LOAN AGREEMENT
Exhibit 10.2
This Loan Agreement (this "Agreement") is entered into as of January 26, 2016 by and between XXXXXXXX MORTGAGE HOLDINGS, LLC, a Delaware limited liability company (together with its successors and assigns, "Lender"), and SUNSET & XXXXXXX INVESTORS LLC, a Colorado limited liability company ("Borrower").
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
ARTICLE 2
Section 2.2 Interest Rate; Late Charge.
(1) The outstanding principal balance of the Loan (including any amounts added to principal under the Loan Documents) shall bear interest at the Interest Rate. The Interest Rate shall be computed as follows:
(a) From the Closing Date to the first Interest Adjustment Date following the Closing Date, the Interest Rate shall be equal to the rate of nine and one half percent (9.5%) per annum.
(b) Lender shall adjust the Interest Rate in accordance with this Section 2.2(1)(b) effective on each Interest Adjustment Date. The adjusted Interest Rate which becomes effective on each Interest Adjustment Date shall be equal to the Then Current Index applicable to the Interest Adjustment Date plus the Margin per annum. For purposes of clarification and notwithstanding anything to the contrary contained in this Agreement, the Interest Rate shall in no event be less than nine and one half percent (9.5%) per annum.
(2) Interest owing for each month shall be computed on the basis of a fraction, the denominator of which is three hundred sixty (360) and the numerator of which is the actual number of days elapsed from the first day of such month provided that interest owing during the First Interest Period shall be computed on the number of days elapsed from the Closing Date through and including the last day of the calendar month immediately following the month in which the Closing Date occurred ("First Interest Period"). Principal and other amortization payments, if any, shall be applied to the outstanding principal balance as and when actually received.
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(3) If Borrower fails to pay any installment of interest or principal within five (5) days of (and including) the date on which the same is due (other than the principal payment due on the Maturity Date), Borrower shall pay to Lender a late charge on such past-due amount, as liquidated damages and not as a penalty, equal to five percent (5%) of such amount, but not in excess of the maximum amount of interest allowed by applicable law. The foregoing late charge is intended to compensate Lender for the expenses incident to handling any such delinquent payment and for the losses incurred by Lender as a result of such delinquent payment. Borrower agrees that, considering all of the circumstances existing on the date this Agreement is executed, the late charge represents a reasonable estimate of the costs and losses Lender will incur by reason of late payment. Borrower and Lender further agree that proof of actual losses would be costly, inconvenient, impracticable and extremely difficult to fix. Acceptance of the late charge shall not constitute a waiver of the default arising from the overdue installment, and shall not prevent Lender from exercising any other rights or remedies available to Lender. While any Event of Default exists, the outstanding principal balance of the Loan (including any amounts added to principal under the Loan Documents) shall bear interest at the Default Rate.
Section 2.3 Terms of Payment. The Loan shall be payable as follows:
(a) Borrower shall deliver to Lender a written request to extend the term of the Loan (the "Extension Request") at least thirty (30) days, but not more than sixty (60) days, before the Initial Stated Maturity Date.
(b) No Event of Default or Potential Default has occurred and is continuing on the date on which Borrower delivers the Extension Request to Lender, or on the date the extension period commences.
(c) Borrower shall have paid to Lender, in immediately available funds, an extension fee equal to $107,000.
(d) During the extended term of the Loan, all terms and conditions of the Loan Documents shall continue to apply except that Borrower shall have no further right to extend the term of the Loan.
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(e) Not less than 15 days prior to the Initial Stated Maturity Date and not more than 45 days prior to the Maturity Date, Borrower shall have paid to Lender in immediately available funds for deposit into the Interest Reserve an amount estimated by Lender, in its sole discretion, to pay the Monthly Interest Payments due during the six (6) month extension period as determined by Lender, based on the outstanding principal balance of the Loan and Interest Rate in effect thirty (30) days prior to the Initial Stated Maturity Date, the estimated funds remaining in the Interest Reserve on the Initial Stated Maturity Date, and Lender's estimate of the Net Operating Income estimated to be available for the payment of the Monthly Interest Payment during such six (6) month extension period.
(f) Borrower shall pay to Lender (from Borrower's funds) the Extension Tax Deposit for deposit into the Tax Reserve in an amount to be determined by Lender pursuant to Section 3.1(1).
(g) Lender shall have received a current tenant estoppel certificate executed by Gelson's in favor of Lender, in form and substance acceptable to Lender.
(h) Lender shall have determined, in its reasonable discretion, that Borrower is in compliance with Section 6.22. Lender shall have determined in its reasonable discretion either (i) that all Entitlements and Site Plan approval as required under the Gelson's Work Letter have been obtained or (ii) Borrower has diligently pursued the approval and issuance all such Entitlements and Site Plan Approval and that such Entitlements and Site Plan approval can be obtained on or before the expiration of the Entitlement Period and that the Building Permits can be obtained on or before the expiration of the Permit Period as determined by Lender's Consultant.
(i) Lender shall have received the most recent financial statement of Guarantor required under the Guaranty and if requested by Lender copies of Guarantor's most recent bank statements and a Compliance Certificate executed by Guarantor, certifying that Guarantor's Tangible Net Worth equals or exceeds Five Million Dollars ($5,000,000.00) and Guarantor's Cash Liquidity Balances equal or exceed Five Hundred Thousand Dollars ($500,000.00).
(j) Borrower shall have delivered to Lender, together with its notice pursuant to clause (a) of this Section 2.3(3) and as of the Initial Stated Maturity Date, a Manager's Certificate in favor of Lender, certifying that no Default or Event of Default exists and that each of the representations and warranties of Borrower contained in the Loan Documents is true, complete and correct in all material respects as of the date of such Manager's Certificate;
(k) Borrower shall have provided Lender with such information as Lender may reasonably request to enable Lender to confirm Borrower's continued compliance with Article 9.
(l) Borrower shall execute and deliver such other instruments, certificates, opinions of counsel and documentation as Lender shall reasonably request in order to preserve, confirm or secure the Liens and security granted to Lender by the Loan Documents, including any amendments, modifications or supplements to any of the Loan Documents, endorsements to Lender's title insurance policy and, if required by Lender, estoppels and other certificates.
(m) Borrower shall pay all costs and expenses incurred by Lender in connection with such extension of the Loan, including Lender's reasonable attorneys' fees and disbursements.
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(n) Lender shall have received and approved certificates of insurance evidencing that the insurance coverage required in Article 4.1 hereof has been obtained in compliance with the requirements of Article 4 hereof.
(4) Prepayment. From the Closing Date through and including July 31, 2016 (the "Initial Prepayment Premium Period") and if the Extension Option is exercised, from the first day following the Initial Maturity Date through and including April 30, 2017 (the "Extension Prepayment Premium Period"), Borrower may prepay the Loan, in whole but not in part, upon not less than thirty (30) days' prior written notice to Lender and upon payment of the Prepayment Premium, plus any and all accrued and unpaid interest and any other amounts due and owing under the Loan Documents. Following the expiration of the Initial Prepayment Premium Period and prior to the Initial Stated Maturity Date and if the Extension Option is exercised pursuant to Section 2.3(3), following the expiration of the Extension Prepayment Premium Period, upon not less than thirty (30) days' prior written notice to Lender, Borrower may prepay the Loan, in whole but not in part, upon payment of any and all accrued and unpaid interest and any other amounts due and owing under the Loan Documents. If the Loan is prepaid, in whole (or in whole or in part pursuant to a casualty or condemnation, or pursuant to Section 6.5), each such prepayment shall be made to Lender on the prepayment date specified in the applicable notice to Lender pursuant hereto, and (in every case) together with the accrued and unpaid interest on the principal amount prepaid. If the Loan is accelerated during either the Initial Prepayment Premium Period or the Extension Prepayment Premium Period for any reason other than casualty or condemnation or pursuant to Section 6.5, Borrower shall pay to Lender, in addition to all other amounts outstanding under the Loan Documents, the Prepayment Premium. For the avoidance of doubt, Borrower shall not be required to pay a prepayment premium in connection with any full or partial prepayment of the Loan pursuant to a casualty or condemnation, or pursuant to Section 6.5. Borrower may revoke a prepayment notice or extend the date of prepayment at any time prior to the date of prepayment without prejudice to Borrower's right to deliver a prepayment notice at some later date; provided, that (i) Borrower shall keep Lender reasonably apprised of the status of any refinancing during the period between the delivery of the prepayment notice and the delivery of the revocation notice, and (ii) Borrower shall reimburse Lender, promptly on demand, for any reasonable out-of-pocket costs and expenses incurred by Lender in reliance on the revoked or extended notice, or in connection with the anticipated prepayment of the Loan. Borrower acknowledges that the Prepayment Premium required by this Section constitutes partial compensation to Lender for the cost of reinvesting the Loan proceeds and for the loss of the contracted rate of return on the Loan. Furthermore, Borrower acknowledges that the loss that may be sustained by Lender as a result of such a prepayment by Borrower is not susceptible of precise calculation and the Prepayment Premium represents the good faith effort of Borrower and Lender to compensate Lender for such loss. Borrower confirms that Lender's agreement to make the Loan at the interest rate and on the other terms set forth herein constitutes adequate and valuable consideration, given individual weight by Borrower, for the prepayment provisions set forth in this Section 2.3(4). By initialing this provision where indicated below, Borrower waives any rights it may have under California Civil Code Section 2954.10, or any successor statute, and Borrower confirms that Lender's agreement to make the Loan at the interest rate(s) and on the other terms set forth herein constitutes adequate and valuable consideration, given individual weight by Borrower, for the prepayment provisions set forth in this Section 2.3(4).
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Borrower's Initials
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ARTICLE 3
Section 3.1 Reserves. The following reserves shall be required in connection with the Loan:
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(2) Predevelopment Expense Reserve. Lender will holdback from Loan proceeds disbursed on the Closing Date the sum of $1,437,000.00 to be deposited into a reserve ("Predevelopment Expense Reserve") to be used solely for the purpose of reimbursing Borrower for Qualified Costs actually paid by Borrower, in each case, subject to and in accordance with the terms and conditions set forth in this Section 3.1(2).
(a) There shall exist no Event of Default or Potential Default (currently and after giving effect to the requested disbursement);
(b) Each request for a disbursement from the Predevelopment Expense Reserve ("Disbursement Request") shall be submitted on the form attached hereto as Schedule 3.1(2)(a), or on such other form as Lender, in its discretion, may require or approve, and shall specify the amount of the requested disbursement and shall be accompanied by appropriate paid invoices and receipts, cancelled checks, bills paid affidavits, lien waivers (if applicable), executed copies of contracts and/or engagement letters between Borrower and third party contractors, title updates, endorsements to Lender's title insurance policy, and other documents as may be required by Lender to evidence that the costs are Qualified Costs.
(c) Disbursement Requests may not be made more than one (1) time per month and, upon satisfaction of all of the conditions precedent to such disbursement otherwise set forth herein, Lender shall disburse such requested disbursement to Borrower within seven (7) Business Days following receipt and approval of the Disbursement Request, together with all supporting certifications and documentation required to be delivered pursuant to this Section 3.1(2) with regard to the disbursement;
(d) Each Disbursement Request shall, among other things, include a summary of the Qualified Costs by Approved Budget line item (including the amounts requested by item, payee and budgeted amounts), and a detailed schedule of the Qualified Costs incurred to date and the remaining Qualified Costs estimated by Borrower to obtain the following (collectively, the "Gelson's Entitlements") (i) the Entitlements on or before the expiration of the Entitlement Period, (ii) Site Plan approval by the City in accordance with the Gelson's Lease, (iii) governmental approvals and Gelson's approval (to the extent required under the Gelson's Lease) of Lessor's Plan's necessary to obtain the Building Permits in accordance with the Gelson's Work Letter, and (iv) issuance of the Building Permits on or before the expiration of the Permit Period in accordance with the terms of the Gelson's Lease;
(e) If Borrower becomes aware that there will need to be changes in any line item in the Approved Budget or becomes aware that the total cost of obtaining the Gelson's Entitlements will exceed the amount set forth in the Approved Budget or generate a surplus, Borrower shall notify Lender and Servicer in writing of the same and shall by the date which is no later than the date Borrower submits its next Disbursement Request to Lender submit a revised proposed budget simultaneously to Lender and Servicer for Lender's approval (and when so approved by Lender, the "Approved Budget"). The Approved Budget unless and until revised in accordance with this subsection (e) is attached hereto as Schedule 3.1(2)(b). Lender's approval of a revised proposed budget shall not increase the Predevelopment Expense Reserve or excuse Borrower from Borrower's obligation under subsection (f) below. Borrower shall have the right, upon the prior written approval of Lender, in its sole and absolute discretion, to reallocate savings on a budget line item which fully completed to an overage on a budget line item;
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(f) If Lender, at any time and from time to time in Lender's judgment, determines (i) the balance of the funds in the Predevelopment Expense Reserve will not be sufficient to pay in full all costs required to obtain all Gelson's Entitlements or (ii) any amount shown in any cost category set forth in the Approved Budget will not be sufficient to pay in full the items to which such amount is allocated (each an "Available Funds Deficiency"), then Borrower shall be required to pay (from sources other than the Predevelopment Expense Reserve) Qualified Costs in an amount equal to such Available Funds Deficiency, before Borrower shall be entitled to receive any further disbursements from the Predevelopment Expense Reserve. As of the Closing Date, there is an Available Funds Deficiency in the amount of $55,891.00 (i.e., the difference between the total costs set forth on the Approved Budget in the amount of $1,493,891 and the Predevelopment Expense Reserve funds in the amount of $1,437,000). As a result, Borrower shall be required to pay (from sources other than the Predevelopment Expense Reserve) Qualified Costs in an amount equal to such Available Funds Deficiency, before Borrower shall be entitled to receive the first disbursements from the Predevelopment Expense Reserve;
(g) Each disbursement from the Predevelopment Expense Reserve must be used solely for the purpose of (i) reimbursing Borrower for Qualified Costs specifically identified on and within the amounts set forth in each line item of the Approved Budget. Borrower shall not use any portion of any funds disbursed from the Predevelopment Expense Reserve for payment of any other cost except as specifically set forth in a Disbursement Request approved by Lender in writing.
(h) Borrower shall have submitted to Lender evidence (including canceled checks, paid invoices and receipts) satisfactory to Lender that the proceeds of all prior disbursements have been used for the purposes for which such disbursements were requested.
(i) To the extent a Disbursement Request includes a request for payment to a Project Contractor under a Project Contract, then, as additional collateral for the Loan, Lender shall have received a written assignment of such Project Contract in favor of Lender, and if applicable, any and all Plans prepared by such Project Contractor, duly executed by Borrower and the Project Contractor, in form and substance acceptable to Lender;
(j) Borrower shall have paid Lender's costs and expenses in connection with such disbursement (including title charges, attorney's fees and Servicer's processing fee of $1,300.00) and any fees and costs of Lender's Consultant;
(k) Lender shall have no obligation to make any disbursement for less than $20,000.00, except for the final disbursement, or to make disbursements more often than once in any one calendar month;
(l) No Disbursement Request may be submitted by Borrower after January 2, 2017 and under no circumstances shall any disbursements be made from the Predevelopment Expense Reserve on or after the date that is ten (10) Business Days prior to the Initial Maturity Date whether or not the Initial Maturity Date is extended pursuant to the terms of this Agreement.
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(m) Borrower shall certify that the representations and warranties contained in this Agreement and in all other Loan Documents are true and correct in all material respects as of the date of the Disbursement Request and as of the date of the requested disbursement;
(n) No (i) material condemnation or materially adverse, as determined by Lender, zoning or usage change proceeding shall have occurred or shall have been threatened against the Project which would have, in Lender's judgment, a material adverse effect on the Loan, the Project, or Borrower's or Guarantor's ability to perform its obligations under the Loan Documents, (ii) damage to the Project by fire or other casualty has occurred which has not been repaired, and (iii) law, regulation, ordinance, moratorium, injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter shall have been enacted, adopted, or threatened in writing by any governmental authority which would have, in Lender's judgment, a material adverse effect on the Loan, the Project, or Borrower's or Guarantor's ability to perform its obligations under the Loan Documents.
(o) The Gelson's Lease is in full force and effect and no default or event of default under the Gelson's Lease by Gelson's or Borrower exists.
(a) Borrower shall pay to Lender for deposit into an interest reserve established by Lender (the "Interest Reserve") the following amounts: (A) the sum of $1,031,000 on the Closing Date ("Initial Interest Reserve Deposit") and (B) as a condition to extending the Initial Stated Maturity Date pursuant to Section 2.3(3) hereof, the amount determined by Lender pursuant to Section 2.3(3) (the "Extension Interest Reserve Deposit"). The Initial Interest Reserve Deposit shall be withheld by Lender from the Loan Proceeds disbursed on the Closing Date for deposit in the Interest Reserve.
(b) So long as no Event of Default is continuing and there are sufficient funds in the Interest Reserve, on each Payment Due Date Lender shall withdraw amounts from the Interest Reserve Account sufficient to pay the Monthly Interest Payment then due and shall so apply such sums.
Section 3.2 General Provisions Regarding Reserves.
(1) All funds deposited in the Reserves shall be held by Lender, without interest, and may be commingled with Lender's general funds.
(2) As additional security for the Loan, Borrower hereby grants to Lender a first-priority security interest in all funds deposited in the Reserves, and any interest earned thereon. In addition to the rights and remedies herein set forth, Lender shall have all of the rights and remedies with respect to the funds in the Reserves available to a secured party at law or in equity, including, without limitation, the rights of a secured party under the Uniform Commercial Code, as if such rights and remedies were fully set forth herein.
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(3) This Agreement shall constitute a security agreement for purposes of the Uniform Commercial Code and other applicable law. Borrower acknowledges and agrees that the funds in the Reserves are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof, and neither Borrower nor any other Borrower Party shall have any right of withdrawal with respect to any Reserve funds except with the prior written consent of Lender or as otherwise provided herein. The Reserve funds shall not constitute trust funds and may be commingled with other monies held by Lender.
(4) While an Event of Default or a Potential Default exists, Lender shall have no obligation to disburse any funds from the Reserves, and while an Event of Default exists, Lender shall be entitled, without notice to Borrower or any other Borrower Party, to apply any funds in the Reserves to satisfy Borrower's obligations under the Loan Documents in such order and manner as Lender shall determine, but no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender.
(5) The insufficiency of Reserve funds on deposit with Lender shall not absolve Borrower of the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.
Section 3.3 The Reserves Generally.
(1) To secure the full and punctual payment and performance of the Debt and all of the obligations under the Loan Documents, Borrower hereby collaterally assigns and grants a security interest in and pledges to Lender, a first priority continuing security interest in and to the following, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the βAccount Collateralβ):
(a) the Reserves and all Reserve Funds deposited therein, and all other cash, checks, drafts, tax escrows, certificates, instruments, and other property, including, without limitation, all deposits and/or wire transfers from time to time deposited or held in, credited to or made to the Reserves;
(b) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and
(c) to the extent not covered by clauses (a) or (b) above, all proceeds (as defined under the UCC) of any or all of the foregoing.
(2) In addition to the rights and remedies herein set forth, Lender shall have all of the rights and remedies with respect to the Account Collateral available to a secured party at law or in equity, including, without limitation, the rights of a secured party under the UCC, as if such rights and remedies were fully set forth herein.
(3) This Agreement shall constitute a security agreement for purposes of the Uniform Commercial Code and other applicable law. Borrower acknowledges and agrees that the Reserve Funds are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof, and Borrower shall have no right of withdrawal with respect to any Reserve Funds except with the prior written consent of Lender or as otherwise provided herein. The Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender.
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(4) Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in the Account Collateral or permit any lien to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto. Lender shall have the right to file a financing statement or statements under the UCC in connection with any of the Account Collateral with respect thereto in the form required to properly perfect Lenderβs security interest therein. Borrower agrees that at any time and from time to time, at the expense of Borrower,, Borrower will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable, or that Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Lender to exercise and enforce its rights and remedies hereunder with respect to any Account Collateral.
(5) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon the occurrence and during the continuance of an Event of Default, without notice from Lender (i) Borrower shall have no rights in respect of the Account Collateral and (ii) Lender shall have all rights and remedies with respect the Reserve Funds and the amounts on deposit therein and the Account Collateral as described in this Agreement, in the Security Instrument or in any of the other Loan Documents, in addition to all of the rights and remedies available to a secured party under the UCC, and, notwithstanding anything to the contrary contained in this Agreement or in the Security Instrument, may apply the Account Collateral as Lender determines in its sole discretion including, but not limited to, payment of the Debt.
(6) The insufficiency of Reserve Funds on deposit with Lender shall not absolve Borrower of the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.
(7) Borrower shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys' fees and expenses) arising from or in any way connected with the Account Collateral or the performance of the obligations for which the Reserve Funds were established, except to the extent arising from the gross negligence or willful misconduct of Lender or Account Bank, or their respective agents or employees. Borrower shall assign to Lender all rights and claims Borrower may have against all Persons supplying labor, materials or other services which are to be paid from or secured by the Account Collateral; provided, however, that Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.
(8) Borrower acknowledges and agrees that it solely shall be, and shall at all times remain, liable to Lender for all fees, charges, costs and expenses in connection with the Reserve Funds, this Agreement and the enforcement hereof, including, without limitation, any commercially reasonable monthly or annual fees or charges as may be assessed by Lender in connection with the administration of the Reserves and the Account Collateral and the reasonable fees and expenses of legal counsel to Lender as needed to enforce, protect or preserve the rights and remedies of Lender under this Agreement.
ARTICLE 4
Section 4.1 Insurance. Borrower shall maintain insurance as follows:
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Section 4.2 Application of Loss Proceeds.
(1) Lender shall make Loss Proceeds available for restoration of the Project in the following circumstances:
(a) if the loss is less than or equal to the Restoration Threshold; or
(b) if the loss exceeds the Restoration Threshold, but is not more than twenty-five percent (25%) of the replacement value of the improvements (if the Project contains multiple phases or stand-alone structures, such calculation to be based on the damaged phase or structure, not the Project as a whole), provided Lender determines that (i) the Net Operating Income during restoration will be sufficient to pay Debt Service during restoration; and (ii) restoration and repair of the Project to a condition approved by Lender will be completed within one (1) year (unless any lease requires earlier completion) after the date of loss or casualty and in any event ninety (90) days prior to the Maturity Date.
(2) If Lender determines that the projected costs to complete the restoration and repair of the Project exceed the Loss Proceeds available to pay such costs (a "Shortfall"), then prior to any disbursement of Loss Proceeds to pay such costs, Borrower shall have provided Lender with satisfactory evidence that Borrower has sufficient sources of funds from which to pay the Shortfall. If required by Lender, Borrower shall first pay restoration and repair costs in an amount equal to the Shortfall prior to receiving any Loss Proceeds.
(3) If Borrower does not qualify for Loss Proceeds under either Sections 4.2(1)(a) or 4.2(1)(b), Lender in its sole discretion may either apply Loss Proceeds to the payment of amounts owing under the Loan Documents or allow all or a portion of such Loss Proceeds to be used for the restoration of the Project.
(4) Loss Proceeds applied to restoration will be disbursed in accordance with the advance conditions under Sections 3.5(1), 3.5(2) and 3.5(3). Any Loss Proceeds remaining after payment of all restoration costs shall be applied by Lender to the payment of amounts owing under the Loan Documents.
(5) If Lender makes the Loss Proceeds from a casualty available to Borrower, Borrower shall promptly commence and diligently pursue to completion restoration of the Project such that, after restoration, the Project will be in compliance with and permitted under all applicable zoning, building and land use laws, rules, regulations and ordinances.
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IF BORROWER FAILS TO PROVIDE LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS LOAN AGREEMENT, INCLUDING, WITHOUT LIMITATION, FLOOD INSURANCE TO THE EXTENT EXPRESSLY REQUIRED HEREUNDER, LENDER MAY, IN ITS SOLE DISCRETION (AND WITHOUT PRIOR NOTICE TO BORROWER IF THERE IS A LAPSE IN COVERAGE), PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT THE PROJECT; SUCH INSURANCE MAY BE PLACED BY LENDER DURING ANY STATUTORY OR OTHER REQUIRED NOTICE PERIOD. BORROWER MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE TO LENDER THAT BORROWER HAS OBTAINED THE APPLICABLE INSURANCE COVERAGE ELSEWHERE. LENDER SHALL HAVE NO DUTY TO PLACE SUCH INSURANCE, LENDER SHALL HAVE NO LIABILITY WITH RESPECT TO THE TERMS OF SUCH INSURANCE OR THE CREDIT OF THE INSURER IF LENDER ELECTS TO PLACE SUCH INSURANCE, AND BORROWER IS NOT ENTITLED TO RELY ON THE EXISTENCE OF ANY LENDER PLACED COVERAGE EVEN IF BORROWER HAS BEEN NOTIFIED THAT LENDER HAS ELECTED TO PLACE SUCH COVERAGE.
BORROWER IS RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY LENDER, INCLUDING INSURANCE PURCHASED DURING ANY NOTICE PERIOD. ALL ACTUAL AND REASONABLE EXPENSES INCURRED BY LENDER IN OBTAINING SUCH INSURANCE AND KEEPING IT IN EFFECT SHALL BE PAID BY BORROWER TO LENDER UPON DEMAND AND UNTIL PAID SHALL BE SECURED BY THE SECURITY INSTRUMENT AND SHALL BEAR INTEREST AT THE DEFAULT RATE. AT LENDER'S OPTION, THE COST OF THIS INSURANCE MAY BE ADDED TO THE LOAN BALANCE. IF THE COST IS ADDED TO THE LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF THE LENDER PURCHASED COVERAGE MAY BE THE DATE THE PRIOR COVERAGE LAPSED OR THE DATE BORROWER FAILED TO PROVIDE PROOF OF COVERAGE TO LENDER.
THE COVERAGE PURCHASED BY LENDER MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE BORROWER CAN OTHERWISE OBTAIN ON ITS OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.
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ARTICLE 5
GENERAL REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.3 Financial Condition; Litigation; Other Secured Transactions.
(1) The most recent financial statements delivered by Borrower and Guarantor (a) are true and correct in all material respects, with no significant change since the date of preparation, and (b) fairly present the financial condition of Borrower and Guarantor as of the date thereof and the results of Borrower's and Guarantor 's operations for the period covered thereby. Except as disclosed in such financial statements, there are no liabilities (fixed or contingent) affecting the Project, Borrower or Guarantor. Except as disclosed in Schedule 5.3, there is no litigation, administrative proceeding, investigation or other legal action (including any proceeding under any state or federal bankruptcy or insolvency law) pending or, to the knowledge of Borrower, threatened, against the Project, Borrower, or Guarantor.
(2) Borrower is not, and has not been, bound (whether as a result of a merger or otherwise) as a debtor under a pledge or security agreement entered into by another Person, which has not heretofore been terminated.
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Section 5.6 Compliance with Law; Project Condition.
(1) Borrower has all requisite licenses, permits, franchises, qualifications, certificates of occupancy or other governmental authorizations to own, lease, occupy and operate the Project and carry on its business and (b) the Project and its current operations, if any, comply with all covenants and restrictions of record and all applicable laws, ordinances, rules and regulations, including, without limitation, the Americans with Disabilities Act and the regulations thereunder, and all laws, ordinances, rules and regulations relating to zoning, subdivision, setback requirements and building codes and there are no waivers of any building codes currently in existence for the Project, and the Project is free of structural defects. To Borrowerβs knowledge, all of the Project's building systems and structural components are in good working order, subject to ordinary wear and tear. To Borrower's knowledge, no structural or other material defects or damage in the Project exists, whether latent or otherwise, and Borrower has not received written notice from any insurance company or bonding company of any defects or inadequacies in the Project, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond. The Project currently does not constitute, in whole or in part, a legally non-conforming use under applicable legal requirements.
(2) No condemnation has been commenced or, to Borrower's knowledge, is contemplated with respect to all or any portion of the Project or for the relocation of roadways providing access to the Project.
(3) The Project has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary or convenient to the full use and enjoyment of the Project are located in the public right-of-way abutting the Project, and all such utilities are connected so as to serve the Project without passing over other property, except to the extent such other property is subject to a perpetual easement for such utility benefiting the Project. All roads necessary for the full utilization of the Project for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities.
(4) Borrower has obtained all licenses, permits, registrations, certificates and other approvals, governmental and otherwise (including, without limitation, zoning, building code, land use, environmental, and all licenses necessary to operate the Project in the manner currently operated), necessary for the use, occupancy and operation of the Project and the conduct of its business thereat, all of which are in full force and effect. To Borrower's best knowledge after diligent inquiry and investigation, no event or condition currently exists which could result in the revocation, suspension, or forfeiture thereof.
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(1) Borrower is not an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and the assets of Borrower do not constitute "plan assets" of one or more such plans for purposes of Title I of ERISA.
(2) Borrower is not and will not be a "governmental plan" within the meaning of Section 3(32) of ERISA, and transactions by or with Borrower are not and will not be subject to state statutes applicable to Borrower regulating investments of, and fiduciary obligations with respect to, governmental plans.
(3) Borrower has no employees.
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Section 5.14 Intentionally Omitted
Section 5.15 No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower and Guarantor will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower or Guarantor pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, operating agreement or other agreement or instrument to which Borrower or Guarantor is a party or by which any of Borrower's or Guarantor's property or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over Borrower or Guarantor or any of Borrower's or Guarantor's properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental agency or body required for the execution, delivery and performance by Borrower of this Agreement or any other Loan Documents has been obtained and is in full force and effect.
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Section 5.21 Restricted Company. Borrower is not a Restricted Company.
ARTICLE 6
Borrower covenants and agrees with Lender as follows:
Section 6.1 No Sale or Encumbrance; No Transfers of Equity Interests.
(1) Borrower acknowledges that Lender, in agreeing to make the Loan, has examined and relied on the experience of the Borrower Parties in owning and operating properties such as the Project, and that Lender will continue to rely on Borrowerβs ownership and operation of the Project as a means of maintaining the value of the Project as security for repayment of the Debt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Project so as to ensure that, should Borrower default in the repayment of the Debt, Lender can recover all or a portion of the Debt by a sale of the Project. Accordingly, subject to the terms of this Section 6.1 and except for Permitted Transfers and the liens in favor of Lender, Borrower shall not, without the prior written consent of Lender, directly or indirectly, sell, convey, alienate, mortgage, encumber, pledge or otherwise Transfer the Project, or any part thereof or any interest therein, or permit the Transfer of the Project, or any part thereof or any legal or beneficial interest therein.
(2) A Transfer of the Project within the meaning of this Section 6.1 shall be deemed to include: (A) an installment sales agreement wherein Borrower agrees to sell the Project or any part thereof or any interest therein for a price to be paid in installments; (B) an agreement by Borrower leasing any part of the Project, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrowerβs right, title and interest in and to any Leases or any Rents or Operating Revenues; (C) if Borrower or other Borrower Party (each a "Restricted Party"), or any partner or member or non-member manager of a Restricted Party (or any indirect owner of an interest in a Restricted Party or any constituent partner or member of a Restricted Party no matter how remote) is a corporation, the Transfer of such corporationβs stock or any portion thereof (or the stock of any corporation directly or indirectly controlling such corporation by operation of law or otherwise) or the creation or issuance of new stock in one or a series of transactions by which any of such corporationβs stock or any portion thereof shall be vested in a party or parties who are not now existing stockholders as of the Closing Date or results in any change in the ultimate ownership or control of such corporation (no matter how remote); (D) if a Restricted Party or any partner or member of a Restricted Party (or other indirect owner of an interest in a Restricted Party or any constituent partner or member of a Restricted Party no matter how remote) is a limited or general partnership, joint venture or limited liability company, the change, removal, resignation or addition of a partner, joint venturer or member or the Transfer of the partnership or membership interest of any partner or any member or the Transfer of the interest of any joint venturer, partner or member; (E) if a Restricted Party is a limited or general partnership, joint venture, limited liability company, trust, nominee trust, tenancy in common or other unincorporated form of business association or form of ownership interest, the Transfer of any interest (including any economic or profits interest) of any Person having a direct or indirect legal or beneficial ownership interest in a Restricted Party, including any legal or beneficial interest in any constituent partner or member of a Restricted Party; (F) any instrument subjecting the Project to a condominium regime or transferring ownership to a cooperative corporation; and (G) the dissolution or termination of a Restricted Party or any partner or member of a Restricted Party or any constituent member or partner of a Restricted Party or the merger or consolidation of a Restricted Party or any partner or member of a Restricted Party with any other Person; (H) any transfer of a direct or indirect ownership interest in a Restricted Party other than Permitted Transfers; (I) any other transaction pursuant to which any Person not holding a direct or indirect ownership interest in a Restricted Party on the Closing Date acquires a direct or indirect (and no matter how remote) ownership interest in a Restricted Party; (J) any swap, derivative or other transaction shifting the risks and rewards of ownership of the Project, unless otherwise expressly required by the Loan Documents; (K) any transaction pursuant to which any Person is granted an option to purchase all or any portion of the Project or any direct, indirect or beneficial interest in a Restricted Party; and (L) any transaction, agreement or arrangement pursuant to which any Person is given any right to control, direct or veto any material actions or decisions by a Restricted Party, directly or indirectly, whether through an ownership interest, contract right or otherwise. For purposes of clarification, a Transfer that is also a Permitted Transfer shall not be a violation of this Section 6.1.
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(3) Lender shall not be required to demonstrate any actual impairment or prejudice of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon any Transfer (other than a Permitted Transfer) without Lenderβs prior written 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.
(4) Lenderβs consent to one Transfer of the Project, including an interest in a Restricted Party, shall not be deemed to be a waiver of Lenderβs right to require such consent to any future Transfer. Any Transfer made in contravention of this Section 6.1 shall be null and void and of no force and effect.
(5) Borrower agrees to bear and shall pay or reimburse Lender on demand for all reasonable costs and expenses (including title search costs, title insurance endorsement premiums and reasonable attorneysβ fees and expenses at standard firm rates and disbursements) actually incurred by Lender in connection with the review, approval and documentation of any proposed Transfer including Permitted Transfers, whether or not such consent is granted, withheld, conditioned or denied.
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Section 6.3 Control; Management.
(1) Without the prior written consent of Lender in Lender's sole discretion, there shall be no Change in Control or change in the day-to-day control and management of Borrower, Borrower's Manager, the SRTCC Member or any other member or non member manager of Borrower or Borrower's Manager, and no change in their respective organizational documents relating to control over Borrower and/or the Project provided however in the event Guarantor is unable to serve as the manager of Borrower's Manager because of his death or disability then (a) either one of Xxxxx Xxxxxxxxx or Xxxxxxx X. Xxxxxxxxx Xx may act as replacement manager of Borrower's Manager without Lender consent so long as Lender shall receive prompt written notice of such replacement within 20 days of such death or disability of Guarantor; together with evidence that such replacement manager is the duly authorized or elected and acting manager of Borrower's Manager and (b) an replacement of Borrower's Manager pursuant to Section 8.16 of the Borrower's Operating Agreement shall require the prior written approval of Lender.
(2) The Property shall be managed at all times by an Approved Property Manager pursuant to an Approved Property Management Agreement. Borrower may from time to time appoint a replacement Approved Property Manager to manage the applicable Property pursuant to an Approved Property Management Agreement, provided that (i) no Event of Default is continuing, (ii) Lender receives at least sixty (60) daysβ prior written notice of same and (iii) such successor manager shall execute and deliver to Lender for Lenderβs benefit a Subordination of Property Management Agreement in form and substance reasonably satisfactory to Lender. The management fees payable to any Approved Property Manager shall not exceed management fees in excess of 5% of Operating Revenues.
(3) Lender may terminate or require Borrower to terminate the engagement of the Property Manager and engage an Approved Property Manager selected by Lender to serve as replacement Approved Property Manager pursuant to an Approved Property Management Agreement (i) during the continuance of an Event of Default, (ii) following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, (iii) during the continuance of a material default by the Approved Property Manager under the Approved Property Management Agreement (after the expiration of any applicable notice and/or cure periods), (iv) if a Bankruptcy occurs in respect of the Approved Property Manager or (v) if the Approved Property Manager engages in gross negligence, willful misconduct, fraud or misappropriation of funds in respect of the Project or its duties with respect thereto and the Borrower has failed to replace the Approved Property Manager in accordance with this Agreement within 30 days of any finding of gross negligence, willful misconduct, fraud or misappropriation of funds.
(4) Without limitation of the foregoing, if the Approved Property Management Agreement is terminated pursuant to the Subordination of Property Management Agreement, ceases to be in full force or effect or is for any other reason no longer in effect, then Lender may require Borrower to engage, in accordance with the terms and conditions set forth herein and in the Subordination of Property Management Agreement, a new Approved Property Manager to manage the Property, which such new Approved Property Manager shall be engaged pursuant to an Approved Property Management Agreement.
(5) Notwithstanding that the Property will be managed by an Approved Property Manager, Borrower shall ensure that the Property is managed in a commercially reasonable manner and that its obligations as the lessor under all Leases are performed. Borrower shall enforce, in a commercially reasonable manner, the obligations of the tenants under such Leases.
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Section 6.11 ERISA. Throughout the term of the Loan:
(1) Borrower will not be an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and the assets of Borrower will not constitute "plan assets" of one or more such employee benefit plans for purposes of Title I of ERISA.
(2) Borrower will not be a "governmental plan" within the meaning of Section 3(32) of ERISA, and transactions by or with Borrower will not be subject to state statutes applicable to Borrower regulating investments of, and fiduciary obligations with respect to, such governmental plans.
(3) Borrower shall have no employees.
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Section 6.18 Material Agreements.
(1) Borrower shall not enter into any agreement or instrument or become subject to any restriction which would reasonably be expected to have a Material Adverse Effect. Borrower shall (a) comply with all material terms, conditions and covenants of each Material Agreement and each material Permitted Encumbrance, including any reciprocal easement agreement, ground lease, declaration of covenants, conditions and restrictions, and any condominium arrangements, (b) promptly deliver to Lender a true and complete copy of each and every notice of default received or served by Borrower with respect to any obligations under the provisions of any Material Agreement and/or Permitted Encumbrance, (c) deliver to each other party to any Permitted Encumbrance and any Material Agreement notice of the identity of Lender and each assignee of Lender of which Borrower is aware if such notice is required in order to protect Lenderβs interest thereunder, and (d) enforce, short of termination thereof, the performance and observance of each and every material term, covenant and provision of each Material Agreement and Permitted Encumbrance to be performed or observed, if any.
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(2) Borrower shall not (x) enter into any Material Agreement, or amend, modify, surrender, grant or withhold any material consent, approval or waiver under any Material Agreement or waive any material rights or remedies under any Material Agreement, except, in each case, on arms-length commercially reasonable terms, (y) terminate any Material Agreement, except for terminations in connection with a material default thereunder, or (y) default in its obligations under any Material Agreement.
(1) (a) initiate or support any limiting change in the permitted uses of the Property (or to the extent applicable, zoning reclassification of the Property, or any portion thereof), (b) seek any variance under existing land use restrictions, laws, rules or regulations (or, to the extent applicable, zoning ordinances) applicable to the Property, (c) use or permit the use of the Property in a manner that would result in the use of the Property becoming a nonconforming use under applicable land-use restrictions or zoning ordinances or that would violate the terms of any Lease, Material Agreement or Legal Requirement (and if under applicable zoning ordinances the use of all or any portion of the Property is a nonconforming use, Borrower shall not cause or permit such nonconforming use to be discontinued or abandoned) or (d) use or permit the use of the Property for any purpose other than for the current uses as of the date of this Agreement; or
(2) execute or file any subdivision plat affecting any portion of the Property, or institute, or permit the institution of, proceedings to alter any tax lot comprising any portion of the Property.
Section 6.22 Gelson's Entitlement Process; Project Contracts; Plans.
(1) From and after the Closing Date, Borrower shall diligently pursue approval of the Site Plan and issuance of the other Gelson's Entitlements. On or before the first day of each month commencing on March 1, 2016, Borrower shall deliver to Lender and Servicer a written report, summarizing the actions and steps that have been taken by Borrower to obtain the Gelson's Entitlements, and summary of the action to be taken to obtain the Gelson's Entitlements, along with any other information as Lender may reasonably request from time to time. The failure to deliver a written report pursuant to this Section 6.22(1) in the time and manner set forth herein and the continuance of such failure for seven (7) days after receipt of written notice from Lender shall constitute an Event of Default..
(2) Borrower shall delivered to Lender and Servicer within (5) Business Days of execution or receipt by Borrower (a) a fully executed copy of each Project Contract; (b) copies of all Lessor's Plans and copies of the preliminary plans and specifications, if any, delivered to Gelson's pursuant to the Gelson's Work Letter; and (c) any amendments or modifications to any Project Contract. Borrower represents, warrants and covenants that (i) there are no Project Contracts as of the date hereof, (ii) each Project Contract shall be in the name of Borrower and the Project Contractor and all right, title and interest in any and all Plans shall be owned solely by Borrower.
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(3) Borrower shall deliver to Lender within (5) Business Days of execution or receipt by Borrower (i) copies of all governmental approvals and conditions of approval evidencing relating to or affecting the Gelson's Entitlements; (ii) a copy of the Lessor's Plans as approved by all governmental authorities and Gelson's and a copy of the preliminary Lessor's Plans delivered to Gelson's pursuant to the Gelson's Work Letter; (iii) within 5 Business Days of execution, a copy of the amendment to the Gelson's Lease required under Section 3.2 of the Gelson's Work Letter, attaching the final Site Plan; and (iv) such further information, reports. or other materials requested by Lender, Servicer or Lender's Consultant.
(4) Borrower shall cooperate with Lender's Consultant and provide such information as Lender's Consultant may reasonably request concerning the Gelson's Entitlements and the Project.
ARTICLE 7
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ARTICLE 8
Section 8.1 Financial Statements.
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Section 8.4 Intentionally Omitted.
ARTICLE 9
ANTI-MONEY LAUNDERING AND INTERNATIONAL TRADE CONTROLS
Section 9.1 Compliance with International Trade Control Laws and OFAC Regulations; Borrower's Funds. Borrower represents, warrants and covenants to Lender that:
(1) Neither Borrower, nor any Borrower Party, nor any Person who owns a 20% or more direct or indirect interest in Borrower, is now nor shall be at any time until after the Loan is fully repaid a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under U.S. law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.
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(2) It has taken, and shall continue to take until after the Loan is fully repaid, such measures as are required by law to verify that the funds invested in Borrower and funds used to make payments on the Loan (including Operating Revenues and funds used to repay the Loan, whether from a refinancing, asset sale or otherwise) are derived (a) from transactions that do not violate U.S. law nor, to the extent such funds originate outside the United States, do not violate the laws of the jurisdiction in which they originated; and (b) from permissible sources under U.S. law and to the extent such funds originate outside the United States, under the laws of the jurisdiction in which they originated.
(3) To the best of its knowledge, neither Borrower, nor any Borrower Party, nor any holder of a 20% or greater direct or indirect interest in Borrower, nor any Person providing funds to Borrower (a) is under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (b) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; and (c) has had any of its/his/her funds seized or forfeited in any action under any Anti-Money Laundering Laws.
(4) Borrower shall make payments on the Loan solely from the Interest Reserve, funds invested in Borrower, Operating Revenues or insurance proceeds unless otherwise agreed to by Lender.
(5) No portion of any of the Project has been or will be purchased, improved, equipped or furnished with proceeds of any illegal activity.
ARTICLE 10
EVENTS OF DEFAULT AND CURE PERIODS
Each of the following shall constitute an "Event of Default":
Section 10.1 Events of Default Not Subject to Cure Periods.
(1) Payment at Maturity. Borrower's failure to pay the Loan by the Maturity Date.
(3) Transfer. Any Transfer occurs in violation of Section 6.1 of this Agreement.
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Section 10.2 Events of Default Subject to Specific Cure Periods.
(2) Involuntary Bankruptcy or Other Proceeding. Commencement of an involuntary case or other proceeding against any Bankruptcy Party, or against the assets of any Bankruptcy Party, which seeks liquidation, reorganization or other relief with respect to such Bankruptcy Party or its Debts or other liabilities, or seeks to consolidate the assets of such Bankruptcy Party with the assets of any other Person, under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any of its property; and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of ninety (90) days; or an order for relief against a Bankruptcy Party or its assets shall be entered in any such case under the Federal Bankruptcy Code.
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Section 10.3 Other Events of Defaults.
(1) no other Event of Default hereunder or under the other Loan Documents has occurred and is then continuing;
(2) Borrower reaffirms its warranties and representations set forth in this Agreement and the other Loan Documents;
(3) Within 30 days following such death or legal incapacity of Guarantor, an Approved Replacement Guarantor (defined below) executes and delivers to Lender a guaranty or guaranties and hazardous indemnity agreement, each in form reasonably acceptable to Lender and in substantially the same form as the Guaranty and Hazardous Indemnity Agreement executed as of the Closing Date, without any cost or expense to Lender. An "Approved Replacement Guarantor" shall mean a Person proposed by Borrower within 15 Business Days following such death or legal incapacity and approved by Lender in its discretion, which approval shall be based upon Lenderβs satisfactory determination as to the reputable character and creditworthiness of such proposed Person, as evidenced by credit and background checks performed by Lender and financial statements and other information reasonably requested by Lender and Lender shall have received satisfactory evidence that such Person has a minimum Tangible Net Worth of not less $5,000,000.00 and a Cash Liquidity Balance of not less than $500,000.00.
(4) Borrower and the Approved Replacement Guarantor shall have delivered such other documents, certificates and legal opinions as Lender shall reasonably request; and
(5) Either (i) Lender receives evidence that either Xxxxx Xxxxxxxxx or Xxxxxxx Xxxxxxxxx Xx. is the duly authorized and acting replacement manager of Borrower's Manager instead of Guarantor or (ii) if the members of Borrower elect to replace Borrower's Manager as the manager of Borrower pursuant to section 8.16 of Borrower's Operating Agreement, Lender shall have approved of such replacement manager, taking into account such factors without limitation, the experience and track record of the proposed replacement manager in owning, managing and developing properties similar to the Project, the financial strength of the proposed replacement manager, the general business standing of the proposed replacement manager and the proposed replacement manager's relationships and experience with contractors, vendors, tenants, lenders and other business entities are acceptable to Lender, in its reasonable discretion.
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ARTICLE 11
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ARTICLE 12
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT
(a) This Agreement, duly executed by Borrower and Lender;
(b) The Note, duly executed by Borrower in favor of Lender;
(c) The Security Instrument, duly executed by Borrower and in recordable form;
(d) The Guaranty, duly executed by Guarantors;
(e) The Hazardous Materials Indemnity Agreement in favor of Lender, duly executed by Borrower and each of the Guarantors.
(f) A Subordination of Property Management Agreement in favor of Lender, duly executed by Borrower and Property Manager;
(g) A Subordination, Nondisturbance and Attornment Agreement ("Gelson's SNDA"), duly executed by Gelson's, Lender and Borrower, in recordable form and to be recorded no later than two (2) Business Day's following the Closing Date;
(h) A tenant estoppel certificate in favor of Lender executed by Gelson's.
(i) An Officer's Certificate for each Borrower Entity, in form and substance acceptable to Lender;
(j) Such financing statements, as determined by Lender; and
(k) Any other documents or agreements reasonably requested by Lender to the extent required or contemplated by this Agreement or the other Loan Documents.
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(5) Fees and Deposits. Borrower shall have paid to Lender the following fees and deposits:
(a) The Origination Fee;
(b) The Initial Interest Reserve Deposit; and
(c) The Initial Tax Reserve Deposit.
(8) Flood Zone. Lender shall have received satisfactory evidence that no portion of the Project is located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards.
(9) Updated UCC, Lien, Bankruptcy and Searches. Lender shall have received and approved of the following updated searches each dated no earlier than thirty (30) days prior to the Closing Date: (a) Uniform Commercial Code searches, state and federal tax and judgment lien searches; federal and local litigation searches and bankruptcy searches on Borrower, Borrower Parties and Guarantor.
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(11) Leases. The Closing Rent Roll and copies of all Leases.
ARTICLE 13
Section 13.1 Limitation on Liability.
(1) Except as provided below in this Section 13.1, Borrower shall not be personally liable for amounts due under the Loan Documents.
(2) Borrower shall be personally liable to Lender for Borrower's failure to perform its obligations under the Hazardous Materials Indemnity Agreement and for any deficiency, loss or damage suffered by Lender due to Borrower's or any Borrower Party's: (a) failure to apply any funds derived from the Project as required by the Loan Documents, including any misappropriation, misapplication or conversion; (b) payment of funds derived from the Project to any Affiliate of Borrower or Borrower Party, other than (i) payments under contracts that comply with Section 6.8 and (ii) dividends, distributions and other payments permitted under Section 6.17; (c) fraud or material misrepresentation made in or in connection with the Loan Documents or the Loan; (d) entering into, modifying or canceling leases in violation of this Agreement or any of the other Loan Documents; (e) failure to turn over to Lender all tenant security deposits and prepaid rents upon Lender's demand following an Event of Default; (f) bad faith interference with Lender's exercise of remedies under the Loan Documents, other than Borrower's good faith challenge to the existence of the Event of Default which gave rise to Lender's exercise of such remedies; (g)intentionally omitted; (h) failure to maintain insurance as required by this Agreement; (i) failure to pay Property Taxes in accordance with the terms of this Agreement or if applicable, failure to make the required monthly payments to the Tax Reserve unless such Property Taxes are not paid when Borrower has timely delivered to Lender the invoice for such Property Taxes and Lender is holding sufficient funds in the Tax Reserve to make such payment; (j) commission of intentional physical waste of the Project, including the removal or disposal of any portion of the Project, except for repair or replacement in the ordinary course of business or restoration following a casualty (in either case, in accordance with this Agreement); (k) intentionally omitted; (l) failure to pay any brokerage commission or finder's fees of any party claiming by or through Borrower or any Borrower Party in connection with the transactions contemplated by the Loan Documents; and (m) failure to promptly remove any judgment lien affecting the Project, or failure to comply with the provisions of Section 6.10 regarding Mechanic's Liens, the cost of which removal or satisfaction shall be deemed to be damages suffered by Lender. Borrower also shall be personally liable to Lender for any and all reasonable attorneys' fees and expenses and court costs incurred by Lender in enforcing this Section 13.1(2) or otherwise incurred by Lender in connection with any of the foregoing matters, regardless of whether such matters are legal or equitable in nature or arise under tort or contract law.
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(3) Notwithstanding anything to the contrary contained in the Loan Documents, the limitation on Borrower's liability contained in Section 13.1(1) SHALL BECOME NULL AND VOID and shall be of no further force and effect if:
(a) any Transfer in violation of the Loan Documents occurs, other than (i) Mechanic's Liens in violation of Section 6.10, and (ii) judgment liens;
(b) Borrower or any Guarantor files a petition under the United States Bankruptcy Code or similar state insolvency laws;
(c) Borrower's or any Guarantor's assets (including the Project) are consolidated with the assets of an Affiliate of Borrower in any proceeding commenced under the United States Bankruptcy Code or similar state insolvency laws; or
(d) Borrower or any Guarantor becomes the subject of an involuntary proceeding under the United States Bankruptcy Code or similar state insolvency laws, and either (i) Borrower, any Borrower Party or any Affiliate of Borrower or any Borrower Party conspired or cooperated with, or solicited, one or more creditors to commence such involuntary proceeding, or (ii) the claims of one or more of the creditors of Borrower or any Guarantor, as applicable, that commenced such involuntary proceeding arise from Debts incurred by Borrower or such Guarantor, as applicable, in violation of this Agreement, provided, however, no liability shall arise hereunder in the event any such involuntary proceeding is instituted by Lender.
(5) Nothing in this Section 13.1 shall be deemed to be a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the United States Bankruptcy Code, as such sections may be amended, or corresponding or superseding sections of the Bankruptcy Amendments and Federal Judgeship Act of 1984, to file a claim for the full amount due to Lender under the Loan Documents or to require that all Collateral shall continue to secure the amounts due under the Loan Documents.
ARTICLE 14
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Addresses for Notices:
| If to Borrower: | Sunset & Xxxxxxx Investors LLC 0000 X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxx Xxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxx and Xxxx Xxxxxxx |
With a copy to: Glenborough LLC 000 X. Xx Xxxxxx Xxxx, Xxxxx 0000 Xxx Xxxxx, XX 00000 Attn: Xxxx Xxxxx
And for Notices of default only, to:
Xxxxxxxxxx Xxxxx Xxxxxx & Xxxxxxx 000 00xx Xxxxxx, Xxxxx 0000 Xxxxxx, XX 00000 Attn: Xxxxxxxx Xxxxxxxxx, Esq.
| If to Lender: | Xxxxxxxx Mortgage Holdings, LLC 0000 Xxxxxxxx Xxxx, Xxxxx 0000 Xxxxxxx Xxxxx, XX 00000 Attention: Xxxx Xxxxx |
with a copy to:
Trimont Real Estate Advisors, Inc. 0000 Xxxxxxxxx Xxxx XX, Xxxxx 0000 Xxxxxxx, XX 00000 Attention: J. Xxxxxxx Xxxxxxxxxx Attention: Xxxxxx Xxxxx
and to:
Trimont Real Estate Advisors, Inc. 0 Xxxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000 Xxxxxx, XX 00000-0000 Attention: Xxxx Xxxxxxxxxxx
and for Notices of default only to:
Xxxxx Xxxxxxx Xxxx Xxxxxx Xxxxxxx & Xxxxxx LLP 0000 Xxxx Xxxxxx, 0xx Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000 Attention: Xxxx X. Xxxxxx, Esq.
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Section 14.2 Amendments, Waivers, References.
(1) This Agreement and any other Loan Document may be amended, modified or supplemented only by a written instrument signed by Borrower and Lender. No waiver of any provision of the Loan Documents shall be effective unless in writing and signed by the party against whom enforcement is sought.
(2) This Agreement and the other Loan Documents shall not be executed, entered into, altered, amended, or modified by electronic means. Without limiting the generality of the foregoing, Borrower and Lender hereby agree that no exchange of electronic correspondence between the parties shall operate to amend, modify or waive any term or provision of any Loan Document.
(3) Any reference to a Loan Document, whether in this Agreement or in any other Loan Document, shall be deemed to be a reference to such Loan Document as it may hereafter from time to time be amended, modified, consolidated, replaced, severed, supplemented, extended and restated.
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Section 14.7 Lender Not in Control; No Partnership.
(1) None of the covenants or other provisions contained in this Agreement shall, or shall be deemed to, give Lender the right or power to exercise control over the affairs or management of Borrower. The power of Lender is limited to the right to exercise the rights and remedies under the Loan Documents.
(2) Borrower and Lender agree that the relationship between Borrower and Lender is, and at all times shall remain, solely that of debtor and creditor. No covenant or provision of the Loan Documents is intended, nor shall be deemed or construed, to create, and Lender and Borrower disclaim any intention to create, a partnership, joint venture, agency or common interest in profits or income between Lender and Borrower, or to create an equity in the Project in Lender, or any sharing of liabilities, losses, costs or expenses. Lender neither undertakes nor assumes any responsibility or duty to Borrower, to any direct or indirect constituent partners, members, stockholders or investors in Borrower (each, a "Borrower Investor") or to any other Person with respect to the Collateral or the Loan, except as expressly provided in the Loan Documents. Notwithstanding any other provision of the Loan Documents: (a) Lender is not, nor shall be construed as, a partner, joint venturer, alter ego, manager, controlling person or other business associate or participant of any kind in Borrower or any Borrower Investor or Borrower Party, and Lender does not intend to ever assume such status; (b) Lender shall in no event be liable for any debts, expenses or losses incurred or sustained by Borrower or any Borrower Investor or Borrower Party; and (c) Lender shall not be deemed responsible for or a participant in any acts, omissions or decisions of Borrower or any Borrower Investor or Borrower Party.
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Section 14.9 Successors and Assigns.
(1) This Agreement shall be binding upon and inure to the benefit of Lender and Borrower and their respective successors and permitted assigns, provided that neither Borrower nor any Borrower Party shall, without the prior written consent of Lender, assign any rights, duties or obligations hereunder.
(2) The Loan, the Note, the Loan Documents, and/or Lender's rights, title, obligations and interests therein may be sold, assigned, participated, syndicated, pledged or otherwise transferred by Lender and any of its successors and assigns to any Person at any time in its sole and absolute discretion, in whole or in part, whether by operation of law (pursuant to a merger or other successor in interest) or otherwise without notice to or consent from any Borrower Party or any other Person and without any other restriction of any kind. Any sale, assignment, participation, pledge or other transfer of the Loan, the Note, the Loan Documents, any additional advance, if any, and/or Lenderβs rights, title and interests therein may be assigned separately from any covenants by Lender to consider the making of any additional advances, if any, hereunder and under the other Loan Documents. Upon any such sale, assignment, participation, syndication, pledge or other transfer, all references to Lender in this Agreement and in any Loan Document shall be deemed to refer to such assignee or successor in interest to the extent of the interest so transferred and such assignee or successor in interest shall thereafter stand in the place of Lender in all respects. To the extent any such assignee or transferee assumes the rights, title and interests of Lender hereunder and under the other Loan Documents, Lender shall be released from such rights, title and interests and shall have no further liability with respect thereto; provided, however, that Lender shall retain any and all covenant to consider the making of future Advances unless Borrower shall have received notice from Lender and such assignee or transferee that such assignee or transferee has assumed the covenant to consider the making of additional advances. Borrower hereby agrees to execute any amendment and/or any other document that may be reasonably necessary to effectuate the foregoing. provided that such amendment or other documents do not change the economic terms of the Loan or otherwise increase, in any material respect, Borrower's or Guarantors' duties, responsibilities or liabilities under the Loan Documents, or decrease, limit or restrict Borrower's or Guarantor's rights under the Loan Documents.. Borrower shall reasonably cooperate with Lender in effecting any such sale, assignment, participation, syndication, pledge or other transfer and shall reasonably cooperate and use all reasonable efforts to satisfy the market standards to which Lender customarily adheres or which may be reasonably required by any participant, investor, lender, or purchaser involved in any such sale, assignment, participation, syndication, pledge or other transfer(including delivery of opinions of counsel in form and substance similar to the opinions of counsel delivered to Lender on the Closing Date). Borrower shall provide such information and documents relating to Borrower, the Guarantors and the Project as Lender may request in connection with any such sale, assignment, participation, syndication, pledge or other transfer. In addition, Borrower shall make available to Lender all information concerning the Project, its business and operations that Lender may reasonably request. Borrower shall not be responsible for Lenderβs costs and expenses incurred in connection with any of the foregoing transactions (including the costs of any third party reports required by Lender).
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(3) Borrower authorizes Lender to disclose to any participant, any assignee or any other Person acquiring an interest in the Obligations, the Loan or the Loan Documents by operation of law (each a "Transferee"), and to any prospective Transferee, any and all information in Lender's possession concerning the Project, the Borrower or any other Borrower Party, or any of their respective Affiliates. Notwithstanding any such provisions or agreements, Lender may also disclose any and all information in Lender's possession concerning the Project, Borrower or any other Borrower Party or any of their respective Affiliates to: (a) Lender's Affiliates; (b) the legal counsel, accountants or other professional advisors to Lender, any assignee or participant of Lender's interest in the Obligations, the Loan or the Loan Documents, or any portion thereof or their respective Affiliates; (c) regulatory officials; (d) any Person as requested pursuant to or as required by law, regulation, or legal process; and (e) any Person in connection with any legal proceeding to which Lender is a party.
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Section 14.17 Governing Law. The validity, construction, enforcement, interpretation and performance of the Loan Documents, and the obligations arising thereunder, and any claim, controversy or dispute arising under or related to any of the Loan Documents, the transactions contemplated thereby or the rights, duties and relationship of the parties thereto, shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in such State, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the United States of America; provided, however, that if any other Loan Document expressly states that it is governed in whole or in part by the laws of a different jurisdiction, then the governing law provision of that Loan Document shall control.
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Section 14.24 Section 2822 Waiver. Borrower hereby irrevocably authorizes Lender to apply any and all amounts received by Lender in repayment of the Indebtedness first to amounts which are not guaranteed pursuant to the terms of any guaranty of the Loan and then to amounts which are guaranteed pursuant to the terms of any guaranty of the Loan. Borrower hereby waives any and all rights it has or may have under Section 2822 of the California Civil Code which provides that if a guarantor is "liable upon only a portion of an obligation and the principal provides partial satisfaction of the obligation, the principal may designate the portion of the obligation that is to be satisfied."
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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EXECUTED as of the date first written above.
| LENDER: | |||
| XXXXXXXX MORTGAGE HOLDINGS, LLC, | |||
| a Delaware limited liability company | |||
| By: | /s/ Xxxxxxx X. Xxxxxxx | ||
| Name: | Xxxxxxx X. Xxxxxxx | ||
| Title: | President |
(SIGNATURES CONTINUE ON NEXT PAGE)
[SIGNATURE PAGE TO LOAN AGREEMENT]
| S-1 |
| BORROWER: | |||
| SUNSET & XXXXXXX INVESTORS LLC, | |||
| a Colorado limited liability company | |||
| By: | Sunset & Xxxxxxx LA LLC, | ||
| a Colorado limited liability company | |||
| Its: Manager | |||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | ||
| Xxxxxxx X. Xxxxxxxxx | |||
| Its: Manager |
[SIGNATURE PAGE TO LOAN AGREEMENT]
| S-2 |
SCHEDULE 1.1
DEFINITIONS
As used in this Agreement, the following terms have the meanings indicated:
"Affiliate" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract, or otherwise. Each Borrower Party shall be deemed to be an Affiliate of Borrower.
"Agreement" means this Loan Agreement.
"Anti-Money Laundering Laws" means those laws, regulations and sanctions, state and federal, criminal and civil, that (a) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (b) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the United States; (c) require identification and documentation of the parties with whom a Financial Institution conducts business; or (d) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed to include the Patriot Act, the Bank Secrecy Act, the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.
"Approved Budget" means the budget attached hereto as Schedule 3.1(2)(b) setting forth the costs and expenses estimated by Borrower to obtain all of the Gelson's Entitlements, as the same may be amended from time to time with the prior written consent of Lender in accordance with Section 3.1(2).
βApproved Property Management Agreementβ means the Property Management Agreement and any other property management agreement that is approved in writing by Lender.
βApproved Property Managerβ means Property Manager or any other property management company approved in writing by Lender.
βApproved Replacement Guarantorβ has the meaning assigned in Section 10.4.
"Bankruptcy Party" has the meaning assigned in Section 10.1.
"Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C. Sections 5311 et seq.
"Borrower" has the meaning assigned in the first paragraph of this Agreement.
"Borrower Entity" has the meaning assigned in Section 3.5.
"Borrower Investor" has the meaning assigned in Section 13.7(2).
SCHEDULE 1.1
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"Borrower Party" means Borrower, Borrower's Manager, SRTCC Member, SROP, SRT and Guarantor.
"Borrower's Manager" means Sunset & Xxxxxxx LA LLC, a Colorado limited liability company, which is the sole manager and a member of Borrower.
"Borrower's Operating Agreement" means the Operating Agreement of Sunset & Xxxxxxx Investors LLC dated January 7, 2016.
"Building Permits" has the meaning set forth in Section 3.4 of the Gelson's Work Letter..
"Business Day" means a day other than a Saturday, a Sunday, or a legal holiday on which national banks located in the State of California are not open for general banking business.
"Cash Liquidity Balances" means lien-free and otherwise unencumbered by any lien, charge or security interest or other encumbrance or type of preferential arrangement (a) cash balances maintained in the conventional forms of demand deposits and money market account deposits, (b) monies held in cash reserves and other cash equivalents acceptable to Lender, (c) readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America, in each case due within one year, and (d) certificates of deposit issued by any bank with combined capital, surplus and undivided profits of at least $500,000,000 (as of the date such certificate of deposit is acquired), doing business in and incorporated under the laws of the United States of America or any State thereof, and whose deposits are insured through the Federal Deposit Insurance Corporation, in each case due within one year. Notwithstanding the foregoing, Cash Liquidity Balances shall not include any reserves maintained by Borrower with respect to the Project and shall not include any funds held in reserves or impounds maintained by Lender.
"Closing Date" means the date of the funding of the Loan to or for the benefit of Borrower.
"Closing Rent Roll" mean a Rent Roll prepared as of a date no earlier than five (5) Business Days prior to the Closing Date, certified by the Managers of Borrower.
"Collateral" means the Project and all other "Mortgaged Property" described in the Mortgage or any of the other Loan Documents, and any other property that at any time secures the Loan or any portion thereof.
"Compliance Certificate" means a certificate executed by Guarantor, in scope and detail satisfactory to Lender, certifying to Lender that Guarantor's then-current Tangible Net Worth and Cash Liquidity Balances are in compliance with Section 6.20.
"Control" with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities, membership interests, partnership interests, by contract or otherwise, and the terms "Controlled", "Controlling" and "Common Control" shall have correlative meanings.
SCHEDULE 1.1
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"Debt" means, for any Person, without duplication: (a) all indebtedness of such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price of property for which such Person or any of its assets is liable or subject, (b) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person or any of its assets would be liable or subject, if such amounts were advanced under the credit facility, (c) all amounts required to be paid by such Person as a guaranteed payment to partners, members or other equity holders, or as a preferred or special dividend, including any mandatory redemption of shares or interests, (d) all indebtedness guaranteed by such Person, directly or indirectly, (e) all obligations under leases that constitute capital leases for which such Person or any of its assets is liable or subject, and (f) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person or any of its assets is liable or subject, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss.
"Debt Service" means, with respect to any particular period of time, the aggregate interest and fixed principal payments due under the Loan. The foregoing calculation shall exclude payments applied to escrows or reserves required by Lender under the Loan Documents.
"Default Rate" means the lesser of (a) the maximum per annum rate of interest allowed by applicable law, and (b) five percent (5%) per annum in excess of the Interest Rate.
"Entitlements" has the meaning set forth in Section 3.2 of the Gelson's Work Letter.
"Entitlement Period" has the meaning set forth in Section 3.2 of the Gelson's Work Letter and includes the 60 extension set forth therein.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules and regulations promulgated thereunder.
"Event of Default" has the meaning assigned in Article 10.
"Extension Prepayment Premium Period" has the meaning assigned in Section 2.3(3).
"Extension Tax Deposit" has the meaning assigned in Section 3.1(1).
"Financial Institution" means a United States Financial Institution as defined in 31 U.S.C. Section 5312, as periodically amended.
"First Interest Period" has the meaning assigned in Section 2.2.
"Gelson's" means Gelson's Markets, a California corporation.
"Gelson's Entitlements" has the meaning assigned in Section 3.1(2).
"Gelson's Lease" means that certain Lease dated as of November 23, 2015 between Gelson's, as tenant, and Cadence Acquisitions, LLC, as lessor ("Original Lessor"), as assigned by Original Lessor to Borrower pursuant to that certain Assignment and Assumption of Lease dated as of January 22, 2016 executed by Original Lessor and Borrower, as the same may be amended from time with the prior written consent of Lender.
"Gelson's Work Letter" means the Work Letter attached as Exhibit C to the Gelson's Lease.
SCHEDULE 1.1
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βGeneral Intangiblesβ means all intangible personal property of Borrower arising out of or connected with the Property or the Project and all renewals and replacements thereof and substitutions therefor , including, without limitation, things in action, contract rights and other rights to payment of money.
βGovernmental Authorityβ means any board, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Property and/or the Project or the use, operation or improvement of the Property or the Project.
"Guarantor" means Xxxxxxx X. Xxxxxxxxx, an individual, and any other Persons executing a Guaranty (collectively, "Guarantors").
"Guaranty" means the instruments of guaranty, if any, now or hereafter in effect from a Guarantor to Lender.
"Hazardous Materials Indemnity Agreement" means the Hazardous Materials Indemnity Agreement executed by Borrower and Guarantor in favor of Lender with respect to the Project.
βImprovementsβ means all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property, including, but not limited to, all gas and electric fixtures, radiators, heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting and other floor coverings, water heaters, awnings and storm sashes, and cleaning apparatus which are or shall be attached to the Property or said buildings, structures or improvements.
"Indebtedness" means, the outstanding principal amount of the Loan set forth in, and evidenced by, this Agreement and the Note (including, without limitation, all Advances advanced or hereafter advanced under this Agreement), together with all accrued and unpaid interest thereon, late charges, and all other obligations and liabilities due or to become due to Lender in respect of the Loan and/or pursuant to the Note, this Agreement, each and every Security Instrument (whether now or hereafter executed) or any of the other Loan Documents (excluding the Guaranty), and all other amounts, sums and expenses paid by or payable to Lender pursuant to the Loan Documents (excluding the Guaranty) and any and all obligations and liabilities of Borrower, including without limitation, any increases in the maximum principal amount of the Loan, contained in any written renewal, extension, amendment, modification, consolidation, restatement of, or substitution or replacement for, all or any part of the Note, this Agreement or any of the other Loan Documents (excluding the Guaranty).
"Index" and "Then Current Index" mean the interest rate per annum equal to the London interbank offered rate for an interest period of thirty (30) days as administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for deposits in EUR dollars with a term equivalent to such interest period appearing on the applicable page or screen at Xxxxxxxxx.xxx (or, in the event such rate does not appear on a Xxxxxxxxx.xxx page or screen, on the appropriate page or screen of such other information service that publishes such rate as shall be selected by Lender in its reasonable discretion) two (2) Business Days prior to applicable Interest Adjustment Date provided that in no event shall the Index or the Then Current Index be less than the Index Floor. In the event that such Index ceases to be published in the referenced publication or in any other generally accepted similar financial publication, or is otherwise no longer available, "Index" or "Then Current Index" shall mean a substitute index selected by Lender, in Lender's sole and absolute discretion, in any manner consistently applied by Lender with respect to other loans of a similar type and nature as the Loan and not inconsistent with applicable federal laws. If an Interest Adjustment Date falls on a date which is not a Business Day, then the first Business Day immediately succeeding such Interest Adjustment Date shall be used for purposes of determining the Then Current Index.
SCHEDULE 1.1
| -4- |
"Index Floor" shall mean that in no event shall the Index or the Then Current Index be less than one quarter of one percent (0.25%).
"Initial Interest Reserve Deposit" has the meaning assigned in Section 3.1(3).
"Initial Prepayment Premium Period" has the meaning assigned in Section 2.3(3).
"Initial Site Assessment" has the meaning assigned in the Hazardous Materials Indemnity Agreement.
"Initial Stated Maturity Date" shall mean January 27, 2017.
"Initial Tax Reserve Deposit" has the meaning assigned in Section 3.1(1).
"Interest Holder" has the meaning assigned in Section 6.1.
"Interest Adjustment Date" means March 1, 2016, and thereafter on the first (1st) day of each calendar month until all principal and interest and other amounts due under the Loan Documents are paid in full.
"Interest Period" means (a) the First Interest Period, and (b) for each Interest Period thereafter, the 1-month period commencing on the first day of the calendar month following the end of the preceding Interest Period through the last day of such calendar month.
"Interest Rate" means the rate or rates at which the outstanding principal amount of the Loan bears interest from time to time in accordance with the provisions of Section 2.2(1).
"Interest Reserve" has the meaning assigned in Section 3.1(4).
βLeaseβ shall mean any lease, occupancy agreement, sublease, sub-sublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of, any space in the Property, and every modification, amendment, assignment, termination, consent to assignment or other agreement relating to such lease, sublease, sub-sublease or other agreement entered into in connection with such lease, sublease, sub-sublease or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.
"Lender" has the meaning assigned in the first paragraph of this Agreement.
"Lender's Consultant" means Xxxx/Okubo Associates, Inc., or any other Person engaged by Lender to act as Lender's consultant for the purposes of preparing the Lender's Consultant Report.
"Lender's Consultant Report" means a written report prepared by Lender's Consultant at such times as Lender requires concerning the progress of the Gelson's Entitlements, and such other matters as Lender may request concerning the Gelson's Entitlements, the cost of which shall be paid for by Borrower, provided that so long as no Event of Default exists, Borrower shall not be required to pay for more than two written reports.
SCHEDULE 1.1
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"Lessor's Plans" has the meaning set forth in Section 3.4 of the Gelson's Work Letter.
"Lien" means any interest, or claim thereof, in the Collateral securing an obligation owed to, or a claim by, any Person other than the owner of the Collateral, whether such interest is based on common law, statute or contract, including the lien or security interest arising from a deed of trust, mortgage, deed to secure debt, assignment, encumbrance, pledge, hypothecation, preference, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, mechanics', materialmen's and similar liens and encumbrances, and any option to purchase, right of first refusal, right of first offer or similar right. The term "Lien" shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting the Collateral.
"Loan" means the loan to be made by Lender to Borrower under this Agreement and all other amounts evidenced or secured by the Loan Documents.
"Loan Amount" has the meaning assigned in Section 2.1.
"Loan Documents" means: (a) this Agreement, (b) the Note, (c) the Security Instrument, (d) the Hazardous Materials Indemnity Agreement, (e) the Guaranty; (f) UCC financing statements, (g) such assignments of contracts and other rights as may be required by Lender, (h) any letter of credit provided to Lender in connection with the Loan, and (i) all other agreements, documents, certificates and instruments evidencing, securing, governing or otherwise pertaining to the Loan, as each of the same may be amended, supplemented or restated from time to time.
"Loss Proceeds" means amounts, awards or payments payable to Borrower or Lender in respect of all or any portion of the Project in connection with a casualty or condemnation thereof (after the deduction therefrom and payment to Borrower and Lender, respectively, of any and all reasonable out-of-pocket expenses incurred by Borrower and Lender in the recovery thereof, including all reasonable attorneys' fees and disbursements, the fees of insurance experts and adjusters and the costs incurred in any litigation or arbitration with respect to such casualty or condemnation) including proceeds from rental or business interruption insurance.
"Marginβ means nine hundred twenty-five basis points (9.25%).
βMaterial Agreementsβ means each contract and agreement (other than Leases) relating to the Project, or otherwise imposing obligations on Borrower, under which Borrower would have the obligation to pay more than $10,000 per annum and that cannot be terminated by Borrower without cause upon thirty (30) daysβ notice or less without payment of a termination fee, or that is with an Affiliate of Borrower.
"Maturity Date" means the Stated Maturity Date, or such earlier date as may result from acceleration of the Loan in accordance with this Agreement.
"Mechanic's Lien" has the meaning assigned in Section 6.10.
βNet Operating Incomeβ means Operating Revenues less Operating Expenses.
SCHEDULE 1.1
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"Note" means the Promissory Note of even date herewith, in the stated principal amount of $10,700,000.00, executed by Borrower, and payable to the order of Lender in evidence of the Loan, and any and all promissory notes delivered in substitution or exchange therefor and as the same may be amended, supplemented or restated from time to time.
"OFAC" means the Office of Foreign Assets Control, Department of the Treasury, and any successor governmental authority.
"Operating Expenses" means, for any period, all operating, renting, administrative, management, legal and other ordinary expenses of Borrower and the Properties during such period, determined in accordance with GAAP or other method of accounting approved by Lender, including property management fees equal to the greater of (i) actual management fees and (ii) management fees not greater than 5% of Operating Revenues; provided, however, that such expenses shall not include (a) depreciation, amortization or other non-cash items, (b) interest, principal or any other sums due and owing with respect to the Loan, (c) income taxes or other taxes in the nature of income taxes, (d) Capital Expenditures, (e) any loss that is covered by the Policies, including any portion of a loss that is subject to a deductible under the Policies, (f) any item of expense which would otherwise be considered within Operating Expenses pursuant to the provisions above but is paid directly by any tenant under a Lease, (g) bad debt expense with respect to rents, and (h) the value of any free rent or other concessions provided with respect to the Properties.
"Operating Revenues" means, for any period, all cash receipts derived or generated by the Project from the ownership and operation of the Project or otherwise arising in respect of the Project after the date hereof which are properly allocable to the Project for the applicable period in accordance with generally accepted accounting principles, including rent, percentage rent and additional rent under the Lease and parking agreements, concession fees and charges, utility charges, interest received on credit accounts, service fees and charges, license fees, any required pass-throughs and other reimbursements paid by tenants under Leases of any nature, other miscellaneous operating revenues and Loss Proceeds from rental or business interruption insurance, but excluding (a) security deposits and xxxxxxx money deposits until they are forfeited by the depositor and, in the case of non-cash security deposits, converted to cash, (b) advance rentals until they are earned, (c) proceeds from a sale or other disposition of the Project or any interest therein, (d) any disbursements from any impounds, escrows, or reserves required under the Loan Documents , and (e) any sales, use, occupancy or other taxes on receipts for which Borrower must account to any Governmental Authority.
"Origination Fee" has the meaning assigned in Section 2.3(5).
"Patriot Act" means the USA PATRIOT Act of 2001, Pub. L. No. 107-56, and any successor statute.
"Payment Due Date" has the meaning assigned in Section 2.2.
"Permit Period" has the meaning set forth in Section 3.4 of the Gelson's Work Letter.
βPermitted Debtβ means with respect to Borrower, (i) the Indebtedness; (ii) Taxes not yet due and payable; (iii) trade payables not represented by a note, paid by Borrower within sixty (60) days of incurrence, which are incurred in the ordinary course of Borrowerβs ownership and operation of the Property, in amounts reasonable and customary for similar properties and not exceeding three percent (3.0%) of the Loan Amount.
SCHEDULE 1.1
| -7- |
"Permitted Encumbrances" means the outstanding liens, easements, restrictions, security interests and other exceptions to title set forth in the policy of title insurance insuring the lien of the Security Instrument, together with the liens and security interests in favor of Lender created by the Loan Documents and any other lien approved by Lender in writing, in its sole and absolute discretion.
"Permitted Transfer" means any of the following: (a) (i) the Gelson's Lease, and any amendment or modification thereto approved in writing by Lender, in it sole and absolute discretion, (ii) any new Lease approved in writing by Lender in its sole and absolute discretion, and (iii) the Leases set forth on the Closing Rent Roll (excluding the Gelson's Lease), and any amendment or modification thereto entered into in accordance with the terms of Section 7.3; (b) any Mechanic's Liens that are paid or are being contested by Borrower in compliance with Section 6.10; (c) Transfers of direct or indirect equity interests in SRT; and (d) Transfers direct or indirect interests in the limited partners of SROP by any Person other than SRT and (e) Transfers of direct or indirect interests in the limited partners of SROP by SRT; provided that upon giving effect to the applicable Transfer under clauses (c) (d) and (e) (i) SRT continues to own not less than 51% of the equity interests in SROP; (ii) SRT remains the sole general partner of SROP and there is no change in Control of any Borrower Party, (iii) no limited partner of SROP (other than SRT) and no shareholder of SRT obtains an interest in Borrower that equals or exceeds twenty percent (20%) of the total indirect legal or beneficial ownership interests in Borrower.
"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity.
"Potential Default" means the occurrence of any event or condition which, with the giving of notice, the passage of time, or both, would constitute an Event of Default.
"Predevelopment Expense Reserve" is defined in Section 3.1(2).
"Prepayment Premium" means the amount equal to the product obtained by multiplying (a) the principal amount of the Loan being prepaid by (b) the applicable Interest Rate on the date of the prepayment by (c) the quotient obtained by dividing (i) the number of days from the date of such prepayment to (y) the expiration of the Initial Prepayment Premium Period (if the prepayment is made during the Initial Prepayment Premium Period), or (z) the expiration of the Extension Prepayment Premium Period (if the prepayment is made during the Extension Prepayment Premium Period), by (ii) 360.
βProceedsβ means all awards, payments, earnings, royalties, issues, profits, liquidated claims, and proceeds (including proceeds of insurance and condemnation or any conveyance in lieu thereof) from the sale, conversion (whether voluntary or involuntary), exchange, transfer, collection, loss, damage, condemnation, disposition, substitution or replacement of any of the Collateral.
"Project" means the Property, and all amenities, fixtures, and personal property owned by Borrower and any Improvements now or hereafter located on the Property.
"Project Contracts" means all contracts and agreements relating to or concerning the Gelson's Entitlements, including without limitation all architect and engineering agreements.
"Project Contractors" means all architects, engineers, consultants and other third parties engaged to provide services in connection with the Gelson's Entitlements.
SCHEDULE 1.1
| -8- |
"Property" means the real property located at 1502, 1504, 1506, 1512, 1514 & 0000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx Xxxxxxxxxx and 7441, 7443, 7445, 7447 & 0000 X. Xxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx upon which the Project is located and more particularly described on Exhibit A to the Security Instrument.
βProperty Management Agreementβ means that certain Property Management Agreement, dated as of January 22, 2016, between Borrower and Property Manager.
βProperty Managerβ means 1st Commercial Realty Group, Inc. a California corporation.
"Property Taxes" means all annual real estate taxes, assessments and similar charges relating to the Project.
"Qualified Costs" means the costs and fees of obtaining the Gelson's Entitlements in the amounts set forth in the Approved Budget.
"Rent Roll" means a current rent roll for the Project, certified by the manager or an authorized officer of Borrower in the form of the Closing Rent Roll, and which shall include for all Leases the following information (which to the extent not included in the Closing Rent Roll may be contained in one or more separate schedules or reports attached thereto and certified by Borrower): (a) identification of tenant; identification of leased premises; net rentable square footage of leased premises; term; extension options; security deposits and any interest earned thereon; base minimum rent; percentage rent; and operating expense, common area maintenance charge reimbursement and other rental obligations; (b) a delinquency report; and (c) a list of all tenant security deposits then being held by Borrower, as landlord.
βRentsβ has the meaning set forth in the Security Instrument.
"Reserves" means the Tax Reserve, the Predevelopment Expense Reserve, the Interest Reserve and any other reserves or escrows required by Lender under the Loan Documents.
"Reserve Funds" means all funds from time to time held in any of the Reserves.
"Restoration Threshold" means, as of any date, the lesser of (a) two and one-half percent (2.5%) of the replacement value of the Improvements at the Project as of such date, and (b) $1,000,000.00.
"Restricted Party" has the meaning assign in Section 6.1(2).
"Restricted Company" means (a) an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended; (b) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (c) any entity that is subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
"Security Instrument" means the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, of even date herewith executed by Borrower in favor of Lender, covering the Project, as the same may be amended, supplemented or restated from time to time.
SCHEDULE 1.1
| -9- |
"Single Purpose Entity" means a Person (other than an individual, a government, or any agency or political subdivision thereof), which (a) is formed or organized solely for the purpose of owning the Project, (b) does not engage in any business other than the ownership, management and operation of the Project, (c) does not have any assets other than those related to its interest in the Project, (d) does not incur, create or assume any Debt other than the Loan and Debt permitted under Section 6.9, (e) does not guarantee, hold itself out to be responsible for, or otherwise become liable on or in connection with any Debt or other obligation of any other Person, and does not pledge its assets for the benefit of any other Person, (f) does not enter into any contract or agreement with any stockholder, partner, principal, member or Affiliate of such Person or any Affiliate of any such stockholder, partner, principal, member or Affiliate except as may be permitted pursuant to Section 6.8 and, in any event, upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm's length basis with third parties other than an Affiliate, (g) does not make any loans or advances to any other Person (including any Affiliate), (h) conducts and operates its business in all material respects as presently conducted and operated, (i) maintains its books and records and bank accounts separately from those of its Affiliates, including its general partners or members, as may be applicable, (j) at all times holds itself out to the public as a legal entity separate and apart from any other Person (including any Affiliate), and promptly corrects any known misunderstandings regarding its separate identity, (k) files its own tax returns, (l) maintains adequate capital for its normal obligations, reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (provided that there is sufficient cash flow from the Project to do so), (m) maintains its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any other Person, (n) complies with all of the limitations on powers set forth in its organizational documentation as in effect on the Closing Date, (o) holds title to the Project and all of its other assets in its own name, (p) utilizes its own letterhead, invoices and checks, (q) allocates fairly and reasonably any overhead expenses that are shared with any Affiliate including paying for office space and services performed by any employee of any Affiliate, and (r) maintains a segregated operating account for the Project from which all Operating Expenses and Debt Service is paid.
"Site Assessment" has the meaning assigned in the Hazardous Materials Indemnity Agreement.
"Site Plan" has the meaning set forth in the Gelson's Lease.
"Specially Designated National and Blocked Persons" means those Persons that have been designated by executive order or by the sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types approved by OFAC.
"SRTCC Member" means SRTCC SG, LLC, a Delaware limited liability company which is a member of Borrower.
"SROP" means Strategic Realty Operating Partnership, L.P., a Delaware limited partnership, which is the sole member of SRTCC Member.
"SRT" means Strategic Realty Trust, Inc., a Maryland corporation which is the sole general partner of SROP.
"Stated Maturity Date" means the Initial Stated Maturity Date, as the same may be extended pursuant to Section 2.3(3).
βSubordination of Property Management Agreementβ means an Assignment of Management Agreement and Subordination of Management Fees among Borrower, an Approved Property Manager and Lender, substantially in the form delivered on the date hereof by Borrower, the initial Approved Property Manager and Lender.
SCHEDULE 1.1
| -10- |
"Tangible Net Worth" means total assets (excluding the value of each Guarantor's direct or indirect interest in Borrower, and excluding goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense, deferred research and development costs, deferred marketing expenses, and other like intangibles) less total liabilities, including accrued and deferred income taxes (but excluding deferred taxes resulting from the completion of a tax deferred exchange), and any reserves against assets, accounted for in accordance with the method used to prepare Guarantorβs financial statements provided to Lender in connection with the Loan, consistently applied.
"Tax Reserve" has the meaning assigned in Section 3.1(1).
"Transfer" means any sale (including any installment sale), conveyance, assignment, mortgage, pledge, lease (including any ground lease), encumbrance, alienation or grant of Lien (other than Permitted Encumbrances) on, grant of any option with respect to or grant of any other interest in the Project, any part thereof or any interest therein (including any legal, beneficial or economic interest in Borrower or any Restricted Party and any rights in or restricting the use or development of the Project), directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record.
"U.S. Person" means any United States citizen, any entity organized under the laws of the United States or its constituent states or territories, or any entity, regardless of where organized, having its principal place of business within the United States or any of its territories.
SCHEDULE 1.1
| -11- |
Schedule 3.1(2)(a)
Form of Request for Disbursement From Predevelopment Expense Reserve
Date: ________________
Xxxxxxxx Mortgage Holdings, LLC 0000 Xxxxxxxx Xxxx, Xxxxx 0000 Xxxxxxx Xxxxx, XX 00000 Attention: Xxxx Xxxxx
| Re: | Request for Disbursement from Predevelopment Expense Reserve |
The undersigned, Sunset & Gardner Investors LLC, a Colorado limited partnership ("Borrower"), refers to the Loan Agreement dated as of January 26, 2016 (the "Loan Agreement"), between the undersigned and Xxxxxxxx Mortgage Holdings, LLC, and hereby gives you notice, irrevocably, that the undersigned hereby requests an Advance pursuant to Section 3.1(2) of the Loan Agreement.
In order to induce Lender to make the disbursement requested herein, Borrower hereby represents, warrants and covenants the following to Lender as of the date hereof and as of the date the disbursement:
Date of the requested disbursement: __________, 20__. [Date inserted must be at least seven (7) Business Days after the date this request is delivered to Lender.]
1. Borrower hereby requests a disbursement in the amount of $______________.
2. The requested disbursement shall be used to reimburse Borrower for the Qualified Costs set forth on Schedule 1 attached hereto
3. Borrower hereby certifies that the conditions contained in Section 3.1(2) of the Loan Agreement have been satisfied on the date hereof with regard to this Disbursement Request, and will continue to be satisfied on the disbursement date, before and after giving effect thereto.
4. Attached are all paid invoices, lien waivers (if applicable), permits, approvals and other documents required by the applicable provisions of Section 3.1(2) of the Loan Agreement.
5. Attached hereto as Schedule 2 is a detailed schedule of the Qualified Costs incurred to date and the remaining Qualified Costs estimated by Borrower to obtain all of the Gelson's Entitlements.
6. Attached hereto as Schedule 3 is the most recent Entitlement Report required pursuant to Section 6.22 of the Loan Agreement.
7. All of Borrower's representations and warranties set forth in the Loan Documents and in any other document, certificate or statement executed or delivered to Lender in connection with the Loan are true and correct as of the date hereof with the same effect as if made on the date hereof.
8. Borrower has delivered to Lender fully executed copies of all Project Contracts in effect as of the date hereof. All of the Project Contracts are in full force and effect and there are no material breaches thereunder as of the date hereof.
Schedule 3.1(2)(a)
| -1- |
9. Guarantor is in compliance with the financial requirements set forth in Section 6.20 of the Loan Agreement.
10. There exists no Event of Default or monetary Potential Default (currently and after giving effect to the requested Advance).
(SIGNATURE APPEARS ON NEXT PAGE)
Schedule 3.1(2)(a)
| -2- |
| Very truly yours, | |||
| SUNSET & GARDNER INVESTORS LLC, | |||
| a Colorado limited liability company | |||
| By: | Sunset & Gardner LA LLC, | ||
| a Colorado limited liability company | |||
| Its: Manager | |||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | ||
| Xxxxxxx X. Xxxxxxxxx | |||
| Its: Manager |
Schedule 3.1(2)(a)
| -3- |
Schedule 3.1(2)(b)
Approved Budget
(Attached)
Schedule 3.1(2)(b)
| -1- |
SCHEDULE 4.1
REQUIRED INSURANCE
| 1. | Special form coverage |
| 2. | Deductible shall not exceed $25,000 |
| 3. | Business Interruption: 12 months gross income plus 6 months Extended Period of Indemnity ("EPI") (or actual loss sustained 12 months plus 6 months EPI) |
| 4. | Terrorism coverage not excluded and domestic acts of terrorism not excluded |
| 5. | Limited fungus coverage (when resulting from a covered peril) |
| 6. | Building Amount coverage equal to the replacement cost of the improvements) |
| 7. | No coinsurance |
| 8. | Equipment breakdown coverage (boiler & machinery coverage) |
| 9. | Ordinance or Law: |
(a) Loss to the undamaged portion of the building (full insured value)
(b) Demolition
(c) Increased cost of construction
| 10. | Sinkhole/Earth movement required for all assets |
| 11. | Earthquake: required for all assets in California and all assets in seismic zones 3 & 4 |
| 12. | Flood coverage is required for all assets in flood zones A, D & V or in other zones if required based on the observations of the inspecting engineer |
| 13. | Wind/Hail required for all assets |
(a) Windstorm/named storm coverage required in Florida and within 25 miles of any coast including the Houston Shipping Channel and Chesapeake Bay)
| 1. | Commercial general liability insurance |
| 2. | General liability deductible shall not exceed $25,000 |
| 3. | Minimum of $1,000,000 per occurrence and $2,000,000 in the aggregate is required together with at least $5,000,000 excess and/or umbrella liability insurance |
| 4. | Terrorism coverage not excluded and domestic acts of terrorism not excluded |
Insurance Certificates. All certificates of insurance shall include the following information (in addition to the applicable insurance described above):
| 1. | Borrower as named insured |
| 2. | Xxxxxxxx Mortgage Holdings, LLC as Beneficiary, Loss Payee or Additional Insured (as applicable) |
SCHEDULE 4.1
| -1- |
| 3. | Certificate Holder: Xxxxxxxx Mortgage Holdings, LLC, x/x Xxxxxxxx Xxxxxx Partners, 0000 Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxx Xxxxx, XX 00000 (please send renewal certificates via mail or email to: xxxxxxxx@xxxxxxxxxxxxxx.xxx) |
| 4. | Project address(es) |
| 5. | Current policy term (expiration at least 30 days after Closing Date) |
| 6. | Policy number and loan number |
| 7. | Deductible may not exceed $25,000 (for general liability insurance, indicate on certificate if $0 deductible) |
| 8. | Reported building value(s) |
| 9. | Replacement cost |
| 10. | Certificate must be signed by an authorized agent (signature required; no stamps) |
| 11. | Annual premiums for coverage as approved (including any amounts unpaid) |
SCHEDULE 4.1
| -2- |
SCHEDULE 5.1
BORROWER'S ORGANIZATIONAL CHART
[Attached]]
SCHEDULE 5.1
| -1- |
SCHEDULE 5.3
SCHEDULE OF LITIGATION
None
SCHEDULE 5.3
| -1- |
LOAN AGREEMENT
between
SUNSET & GARDNER INVESTORS LLC, a Colorado limited liability company as Borrower
and
XXXXXXXX MORTGAGE HOLDINGS, LLC as Lender
January 26, 2016
TABLE OF CONTENTS
|
| Page | |
| ARTICLE 1 | DEFINITIONS AND INTERPRETATIONS | 1 |
| Section 1.1 | Defined Terms | 1 |
| Section 1.2 | Singular and Plural | 1 |
| Section 1.3 | Phrases | 1 |
| Section 1.4 | Exhibits and Schedules | 1 |
| Section 1.5 | Titles of Articles, Sections and Subsections | 1 |
| Section 1.6 | Non-Business Days | 1 |
| ARTICLE 2 | LOAN TERMS | 2 |
| Section 2.1 | The Loan | 2 |
| Section 2.2 | Interest Rate; Late Charge | 2 |
| Section 2.3 | Terms of Payment | 3 |
| Section 2.4 | Security | 6 |
| ARTICLE 3 | RESERVES AND DISTRIBUTIONS | 6 |
| Section 3.1 | Reserves | 6 |
| Section 3.2 | General Provisions Regarding Reserves | 9 |
| Section 3.3 | The Reserves Generally | 10 |
| ARTICLE 4 | INSURANCE AND CONDEMNATION | 11 |
| Section 4.1 | Insurance | 11 |
| Section 4.2 | Application of Loss Proceeds | 13 |
| Section 4.3 | Condemnation Awards | 13 |
| Section 4.4 | WARNING | 14 |
| Section 4.5 | Lender's Rights Upon Foreclosure | 14 |
| ARTICLE 5 | GENERAL REPRESENTATIONS AND WARRANTIES | 15 |
| Section 5.1 | Organization and Power | 15 |
| Section 5.2 | Validity of Loan Documents | 15 |
| Section 5.3 | Financial Condition; Litigation; Other Secured Transactions | 15 |
| Section 5.4 | Taxes and Assessments | 15 |
| Section 5.5 | Other Agreements; Defaults | 16 |
| Section 5.6 | Compliance with Law; Project Condition | 16 |
| Section 5.7 | Location of Borrower | 16 |
| Section 5.8 | ERISA | 17 |
| Section 5.9 | Margin Stock | 17 |
| Section 5.10 | Tax Filings | 17 |
| Section 5.11 | Solvency | 17 |
| Section 5.12 | Full and Accurate Disclosure | 17 |
| Section 5.13 | Single Purpose Entity | 18 |
| Section 5.14 | Intentionally Omitted | 18 |
| (i) |
| Page | ||
| Section 5.15 | No Conflicts | 18 |
| Section 5.16 | Title | 18 |
| Section 5.17 | Use of Project | 18 |
| Section 5.18 | Flood Zone | 18 |
| Section 5.19 | Insurance | 18 |
| Section 5.20 | Filing and Recording Taxes | 19 |
| Section 5.21 | Restricted Company | 19 |
| ARTICLE 6 | GENERAL COVENANTS | 19 |
| Section 6.1 | No Sale or Encumbrance; No Transfers of Equity Interests | 19 |
| Section 6.2 | Taxes; Charges | 20 |
| Section 6.3 | Control; Management | 21 |
| Section 6.4 | Use; Maintenance; Inspection | 22 |
| Section 6.5 | Taxes on Security | 22 |
| Section 6.6 | Compliance with Law and Other Restrictions | 22 |
| Section 6.7 | Legal Existence; Name, Status, Etc | 22 |
| Section 6.8 | Affiliate Transactions | 23 |
| Section 6.9 | Limitation on Other Debt | 23 |
| Section 6.10 | Mechanic's Liens and Stop Payment Notices | 23 |
| Section 6.11 | ERISA | 24 |
| Section 6.12 | No Liens | 24 |
| Section 6.13 | Further Assurances | 24 |
| Section 6.14 | Estoppel Certificates | 24 |
| Section 6.15 | Notice of Certain Events | 24 |
| Section 6.16 | Indemnification | 25 |
| Section 6.17 | Application of Operating Revenues; Restriction of Distributions | 25 |
| Section 6.18 | Material Agreements | 25 |
| Section 6.19 | Other Agreements; Defaults | 26 |
| Section 6.20 | Financial Covenants | 26 |
| Section 6.21 | Zoning and Use | 26 |
| Section 6.22 | Gelson's Entitlement Process; Project Contracts; Plans | 26 |
| ARTICLE 7 | LEASING MATTERS | 27 |
| Section 7.1 | Leasing Representations and Warranties | 27 |
| Section 7.2 | Leasing Covenants | 27 |
| Section 7.3 | No Other Leases; Lease Amendments | 28 |
| Section 7.4 | Tenant Estoppels | 28 |
| ARTICLE 8 | FINANCIAL REPORTING | 28 |
| Section 8.1 | Financial Statements | 28 |
| Section 8.2 | Accounting Principles | 29 |
| Section 8.3 | Other Information | 29 |
| Section 8.4 | Intentionally Omitted | 29 |
| Section 8.5 | Audits | 29 |
| (ii) |
| Page | ||
| ARTICLE 9 | ANTI-MONEY LAUNDERING AND INTERNATIONAL TRADE CONTROLS | 29 |
| Section 9.1 | Compliance with International Trade Control Laws and OFAC Regulations; Borrower's Funds | 29 |
| ARTICLE 10 | EVENTS OF DEFAULT AND CURE PERIODS | 30 |
| Section 10.1 | Events of Default Not Subject to Cure Periods | 30 |
| Section 10.2 | Events of Default Subject to Specific Cure Periods | 31 |
| Section 10.3 | Other Events of Defaults | 32 |
| Section 10.4 | Replacement Guarantor | 32 |
| ARTICLE 11 | LENDER'S REMEDIES | 33 |
| Section 11.1 | Remedies - Insolvency Events | 33 |
| Section 11.2 | Remedies - Other Events | 33 |
| Section 11.3 | Lender's Right to Perform the Obligations | 33 |
| ARTICLE 12 | CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT | 34 |
| Section 12.1 | Conditions Precedent to Effectiveness of Agreement | 34 |
| ARTICLE 13 | LIABILITY | 36 |
| Section 13.1 | Limitation on Liability | 36 |
| Section 13.2 | Limitation on Liability of Lender's Officers, Employees, Etc | 37 |
| ARTICLE 14 | MISCELLANEOUS | 37 |
| Section 14.1 | Notices | 37 |
| Section 14.2 | Amendments, Waivers, References | 39 |
| Section 14.3 | Limitation on Interest | 39 |
| Section 14.4 | Invalid Provisions | 39 |
| Section 14.5 | Reimbursement of Expenses | 40 |
| Section 14.6 | Approvals; Third Parties; Conditions | 40 |
| Section 14.7 | Lender Not in Control; No Partnership | 40 |
| Section 14.8 | Time of the Essence | 41 |
| Section 14.9 | Successors and Assigns | 41 |
| Section 14.10 | Renewal, Extension or Rearrangement | 42 |
| Section 14.11 | Waivers | 42 |
| Section 14.12 | Cumulative Rights | 42 |
| Section 14.13 | Promotional Material | 42 |
| Section 14.14 | Survival | 42 |
| Section 14.15 | WAIVER OF JURY TRIAL | 42 |
| Section 14.16 | Punitive or Consequential Damages; Waiver | 43 |
| Section 14.17 | Governing Law | 43 |
| Section 14.18 | Entire Agreement | 43 |
| Section 14.19 | Counterparts | 43 |
| Section 14.20 | Brokers | 43 |
| (iii) |
| Page | ||
| Section 14.21 | Claims Against Lender | 43 |
| Section 14.22 | Invalidated Payments | 44 |
| Section 14.23 | Retention of Servicer | 44 |
| Section 14.24 | Section 2822 Waiver | 44 |
| EXECUTED as of the date first written above | S-1 |
| (iv) |
LIST OF SCHEDULES
| SCHEDULE 1.1 | β | DEFINITIONS |
| SCHEDULE 3.1(2)(a) | FORM OF DISBURSEMENT REQUEST | |
| FROM PREDEVELOPMENT EXPENSE RESERVE | ||
| SCHEDULE 3.1(2)(b) | APPROVED BUDGET | |
| SCHEDULE 4.1 | β | REQUIRED INSURANCE |
| SCHEDULE 5.1 | β | ORGANIZATIONAL CHART |
| SCHEDULE 5.3 | SCHEDULE OF LITIGATION |
| (v) |