c) below; and
(ix) If
an Approved Junior Mezzanine Loan is outstanding at the time of the Transfer and
Assumption, the proposed Transfer and Assumption shall not constitute or cause a
default under the Junior Mezzanine Loan Documents.
(c) If
Lender consents to the Transfer and Assumption, the Transferee Senior Mezzanine
Borrower and/or Borrower as the case may be, shall promptly deliver the
following to Lender concurrently with the consummation of such Transfer and
Assumption:
(i) Borrower
shall deliver to Lender an assumption fee in the amount of 1% of the then unpaid
Principal (provided, however, no such assumption fee shall be required hereunder
if the Transferee Senior Mezzanine Borrower is a Qualified Loan Transferee and
Xxxxxx X. Xxxxxxx III: (x) “controls” (directly or indirectly) the Qualified
Loan Transferee and (y) owns 20% of the ownership interests (directly or
indirectly) in such Qualified Loan Transferee). For purposes of this
clause (c)(i), “controls” means Xxxxxx X. Xxxxxxx III is the senior executive
officer with day to day responsibility for management of such Qualified Loan
Transferee with the
power to direct or cause the direction of the management and policies of such
Qualified Loan Transferee and a member of a board of directors or equivalent
board of such Qualified Loan Transferee);
(ii) Borrower,
Transferee Senior Mezzanine Borrower and the original and replacement guarantors
and indemnitors shall execute and deliver to Lender any and all documents
reasonably required by Lender, in form and substance reasonably required by
Lender;
59
(iii) Counsel
to the Transferee Senior Mezzanine Borrower and replacement guarantors and
indemnitors shall deliver to Lender opinions in form and substance reasonably
satisfactory to Lender as to such matters as Lender shall reasonably require,
which may include opinions as to substantially the same matters as were required
in connection with the origination of the Loan;
(iv) Borrower
or the Transferee Senior Mezzanine Borrower shall cause to be delivered to
Lender, an endorsement (relating to the change in the identity of the vestee and
execution and delivery of the Transfer and Assumption documents) to the UCC
insurance policy relating to the Pledged Collateral in form and substance
reasonably acceptable to Lender (the “Endorsement”);
and
(v) Borrower
or the Transferee Senior Mezzanine Borrower shall deliver to Lender a payment in
the amount of all remaining unpaid costs incurred by Lender in connection with
the Transfer and Assumption, including but not limited to, Lender’s reasonable
attorneys fees and expenses, all recording fees, and all fees payable to the
title company for the delivery to Lender of the Endorsement.
(d) Upon
the closing of a Transfer and Assumption, Lender shall release Borrower and the
Guarantor from all obligations under the Loan Documents arising prior to and
after the date of the Transfer and Assumption (but only to the extent that such
obligations of Borrower and Guarantor are expressly assumed by the Transferee
Senior Mezzanine Borrower and the replacement guarantor, as the case may be, in
connection with the Transfer and Assumption).
Section
5.27 Liens
. Except
as permitted under Section 5.25 hereof
or Section 5.26
hereof, without Lender’s prior written consent, Borrower shall not create,
incur, assume, permit or suffer to exist any Lien on all or any portion of the
Collateral or the Property or any direct or indirect legal or beneficial
ownership interest in Borrower or Owner, except Liens in favor of Lender,
Permitted Encumbrances and Liens encumbering Traded Equity, unless, with respect
to a Lien on the Property, such Lien is bonded or discharged within thirty (30)
days after Borrower or Owner first receives notice of such Lien.
Section
5.28 Dissolution
. Borrower
shall not and shall not permit Owner to (i) engage in any dissolution (to
the fullest extent such prohibition is permitted by law), liquidation or
consolidation or merger with or into any other business entity, (ii) engage
in any business activity not related to the ownership and operation of the
Collateral and the Property or (iii) transfer, lease or sell, in one
transaction or any combination of transactions, all or substantially all of the
property or assets of Borrower or Owner except to the extent expressly permitted
by the Loan Documents and the Senior Loan Documents.
Section
5.29 Expenses
60
Section
5.30 Indemnity
. Borrower
shall defend, indemnify and hold harmless Lender and each of its Affiliates and
their respective successors and assigns, including the directors, officers,
partners, members, shareholders, participants, employees, professionals and
agents of any of the foregoing (including any Servicer) and each other Person,
if any, who Controls Lender, its Affiliates or any of the foregoing (each, an
“Indemnified Party”),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for an Indemnified Party in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not Lender shall be designated a party thereto, court costs and costs
of appeal at all appellate levels, investigation and laboratory fees, consultant
fees and litigation expenses), that may be imposed on, incurred by, or asserted
against any Indemnified Party (collectively, the “Indemnified Liabilities”) in
any manner, relating to or arising out of or by reason of the Loan,
including: (i) any breach by Borrower of its obligations under,
or any misrepresentation by Borrower contained in, any Loan Document;
(ii) the use or intended use of the proceeds of the Loan; (iii) any
information provided by or on behalf of Borrower, or contained in any
documentation approved by Borrower; (iv) ownership of the Security
Documents, the Collateral or any interest therein, in
61
connection
with pledging of the Pledged Securities or receipt of any Rents; (v) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (vi) any use,
nonuse or condition in, on or about the Property or on adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways;
(vii) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property; (viii) the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release, or threatened release of any Hazardous Substance on, from or affecting
the Property; (ix) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Substance; (x) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substance; (xi) any violation
of the Environmental Laws which is based upon or in any way related to such
Hazardous Substance, including the costs and expenses of any Remedial Work;
(xii) any failure of the Property to comply with any Legal Requirement;
(xiii) any claim by brokers, finders or similar persons claiming to be
entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof, or any liability asserted against
Lender with respect thereto; and (xiv) the claims of any lessee of any
portion of the Property or any Person acting through or under any lessee or
otherwise arising under or as a consequence of any Lease; provided, however,
that Borrower shall not have any obligation to any Indemnified Party hereunder
(A) to the extent that it is finally judicially determined that such Indemnified
Liabilities arise from the gross negligence, illegal acts, fraud or willful
misconduct of such Indemnified Party or (B) for any event or condition that
first arises on or after the date on which Lender or any Affiliate of Lender
acquires title to the Collateral (whether at foreclosure sale, a transfer in
lieu of foreclosure or any other transfer); provided that Borrower’s obligation to
indemnify the Indemnified Parties with respect to an event or condition
specified in clauses (viii) through (xi) above (relating to Hazardous
Substances) shall continue in perpetuity after Lender or its Affiliates acquires
title or control of the Collateral unless such specified event or condition
occurs during or after Lender’s (or its Affiliate’s) period of ownership and
provided that Borrower shall bear the burden of proving that such specified
event or condition occurred during Lender’s (or such Affiliate’s) period of
ownership. Any amounts payable to any Indemnified Party by reason of
the application of this Section 5.30 shall be
payable on demand and shall bear interest at the Default Rate from the date loss
or damage is sustained by any Indemnified Party until paid. The
obligations and liabilities of Borrower under this Section 5.30 shall survive
the Term and the exercise by Lender of any of its rights or remedies under the
Loan Documents.
Section
5.31 Patriot Act
Compliance
.
(a) Borrower
will use its good faith and commercially reasonable efforts to comply (and to
cause Owner to comply) with the Patriot Act (as defined below) and all
applicable requirements of governmental authorities having jurisdiction over
Borrower, Owner and the Property, including those relating to money laundering
and terrorism. Lender shall have the right to audit Borrower’s
compliance with the Patriot Act and all applicable requirements of governmental
authorities having jurisdiction over Borrower and the Collateral and the
Property, including those relating to money laundering and
terrorism. In the event that Borrower fails to comply with the
Patriot Act or any such requirements of governmental authorities, then Lender
62
may, at
its option, cause Borrower to comply therewith and any and all reasonable costs
and expenses incurred by Lender in connection therewith shall be secured by the
Pledge and the other Loan Documents and shall be immediately due and
payable. For purposes hereof, the term “Patriot Act” means the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may be amended
from time to time, and corresponding provisions of future laws.
(b) Neither
Owner, Borrower, OP nor REIT nor to Borrower’s knowledge, any Affiliate that
owns more than a twenty percent (20%) interest in either the OP or REIT (a) is
listed on any Government Lists (as defined below), (b) is a person who has been
determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar
prohibitions contained in the rules and regulations of OFAC (as defined below)
or in any enabling legislation or other Presidential Executive Orders in respect
thereof, (c) has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any Patriot Act Offense
(as defined below), or (d) is currently under investigation by any governmental
authority for alleged criminal activity. For purposes hereof, the
term “Patriot Act
Offense” means any violation of the criminal laws of the United States of
America or of any of the several states, or that would be a criminal violation
if committed within the jurisdiction of the United States of America or any of
the several states, relating to terrorism or the laundering of monetary
instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
the (e) Patriot Act. “Patriot Act Offense” also includes the crimes
of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense. For purposes hereof, the term “Government Lists” means (i)
the Specially Designated Nationals and Blocked Persons Lists maintained by
Office of Foreign Assets Control (“OFAC”), (ii) any other list of
terrorists, terrorist organizations or narcotics traffickers maintained pursuant
to any of the Rules and Regulations of OFAC that Lender notified Borrower in
writing is now included in “Governmental Lists”, or (iii) any similar lists
maintained by the United States Department of State, the United States
Department of Commerce or any other government authority or pursuant to any
Executive Order of the President of the United States of America that Lender
notified Borrower in writing is now included in “Governmental
Lists”.
Section
5.32 Limitation on Securities
Issuances
. Neither
Borrower nor Owner shall issue any membership interests or other securities
other than those that have been issued as of the date hereof.
Section
5.33 Limitation on
Distributions
. Following
the occurrence and during the continuance of an Event of Default, Borrower shall
not make any distributions to its members.
Section
5.34 Contractual
Obligations
. Other
than the Loan Documents, the organizational documents of Borrower (and the
initial membership interests in Borrower issued pursuant thereto) and Owner,
neither Borrower nor any
63
of its
assets shall be subject to any Contractual Obligations, and Borrower shall not
enter into any agreement, instrument or undertaking by which it or its assets
are bound, except for such liabilities, not material in the aggregate, that are
incidental to its activities as a regular member of Owner.
ARTICLE
6
NOTICES
AND REPORTING
Section
6.1 Notices
. All
notices, consents, approvals and requests required or permitted hereunder or
under any other Loan Document (a “Notice”) shall be given in
writing and shall be effective for all purposes if either hand delivered with
receipt acknowledged, or by a nationally recognized overnight delivery service
(such as Federal Express), or by certified or registered United States mail,
return receipt requested, postage prepaid, or by facsimile and confirmed by
facsimile answer back, in each case addressed as follows (or to such other
address or Person as a party shall designate from time to time by notice to the
other party):
If to
Lender:
Greenwich
Capital Financial Products, Inc.
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxxxx 00000
Attention: Mortgage
Loan Department (Attn: CMBS Department)
Telecopier
(000) 000-0000
With a
copy to:
Xxxx
Xxxxxxx LLP
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxx
Xxxxxxx, Esq.
Telecopier: (000)
000-0000
If to
Borrower:
Xxxxxxx
Properties-Xxxxxxx Towers, LLC
0000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx.
Xxxxxx X. Xxxxxxx III and Xxxx Xxxxxx, Esq.
Telecopier: (000)
000-0000
64
Xxxxxx
& Xxxxxxx LLP
000 Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxx, Esq.
Telecopier: (000)
000-0000
A notice
shall be deemed to have been given: (i) in the case of hand
delivery, at the time of delivery; (ii) in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business
Day; (iii) in the case of overnight delivery, upon the first attempted
delivery on a Business Day; or (iv) in the case of facsimile, upon the
confirmation of such facsimile transmission. Any party may change the
address to which any such Notice is delivered, by furnishing ten (10) days’
written notice of such change to the other parties in accordance with the
provisions of this Section
6.1. Notice for either party may be given by its respective
counsel.
Section
6.2 Borrower Notices and
Deliveries
. Borrower
shall (or shall cause Owner to) (a) give prompt written notice to Lender
of: (i) any litigation, governmental proceedings or claims or
investigations pending or threatened against Borrower or the OP (or any other
Guarantor) or the REIT or Owner which might materially adversely affect
Borrower’s or the OP’s (or any other Guarantor’s) or the REIT’s or Owner’s
condition (financial or otherwise) or business or the Collateral; (ii) any
material adverse change in Borrower’s or the OP’s (or any other Guarantor’s) or
the REIT’s or Owner’s condition, financial or otherwise, or of the occurrence of
any Default or Event of Default of which Borrower has knowledge; and
(b) furnish and provide to Lender: (i) if requested by
Lender, any Securities and Exchange Commission or other public filings, if any,
of Borrower, the OP (or any other Guarantor), the REIT, Owner, Manager, or any
Affiliate of any of the foregoing within two (2) Business Days of such filing
and (ii) all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, appraisals, title
and other insurance reports and agreements, reasonably requested, from time to
time, by Lender. In addition, after request by Lender (but no more
frequently than twice in any year), Borrower shall(x) furnish to
Lender within ten (10) days, a certificate addressed to Lender, its successors
and assigns reaffirming all representations and warranties of Borrower set forth
in the Loan Documents as of the date requested by Lender or, to the extent of
any changes to any such representations and warranties, so stating such changes,
and (y) within thirty (30) days, use commercially reasonable efforts to
obtain tenant estoppel certificates addressed to Lender, its successors and
assigns from each commercial tenant at the Property in form and substance
reasonably satisfactory to Lender.
Section
6.3 Financial
Reporting
.
6.3.1 Financial
Statements. The financial statements heretofore furnished to
Lender with respect to Borrower, Owner, the OP and the REIT are, as of the dates
specified therein, complete and correct in all material respects and fairly
present in all material respects the
65
financial
condition of Borrower, Owner, the OP and the REIT and are prepared in accordance
with GAAP. Since the date of such financial statements, there has
been no materially adverse change in the financial condition, operation or
business of Borrower, Owner, the OP and the REIT from that set forth in said
financial statements.
6.3.2 Quarterly
Reports. Borrower will (and will cause Owner to) maintain full
and accurate books of accounts and other records reflecting the results of the
operations of the Property and will furnish to Lender on or before forty-five
(45) days after the end of each calendar quarter the following items, each
certified by Borrower as being true and correct in all material
respects: (i) a written statement (rent roll) dated as of the
last day of each such calendar quarter identifying each of the Leases (excluding
subleases) by the term, space occupied, rental required to be paid, security
deposit paid, any rental concessions, and a report identifying any defaults or
payment delinquencies thereunder; (ii) monthly and year to date operating
statements prepared for each calendar month during each such calendar quarter,
noting Net Operating Income, and operating expenses, and including an
itemization of actual (not pro forma) capital expenditures and other information
necessary and sufficient under generally accepted accounting practices to fairly
represent the financial position and results of operation of the Property during
such calendar month, all in form satisfactory to Lender; (iii) a property
balance sheet for each such calendar quarter; (iv) a comparison of the
budgeted income and expenses and the actual income and expenses for year to date
together with a detailed explanation of any variances of five percent (5%) or
more between budgeted and actual amounts for such year to date period; and
(v) a calculation reflecting the Debt Service Coverage Ratio as of the last
day of each such calendar quarter. Until a Securitization has
occurred, Borrower shall (and shall cause Owner to) furnish monthly each of the
items listed in the immediately preceding sentence within thirty (30) days after
the end of such month.
6.3.3 Annual
Reports. Within 120 days following the end of each calendar
year (provided,
however, if
requested by Lender, Borrower shall use commercially reasonable efforts to
provide Lender with any unaudited annual statements prior to such date),
Borrower shall furnish statements of its financial affairs and condition
including a balance sheet and a statement of profit and loss for Borrower and
Owner in such detail as Lender may reasonably request, and setting forth the
financial condition and the income and expenses for the Property for the
immediately preceding calendar year, which statements shall be prepared by
Borrower and may be consolidated statements. Borrower’s annual
financial statements shall include (x) a list of the tenants, if any,
occupying more than twenty (20%) percent of the total floor area of the
Improvements, and (y) a breakdown showing the year in which each Lease then
in effect expires and the percentage of total floor area of the Improvements and
the percentage of base rent with respect to which Leases shall expire in each
such year, each such percentage to be expressed on both a per year and a
cumulative basis. Borrower’s annual financial statements shall be
accompanied by a certificate executed by a financial officer of Borrower or the
REIT stating that each such annual financial statement presents fairly, in all
material respects, the financial condition of the Property being reported upon
and shall be audited by a “Big Four” accounting firm or other independent
certified public accountant reasonably acceptable to Lender, which audited
financial statements may be in the form of schedules to the audited consolidated
financial statements of the REIT. Each such annual financial
statement shall be prepared in accordance with GAAP. At any time and
from time to time Borrower shall deliver to Lender or its agents
66
such
other financial data as Lender or its agents shall reasonably request with
respect to the ownership, maintenance, use and operation of the
Property.
6.3.4 Annual
Budget. Borrower shall (or shall cause Owner to) submit to
Lender by December 15th of each
year during the Term of the Loan a detailed budget (an “Annual Budget”) for the
Property covering the calendar year commencing on the following January 1, each
of which budgets shall be subject to Lender’s approval, not to be unreasonably
withheld, (provided that Borrower shall have the option to submit to Lender a
revised budget not later than June 30th of each
year during the Term of the Loan to adjust such budget on the basis of the
actual results of Borrower to such point in such calendar year) (each such
budget, when so approved, is referred to as an “Approved Annual
Budget”). Until such time that Lender approves a proposed
Annual Budget, Borrower may permit Owner to operate under the most recently
Approved Annual Budget (adjusted to reflect actual increases in real estate
taxes, insurance premiums, utilities expenses, labor costs, interest and other
fixed costs with respect to the ownership, operation and financing of the
Property).
6.3.5 Senior
Loan. Unless otherwise delivered to Lender pursuant to the
provisions of this Section 6.3, Borrower will deliver (or cause Owner to
deliver) to Lender all of the financial statements, reports, certificates and
related items delivered or required to be delivered by Owner to Senior Lender
under the Senior Loan Documents as and when due under the Senior Loan
Documents.
6.3.6 Inspection. Borrower
shall permit and shall cause Owner to permit any authorized representatives
designated by Lender to visit, examine, audit, and inspect, upon reasonable
notice and during normal business hours, the Property including Borrower’s
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and independent public accountants (with Borrower’s
representative(s) present in all instances), at such reasonable times during
normal business hours and as often as may be reasonably
requested. Borrower shall cause its Affiliates to make all books of
account and records so available at the office where the same are regularly
maintained. Lender shall have the right to copy, duplicate and make
abstracts from such books and records as Lender may reasonably
require. During the continuance of an Event of Default, Borrower
shall pay any costs incurred by Lender to examine such books, records and
accounts. Borrower acknowledges and agrees that (i) all of such
audits, inspections and reports shall be made for the sole benefit of Lender,
and not for the benefit of Borrower or any third party, and neither Lender nor
Lender’s auditors or inspectors or any of Lender’s representatives, agents or
contractors assumes any responsibility or liability (except to Lender) by reason
of such audits, inspections or reports, (ii) Borrower will not rely upon any of
such audits, inspections or reports for any purpose whatsoever, and (iii) the
performance of such audits, inspections and reports will not constitute a waiver
of any of the provisions of this Agreement or any other Loan Document or any of
the obligations of Borrower hereunder or thereunder. Borrower further
acknowledges and agrees that neither Lender nor Lender’s inspector,
representatives, agents or contractors shall be deemed to be in any way
responsible for any matters related to design or construction of the
Improvements or any construction work. At any time during the term of
the Loan, Borrower shall cooperate with Lender and use commercially reasonable
efforts to assist Lender in obtaining an appraisal of the
Property. Such cooperation and assistance from Borrower shall include
but not be limited to the obligation to provide (or cause Owner to
67
provide)
Lender or Lender’s appraiser with the following: (i) reasonable access to the
Property, (ii) a current certified rent roll for the Property in form and
substance reasonably satisfactory to Lender, including current asking rents and
a history of change in asking rents and historical vacancy for the past three
years, (iii) current and budgeted income and expense statements for the prior
three years, (iv) the then existing site plan and survey of the Property, (v)
the building plans and specifications, including typical elevation and floor
plans, to the extent in Borrower’s possession or reasonably available to
Borrower; (vi) the current and prior year real estate tax bills, (vii) a
reasonably detailed list of past and scheduled capital improvements and the
costs thereof, (viii) all environmental reports relating to the Property, and
(ix) copies of all recent appraisals/property description information or
brochures, including descriptions of amenities and services relating to the
Property to the extent in Borrower’s or Owner’s possession or reasonably
available to Borrower or Owner. The appraiser performing any such
appraisal shall be engaged by Lender and Borrower shall be responsible for any
reasonable fees payable to said appraiser in connection with an appraisal of the
Property. Borrower shall use commercially reasonable efforts to
cooperate with Lender with respect to any proceedings before any Governmental
Authority which may in any way affect the rights of Lender hereunder or any
rights obtained by Lender under any of the Loan Documents and, in connection
therewith, not prohibit Lender, at its election, from participating in any such
proceedings.
ARTICLE
7
INSURANCE;
CASUALTY; AND CONDEMNATION
Section
7.1 Insurance
.
7.1.1 Coverage. Borrower
shall cause Owner to maintain insurance for Borrower, Owner and the Property
providing at least the following coverages:
(a) comprehensive
all risk insurance on the Improvements and the Equipment, in each case
(A) in an amount equal to 100% of the “Full Replacement Cost,” which
for purposes of this Agreement shall mean actual replacement value (exclusive of
costs of excavations, foundations, underground utilities and footings) with a
waiver of depreciation; (B) containing an agreed amount endorsement with
respect to the Improvements and Equipment waiving all co insurance provisions;
(C) providing for no “all risk” deductible in excess of $100,000; and
(D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement
if any of the Improvements or the use of the Property shall at any time
constitute legal non conforming structures or uses. In addition,
Borrower shall cause Owner to obtain: (x) Flood Insurance in an
amount sufficient to cover the lesser of 20% of the insured building
improvements, or the value of the first floor building improvements, subject to
a deductible not to exceed $500,000; (y) earthquake insurance in an amount
equal to the full replacement value less a deductible of five percent (5%) of
the Total Insured Value (which includes annual rental value) at the Property,
and otherwise in form and substance reasonably satisfactory to Lender if a
Seismic Report shows the PML to be 20% or greater; and (z) windstorm
insurance in amounts and in form and substance satisfactory to Lender if
coverage is ever excluded from the all risk policy, provided that the insurance
pursuant to clauses (x), (y) and (z) hereof shall be on terms
68
consistent
with the comprehensive all risk insurance policy required under this subsection (a) and
rental interruption insurance under subsection (c)
below;
(b) commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called “occurrence” form with a combined
limit of not less than $2,000,000 in the aggregate and $1,000,000 per
occurrence; (B) to continue at not less than the aforesaid limit until
required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least the
following hazards: (1) premises and operations;
(2) products and completed operations on an “if any” basis;
(3) independent contractors; (4) blanket contractual liability for all
legal contracts; and (5) liability that may arise from acts of terrorism,
if commercially available. The self-insured retention or deductible
for general liability coverage is not to exceed $100,000 per occurrence subject
to a $750,000 maximum. This deductible is to be initially funded with
a letter of credit in the amount of $200,000, held and administrated by the
carrier. Once the first $200,000 is exhausted additional Letters of
Credit must be continually posted until the $750,000 maximum deductible is
exhausted.
(c) rental
interruption insurance (A) with loss payable to Senior Lender (allowing
reimbursement to Borrower for reasonable operating costs during the
interruption); (B) covering all risks required to be covered by the
insurance provided for in subsection (a) above;
(C) containing an unlimited period of restoration and extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and Equipment has been repaired, the continued loss of rental
income will be insured until such rental income either returns to the same level
it was at prior to the loss, or the expiration of six (6) months from the date
that the Property is repaired or replaced and operations are resumed, whichever
first occurs, and notwithstanding that the policy may expire prior to the end of
such period, provided that the unlimited period of restoration endorsement may
be limited to the length of time required with the exercise of due diligence and
dispatch to rebuild, repair or replace the damaged or destroyed property; and
(D) in an amount equal to 100% of the projected gross income from the
Property for a period of eighteen (18) months from the date that the Property is
repaired or replaced and operations are resumed. The amount of such
rental interruption insurance shall be determined prior to the date hereof and
at least once each year thereafter based on Borrower’s reasonable estimate of
the gross income from the Property for the succeeding eighteen (18) month
period. Subject to the rights of Lender and subject to the provisions
of Section
7.4.1(j) below, all proceeds payable to Lender pursuant to this
subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to pay
the obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such rental interruption
insurance;
(d) at
all times during which structural construction, repairs or alterations are being
made with respect to the Improvements, and only if the property coverage form
does not otherwise apply, (A) owner’s contingent or protective liability
insurance covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability
69
insurance
policy; and (B) the insurance provided for in subsection
(a) above written in a so called builder’s risk completed value form
(1) on a non reporting basis, (2) against all risks insured against
pursuant to subsections (a) and
(c) above, (3) including permission to occupy the Property, and
(4) with an agreed amount endorsement waiving co insurance
provisions;
(e) Workers’
Compensation insurance, as required by any governmental authority or any Legal
Requirements and Employer’s Liability Insurance of not less than $1,000,000 for
each occurrence;
(f) comprehensive
boiler and machinery insurance in an amount reasonably acceptable to Lender on
terms consistent with the commercial property insurance policy required under
subsections (a) and
(c) above;
(g) umbrella
liability insurance in an amount not less than $50,000,000 per occurrence, on
terms consistent with the commercial general liability insurance policy and
motor liability insurance policy required under subsection
(b) above and subsection (h) below,
on a portfolio basis naming the Property and all other properties owned by the
OP and/or its Affiliates; provided, that such insurance may be provided under a
blanket insurance Policy so long as the coverage required pursuant to this
clause is not reduced below the per occurrence limit set forth in this
clause;
(h) motor
vehicle liability coverage for all owned and non owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence, excluding
umbrella coverage, of $1,000,000;
(i) if
the Property is or becomes a legal “non conforming” use, ordinance and law
coverage is required based on the following minimum limits: Coverage
A (value of the undamaged portion) to be included with the insured building
limit; Coverage B (demolition/debris removal) at 10% of insured building value,
or if a stated value is required, in a minimum limit to compliment the
destruction threshold in the applicable building code; and Coverage C (increased
cost of construction) at 10% of insured building value;
(j) if
“certified acts of terrorism”, as declared by the United States Government, are
now or hereafter excluded from Owner’s comprehensive all risk insurance policy,
business income coverage, commercial general liability insurance or umbrella
liability insurance coverage, Borrower shall cause Owner to obtain an
endorsement to such policies, or separate policies, insuring against all such
“certified acts of terrorism” (such acts or events so excluded, “Terrorism Acts”); provided
Borrower shall not be required to cause Owner to spend in excess of an amount
equal to 150% of the aggregate amount of all insurance premiums payable for all
coverages required for the Loan with respect to the Property and all other
properties owned by the OP and/or its Affiliates per annum for the last policy
year in which coverage for terrorism was included as part of the “all risk”
property policy, adjusted annually by a percentage equal to the increase in the
Consumer Price Index (hereinafter defined) (the “Terrorism Premium Cap”) for
such coverage and, in the event that coverage in an amount equal to 100% of the
Full Replacement Cost is not available at a per annum cost of the Terrorism
Premium Cap, then Borrower shall cause Owner to purchase insurance covering
Terrorism Acts in an amount equal to the principal balance of the Loan and the
Senior Loan, but shall not be
70
required
to maintain the full amount of such coverage if such coverage is not available
at a per annum cost of the Terrorism Premium Cap or less, provided that in the
event that the Terrorism Premium Cap is not sufficient to purchase such coverage
in an amount equal to the principal balance of the Loan and the Senior Loan,
then Borrower shall cause Owner to obtain the greatest amount of coverage
obtainable at a per annum cost of the Terrorism Premium Cap. As used
herein, “Consumer Price
Index” means the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics of the United States Department of Labor, New
York Metropolitan Statistical Area, All Items (1982-84 = 100), or any successor
index thereto, approximately adjusted, and in the event that the Consumer Price
Index is converted to a different standard reference base or otherwise revised,
the determination of adjustments provided for herein shall be made with the use
of such conversion factor, formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor, formula
or table as may be published by Xxxxxxxx-Xxxx, Inc., or any other nationally
recognized publisher of similar statistical information; and if the Consumer
Price Index ceases to be published, and there is no successor thereto (i) such
other index as Lender and Borrower shall agree upon in writing or (ii) if Lender
and Borrower cannot agree on a substitute index, such other index, as reasonably
selected by Lender.
In the
event that the limits of insurance in place covering Terrorism Acts on a
portfolio basis are exhausted by damage to a property other than the Property,
then Borrower shall restore the coverage provided for in clause (x) above
(or any lesser amount of coverage that is available if such coverage is not
available), to the extent such insurance is commercially available;
and
(k) upon
sixty (60) days’ written notice, such other reasonable insurance and in such
reasonable amounts as Lender from time to time may reasonably request against
such other insurable hazards which at the time are commonly insured against for
property similar to the Property located in or around the region in which the
Property is located.
7.1.2 Policies. All
insurance provided for in Section 7.1.1 above
shall be obtained under valid and enforceable policies (collectively, the “Policies” or in the singular,
the “Policy”) and shall
be subject to the reasonable approval of Lender as to insurance companies,
amounts, deductibles, loss payees and insureds. The Policies (or a
“cut-through” endorsement, approved by Lender, with respect to any such Policy)
shall be issued by financially sound and responsible insurance companies
authorized to do business in the State and, except in the case of flood hazard
insurance and earthquake insurance, having a claims paying ability rating of “A”
or better by S&P and an equivalent rating by Xxxxx’x (provided, however for
multi-layered policies, (A) if four (4) or less insurance companies issue
the Policies, then at least seventy-five percent (75%) of the insurance coverage
represented by the Policies must be provided by insurance companies with a
claims paying ability rating of “A” or better by S&P (and the equivalent by
any other Rating Agency), with no carrier below “BBB” (and the equivalent by any
other Rating Agency) or (B) if five (5) or more insurance companies issue
the Policies, then at least sixty percent (60%) of the insurance coverage
represented by the Policies must be provided by insurance companies with a
claims paying ability rating of “A” or better by S&P (and the equivalent by
any other Rating Agency), with no carrier below “BBB” (and the equivalent by any
other Rating Agency). The Policies described in Section 7.1.1 above
(other than those strictly limited to liability protection) shall designate
Lender and Senior Lender as loss
71
payee and
Lender and Senior Lender shall be an additional named insured, as its interests
may appear. Five (5) days prior to the renewal dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder shall be delivered by Borrower or Owner to
Lender.
7.1.3 Insurance
Premiums. Borrower shall cause Owner to pay the premiums for
such Policies (the “Insurance
Premiums”) as the same become due and payable and shall furnish to Lender
evidence of the renewal of each of the Policies (unless such Insurance Premiums
have been paid by Senior Lender pursuant to Section 3.3 of the Senior Loan
Agreement) with receipts for the payment of the Insurance Premiums or other
evidence of such payment reasonably satisfactory to Lender (provided, however, that
Borrower is not required to furnish such evidence of payment to Lender in the
event that such Insurance Premiums have been paid by Senior Lender pursuant to
Section 3.3 of
the Senior Loan Agreement). If Borrower is required to furnish such
evidence and receipts pursuant to the preceding sentence and Borrower does not
furnish such evidence and receipts at least ten (10) days prior to the
expiration of any expiring Policy, then Lender may procure, but shall not be
obligated to procure, such insurance and pay the Insurance Premiums therefor,
and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums
promptly on demand. Within thirty (30) Business Days after request by
Lender, Borrower shall cause Owner to obtain such increases in the amounts of
coverage required hereunder as may be reasonably requested by Lender, taking
into consideration changes in the value of money over time, changes in liability
laws, changes in prudent customs and practices of owners of property similar to
the Property located in or around the region in which the Property is located
and as may be available at commercially reasonable rates. Lender
acknowledges that the Policies, delivered with respect to the Property as of the
date hereof satisfy the requirements of this Article
7. Such approval shall continue in effect until the expiration
or termination of such Policies, provided that there is not a downgrade by
S&P or Xxxxx’x of any insurer providing such Policies and, as a result
thereof, Borrower fails to satisfy the rating criteria set forth in Section 7.1.2
above. Any renewal or replacement of such Policies, however, shall
require Lender’s approval as provided above in this Section 7.1.3 unless
(i) the companies providing such renewal or replacement Policies are
licensed or authorized to do business in the state where the Property is located
and have a claims paying ability rating by S&P and Xxxxx’x that satisfy the
requirements set forth in Section 7.1.2 above
or that, subject to the provisions of Section 7.1.5 below,
such rating is no less than the rating as of the date hereof of the company
providing the insurance approved by Lender as of the date hereof, (ii) the
coverage provided by such renewal or replacement Policies is no less than the
coverage approved by Lender as of the date hereof, (iii) such renewal or
replacement Policies contain in all material respects the same terms and
conditions as the Policies approved by Lender as of the date hereof and
(iv) Lender has not notified Borrower in accordance with this Section 7.1 that the
requirements for the Policies have changed since the date hereof.
7.1.4 Blanket
Policies. The insurance coverage required under this Section 7.1 may be
effected under one or more blanket Policies covering the Property and other
property and assets not constituting a part of the Property; provided that any
blanket Policy shall specify, except in the case of general liability insurance,
the portion of the total coverage of such blanket Policy that is allocated
exclusively to the Property and shall comply in all respects with the
requirements of this Article
7. Lender hereby confirms that it approves (i) the terms
of the existing Property Insurance Sharing Agreement among Owner and certain of
its Affiliates, and
72
(ii) that
the Insurance Premiums are financed through one or more finance companies
(individually and/or collectively, the “Blanket Insurance Premium Financing
Arrangement”) to whom Owner pays Owner’s allocable share of the annual
initial deposit and the monthly payments due for each blanket Policy to the
applicable finance company (with respect to each blanket Policy, such monthly
payment, together with one-twelfth (1/12th) of the allocable share of the annual
initial deposit necessary to accumulate such allocable share for such Policy at
least thirty (30) days prior to its due date, each, a “Financing
Installment”).
Section
7.2 Casualty
.
7.2.1 Notice;
Restoration. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a “Casualty”), Borrower shall
give prompt notice thereof to Lender. Following the occurrence of a
Casualty, subject to the requirements of the Senior Loan Documents, Borrower,
regardless of whether insurance proceeds are available (unless Lender has
breached its obligation (if any) to make such insurance proceeds available
pursuant to Section
7.4.1 below), shall promptly proceed to restore, repair, replace or
rebuild (or shall cause Owner to promptly proceed to restore, repair, replace or
rebuild) the same to be of at least equal value and of substantially the same
character as prior to such damage or destruction (a “Casualty Restoration”), all to
be effected in accordance with applicable law. Concurrently with the
delivery to Senior Lender of any of the items required under Section 7.4.1 of the
Senior Loan Agreement in connection with a Restoration by Owner, Borrower shall
cause such items to be concurrently delivered to Lender for Lender’s prior
approval.
7.2.2 Settlement of
Proceeds. If a Casualty covered by any of the Policies (an
“Insured Casualty”)
occurs where the loss does not exceed $1,500,000, provided no Default or Event
of Default has occurred and is continuing, Borrower may cause Owner to settle
and adjust any claim without the prior consent of Lender; provided such
adjustment is carried out in a competent and timely manner, and Borrower is
hereby authorized to permit Owner to collect and receipt for the Insurance
Proceeds (as hereinafter defined). In the event of an Insured
Casualty where the loss exceeds $1,500,000 (a “Significant Casualty”), Lender
may, in its sole discretion but subject to the rights of Senior Lender, settle
and adjust any claim without the consent of Borrower or Owner and agree with the
insurer(s) in a commercially reasonable manner on the amount to be paid on the
loss, and the Insurance Proceeds shall, if required by Senior Lender, be due and
payable solely to Senior Lender and held by Senior Lender in accordance with the
terms of the Senior Loan Agreement. If Borrower, Owner or any party
other than Lender is a payee on any check representing Insurance Proceeds with
respect to a Significant Casualty, Borrower shall (or shall cause Owner to)
immediately endorse, and cause all such third parties to endorse, such check
payable to the order of Lender (subject to the rights of Senior
Lender). Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to endorse such check payable to the
order of Lender (subject to the rights of Senior Lender). The
expenses incurred by Lender in the settlement, adjustment and collection of the
Insurance Proceeds shall become part of the Debt and shall be reimbursed by
Borrower to Lender within ten (10) days following demand.
73
.
7.3.1 Notice;
Restoration. Borrower shall promptly give Lender written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding (a “Condemnation”) and shall
deliver to Lender copies of any and all papers served in connection with such
Condemnation. Following the occurrence of a Condemnation, Borrower,
regardless of whether an Award (hereinafter defined) is available (unless Lender
has breached its obligation (if any) to make such Award available pursuant to
Section 7.4.1
below), shall promptly proceed to restore, repair, replace or rebuild (or cause
Owner to promptly proceed to restore, repair, replace or rebuild) the same to
the extent practicable to be of at least equal value and of substantially the
same character as prior to such Condemnation (a “Condemnation Restoration”,
together with a Casualty Restoration, collectively a “Restoration”), all to be
effected in accordance with applicable law.
7.3.2 Collection of
Award. Subject to the rights of Senior Lender, Lender is
hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled with an
interest, with exclusive power on behalf of Owner to collect, receive and retain
any award or payment (“Award”) for any taking
accomplished through a Condemnation (a “Taking”) and to make any
commercially reasonable compromise or settlement in connection with any such
Condemnation, subject to the provisions of this
Agreement. Notwithstanding the foregoing, Borrower and Owner shall
have the right, provided no Default or Event of Default has occurred and is
continuing, to compromise and collect or receive any award that does not exceed
$1,500,000. Notwithstanding any Taking by any public or quasi-public
authority (including, without limitation, any transfer made in lieu of or in
anticipation of such a Taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for in the Note, in this Agreement and the other
Loan Documents and the Debt shall not be reduced unless and until any Award
shall have been actually received and applied by Lender to expenses of
collecting the Award and to discharge of the Debt. Subject to the
rights of Senior Lender, Lender shall not be limited to the interest paid on the
Award by the condemning authority but shall be entitled to receive out of the
Award interest at the rate or rates provided in the Note. Borrower
shall cause any Award that is payable to Borrower pursuant to Owner’s operating
agreement to be paid directly to Lender. The expenses incurred by
Lender in the adjustment and collection of the Award shall become part of the
Debt and be secured hereby and shall be reimbursed by Borrower to Lender within
ten (10) days after the date Lender makes written demand therefor.
7.3.3 Application of Insurance
Proceeds or Award
. If,
pursuant to the terms of the Senior Loan Documents, Owner is ever entitled to
receive any portion of any Insurance Proceeds or Awards (i.e., such amounts are
not required to be used for Restoration or to be applied to repayment of the
Senior Loan), Borrower shall cause such portion of such Insurance Proceeds or
Award to be deposited into the Senior Subordinate Deposit Account and all such
amounts shall then be applied to the payment of the Debt in accordance with
Section
2.3.2.
74
DEFAULTS
Section
8.1 Events of
Default
. An
“Event of Default” shall
exist with respect to the Loan if any of the following shall occur:
(a) any
portion of the Debt is not paid when due;
(b) subject
to Borrower’s and Owner’s right to contest as provided herein and in the Senior
Loan Documents, as applicable, if any of the Taxes are not paid prior to the
date that any interest, late fees or other penalties would accrue thereon or any
of the Other Charges are not paid when the same are due and payable (unless sums
equaling the amount of Taxes and Other Charges then due and payable have been
delivered to Senior Lender in accordance with Section 3.3 of the
Senior Loan Agreement);
(c) if
the Policies are not kept in full force and effect, or if the Policies or
certificates evidencing such Policies are not delivered to Lender within fifteen
(15) days after request;
(d) except
as expressly permitted by the terms of this Agreement or the other Loan
Documents, a Transfer occurs without Lender’s prior written
consent;
(e) if
any representation or warranty of Borrower, or of Guarantor, made herein or in
any other Loan Document or in any certificate, report, financial statement or
other instrument or document furnished to Lender in connection with the Loan
shall have been false or misleading in any material respect when made, provided
that if such misrepresentation was not intentional, is susceptible to cure and
Lender will not be adversely affected by a delay in enforcing its remedy under
the Loan Documents, Borrower shall have thirty (30) days after notice thereof to
cure such default;
(f) if
Borrower, Owner or Guarantor shall make an assignment for the benefit of
creditors or Borrower shall generally not be paying its debts as they become
due;
(g) if
a receiver (other than a receiver appointed by Lender), liquidator or trustee of
Borrower, Owner or of Guarantor shall be appointed or if Borrower, Owner or
Guarantor shall be adjudicated a bankrupt or Insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower, Owner or Guarantor or if any proceeding for the
dissolution or liquidation of Borrower, Owner or of Guarantor shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower, Owner or Guarantor, upon the
same not being discharged, stayed or dismissed within ninety (90)
days;
(h) Borrower
breaches any covenant contained in Section 2.3.2(a), 5.12.1,
5.13, 5.15, 5.22, 5.25, 5.28 or 11.7
hereof;
75
(j) subject
to Borrower’s right to contest as provided herein and Owner’s right to contest
as provided in the Senior Loan Agreement, if the Property becomes subject to any
mechanic’s, materialman’s or other lien that is not otherwise permitted by the
Loan Documents and such lien is not removed of record within thirty (30) days of
the filing or recording of such lien (except a lien for local real estate taxes
and assessments or special taxes not then due and payable);
(k) if
Borrower or Owner fails to cure properly any violations of laws or ordinances
affecting or which may be interpreted to affect the Property within thirty (30)
days after Borrower or Owner first receives notice of any such violations; provided, however, that if such
violation is reasonably susceptible of cure, but not within such thirty (30) day
period and the applicable law or ordinance permits such longer period within
which to cure such violation, then Borrower shall be permitted up to an
additional sixty (60) days to cure such violation provided that Borrower or
Owner diligently and continuously pursues such cure;
(l) except
as permitted in this Agreement, the alteration, improvement, demolition or
removal of any of the Improvements without the prior consent of
Lender;
(m) if
Borrower shall continue to be in default under any term, covenant, or provision
of the Note or any of the other Loan Documents, beyond applicable notice and/or
cure periods contained in those documents;
(n) if
Borrower fails to cure a default under any other term, covenant or provision of
this Agreement within thirty (30) days after Borrower first receives notice of
any such default; provided, however, if such
default is reasonably susceptible of cure, but not within such thirty (30) day
period, then Borrower may be permitted up to an additional sixty (60) days to
cure such default provided that Borrower diligently and continuously pursues
such cure;
(o) if
without Lender’s prior written consent, except as otherwise expressly permitted
by the Loan Documents, (i) the Management Agreement is terminated,
(ii) the ownership, management or control of Manager is transferred,
(iii) there is a material change in the Management Agreement, or
(iv) there shall be a material default by Owner under the Management
Agreement that is not cured within any applicable notice or cure period provided
under the Management Agreement;
(p) if
Owner ceases to continuously operate the Property or any material portion
thereof as office space for any reason whatsoever (other than temporary
cessation in connection with any repair or renovation thereof undertaken with
the consent of Lender, in connection with retail or other uses of the Property
as in effect on the date hereof, or otherwise permitted under this
Agreement);
(q) if
any of the assumptions contained in the “non-consolidation” opinion delivered to
Lender in connection with the Loan, or in any other “non-consolidation” opinion
delivered subsequent to the closing of the Loan, is or shall become untrue in
any respect;
76
(s) if
a change of Control of the OP or the REIT occurs except in connection with the
REIT being taken private in connection with a Permitted Transfer contemplated
by, and upon the satisfaction of all of the conditions set forth in, Section 5.26.5(e)
hereof; or
(t) an
Event of Default as defined or described in the Senior Loan Documents occurs; or
any other event shall occur or condition shall exist, if the effect of such
event or condition is to accelerate or permit Senior Lender to accelerate the
maturity of any portion of the Senior Loan.
Section
8.2 Remedies
.
8.2.1 Acceleration.
(a) Upon
the occurrence of an Event of Default (other than an Event of Default described
in paragraph (f) or (g) of Section 8.1 hereof)
and at any time and from time to time thereafter while such an Event of Default
is then continuing, in addition to any other rights or remedies available to it
pursuant to the Loan Documents or at law or in equity, Lender may take such
action, without notice or demand, that Lender deems advisable to protect and
enforce its rights against Borrower and in and to the Collateral including
declaring the Debt to be immediately due and payable (including unpaid interest,
Default Rate interest, Late Payment Charges, Yield Maintenance Premium and any
other amounts owing by Borrower), without notice or demand.
(b) Upon
any Event of Default described in paragraph (f), (g) or (s) of Section 8.1 hereof,
the Debt (including unpaid interest, Default Rate interest, Late Payment
Charges, Yield Maintenance Premium and any other amounts owing by Borrower)
shall immediately and automatically become due and payable, without notice or
demand, and Borrower hereby expressly waives any such notice or demand, anything
contained in any Loan Document to the contrary notwithstanding.
8.2.2 Remedies
Cumulative. Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Lender against Borrower under the Loan Documents or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared, or be automatically, due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Lender may determine in its
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth in the Loan Documents. Without
limiting the generality of the foregoing, Borrower agrees that if an Event of
Default is continuing, (i) to the extent permitted by applicable law,
Lender is not subject to any “one action” or “election of remedies”
77
law or
rule, and (ii) all Liens and other rights, remedies or privileges provided
to Lender shall remain in full force and effect until Lender has exhausted all
of its remedies against the Collateral, the Pledge and other Security Documents
and the Pledged Securities have been foreclosed, the Collateral has been sold
and/or otherwise realized upon in satisfaction of the Debt or the Debt has been
paid in full. To the extent permitted by applicable law, nothing
contained in any Loan Document shall be construed as requiring Lender to resort
to any portion of the Collateral for the satisfaction of any of the Debt in
preference or priority to any other portion, and Lender may seek satisfaction
out of all or less than all of the Collateral, in its discretion.
8.2.3 Severance. Lender
shall have the right from time to time to sever the Note and the other Loan
Documents into one or more separate notes, pledge and security agreements and
other security documents in such denominations and priorities of payment and
liens as Lender shall determine in its discretion for purposes of evidencing and
enforcing its rights and remedies. Borrower shall execute and deliver
to Lender from time to time, promptly after the request of Lender, a severance
agreement and such other documents as Lender shall request in order to effect
the severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect such severance, Borrower ratifying all that such attorney
shall do by virtue thereof.
8.2.4 Delay. No
delay or omission to exercise any remedy, right or power accruing upon an Event
of Default, or the granting of any indulgence or compromise by Lender shall
impair any such remedy, right or power hereunder or be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or
Event of Default shall not be construed to be a waiver of any subsequent Default
or Event of Default or to impair any remedy, right or power consequent
thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim in connection with the foreclosure of the Collateral to the extent
necessary to foreclose on all or less than all of any portion of such
Collateral.
8.2.5 Lender’s Right to
Perform. If Borrower fails to perform any covenant or
obligation contained herein (including the covenant set forth in the last
sentence of Section
5.4.1 hereof) and such failure shall continue for a period of five (5)
Business Days after Borrower’s receipt of written notice thereof from Lender,
without in any way limiting Lender’s right to exercise any of its rights, powers
or remedies as provided hereunder, or under any of the other Loan Documents,
Lender may, but shall have no obligation to, perform, or cause performance of,
such covenant or obligation, and all costs, expenses, liabilities, penalties and
fines of Lender incurred or paid in connection therewith shall be payable by
Borrower to Lender within ten (10) days after the date Lender makes written
demand therefor and, if not paid, shall be added to the Debt (and to the extent
permitted under applicable laws, secured by the Pledge and other Loan Documents)
and shall bear interest thereafter at the Default
Rate. Notwithstanding the foregoing, Lender shall have no obligation
to send notice to Borrower of any such failure.
78
SPECIAL
PROVISIONS
Section
9.1 Sale of Note and
Securitization
.
9.1.1 Cooperation in
Securitization. At the request of the holder of the Note and,
to the extent not already required to be provided by Borrower under the Note,
Loan Agreement or other Loan Documents, Borrower and its affiliates shall use
reasonable efforts to comply with the requests of the holder of the Note or to
take such action as may be required by a purchaser, transferee, assignee,
servicer, participant or other potential investor (collectively, the “Investor”) or by the Rating
Agencies in connection with one or more sales, transfers or assignments of the
Loan (or portions thereof or interests therein), or grants of participation
interests therein, in connection with one or more securitizations of such Note,
or portions thereof or interests therein (each such sale and/or securitization,
a “Securitization”)
involving the issuance of rated or unrated single-class or multi-class
securities (the “Securities”) secured by or
evidencing direct or indirect ownership interests in, among other things, the
Note (or any portion thereof or interests therein) and the Loan
Agreement. Such efforts, with respect to each Securitization may
include, without limitation, to:
(a) (i) provide
such financial and other information with respect to the Property, the
Collateral, Owner, Borrower, the OP (or any other Guarantor) and the REIT (the
OP (or any other Guarantor) and the REIT, being individually or collectively
referred to herein as the “Parent”) and the manager of
the Property as reasonably determined by the holder of the Note to be necessary
or appropriate in connection with the Securitization (including, without
limitation, existing audited or unaudited financial statements or at no expense
to Borrower or any Parent, audited or unaudited financial statements),
(ii) provide budgets relating to the Property (iii) at no expense to
Borrower or any Parent, perform or permit or cause to be performed or permitted
such site inspections, appraisals, market studies, environmental reviews and
reports (Phase I’s and, if appropriate, Phase II’s), engineering reports and
other due diligence investigations of the Property, as may be reasonably
requested by the holder of the Note, the Rating Agencies, and/or Investors in
the Securities, or as may be reasonably necessary or appropriate in connection
with the Securitization in a manner which does not unreasonably interfere with
the tenants or occupants thereof (such information in clauses (i), (ii) and
(iii) being collectively referred to as the “Provided Information”),
together with appropriate verification and/or consents with respect to the
Provided Information through letters of auditors or opinions of counsel of
independent attorneys acceptable to the holder of the Note and the Rating
Agencies;
(b) prepare
a presentation for the Rating Agencies describing Owner, Borrower, Parent, the
Property, the Collateral, management of the Property and such other matters as
are customary for securitizations such as the Securitization, in each case as
may be reasonably requested by the holder of the Note, the Rating Agencies
and/or Investors in the Securities or as may be reasonably determined by the
holder of the Note to be necessary or appropriate in connection with the
Securitization;
79
(d) work
with and, if requested, supervise third-party service providers engaged by
Borrower (or Owner on behalf of Borrower) to obtain, collect and deliver
information reasonably required by the Rating Agencies in connection with the
Securitization;
(e) if
required by the Rating Agencies, use commercially reasonable efforts to deliver
such additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Property, which estoppel
letters, subordination agreements or other agreements shall be reasonably
satisfactory to Lender and the Rating Agencies;
(f) make
such representations and warranties as of the closing date of the Securitization
with respect to the Collateral, the Property, Owner, Borrower, Parent, the Note,
Loan Agreement and other Loan Documents as may be reasonably requested by the
holder of the Note, the Rating Agencies and/or Investors in the Securities and
as are consistent with the facts covered by such representations and warranties
as they exist on the date thereof, including the representations and warranties
made in the Note, Loan Agreement and other Loan Documents; and
(g) execute
such amendments to the Note, Loan Agreement, other Loan Documents and
organizational documents as may be reasonably requested by the holder of the
Note, the Rating Agencies and/or Investors in the Securities or otherwise to
effect one or more Securitizations (including, without limitation, such
amendments as shall be necessary or advisable to sever the Note (and/or any then
existing component thereof) into one or more notes and/or one or more components
and allocate Principal amounts thereof in order to effectuate one or more sales
of the Note (and/or the resulting notes or components thereof) and/or to
correspond to the related classes of Securities in one or more Securitizations
so long as, in all such cases, the overall duration-weighted interest rate over
all of the notes and components shall equal the Interest Rate); provided, however, that
Borrower shall not be required to modify or amend the Note, Loan Agreement or
any other Loan Documents if such modification or amendment would (i) have a
material adverse economic effect on Borrower or its Affiliates, (ii) modify
or amend the loan term, amortization or any other economic term of the Loan or
(iii) otherwise materially increase the obligations or materially decrease
the rights of Borrower or the other parties pursuant to the Note, Loan Agreement
and other Loan Documents (including, but not limited to, modifying the transfer,
recourse, prepayment, event of default or remedy provisions of the Loan
Documents or the organizational documents of Borrower or its
Affiliate).
9.1.2 Costs and
Expenses. Owner, Borrower, the REIT and their Affiliates will
bear their own internal costs of cooperation required by this Agreement in
connection with any Securitization, but Lender shall be responsible for all
other out-of-pocket costs and expenses in connection with any Securitization
after the closing of the Loan.
80
(a) Borrower
and its respective Affiliates understand that certain of the Provided
Information may be included in disclosure documents in connection with each
Securitization, including, without limitation, a prospectus, prospectus
supplement, private placement memorandum, collateral term sheets, structured
term sheets and computational materials (each, a “Disclosure Document”) and may
also be included in filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the “Securities Act”), or the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or provided or
made available to Investors in the Securities, the Rating Agencies and service
providers relating to such Securitization. In the event that such
Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower, and its respective Affiliates will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects; provided, however, that this
provision shall be limited to those portions of the Disclosure Document that
described Owner, Borrower or any of their Affiliates, the Property, the
Collateral, the Loan or the other Loan Documents.
(b) In
the case of each Securitization, Borrower agrees to cooperate in connection with
(i) the preparation of a preliminary and a final private placement
memorandum and/or (ii) the preparation of a preliminary and final
prospectus or prospectus supplement, as applicable, and (iii) the execution
of an indemnification certificate (A) certifying that Borrower has
carefully examined in each such memorandum or prospectus, as applicable, all
sections containing information relating to the Collateral, the Property,
Parent, Owner, Borrower, any Affiliates of Parent, Owner, Borrower, or the Loan,
and that such information included therein (collectively, the “Securitization Information”),
does not contain any untrue statement of a material fact or omit to state a
material fact known to Borrower that is necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, (B) indemnifying Lender (and for purposes of this Section 9.1.3, Lender
hereunder shall include its officers, directors and employees), the Person who
acts as depositor, issuer and/or registrant who may have filed a registration
statement relating to the Securitization, each underwriter or placement agent
involved in the Securitization, each of their respective directors and officers
and each Person who controls such Person within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnified Group”), for any
losses, claims, damages or liabilities (collectively, the “Liabilities”) to which any of
the Indemnified Group may become subject insofar as the Liabilities arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Securitization Information which untrue or
alleged untrue statement is not expressly disclosed to Lender by Borrower after
Borrower has been given an opportunity to review the Securitization Information,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse each Person in the
Indemnified Group for any legal or other expenses incurred by each such Person
in connection with investigating or defending the Liabilities for which an
indemnity is owed hereunder; provided, however, that
Borrower will be liable in any such case under clauses (B) or (C) above only to
the extent that any such Liability arises out of or is based upon any Provided
Information or upon the omission or alleged omission to state therein a
material
81
fact
known to Borrower that is required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or any other information furnished to Lender or any other
Person in the Indemnified Group by Borrower or an affiliate in connection with
the preparation of any Disclosure Document or in connection with the
underwriting of the Debt, including, without limitation, financial statements of
Borrower, operating statements, rent rolls, environmental site assessment
reports and Property condition reports with respect to the
Property. This indemnity agreement will be in addition to any
liability which Borrower may otherwise have.
(c) In
the case of each Securitization, in connection with filings under the Exchange
Act, Borrower agrees to indemnify (i) each Person in the Indemnified Group
for Liabilities to which each such Person may become subject insofar as the
Liabilities arise out of or are based upon an untrue statement or an alleged
untrue statement in the Provided Information or an omission or alleged omission
to state in the Provided Information a material fact known to Borrower that is
necessary in order to make the statements in the Provided Information, in light
of the circumstances under which they were made, not misleading, which untrue or
alleged untrue statement or omission or alleged omission is not expressly
disclosed to Lender by Borrower after Borrower has been given an opportunity to
review such filings under the Exchange Act and (ii) each Person in the
Indemnified Group for any reasonable legal or other expenses incurred by each
such Person in connection with defending or investigating the Liabilities for
which an indemnity is owed hereunder.
(d) Promptly
after receipt by a party seeking indemnification hereunder of notice of the
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made under this Section 9.1.3, such
party will notify Borrower in writing of the commencement thereof, but the
omission to so notify Borrower will not relieve Borrower from any liability
which Borrower may have to any indemnified party hereunder except to the extent
that failure to notify causes prejudice to Borrower. In the event
that any action is brought against any indemnified party, and it notifies
Borrower of the commencement thereof, Borrower will be entitled to participate
therein and, to the extent that Borrower may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from Borrower to
such indemnified party hereunder, Borrower shall be responsible for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and Borrower
and the indemnified party shall have reasonably concluded that there are any
legal defenses available to it and/or other indemnified parties that are
different from or in addition to those available to Borrower, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Borrower shall not be
liable for the expenses of more than one separate counsel unless an indemnified
party shall have reasonably concluded that there may be legal defenses available
to Borrower that are different from or additional to those available to another
indemnified party.
(e) In
order to provide for just and equitable contribution in circumstances in which
any indemnification provided for under this Section 9.1.3 is for
any reason held to be
82
unenforceable,
unavailable or insufficient to hold harmless an indemnified party in respect of
any Liabilities which would otherwise be indemnifiable hereunder, Borrower shall
contribute to the amount paid or payable by the indemnified party as a result of
such Liabilities; provided, however, that if any
indemnified party is guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) it shall not be entitled to contribution
from Borrower if Borrower was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be
considered: (i) the relative knowledge and access to information
concerning the matter with respect to which a claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the
circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f) The
liabilities and obligations of Borrower and its Affiliates hereunder shall
survive the termination of the Note, Loan Agreement and other Loan Documents and
the satisfaction and discharge of the Debt.
(g) Each
Person in the Indemnified Group is an intended third party beneficiary of the
obligations of Borrower herein.
9.1.4 Rating
Surveillance. Lender will retain the Rating Agencies to
provide rating surveillance services on Securities. The pro rata
expenses of such surveillance will be paid for by Borrower based on the
applicable percentage of such expenses determined by dividing the then
outstanding Principal by the then aggregate outstanding amount of the pool
created in the Securitization which includes the Loan.
9.1.5 Severance of
Loan. Lender shall have the right, at any time (whether prior
to, in connection with, or after any Securitization), with respect to all or any
portion of the Loan, to modify, split and/or sever all or any portion of the
Loan as hereinafter provided. Without limiting the foregoing, Lender
may (i) cause the Note and the Pledge to be split into a first and second
loan, (ii) create one more senior and subordinate notes (i.e., an A/B or A/B/C
structure), or (iii) create multiple components of the Note or Notes (and
allocate or reallocate the Principal balance of the Loan among such components);
provided, however, in each such
instance the outstanding Principal balance of all the Notes evidencing the Loan
(or components of such Notes) immediately after the effective date of such
modification equals the outstanding Principal balance of the Loan immediately
prior to such modification and the weighted average of the interest rates for
all such Notes (or components of such Notes) immediately after the effective
date of such modification equals the interest rate of the original Note
immediately prior to such modification and such action shall not result in
additional costs to Borrower except as expressly provided above. If
requested by Lender, Borrower (and Borrower’s constituent members, if
applicable, and Guarantor) shall execute within five (5) Business Days after
such request, such documentation as Lender may reasonably request to evidence
and/or effectuate any such modification or severance.
83
MISCELLANEOUS
Section
10.1 Exculpation
. Subject
to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower or its constituent members, partners, shareholders,
directors, employees or agents or the direct or indirect constituent members,
partners, shareholders, directors, employees or agents thereof (collectively,
the “Borrower Parties”)
or any other Person, to perform and observe the obligations contained in this
Agreement, the Note or any of the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against any of the Borrower
Parties or any other Person, except that Lender may bring a foreclosure action,
an action for specific performance or any other appropriate action or proceeding
to enable Lender to enforce and realize upon all or any portion of the
Collateral; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against the Borrower Parties only to the extent of their
interest in the Collateral, and Lender, by accepting this Agreement, the Note
and the other Loan Documents, agrees that it shall not xxx for, seek or demand
any deficiency judgment against any of the Borrower Parties or any other Person
in any such action or proceeding under or by reason of or in connection with
this Agreement, the Note or any of the other Loan Documents. The
provisions of this paragraph shall not, however, (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by this Agreement,
the Note or any of the other Loan Documents; (ii) impair the right of
Lender to name any of the Borrower Parties, as a party defendant in any action
or suit in connection with exercising its remedies under the Security Documents
and the Pledged Securities; (iii) affect the validity or enforceability of
any guaranty made in connection with the Loan or any rights and remedies of
Lender thereunder; (iv) impair the right of Lender to obtain the
appointment of a receiver; or (v) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower (but not against any
members of Borrower (other than Guarantor to the extent provided in the
Non-Recourse Guaranty) or their direct or indirect constituent members or
partners or any other Person), by money judgment or otherwise, to the extent of
any loss, damage, cost, expense, liability, claim or other obligation (but
excluding any punitive, consequential or speculative damages) incurred by Lender
(including attorneys’ fees and costs reasonably incurred) arising out of or in
connection with the following:
(a) fraud
or intentional misrepresentation by Borrower, Owner or Guarantor in connection
with the Loan;
(b) intentional
physical waste of the Property (including, but not limited to, waste due to
gross negligence) by Borrower, Owner or any affiliate thereof; provided, however, such
physical waste shall exclude wear and tear to the Property that occurs in the
ordinary course of business of the Property by Borrower, Owner or any affiliate
thereof;
(c) the
material breach of any representation, warranty, covenant or indemnification
provision in the Environmental Indemnity or in this Agreement
concerning Environmental Laws, Hazardous Substances or Asbestos;
84
(e) the
misapplication or conversion by Borrower, Owner or any affiliate thereof of
(i) any insurance proceeds paid by reason of any loss, damage or
destruction to the Property, (ii) any awards or other amounts received in
connection with the condemnation of all or a portion of the Property,
(iii) any Rents following an Event of Default or (iv) any Rents paid
more than one (1) month in advance;
(f) failure
to pay charges for labor or materials or taxes or other charges that can create
liens superior to the lien of the Mortgage on any portion of the Property unless
such taxes or other charges are being contested in accordance with the Senior
Loan Documents or in accordance with the terms herewith or such taxes or charges
have been delivered to Senior Lender in accordance with the terms of the Senior
Loan Documents or Borrower has complied with Section 5.2
hereof;
(g) any
security deposits collected by Borrower, Owner or any affiliate thereof with
respect to the Property which are not delivered to Lender (subject to the rights
of Senior Lender) upon a foreclosure of the Property or action in lieu thereof,
except to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of the
Event of Default that gave rise to such foreclosure or action in lieu
thereof;
(h) the
failure by Borrower to cause Owner to deposit with Senior Lender all Rents, as
required under Article 3 of the Senior Loan Agreement; or
(i) the
failure by Borrower to cause Owner to use any funds released by Senior Lender
from any subaccount provided for in the Senior Loan Agreement for the intended
use therefor in default of the requirements of the Senior Loan
Agreement.
Notwithstanding
anything to the contrary in any of the Loan Documents (i) Lender shall not
be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim
for the full amount of the Debt or to require that all collateral shall continue
to secure all of the Debt owing to Lender in accordance with the Loan Documents,
and (ii) the Debt shall become fully recourse to Borrower (but not its members
(other than Guarantor solely to the extent provided in the Non-Recourse
Guaranty) or other direct or indirect constituent members or partners or any
other Person) in the event that: (A) the first full Monthly Debt
Service Payment Amount under the Note is not paid when due; (B) other than
in connection with a default under subsection (x) of the definition of
Special Purpose Bankruptcy Remote Entity set forth in Schedule 5 hereto,
Borrower fails to maintain its status as a Special Purpose Bankruptcy Remote
Entity in accordance with the provisions of this Agreement and such failure
results in the substantive consolidation of Borrower with another Person;
(C) except as otherwise permitted pursuant to the Loan Documents, Borrower
fails to obtain Lender’s prior written consent to any subordinate financing or
other voluntary lien encumbering the Property or any portion of the
Collateral;
85
(D) except
as otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain
Lender’s prior written consent to any assignment, transfer, or conveyance of the
Property, the Collateral or any interest in either of the foregoing as and to
the extent required by this Agreement or the Pledge; (E) (1) if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by Owner,
Borrower or Guarantor, or (2) if Owner, Borrower or Guarantor files an
answer consenting to, or otherwise joining in, any involuntary petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law filed against it by any other Person, or is
found pursuant to a final, unappealable order of a court of competent
jurisdiction to have solicited or caused to be solicited creditors to file any
involuntary petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law against Owner,
Borrower or Guarantor, or (3) if Owner, Borrower or Guarantor are found,
pursuant to a final unappealable order of a court of competent jurisdiction, to
have been in collusion with creditors that initiate a bankruptcy action or
proceeding against Owner, Borrower or Guarantor; (F) an Event of Default
described in Section
8.1(s) hereof shall have occurred or (G) if Guarantor, Borrower or
any Affiliate of any of the foregoing, in connection with any enforcement action
or exercise or assertion of any right or remedy by or on behalf of Lender under
or in connection with the Note, the Pledge or any other Loan Document, seeks a
defense, judicial intervention or injunctive or other equitable relief of any
kind or asserts in a pleading filed in connection with a judicial proceeding any
defense against Lender or any right in connection with any security for the Loan
which the court in any such action or proceeding, determines that Borrower’s
defense is without merit, or such request for judicial intervention or
injunctive or other equitable relief is unwarranted.
Section
10.2 Brokers and Financial
Advisors
. Borrower
hereby represents that, with the exception of Xxxxxxxxxxx-Xxxxxxx Company (whose
fees shall be paid by Borrower pursuant to a separate agreement), it has dealt
with no financial advisors, brokers, underwriters, placement agents, agents or
finders in connection with the Loan. Borrower shall indemnify and
hold Lender harmless from and against any and all claims, liabilities, costs and
expenses (including attorneys’ fees, whether incurred in connection with
enforcing this indemnity or defending claims of third parties) of any kind in
any way relating to or arising from a claim by any Person (including
Xxxxxxxxxxx-Xxxxxxx Company) that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein. The provisions
of this Section
10.2 shall survive the expiration and termination of this Agreement and
the repayment of the Debt.
Section
10.3 Retention of
Servicer
. Lender
reserves the right to retain the Servicer to act as its agent hereunder with
such powers as are specifically delegated to the Servicer by Lender, whether
pursuant to the terms of this Agreement, any Pooling and Servicing Agreement or
similar agreement entered into as a result of a Securitization, the Senior
Subordinate Deposit Account Agreement or otherwise, together with such other
powers as are reasonably incidental thereto. Borrower shall pay any
reasonable fees and expenses of the Servicer (i) in connection with a
release of the Collateral (or any portion thereof), (ii) from and after a
transfer of the Loan to any “master servicer” or “special servicer” for any
reason, including without limitation, as a result of a decline in the occupancy
level of the
86
Property,
(iii) in connection with an assumption or modification of the Loan,
(iv) in connection with the enforcement of the Loan Documents or
(v) in connection with any other action taken by Servicer hereunder on
behalf of Lender (which shall not include ongoing regular servicing fees
relating to the day-to-day servicing of the Loan, for which Borrower shall not
be charged).
Section
10.4 Survival
. This
Agreement and all covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall survive the
making by Lender of the Loan and the execution and delivery to Lender of the
Note, and shall continue in full force and effect so long as any of the Debt is
unpaid or such longer period if expressly set forth in this
Agreement. All Borrower’s covenants and agreements in this Agreement
shall inure to the benefit of the respective legal representatives, successors
and assigns of Lender.
Section
10.5 Lender’s
Discretion
. Whenever
pursuant to this Agreement or any other Loan Document, Lender exercises any
right given to it to approve or disapprove, or consent or withhold consent, or
any arrangement or term is to be satisfactory to Lender or is to be in Lender’s
discretion, the decision of Lender to approve or disapprove, to consent or
withhold consent, or to decide whether arrangements or terms are satisfactory or
not satisfactory, or acceptable or unacceptable or in Lender’s discretion shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
Section
10.6 Governing
Law
.
(a) THIS
AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE NOTE
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE
THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
§ 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
NEW YORK COUNTY, NEW
87
YORK AND
BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION
TRUST COMPANY AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AUTHORIZED
AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR
STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID
AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF BORROWER MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER (UNLESS LOCAL LAW REQUIRES
ANOTHER METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE
OF NEW YORK. BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER OF
ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME
AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN
NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE
OF PROCESS), AND (iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR. NOTWITHSTANDING THE FOREGOING, LENDER SHALL HAVE
THE RIGHT TO INSTITUTE ANY LEGAL SUIT, ACTION OR PROCEEDING FOR THE ENFORCEMENT
OR FORECLOSURE OF ANY LIEN ON ANY COLLATERAL FOR THE LOAN IN ANY FEDERAL OR
STATE COURT IN ANY JURISDICTION(S) THAT LENDER MAY ELECT IN ITS SOLE AND
ABSOLUTE DISCRETION, AND BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING.
Section
10.7 Modification, Waiver in
Writing
. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise
expressly provided herein, no notice to or demand on Borrower shall entitle
Borrower to any other or future notice or demand in the same, similar or other
circumstances. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege hereunder, or
under any other Loan Document, shall operate as or constitute a waiver thereof,
nor shall a single or partial exercise thereof preclude any other future
exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under any Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due
88
under the
Loan Documents, or to declare an Event of Default for failure to effect prompt
payment of any such other amount.
Section
10.8 Trial by
Jury
. BORROWER
AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR
ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY THE OTHER.
Section
10.9 Headings/Exhibits
. The
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose. The Exhibits attached hereto, are hereby incorporated by
reference as a part of the Agreement with the same force and effect as if set
forth in the body hereof.
Section
10.10 Severability
. Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section
10.11 Preferences
. Upon
the occurrence and continuance of an Event of Default, Lender shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the Debt. To the extent
Borrower makes a payment to Lender, or Lender receives proceeds of any
collateral, which is in whole or part subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
received, the Debt or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received by Lender. This provision shall survive the expiration or
termination of this Agreement and the repayment of the Debt.
Section
10.12 Waiver of
Notice
89
. Borrower shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or any other Loan Document specifically and expressly requires the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which no
Loan Document specifically and expressly requires the giving of notice by Lender
to Borrower.
Section
10.13 Remedies of
Borrower
. If
a claim or adjudication is made that Lender or any of its agents, including
Servicer, has acted unreasonably or unreasonably delayed acting in any case
where by law or under any Loan Document, Lender or any such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents, including Servicer, shall be liable for any
monetary damages, and Borrower’s sole remedy shall be to commence an action
seeking injunctive relief or declaratory judgment. Any action or
proceeding to determine whether Lender has acted reasonably shall be determined
by an action seeking declaratory judgment. Borrower specifically
waives any claim against Lender and its agents, including Servicer, with respect
to actions taken by Lender or its agents on Borrower’s behalf.
Section
10.14 Prior
Agreements
. This
Agreement and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements, understandings and negotiations among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.
Section
10.15 Offsets, Counterclaims and
Defenses
. Borrower
hereby waives the right to assert a counterclaim, other than a mandatory or
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents, including Servicer, or otherwise offset any obligations to
make payments required under the Loan Documents. Any assignee of
Lender’s interest in and to the Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which Borrower may otherwise
have against any assignor of such documents, and no such offset, counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents, and any such right to
interpose or assert any such offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
Section
10.16 Publicity
. All
news releases, publicity or advertising through any media intended to reach the
general public (collectively, “Public Releases”) issued by
Borrower or its Affiliates that refer to the Loan Documents, the Loan, Lender or
any member of the Indemnified Group, a Loan purchaser, the Servicer or the
trustee in a Securitization shall be subject to the prior written approval of
Lender. Lender shall have the right to issue any Public Releases
without Borrower’s approval.
Section
10.17 No Usury
90
Section
10.18 Conflict; Construction of
Documents
. In
the event of any conflict between the provisions of this Agreement and any of
the other Loan Documents, the provisions of this Agreement shall
control. The parties hereto acknowledge that each is represented by
separate counsel in connection with the negotiation and drafting of the Loan
Documents and that the Loan Documents shall not be subject to the principle of
construing their meaning against the party that drafted them.
Section
10.19 No Third Party
Beneficiaries
. The
Loan Documents are solely for the benefit of Lender and Borrower and nothing
contained in any Loan Document shall be deemed to confer upon anyone other than
the Lender and Borrower any right to insist upon or to enforce the performance
or observance of any of the obligations contained therein.
Section
10.20 Yield Maintenance
Premium
. BORROWER EXPRESSLY ACKNOWLEDGES AND
UNDERSTANDS THAT, PURSUANT TO THE TERMS OF THIS AGREEMENT, BORROWER HAS AGREED
THAT BORROWER SHALL BE LIABLE FOR THE PAYMENT OF THE YIELD MAINTENANCE PREMIUM
TO THE EXTENT PROVIDED HEREIN IF BORROWER PREPAYS THE LOAN FOLLOWING THE
OCCURRENCE OF AN ACCELERATION OF THE LOAN AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT. FURTHERMORE, BORROWER WAIVES ANY RIGHTS IT MAY HAVE
UNDER
91
SECTION 2954.10 OF THE CALIFORNIA
CIVIL CODE, OR ANY SUCCESSOR STATUTE, AND BORROWER AGREES THAT IF A PREPAYMENT
OF ANY OR ALL OF THIS AGREEMENT IS MADE FOLLOWING ANY ACCELERATION OF THE
MATURITY DATE BY LENDER ON ACCOUNT OF ANY TRANSFER OR DISPOSITION PROHIBITED OR
RESTRICTED HEREIN OR BY THE MORTGAGE, BORROWER SHALL BE OBLIGATED TO PAY
CONCURRENTLY THEREWITH THE YIELD MAINTENANCE PREMIUM APPLICABLE
THERETO. BORROWER EXPRESSLY ACKNOWLEDGES AND UNDERSTANDS THAT LENDER
HAS MADE THE LOAN EVIDENCED HEREBY IN RELIANCE ON THE FOREGOING AGREEMENTS AND
WAIVERS OF BORROWER, THAT LENDER WOULD NOT HAVE MADE THIS LOAN WITHOUT SUCH
AGREEMENTS AND WAIVERS OF BORROWER, AND THAT THE MAKING OF THE LOAN AT THE
INTEREST RATE AND FOR THE TERMS SET FORTH HEREIN CONSTITUTES ADEQUATE
CONSIDERATION, GIVEN WEIGHT BY THE UNDERSIGNED, FOR SUCH AGREEMENTS AND
WAIVER. Such Yield Maintenance Premium shall be required
whether payment is made by Borrower, by a Person on behalf of Borrower, or by
the purchaser at any foreclosure sale, and may be included in any bid by Lender
at such sale. Borrower further acknowledges that (A) it is a
knowledgeable real estate developer and/or investor; (B) it fully
understands the effect of the provisions of this Section 10.20, as
well as the other provisions of the Loan Documents; (C) the making of the
Loan by Lender at the Interest Rate and other terms set forth in the Loan
Documents are sufficient consideration for Borrower’s obligation to pay a Yield
Maintenance Premium (if required); and (D) Lender would not make the Loan
on the terms set forth herein without the inclusion of such
provisions. Borrower also acknowledges that the provisions of this
Agreement limiting the right of prepayment and providing for the payment of the
Yield Maintenance Premium and other charges specified herein were independently
negotiated and bargained for, and constitute a specific material part of the
consideration given by Borrower to Lender for the making of the Loan except as
expressly permitted hereunder.
Section
10.21 Assignment
. The
Loan, the Note, the Loan Documents and/or Lender’s rights, title, obligations
and interests therein may be assigned by Lender and any of its successors and
assigns to any Person at any time in its discretion, in whole or in part,
whether by operation of law (pursuant to a merger or other successor in
interest) or otherwise. Upon such assignment, all references to
Lender in this Agreement and in any Loan Document shall be deemed to refer to
such assignee or successor in interest and such assignee or successor in
interest shall thereafter stand in the place of Lender. Borrower may
not assign its rights, title, interests or obligations under this Agreement or
under any of the Loan Documents except as specifically provided in Section 5.26.5 and
Section 5.26.6
of this Agreement. In connection with any assignment, the new Lender
shall provide notice to Borrower of the identity, address and other pertinent
information pertaining to the new Lender.
Section
10.22 Certain Additional Rights of
Lender
. Notwithstanding anything
to the contrary which may be contained in this Agreement, Lender shall
have:
92
(1) the
right to routinely consult with Borrower’s management regarding the significant
business activities and business and financial developments of Borrower,
provided, however, that such consultations shall not include discussions of
environmental compliance programs or disposal of hazardous
substances. Consultation meetings should occur on a regular basis (no
less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times;
(2) the
right, in accordance with the terms of this Agreement, to examine the books and
records of Borrower at any time upon reasonable notice;
(3) the
right, in accordance with the terms of this Agreement, to receive financial
reports, including balance sheets, statements of income, shareholder’s equity
and cash flow, a management report and schedules of outstanding
indebtedness;
(4) the
right on the terms set forth herein, without restricting any other rights of
Lender under this Agreement (including any similar right), to restrict financing
to be obtained with respect to the Collateral so long as any portion of the Debt
remains outstanding;
(5) the
right on the terms set forth herein, without restricting any other right of
Lender under this Agreement or the other Loan Documents (including any similar
right), to restrict, upon the occurrence and during the continuance of an Event
of Default, Borrower’s and Owner’s payments of management, consulting, director
or similar fees to Affiliates of Borrower or Owner from the Rents;
(6) the
right on the terms set forth herein, without restricting any other rights of
Lender under this Agreement (including any similar right), to approve any
operating budget and/or capital budget of Borrower or Owner;
(7) the
right, without restricting any other rights of Lender under this Agreement
(including any similar right), to approve any acquisition by Borrower or Owner
of any other significant property (other than personal property required for the
day to day operation of the Property); and
(8) the
right, without restricting any other rights of Lender under this Agreement
(including any similar right), to restrict the transfer of interests in Borrower
held by its members, and the right to restrict the transfer of interests in such
member, except for any transfer that is a Permitted Transfer.
The
rights described above may be exercised directly or indirectly by any Person
that owns substantially all of the ownership interests in Lender. The
provisions of this Section
10.22 are intended to satisfy the requirement of management rights
for purposes of the Department of Labor “plan assets” regulation 29 C.F.R.,
Section 2510.3-101.
Section
10.23 Set-Off
. In
addition to any rights and remedies of Lender provided by this Loan Agreement
and by law, Lender shall have the right, without prior notice to Borrower, any
such notice being expressly waived by Borrower to the extent permitted by
applicable law, upon any amount becoming due
93
and
payable by Borrower hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to
notify Borrower after any such set-off and application made by Lender; provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
Section
10.24 Counterparts
. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section
10.25 Proofs of
Claim
. In
the case of any receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other proceedings affecting Borrower,
Owner, Sole Member or Guarantor, or any of their respective creditors or
property, Lender, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order to
have the claims of Lender allowed in such proceedings for the entire Debt at the
date of the institution of such proceedings and for any additional amount which
may become due and payable by Borrower hereunder after such date.
Section
10.26 Waiver of
Stay
. Borrower
agrees (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
Borrower from paying all or any portion of the Debt or which may affect the
covenants or the performance of this Agreement; and Borrower (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE
11
SENIOR
LOAN
Section
11.1 Compliance with Senior Loan
Documents
. Borrower
shall (or shall cause Owner to): (a) pay all principal, interest and
other sums required to be paid by Owner under and pursuant to the provisions of
the Senior Loan Documents; (b) diligently perform and observe all of the terms,
covenants and conditions of the Senior Loan Documents on the part of Owner to be
performed and observed, unless such performance or observance shall be waived in
writing by Senior Lender; (c) promptly notify
94
Lender of
the giving of any notice by Senior Lender to Owner or Borrower of any default by
Owner in the performance or observance of any of the terms, covenants or
conditions of the Senior Loan Documents on the part of Owner to be performed or
observed and deliver to Lender a true copy of each such notice; (d) deliver a
true, correct and complete copy of all notices, demands, requests or material
correspondence (including electronically transmitted items) given or received by
Owner or Guarantor to or from the Senior Lender or its agent; and (e) not enter
into or be bound by any Senior Loan Documents from and after the date hereof,
that are not approved by Lender. Without limiting the foregoing,
Borrower shall cause Owner to fund all reserves required to be funded pursuant
to the Senior Loan Documents. In the event of a refinancing of the
Senior Loan permitted by the terms of this Agreement, Borrower will cause all
reserves on deposit with Senior Lender to be utilized by Owner to reduce the
amount due and payable to the Senior Lender or alternatively shall be remitted
to Lender as a mandatory prepayment of the Loan.
Section
11.2 Senior Loan
Defaults
.
(a) Without
limiting the generality of the other provisions of this Agreement, and without
waiving or releasing Borrower from any of its obligations hereunder, if there
shall occur any Event of Default (as such term is defined in the Senior Loan
Agreement) under the Senior Loan Documents, Borrower hereby expressly agrees
that Lender shall have the immediate right, without prior notice to Borrower,
but shall be under no obligation: (i) to pay all or any part of the
Senior Loan and any other sums that are then due and payable, and to perform any
act or take any action on behalf of Borrower and/or Owner as may be appropriate,
to cause all of the terms, covenants and conditions of the Senior Loan Documents
on the part of Owner to be performed or observed thereunder to be promptly
performed or observed; and (ii) to pay any other amounts and take any other
action as Lender, in its sole and absolute discretion, shall deem advisable to
protect or preserve the rights and interests of Lender in the Loan and/or the
Collateral. All sums so paid and the costs and expenses incurred by
Lender in exercising rights under this Section 11.2
(including reasonable attorneys’ fees) (i) shall constitute additional
advances of the Loan to Borrower, (ii) shall increase the then unpaid
Principal, (iii) shall bear interest at the Default Rate for the period
from the date that such costs or expenses were incurred to the date of payment
to Lender, (iv) shall constitute a portion of the Debt, and (v) shall
be secured by the Pledge.
(b) Borrower
hereby indemnifies Lender from and against all liabilities, obligations, losses,
damages, penalties, assessments, actions, or causes of action, judgments, suits,
claims, demands, costs, expenses (including reasonable attorneys’ and other
professional fees, whether or not suit is brought, and settlement costs) and
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Lender as a result of the foregoing actions, other than
those caused directly by the gross negligence or willful malfeasance of
Lender. Lender shall have no obligation to Borrower, Sole Member,
Owner or any other party to make any such payment or
performance. Borrower shall not impede, interfere with, hinder or
delay, and shall not permit Owner to impede, interfere with, hinder or delay,
any effort or action on the part of Lender to cure any Default or Event of
Default (as such terms are defined in the Senior Loan Agreement) under the
Senior Loan, or to otherwise protect or
95
preserve
Lender’s interests in the Loan and the Collateral following such Default or
Event of Default (as such terms are defined in the Senior Loan Agreement) under
the Senior Loan.
(c) Any
default or breach by Owner under the Senior Loan Documents which is not cured
prior to the expiration of any applicable grace, notice or cure period afforded
to Owner under the Senior Loan Documents shall constitute an Event of Default,
without regard to any subsequent payment or performance of any such obligations
by Lender. Borrower hereby grants Lender and any person designated by
Lender the right to enter upon the Property at any time following the occurrence
and during the continuance of any Event of Default (as such terms are defined in
the Senior Loan Agreement), or the assertion by Senior Lender that an Event of
Default (as such terms are defined in the Senior Loan Agreement) has occurred
under the Senior Loan Documents, for the purpose of taking any such action or to
appear in, defend or bring any action or proceeding to protect Borrower’s,
Owner’s and/or Lender’s interest. Lender may take such action as
Lender deems reasonably necessary or desirable to carry out the intents and
purposes of this subsection (including communicating with Senior Lender with
respect to any Senior Loan defaults), without prior notice to, or consent from,
Borrower. Lender shall have no obligation to complete any cure or
attempted cure undertaken or commenced by Lender.
(d) If
Lender shall receive a copy of any notice of default under the Senior Loan
Documents sent by Senior Lender to Owner, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender, in
good faith, in reliance thereon. As a material inducement to Lender’s
making the Loan, Borrower hereby absolutely and unconditionally releases and
waives all claims against Lender arising out of Lender’s exercise of its rights
and remedies provided in this Section 11.2, except
for Lender’s gross negligence or willful misconduct. In the event
that Lender makes any payment in respect of the Senior Loan, Lender shall be
subrogated to all of the rights of Senior Lender under the Senior Loan Documents
against the Property, in addition to all other rights it may have under the Loan
Documents.
Section
11.3 Senior Loan
Estoppels
. Borrower
shall (or shall cause Owner to), from time to time, use commercially reasonable
efforts to obtain from Senior Lender such certificates of estoppel with respect
to compliance by Owner with the terms of the Senior Loan Documents as may be
reasonably requested by Lender. In the event or to the extent that
Senior Lender is not legally obligated to deliver such certificates of estoppel
and is unwilling to deliver the same, or is legally obligated to deliver such
certificates of estoppel but breaches such obligation, then Borrower shall not
be in breach of this provision so long as Borrower furnishes to
Lender an estoppel executed by Borrower and Owner expressly representing to
Lender the information requested by Lender regarding compliance by Owner with
the terms of the Senior Loan Documents. Borrower hereby indemnifies
Lender from and against all liabilities, obligations, losses, damages,
penalties, assessments, actions, or causes of action, judgments, suits, claims,
demands, costs, expenses (including reasonable attorneys’ and other professional
fees, whether or not suit is brought and settlement costs) and disbursements of
any kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Lender based in whole or in part upon any fact, event, condition, or
circumstances relating to the Senior Loan which was misrepresented in, or which
warrants disclosure and was omitted from such
96
estoppel
executed by Borrower and Owner, other than those caused directly by the gross
negligence or willful malfeasance of Lender.
Section
11.4 No Amendments to Senior Loan
Documents
. Without
obtaining the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed, Borrower shall not cause or
permit Owner to (i) enter into any amendment or modification of any of the
Senior Loan Documents or (ii) grant to Senior Lender any consent or
waiver. Borrower shall cause Owner to provide Lender with a copy of
any amendment or modification to the Senior Loan Documents within five business
days after the execution thereof.
Section
11.5 Acquisition of the Senior
Loan
. Neither
Borrower, Sole Member nor Owner nor any Affiliate of any of them shall acquire
or agree to acquire the Senior Loan, or any portion thereof or any interest
therein, or any direct or indirect ownership interest in the holder of the
Senior Loan, via purchase, transfer, exchange or otherwise, and any breach or
attempted breach of this provision shall constitute an Event of Default
hereunder. If, solely by operation of applicable subrogation law,
Borrower, Sole Member or Owner or any Affiliate of any of them shall have failed
to comply with the foregoing, then Borrower: (i) shall promptly
notify Lender of such failure; (ii) shall cause any and all such prohibited
parties acquiring any interest in the Senior Loan
Documents: (A) not to enforce the Senior Loan Documents; and
(B) upon the request of Lender, to the extent any of such prohibited
parties has or have the power or authority to do so, to
promptly: (1) cancel the promissory note evidencing the Senior
Loan, (2) reconvey and release the lien securing the Senior Loan and any
other collateral under the Senior Loan Documents, and (3) discontinue and
terminate any enforcement proceeding(s) under the Senior Loan
Documents.
Section
11.6 Deed in Lieu of
Foreclosure
. Without
the express prior written consent of Lender, Borrower shall not, and Borrower
shall not cause, suffer or permit Owner to, enter into any deed-in-lieu or
consensual foreclosure with or for the benefit of Senior Lender or any of its
affiliates.
Section
11.7 Refinancing or Prepayment of
the Senior Loan
. Neither
Borrower, nor Sole Member nor Owner shall refinance the Senior Loan without the
prior written consent of Lender, unless such refinancing results in the
concurrent payment in full of the Debt.
Section
11.8 Intercreditor
Agreement
. Borrower
hereby acknowledges and agrees that any intercreditor agreements entered into
among Lender, Approved Junior Mezzanine Lender and Senior Lender (collectively,
the “Intercreditor
Agreement”) will be solely for the benefit of Lender, Senior Lender and
Approved Junior Mezzanine Lender, and that Borrower and Owner shall not be
intended third-party beneficiaries of any of the provisions therein, shall have
no rights thereunder and shall not be entitled to rely on any of the provisions
contained therein. Lender, Senior Lender and
97
Approved
Junior Mezzanine Lender shall have no obligation to disclose to Borrower the
contents of the intercreditor agreement. Borrower’s obligations
hereunder are and will be independent of such intercreditor agreement and shall
remain unmodified by the terms and provisions thereof.
98
IN WITNESS WHEREOF, the
parties hereto have caused this Senior Mezzanine Loan Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.
BORROWER:
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||
XXXXXXX PROPERTIES - XXXXXXX
TOWERS SENIOR
MEZZANINE, LLC, a
Delaware limited liability company
|
||
By:
|
/s/
XXXX X. XXXXXX
|
|
Name:
Xxxx X. Xxxxxx
|
||
Its:
Vice President & Secretary
|
LENDER:
|
||
GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC.,
a
Delaware corporation
|
||
By:
|
/s/
XXXXXX X. XXXX
|
|
Name:
Xxxxxx X. Xxxx
|
||
Title:
Managing Director
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