EXHIBIT 10.1
LOAN AGREEMENT
Dated as of June 1, 2001
Between
1350 LLC,
as Borrower
and
XXXXXX FINANCIAL CORPORATION,
as Lender
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TABLE OF CONTENTS
Page
I DEFINITIONS; PRINCIPLES OF CONSTRUCTION...............................5
Section 1.1 Definitions.........................................5
Section 1.2 Principles of Construction.........................25
II THE LOAN.............................................................26
Section 2.1 The Loan...........................................26
Section 2.2 Interest Rate......................................27
Section 2.3 Loan Payments......................................28
Section 2.4 Prepayments........................................30
Section 2.5 Defeasance.........................................31
III REPRESENTATIONS AND WARRANTIES.......................................35
Section 3.1 Borrower Representations...........................35
Section 3.2 Survival of Representations........................48
IV BORROWER COVENANTS...................................................48
Section 4.1 Borrower Affirmative Covenants.....................48
Section 4.2 Borrower Negative Covenants........................56
V INSURANCE, CASUALTY AND CONDEMNATION.................................59
Section 5.1 Insurance..........................................59
Section 5.2 Casualty and Condemnation..........................65
Section 5.3 Delivery of Net Proceeds...........................66
VI CASH MANAGEMENT......................................................72
Section 6.1 [Intentionally Omitted]............................72
Section 6.2 [Intentionally Omitted]............................72
Section 6.3 [Intentionally Omitted]............................72
Section 6.4 Cash Management....................................72
VII PROPERTY MANAGEMENT..................................................73
Section 7.1 The Management Agreement...........................73
Section 7.2 Prohibition Against Termination or Modification....73
Section 7.3 Replacement of Manager.............................74
VIII PERMITTED TRANSFERS..................................................74
Section 8.1 Permitted Transfers of Indirect Interest
in Borrower......................................74
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IX SALE AND SECURITIZATION OF MORTGAGE..................................75
Section 9.1 Sale of Mortgage and Securitization................75
Section 9.2 Securitization Indemnification.....................77
X DEFAULTS.............................................................81
Section 10.1 Event of Default...................................81
Section 10.2 Remedies...........................................84
Section 10.3 Remedies Cumulative................................86
XI MISCELLANEOUS........................................................86
Section 11.1 Successors and Assigns.............................86
Section 11.2 Lender's Discretion................................87
Section 11.3 Governing Law......................................87
Section 11.4 Modification, Waiver in Writing....................88
Section 11.5 Delay Not a Waiver.................................88
Section 11.6 Notices............................................88
Section 11.7 Trial by Jury......................................89
Section 11.8 Headings...........................................90
Section 11.9 Severability.......................................90
Section 11.10 Preferences........................................90
Section 11.11 Waiver of Notice...................................91
Section 11.12 Remedies of Borrower...............................91
Section 11.13 Expenses; Indemnity................................91
Section 11.14 Schedules Incorporated.............................93
Section 11.15 Offsets, Counterclaims and Defenses................93
Section 11.16 No Joint Venture or Partnership; No Third
Party Beneficiaries..............................94
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Section 11.17 Publicity..........................................95
Section 11.18 Waiver of Marshalling of Assets....................95
Section 11.19 Waiver of Counterclaim.............................96
Section 11.20 Conflict; Construction of Documents; Reliance......96
Section 11.21 Brokers and Financial Advisors.....................96
Section 11.22 Exculpation........................................97
Section 11.23 Prior Agreements..................................100
Section 11.24 Servicer..........................................100
Section 11.25 Assignment to Successor Lender....................101
SCHEDULES
Schedule 1 - Annual Budget
Schedule 2 - Monthly Debt Service Payment Amount
Schedule 3 - Non-Compliance
Schedule 4 - Leases
Schedule 4A - Defaulted Leases
EXHIBITS
Exhibit A - Form of Financial Statements
Exhibit B - Form of Cash Management Agreement
Exhibit C - Form of Letter of Instruction
Exhibit D - Form of Subordination Agreement
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LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of June 1, 2001 (as amended,
restated, replaced, supplemented or otherwise modified from time to time,
this "Agreement"), between XXXXXX FINANCIAL CORPORATION, a Pennsylvania
corporation, having an address at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxx,
Xxxxxxxx, Xxxxxxxx, 00000 (together with its successors and assigns,
"Lender") and 1350 LLC, a Delaware limited liability company, having an
address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Borrower").
All capitalized terms used herein shall have the respective
meanings set forth in Article I hereof.
W I T N E S S E T H :
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject
to and in accordance with the conditions and terms of this Agreement and
the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree, represent and warrant as follows:
I DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided:
"Act" shall mean the Delaware Limited Liability Company Act, 6
Del. C. Section 18-101 et seq., as amended from time to time.
"Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person
or of an Affiliate of such Person.
"Affiliate Creditor" shall mean, with respect to any Affiliate
Loan, the Affiliate of Borrower that made such Affiliate Loan.
"Affiliate Loan" shall mean an unsecured loan made by an
Affiliate of Borrower to Borrower.
"Affiliate Obligations" shall mean, with respect to any Affiliate
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Loan, (a) the principal amount of, and accrued interest on (including,
without limitation, any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of Borrower), such Affiliate Loan and (b) all other
indebtedness, obligations and liabilities of Borrower to the Affiliate
Creditor that made such Affiliate Loan now existing or hereafter incurred
or created under or with respect to or in connection with such Affiliate
Loan.
"Agent" shall mean the bank that is party to the Cash Management
Agreement, its permitted successors and assigns.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"Alteration Threshold" shall mean $3,500,000, excluding the cost
of any alterations set forth in the Annual Budget attached as Schedule 1
hereto.
"Annual Budget" shall mean the operating and capital budget for
the Property setting forth Borrower's good faith estimate of Gross Revenue,
Operating Expenses, and Capital Expenditures for the applicable Fiscal
Year.
"Applicable Interest Rate" shall mean 6.52%.
"Assignment of Leases" shall mean that certain first priority
Assignment of Leases and Rents dated as of the date hereof from Borrower,
as assignor, to Lender, as assignee, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"Assignment of Management Agreement" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees
dated the date hereof among Borrower, Manager and Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from
time to time.
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"Award" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part
of the Property.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time
promulgated thereunder, and any comparable foreign laws relating to
bankruptcy, insolvency or creditors' rights.
"Basic Carrying Costs" shall mean, with respect to the Property,
the sum of the following costs associated with the Property for the
relevant Fiscal Year or payment period: (i) real property taxes with
respect to the Property and (ii) insurance premiums with respect to the
Property.
"Borrower" shall have the meaning set forth in the first
paragraph of this Agreement, together with its permitted successors and
permitted assigns.
"Business Day" shall mean any day other than a Saturday, Sunday
or day on which national banks in New York, New York are not open for
business.
"Capital Expenditures" for any period shall mean amounts expended
for replacements and alterations to the Property and required to be
capitalized according to GAAP.
"Cash Management Agreement" shall mean that certain cash
management agreement among Lender, Borrower and Agent relating to funds
deposited in the Lockbox Account.
"Casualty" shall mean the occurrence of any casualty, damage or
injury, by fire or otherwise, to the Property or any part thereof.
"Casualty Consultant" shall have the meaning set forth in Section
5.3.2(c).
"Casualty Retainage" shall have the meaning set forth in Section
5.3.2(d).
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"Closing Date" shall mean the date of funding the Loan.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"Condemnation" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part
of the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the
Property or any part thereof.
"Cooperation Agreement" shall mean that certain Cooperation
Agreement dated as of the date hereof among Borrower, Mezzanine Borrower
and Lender.
"Crescent" shall mean Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership.
"Debt" shall mean the outstanding principal amount of the Loan
together with all interest accrued and unpaid thereon and all other sums
(including the Yield Maintenance Premium, if applicable) due to Lender in
respect of the Loan under the Note, this Agreement, the Mortgage, the
Environmental Indemnity or any other Loan Document.
"Debt Service" shall mean, with respect to any particular period
of time, scheduled principal and interest payments under the Note.
"Debt Service Coverage Ratio" shall mean, with respect to the
Property, the ratio of (i) Underwritable Net Operating Income for the
Property for the immediately preceding twelve (12) calendar month period to
(ii) the projected Debt Service that would be due with respect to the
Property for the twelve (12) calendar month period immediately following
such calculation.
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"Default" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or
passage of time, or both, would be an Event of Default.
"Default Rate" shall mean, with respect to the Loan, a rate per
annum equal to the lesser of (a) the maximum rate permitted by applicable
law, or (b) three percent (3%) above the Applicable Interest Rate.
"Defeasance Collateral" shall mean U.S. Obligations, which
provide payments (i) on or prior to, but as close as possible to, all
Monthly Payment Dates and other scheduled payment dates, if any, under the
Note after the Defeasance Date and up to and including the Maturity Date,
and (ii) in amounts equal to or greater than the Scheduled Defeasance
Payments.
"Defeasance Collateral Account" shall have the meaning set forth
in Section 2.5.2.
"Defeasance Date" shall have the meaning set forth in Section
2.5.1(a)(1).
"Defeasance Event" shall have the meaning set forth in Section
2.5.1(a).
"Defeased Note" shall have the meaning set forth in Section
2.5.2(iv) hereof.
"Disclosure Document" shall have the meaning set forth in Section
9.2(a).
"DSC Trigger Event" shall mean a Debt Service Coverage Ratio of
less than 1.0.
"Eligible Account" shall mean a separate and identifiable account
from all other funds held by the holding institution that is either (i) an
account or accounts maintained with a federal or state-chartered depository
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institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting
in its fiduciary capacity which, in the case of a state chartered
depository institution or trust company is subject to regulations
substantially similar to 12 C.F.R. ss.9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal and state authority. An Eligible
Account will not be evidenced by a certificate of deposit, passbook or
other instrument.
"Eligible Institution" shall mean a depository institution or
trust company the short term unsecured debt obligations or commercial paper
of which are rated at least A-1 by Standard & Poor's Ratings Group, P-1 by
Xxxxx'x Investors Service, Inc. and F-1+ by Fitch, Inc., in the case of
accounts in which funds are held for 30 days or less (or, in the case of
accounts in which funds are held for more than 30 days, the long term
unsecured debt obligations of which are rated at least "AA" by Fitch and
S&P and "Aa2" by Moody's).
"Environmental Indemnity" shall mean that certain Environmental
Indemnity Agreement dated as of the date hereof executed by Borrower in
connection with the Loan for the benefit of Lender.
"Equipment" shall have the meaning set forth in the granting
clause of the Mortgage.
"ERISA" shall have the meaning set forth in Section 4.2.11.
"Event of Default" shall have the meaning set forth in Section
10.1.
"Exchange Act" shall have the meaning set forth in Section
9.2(a).
"Extraordinary Expense" shall mean any operating expense or
capital expenditure not set forth in the Annual Budget.
"Fiscal Year" shall mean each twelve month period commencing on
January 1 and ending on December 31 during each year of the term of the
Loan.
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"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such entity as may
be in general use by significant segments of the U.S. accounting
profession.
"Governmental Authority" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever or any
governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) whether now or hereafter in existence.
"Gross Revenue" shall mean all revenue, derived from the
ownership and operation of the Property from whatever source, including,
but not limited to, Rents, but excluding sales, use and occupancy or other
taxes on receipts required to be accounted for by Borrower to any
Governmental Authority, non-recurring revenues as determined by Lender,
refunds and uncollectible accounts, proceeds of casualty insurance and
Awards (other than business interruption or other loss of income
insurance), and any disbursements to Borrower of any Funds or any other
fund established by the Loan Documents. If any Lease has been terminated by
Borrower in accordance with the terms of this Agreement and (i) a
replacement Lease has not been executed by Borrower with respect to the
space demised by such terminated Lease or (ii) a replacement Lease has been
executed by Borrower with respect to the space demised by such terminated
Lease but rents are not yet payable under such replacement Lease, the rents
that would otherwise be payable under such terminated or replacement Lease,
respectively, shall be included in the calculation of "Gross Revenue".
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"Guaranty" shall mean that certain Partial Guaranty dated as of
the date hereof executed by Metropolitan in favor of Lender.
"Improvements" shall have the meaning set forth in the granting
clause of the Mortgage.
"Indebtedness" shall mean, for any Person, without duplication:
(i) 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 its assets is liable, (ii) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for
which such Person would be liable if such amounts were advanced thereunder,
(iii) all amounts required to be paid by such Person as a guaranteed
payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests, (iv) all indebtedness
guaranteed by such Person, directly or indirectly, (v) all obligations
under leases that constitute capital leases for which such Person is
liable, and (vi) all obligations of such Person under interest rate swaps,
caps, floors, collars and other interest hedge agreements, in each case
whether such Person is liable contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss.
"Independent Director" shall have the meaning set forth in
Section 3.1.24(p).
"Independent Manager" shall have the meaning set forth in Section
3.1.24(o).
"Insolvency Opinion" shall have the meaning set forth in Section
3.1.24(r).
"Insurance Premiums" shall have the meaning set forth in Section
5.1.1.
"Interest Period" shall mean (a) initially, the period commencing
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on the Closing Date and ending on [the last day of June, 2001] and (b) for
each period thereafter, the period commencing on the first (1st) day of
each calendar month and ending on the last day of such calendar month.
"Lease" shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement (whether written or oral and whether
now or hereafter in effect) to which Borrower or any
predecessor-in-interest of Borrower is a party 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 or
other agreement relating to such lease, sublease, subsublease, or other
agreement entered into in connection with such lease, sublease,
subsublease, 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.
"Legal Requirements" shall mean, with respect to Borrower and the
Property, all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees
and injunctions of Governmental Authorities affecting Borrower or the
Property or any part thereof or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted
and in force, including, without limitation, the Americans with
Disabilities Act of 1990, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting the Property or any part thereof,
including, without limitation, any which may (i) require repairs,
modifications or alterations in or to the Property or any part thereof, or
(ii) in any way limit the use and enjoyment thereof.
"Lender" shall have the meaning set forth in the first paragraph
of this Agreement, together with its successors and assigns.
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"Liabilities" shall have the meaning set forth in Section 9.2(b).
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance,
charge or transfer of, on or affecting the Property or any portion thereof
or Borrower, or any interest therein, including, without limitation, any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, and mechanic's, materialmen's and other
similar liens and encumbrances.
"Loan" shall mean the loan made by Lender to Borrower pursuant to
this Agreement.
"Loan Documents" shall mean, collectively, this Agreement, the
Note, the Mortgage, the Assignment of Leases, the Cash Management
Agreement, the Environmental Indemnity, the Assignment of Management
Agreement, the Guaranty, the Pledge Agreement and any other document now or
hereafter executed and/or delivered in connection with the Loan.
"Lockbox Account" shall have the meaning set forth in Section
6.4.1.
"Lockbox Trigger Date" shall have the meaning set forth in
Section 6.4.1.
"Major Lease" shall mean any Lease covering more than 25,000
square feet at the Property.
"Management Agreement" shall mean, with respect to the Property,
that certain management agreement dated as of January 13, 2000 by and
between Borrower and Manager, pursuant to which Manager is to provide
management and other services with respect to the Property.
"Manager" shall mean Rany Management Group, Inc. or any other
manager approved or deemed approved by Lender in accordance with the terms
of this Agreement.
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"Maturity Date" shall mean June 1, 2006 or such other date on
which the final payment of principal of the Note becomes due and payable as
therein or herein provided, whether at such stated maturity date, by
declaration of acceleration, or otherwise.
"Maximum Legal Rate" shall mean the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws
of such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of the Loan.
"Mezzanine Borrower" shall mean 1350 Mezzanine LLC, a Delaware
limited liability company.
"Metropolitan" shall mean Metropolitan Partners LLC, a Delaware
limited liability company.
"Metropolitan Operating Partnership" shall mean Metropolitan
Operating Partnership, L.P., a Delaware limited partnership.
"Monthly Debt Service Payment Amount" shall mean a monthly
payment as set forth on Schedule 2 attached hereto.
"Monthly Payment Date" shall mean the first (1st) Business Day of
every calendar month occurring during the term of the Loan.
"Monthly Tax Amount" shall have the meaning set forth in the Cash
Management Agreement.
"Xxxxxx Xxxxxxx" shall have the meaning set forth in Section
9.2(b).
"Xxxxxx Xxxxxxx Group" shall have the meaning set forth in
Section 9.2(b).
"Mortgage" shall mean that certain first priority Consolidated,
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Amended and Restated Mortgage, Security Agreement and Fixture Filing dated
as of the date hereof, executed and delivered by Borrower as security for
the Loan made to Borrower and encumbering the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time
to time.
"Net Proceeds" shall mean: (i) the net amount of all insurance
proceeds payable as a result of a Casualty to the Property, after deduction
of reasonable costs and expenses (including, but not limited to, reasonable
attorneys' fees), if any, in collecting such insurance proceeds, or (ii)
the net amount of the Award, after deduction of reasonable costs and
expenses (including, but not limited to, reasonable attorneys' fees), if
any, in collecting such Award.
"Net Proceeds Deficiency" shall have the meaning set forth in
Section 5.3.2(f).
"Note" shall have the meaning set forth in Section 2.1.3.
"Notice" shall have the meaning set forth in Section 11.6.
"Officer's Certificate" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized officer of Borrower.
"Operating Expenses" shall mean all costs and expenses relating
to the operation, maintenance and management of the Property, including,
without limitation, utilities, repairs and maintenance, insurance, property
taxes and assessments, advertising expenses, payroll and related taxes,
equipment lease payments, a management fee equal to the greater of 3.5% of
annual rents or the actual management fee and deposits required to be made
as Funds, but excluding depreciation, amortization and Extraordinary
Expenses; provided, however, such costs and expenses shall be subject to
adjustment by Lender to normalize such costs and expenses.
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"Operating Partnership" shall mean Reckson Operating Partnership
L.P., a Delaware limited partnership.
"Other Charges" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Property, now or hereafter levied or
assessed or imposed against the Property or any part thereof.
"Permitted Encumbrances" shall mean, with respect to the
Property, collectively, (i) the Liens and security interests created by the
Loan Documents, (ii) all Liens, encumbrances and other matters disclosed in
the Title Insurance Policy relating to the Property or any part thereof,
(iii) Liens, if any, for Taxes imposed by any Governmental Authority not
yet due or delinquent, (iv) to the extent that any leases are either
approved by Lender or do not require the approval of Lender pursuant to the
terms of this Agreement, rights of tenants under such leases as tenants
only and (v) such other title and survey exceptions as Lender has approved
or may approve in writing in Lender's sole discretion, which in the
aggregate do not materially adversely affect the value or use of the
Property or Borrower's ability to repay the Loan.
"Permitted Investments" shall have the meaning set forth in the
Cash Management Agreement.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any other entity, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary
acting in such capacity on behalf of any of the foregoing.
"Pledge Agreement" shall mean that certain first priority Pledge
Agreement dated as of the date hereof from Mezzanine Borrower, as assignor,
to Lender, as assignee, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
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"Policies" shall have the meaning specified in Section 5.1.1(b).
"Prepayment Date" shall mean the date on which the Loan is
prepaid in accordance with the terms hereof.
"Property" shall mean each parcel of real property, the
improvements thereon and all personal property owned by Borrower and
encumbered by the Mortgage, together with all rights pertaining to such
property and improvements, as more particularly described in the Granting
Clauses of the Mortgage.
"Qualified Equityholder" shall mean:
(i) Reckson;
(ii) Metropolitan Operating Partnership, provided that Reckson,
directly or indirectly, continues to (A) control the operation and
management of Metropolitan Operating Partnership and (B) own no less than
33.33% of the equity interests in Metropolitan Operating Partnership;
(iii) any Person which receives Rating Agency Confirmation from
each of the Rating Agencies with respect to its ownership of more than 50%
of the ownership interests in Borrower;
(iv) an investment grade rated real estate investment trust or
other investment grade rated real estate operating company;
(v) a bank, saving and loan association, investment bank,
insurance company, trust company, commercial credit corporation, mutual
fund, pension fund, trust or pension account, real estate company,
investment fund or an institution substantially similar to any of the
foregoing, provided in each case that (A) such Person has total assets in
excess of $1,500,000,000 and capital/statutory surplus or shareholder's
equity in excess of $750,000,000 and (B) if such Person is not self-managed
with respect to its real estate assets, it is managed by a Person which
manages no less than $1,500,000,000 in assets and has substantial
experience in managing institutional quality commercial office properties;
or
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(vi) a pension fund advisory firm or similar fiduciary which (A)
controls no less than $1,500,000,000 of real estate assets and (B) is
acting on behalf of one or more pension funds that in the aggregate,
satisfy the requirements of clause (v) of this definition.
"Rating Agencies" shall mean, prior to the final Securitization
of the Loan, each of Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., Xxxxx'x Investors Service, Inc. and Fitch,
Inc., or any other nationally-recognized statistical rating agency which
has been designated by Lender and, after the final Securitization of the
Loan, shall mean any of the foregoing that have rated any of the
Securities.
"Rating Agency Confirmation" shall mean a written affirmation
from each of the Rating Agencies that the credit rating of the Certificates
by such Rating Agency immediately prior to the occurrence of the event with
respect to which such Rating Agency Confirmation is sought will not be
qualified, downgraded or withdrawn as a result of the occurrence of such
event, which affirmation may be granted or withheld in such Rating Agency's
sole and absolute discretion.
"Rating Surveillance Charge" shall have the meaning set forth in
Section 9.3.
"Reckson" shall mean Reckson Associates Realty Corp., a Maryland
corporation.
"Registration Statement" shall have the meaning set forth in
Section 9.2(b).
"Release Date" shall mean the earlier to occur of (a) the third
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anniversary of the Closing Date and (b) the date that is two (2) years from
the "startup day" (within the meaning of Section 860G(a)(9) of the Code) of
the REMIC Trust established in connection with a Securitization involving
this Loan.
"REMIC Trust" shall mean a "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code that holds the
Note.
"Rents" shall mean, with respect to the Property, all rents,
moneys payable as damages or in lieu of rent, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and
all sources arising from or attributable to the Property.
"Restoration" shall have the meaning set forth in Section 5.2.1.
"Restoration Threshold" shall mean $3,500,000.
"Scheduled Defeasance Payments" shall mean scheduled payments of
interest and principal under the Note for all Monthly Payment Dates
occurring after the Defeasance Date and up to and including the Maturity
Date (including the outstanding principal balance on the Note as of the
Maturity Date).
"Secondary Market Transaction" shall have the meaning set forth
in Section 9.1(a).
"Securities" shall have the meaning set forth in Section 9.1(a).
"Securities Act" shall have the meaning set forth in Section
9.2(a).
"Securitization" shall have the meaning set forth in Section
9.1(a).
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"Security Agreement" shall mean a security agreement in form and
substance satisfactory to Lender pursuant to which Borrower grants Lender a
perfected, first priority security interest in the Defeasance Collateral
Account and the Defeasance Collateral.
"Servicer" shall have the meaning set forth in Section 11.24.
"Servicing Agreement" shall have the meaning set forth in Section
11.24.
"Severed Loan Documents" shall have the meaning set forth in
Section 10.2(c).
"SPC Member" shall have the meaning set forth in Section
3.1.24(o).
"Specified Disclosures" shall have the meaning set forth in
Section 9.2(b).
"Springing Event" shall have the meaning set forth in Section
3.1.24(v).
"Springing Member" shall have the meaning set forth in Section
3.1.24(v)
"State" shall mean the State of New York.
"Subordinate and Junior in Right of Payment", with respect to any
Affiliate Loan, shall mean that:
(i) no part of the Affiliate Obligations shall have any claim to
the assets of Borrower on a parity with or prior to the claim of the Debt.
Unless and until the Debt shall have been fully paid and satisfied by
payment in full in cash, no Affiliate Creditor will (A) take, demand or
receive from Borrower, and Borrower will not make, give or permit, directly
or indirectly, by set-off, redemption, purchase or in any other manner, any
payment, prepayment, collateral or security, or permit any payment,
prepayment, collateral, security or guarantee, for the whole or any part
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of the Affiliate Obligations, provided, however, that if (x) no Default or Event
of Default has occurred under this Agreement or any other Loan Document and (y)
the cash flow from the operation of the Property is sufficient to make such
payments, then Borrower shall be permitted to make payments on account of the
Affiliate Obligations in an aggregate amount not to exceed $3,500,000, (B)
accelerate for any reason the scheduled maturities of any of the Affiliate
Obligations, (C) institute or maintain any action to enforce the loan documents
and other instruments evidencing, representing, securing and/or guaranteeing the
Affiliate Loan, as any of the same may be amended, supplements, extended,
renewed, restated, replaced, substituted or otherwise modified from time to time
with the prior written consent of Lender (collectively, the "Subordinated Loan
Documents"), including, without limitation, any action to foreclose the
Subordinated Loan Documents by judicial procedure or otherwise, (D) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to Borrower, or seeking to adjudicate Borrower a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to Borrower
or its debts, (E) apply to any court or other public body for the appointment of
a receiver, trustee, agent or similar official for the Project, (F) exercise any
of the other remedies provided in the Subordinated Loan Documents, including,
without limitation, the right to collect and retain rents and revenues from the
Project and the right to enter upon, take possession of and manage the Project
or (G) demand or take any security for all or part of the Affiliate Obligations.
(ii) (A) In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by operation of
law or otherwise, of all or any substantial part of the property, assets or
business of Borrower or the proceeds thereof to any creditor or creditors
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of Borrower or (B) upon any indebtedness of Borrower becoming due and
payable by reason of any liquidation, dissolution or other winding-up of
Borrower or its business or by reason of any sale, receivership,
insolvency, reorganization or bankruptcy proceedings, assignment for the
benefit of creditors, arrangement or any proceeding by or against Borrower
for any relief under any bankruptcy, reorganization or insolvency law or
laws, Federal or state, or any law, Federal or state, relating to the
relief of debtors, readjustment of indebtedness, reorganization,
composition, or extension, or (C) in the event that any of the Affiliate
Obligations is declared due and payable prior to its stated maturity (under
circumstances when the preceding clause (A) or (B) shall not be
applicable), or (D) in the event that any of the Debt have become, or have
been declared to be, due and payable (and have not been paid in accordance
with their terms), then and in any such event, any payment or distribution
of any kind or character, whether in cash, property or securities which,
but for the subordination provisions contained herein, would otherwise be
payable or deliverable to the Affiliate Creditor upon or in respect of the
Affiliate Obligations, shall instead be paid over or delivered to, and for
the account of, Lender, and the Affiliate Creditor shall not receive any
such payment or distribution or any benefit therefrom unless and until the
Debt shall have been fully paid and satisfied in cash.
"Subordination Agreement" shall have the meaning set forth in
Section 3.1.24(d).
"Successor Borrower" shall have the meaning set forth in Section
2.5.3.
"Survey" shall mean that certain survey of the Property in
question prepared by Xxxx X. Xxxxxxx and dated as of April 14, 1966, as
updated by a visual examination by Xxxxxxx Surveying P.C. on May 17, 2001.
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"Taxes" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or
assessed or imposed against the Property or any part thereof.
"Tax Funds" shall have the meaning set forth in the Cash
Management Agreement.
"Tenant" shall mean any Person obligated under any Lease now or
hereafter affecting all or any part of the Property.
"Title Insurance Policy" shall mean that certain ALTA mortgagee
title insurance policy number NY2K0594 issued by Commonwealth Land Title
Insurance Company with respect to the Property and insuring the lien of the
Mortgage encumbering the Property.
"Transfer" shall have the meaning set forth in the Mortgage.
"UCC" or "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the applicable State or Commonwealth in
which the Property is located.
"Underwritable Net Operating Income" shall mean the excess of
Gross Revenue over Operating Expenses. Lender's calculation of
Underwritable Net Operating Income (including determination of items that
do not qualify as Gross Revenue or Operating Expenses) shall be final
absent manifest error.
"Underwriter Group" shall have the meaning set forth in Section
9.2(b).
"Updated Information" shall have the meaning set forth in Section
9.1(b).
"U.S. Obligations" shall mean direct full faith and credit
obligations of the United States of America that are not subject to
prepayment, call or early redemption.
"Yield Maintenance Premium" shall mean an amount equal to the
greater of: (i) one percent (1%) of the principal amount of the Loan being
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prepaid or (ii) the present value as of the Prepayment Date of the
Calculated Payments from the Prepayment Date through the Maturity Date
determined by discounting such payments at the Discount Rate. As used in
this definition, the term "Prepayment Date" shall mean the date on which
prepayment is made. As used in this definition, the term "Calculated
Payments" shall mean the monthly payments of interest only which would be
due based on the principal amount of the Loan being prepaid on the
Prepayment Date and assuming an interest rate per annum equal to the
difference (if such difference is greater than zero) between (y) the
Applicable Rate and (z) the Yield Maintenance Treasury Rate. As used in
this definition, the term "Discount Rate" shall mean the rate which, when
compounded monthly, is equivalent to the Yield Maintenance Treasury Rate,
when compounded semi- annually. As used in this definition, the term "Yield
Maintenance Treasury Rate" shall mean the yield calculated by the linear
interpolation of the yields, as reported in the Federal Reserve Statistical
Release H.15- Selected Interest Rates under the heading U.S. Government
Securities/Treasury Constant Maturities for the week ending prior to the
Prepayment Date, of U.S. Treasury Constant Maturities with maturity dates
(one longer or one shorter) most nearly approximating the Maturity Date. In
the event Release H.15 is no longer published, Lender shall select a
comparable publication to determine the Yield Maintenance Treasury Rate. In
no event, however, shall Lender be required to reinvest any prepayment
proceeds in U.S. Treasury obligations or otherwise.
Section 1.2 Principles of Construction.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. Unless
otherwise specified, the words "hereof," "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. Unless
otherwise specified, all meanings attributed to defined terms herein shall
be equally applicable to both the singular and plural forms of the terms so
defined.
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II THE LOAN
Section 2.1 The Loan.
2.1.1 Agreement to Lend and Borrow
Subject to and upon the terms and conditions set forth herein,
Lender shall make the Loan to Borrower and Borrower shall accept the Loan
from Lender on the Closing Date in the original principal amount of
$75,000,000.
2.1.2 Single Disbursement to Borrower
Borrower shall receive only one borrowing hereunder in respect of
the Loan and any amount borrowed and repaid hereunder in respect of the
Loan may not be reborrowed.
2.1.3 The Note
The Loan shall be evidenced by that certain Consolidated, Amended
and Restated Note dated as of the date hereof made by Borrower in favor of
Lender in the original principal amount of $75,000,000 (as the same may be
amended, supplemented, restated, increased, extended, consolidated or
severed from time to time, the "Note").
2.1.4 Use of Proceeds
Borrower shall use proceeds of the Loan (i) to repay and
discharge any existing loans relating to the Property, (ii) to pay all past
due Basic Carrying Costs, if any, in respect of the Property, (iii) to pay
costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender and (iv) for such other purposes as Borrower may see
fit.
2.1.5 Existing Loans
Borrower and Lender agree that any existing loans related to
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the Property which have been acquired by Lender as of the date hereof, and all
documents related thereto, have been amended and restated in their entirety by
the Loan Documents and neither Borrower nor Lender shall have any obligations
thereunder except to the extent of Lender's and Borrower's obligations under the
Loan Documents.
Section 2.2 Interest Rate.
2.2.1 Applicable Interest Rate.
Interest on the outstanding principal balance of the Loan shall
accrue from the Closing Date up to and including the Maturity Date, at the
Applicable Interest Rate.
2.2.2 Interest Calculation.
Interest on the outstanding principal balance of the Loan shall
be calculated by multiplying (a) the actual number of days elapsed in the
period for which the calculation is being made by (b) a daily rate based on
a three hundred sixty (360) day year (that is, the Applicable Interest Rate
or the Default Rate, as then applicable, expressed as an annual rate
divided by 360) by (c) the outstanding principal balance of the Loan. The
accrual period for calculating interest due on each Monthly Payment Date
shall be the calendar month immediately prior to such Monthly Payment Date.
2.2.3 Usury Savings.
This Agreement and the other Loan Documents are subject to the
express condition that at no time shall Borrower be required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess
of the
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Maximum Legal Rate. If by the terms of this Agreement or the other
Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as
the case may be, shall be deemed to be immediately reduced to the Maximum
Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the
Loan, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Loan
until payment in full so that the rate or amount of interest on account of
the Loan does not exceed the Maximum Legal Rate from time to time in effect
and applicable to the Loan for so long as the Loan is outstanding.
Section 2.3 Loan Payments.
2.3.1 Payments Before Maturity Date.
Borrower shall make a payment to Lender of interest only on the
date hereof for the period from the Closing Date to and including June 30,
2001. Borrower shall make a payment to Lender in the amount of the Monthly
Debt Service Payment Amount (as set forth on Schedule 2 attached hereto) on
August 1, 2001 and on each Monthly Payment Date thereafter through but not
including the Maturity Date. Provided no Event of Default shall have
occurred, each such payment shall be applied first to interest in an amount
equal to the interest that would have accrued on the outstanding principal
balance of the Loan and the balance applied to the outstanding principal
balance of the Loan. The Monthly Debt Service Payment Amount required
hereunder is based upon a thirty (30) year amortization schedule.
2.3.2 Payments On Maturity Date.
Borrower shall pay to Lender on the Maturity Date the outstanding
principal balance of the Loan, all accrued and unpaid interest, and all
other amounts then due hereunder and under the Note, the Mortgage and the
other Loan Documents.
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2.3.3 Payment After Default.
In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal balance of the
Loan shall accrue interest at the Default Rate, calculated from the date
the Default which gave rise to such Event of Default occurred without
regard to any grace or cure periods contained herein.
2.3.4 Late Payment Charge.
If any principal, interest or any other sum due under the Loan
Documents is not paid by Borrower on the date on which it is due, Borrower
shall pay to Lender upon demand an amount equal to the lesser of three
percent (3%) of such unpaid sum or the maximum amount permitted by
applicable law in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender
for the loss of the use of such delinquent payment. Any such amount shall
be secured by the Mortgage and the other Loan Documents.
2.3.5 Method and Place of Payment.
(1) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Note shall be made to
Lender not later than 1:00 P.M., New York City time, on the date when due
and shall be made in lawful money of the United States of America in
immediately available funds at Lender's office, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have
been paid on the next succeeding Business Day.
(a) Whenever any payment to be made hereunder or under any other
Loan Document shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business
Day and, with respect to payments of principal, interest shall be payable
at the Applicable Interest Rate or the Default Rate, as the case may be,
during such extension.
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(b) All payments required to be made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of,
and without deduction for, any setoff, claim or counterclaim and shall be
made irrespective of any defense thereto.
Section 2.4 Prepayments.
2.4.1 Voluntary Prepayments.
Except as otherwise provided herein, Borrower shall not have the
right to prepay the Loan in whole or in part. Notwithstanding the
foregoing, on and after April 1, 2006, Borrower may, at its option and upon
five (5) Business Days prior notice to Lender, prepay the Debt in whole on
any Monthly Payment Date without payment of the Yield Maintenance Premium;
provided that, notwithstanding any other provision of this Agreement, so
long as such prepayment is made in accordance with Section 2.3.5, no
interest shall be payable by Borrower for the day comprising the Monthly
Payment Date.
2.4.2 Mandatory Prepayments.
If Lender actually receives a distribution of Net Proceeds, and
if Lender is not required to and does not actually make such Net Proceeds
available to Borrower for a Restoration, Borrower shall, at Lender's
option, as of the Monthly Payment Date next succeeding the receipt of such
Net Proceeds, prepay the outstanding principal balance of the Note in an
amount equal to one hundred percent (100%) of such Net Proceeds. No Yield
Maintenance Premium shall be due in connection with any prepayment made
pursuant to this Section 2.4.2.
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2.4.3 Prepayments After Default.
If after an Event of Default, payment of all or any part of the
principal of the Loan is tendered by Borrower, a purchaser at foreclosure
or any other Person, such tender shall be deemed an attempt to circumvent
the prohibition against prepayment set forth in Section 2.4.1 and Borrower,
such purchaser at foreclosure or other Person shall pay the Yield
Maintenance Premium, in addition to the outstanding principal balance, all
accrued and unpaid interest and other amounts payable under the Loan
Documents.
Section 2.5 Defeasance.
2.5.1 Defeasance.
(a) Provided no Event of Default shall have occurred and remain
uncured, Borrower shall have the right at any time after the Release Date
to voluntarily defease the entire Loan and obtain a release of the lien of
the Mortgage by providing Lender with the Defeasance Collateral
(hereinafter, a "Defeasance Event") upon satisfaction of the following
conditions precedent:
(i) Borrower shall provide Lender not less than thirty (30) days
notice (or such shorter period of time permitted by Lender in its sole
discretion) specifying a date (the "Defeasance Date") on which the
Defeasance Event is to occur;
(ii) Borrower shall pay to Lender (A) all payments of principal
and interest due on the Loan to and including the Defeasance Date and (B)
all other sums then due and payable under the Note, this Agreement, the
Mortgage and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance Collateral into the
Defeasance Collateral Account and otherwise comply with the provisions of
Sections 2.5.2 and 2.5.3 hereof;
(iv) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the
Defeasance Collateral;
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(v) Borrower shall deliver to Lender opinions of counsel for
Borrower that are standard in commercial lending transactions and subject
only to customary qualifications, assumptions and exceptions opining, among
other things, that (A) Lender has a legal and valid perfected first
priority security interest in the Defeasance Collateral Account and the
Defeasance Collateral, (B) if a Securitization has occurred, the REMIC
Trust formed pursuant to such Securitization will not fail to maintain its
status as a "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code as a result of a Defeasance Event pursuant to this
Section 2.5.1, (C) the Defeasance Event will not result in a deemed
exchange for purposes of the Code and will not adversely affect the status
of the Note as indebtedness for federal income tax purposes, (D) delivery
of the Defeasance Collateral and the grant of a security interest therein
to Lender shall not constitute an avoidable preference under Section 547 of
the Bankruptcy Code or applicable state law and (E) a non-consolidation
opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Agency
Confirmation as to the Defeasance Event;
(vii) Borrower shall deliver an Officer's Certificate certifying
that the requirements set forth in this Section 2.5.1(a) have been
satisfied;
(viii) Borrower shall deliver a certificate of a "big five" or
other nationally recognized public accounting firm acceptable to Lender
certifying that the Defeasance Collateral will generate monthly amounts
equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions,
documents and instruments as the Rating Agencies may require; and
(x) Borrower shall pay all reasonable out-of-pocket costs and
expenses of Lender incurred in connection with the Defeasance Event,
including Lender's reasonable out-of-pocket attorneys' fees and expenses
and Rating Agency fees and expenses.
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(b) If Borrower has elected to defease the Note and the
requirements of this Section 2.5.1 have been satisfied, the Property shall
be released from the Lien of the Mortgage and the Defeasance Collateral
pledged pursuant to the Security Agreement shall be the sole source of
collateral securing the Note. In connection with the release of the Lien of
the Mortgage, Borrower shall submit to Lender, not less than thirty (30)
days prior to the Defeasance Date (or such shorter time as is acceptable to
Lender in its sole discretion), an assignment or release of Lien (and
related Loan Documents) for execution by Lender. Such release shall be in a
form appropriate in New York, New York and that contains standard
provisions protecting the rights of the releasing lender. In addition,
Borrower shall provide all other documentation Lender reasonably requires
to be delivered by Borrower in connection with such release, together with
an Officer's Certificate certifying that such documentation (i) is in
compliance with all Legal Requirements, and (ii) will effect such release
in accordance with the terms of this Agreement. Borrower shall pay all
costs, taxes and expenses associated with the release of the Lien of the
Mortgage, including Lender's reasonable out-of-pocket attorneys' fees.
Except as set forth in Section 2.4 and this Section 2.5, no repayment,
prepayment or defeasance of all or any portion of the Note shall cause,
give rise to a right to require, or otherwise result in, the release of the
lien of the Mortgage on the Property.
2.5.2 Defeasance Collateral Account.
On or before the date on which Borrower delivers the Defeasance
Collateral, Borrower shall open at any Eligible Institution the defeasance
collateral account (the "Defeasance Collateral Account") which shall at all
times be an Eligible Account. The Defeasance Collateral Account shall
contain only (i) Defeasance Collateral, and (ii) cash from interest and
Page 33
principal paid on the Defeasance Collateral. All cash from interest and
principal payments paid on the Defeasance Collateral shall be paid over to
Lender on each Monthly Payment Date and applied first to accrued and unpaid
interest and then to principal in the manner and priorities herein
established. Any cash from interest and principal paid on the Defeasance
Collateral not needed to pay accrued and unpaid interest or principal shall
be retained in the Defeasance Collateral Account as additional collateral
for the Loan. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral are deposited to enter into an agreement with
Borrower and Lender, satisfactory to Lender in its reasonable discretion,
pursuant to which such Eligible Institution shall agree to hold and
distribute the Defeasance Collateral in accordance with this Agreement. The
Successor Borrower shall be the owner of the Defeasance Collateral Account
and shall report all income accrued on Defeasance Collateral for federal,
state and local income tax purposes in its income tax return. Borrower
shall prepay all costs and expenses associated with opening and maintaining
the Defeasance Collateral Account. Lender shall not in any way be liable by
reason of any insufficiency in the Defeasance Collateral Account, unless
such insufficiency is the result of the gross negligence or willful
misconduct of Lender.
2.5.3 Successor Borrower.
In connection with a defeasance under this Section 2.5, Borrower
shall, if required by the Rating Agencies or if Borrower elects to do so,
establish or designate a successor entity (the "Successor Borrower") which
shall be a single purpose bankruptcy remote entity and which shall be
approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower's option, be an Affiliate of Borrower unless the Rating Agencies
shall require otherwise. Borrower shall transfer and assign all
obligations, rights and duties under and to the Note together with the
Defeasance Collateral to such Successor Borrower. Such Successor Borrower
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shall assume the obligations under the Note and the Security Agreement, and
Borrower shall be relieved of its obligations under such documents.
Borrower shall pay a minimum of $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Note and the Security
Agreement. Borrower shall pay all reasonable out-of-pocket costs and
expenses incurred by Lender, including Lender's attorney's fees and
expenses, incurred in connection therewith.
III REPRESENTATIONS AND WARRANTIES
Section 3.1 Borrower Representations.
Borrower represents and warrants that:
3.1.1 Organization.
Borrower is duly organized, validly existing and in good standing
with full power and authority to own its assets and conduct its business,
is duly qualified in all jurisdictions in which the ownership or lease of
its property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on its ability to perform its obligations hereunder, and
Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement by it, and has the power and
authority to execute, deliver and perform under this Agreement and all the
transactions contemplated hereby.
3.1.2 Organization.
This Agreement and the other Loan Documents have been duly
authorized, executed and delivered by Borrower and constitute a legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally, and
by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
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3.1.3 No Conflicts.
The execution and delivery of this Agreement and the other Loan
Documents by Borrower and the performance of its obligations hereunder and
thereunder will not conflict with any provision of any law or regulation to
which Borrower is subject, or conflict with, result in a breach of, or
constitute a default under, any of the terms, conditions or provisions of
any of Borrower's organizational documents or any agreement or instrument
to which Borrower is a party or by which it is bound, or any order or
decree applicable to Borrower, or result in the creation or imposition of
any lien on any of Borrower's assets or property (other than the Property),
in each case which would materially and adversely affect the ability of
Borrower to carry out the transactions contemplated by this Agreement.
3.1.4 Litigation.
There is no action, suit, proceeding or investigation pending or,
to Borrower's knowledge, threatened against Borrower in any court or by or
before any other Governmental Authority which would materially and
adversely affect the ability of Borrower to carry out the transactions
contemplated by this Agreement.
3.1.5 Agreements.
Borrower is not in default with respect to any order or decree of
any court or any order, regulation or demand of any Governmental Authority,
which default might have consequences that would materially and adversely
affect the condition (financial or other) or operations of Borrower or its
properties or might have consequences that would materially and adversely
affect its performance hereunder.
3.1.6 Consents.
No consent, approval, authorization or order of any court or
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Governmental Authority is required for the execution, delivery and
performance by Borrower of, or compliance by Borrower with, this Agreement
or the consummation of the transactions contemplated hereby, other than
those which have been obtained by Borrower.
3.1.7 Title.
Borrower has good, marketable and insurable title in fee simple
to the real property comprising part of the Property and good title to the
balance of the Property, free and clear of all Liens whatsoever except the
Permitted Encumbrances. The Mortgage, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (i) a
valid, first priority, perfected lien on the Property, subject only to
Permitted Encumbrances and (ii) perfected security interests in and to, and
perfected collateral assignments of, all personalty (including the Leases),
all in accordance with the terms thereof, in each case subject only to any
Permitted Encumbrances.
3.1.8 No Plan Assets.
Borrower is not an "employee benefit plan," as defined in Section
3(3) of ERISA, subject to Title I of ERISA, and none of the assets of
Borrower constitutes or will constitute "plan assets" of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (i)
Borrower is not a "governmental plan" within the meaning of Section 3(32)
of ERISA and (ii) transactions by or with Borrower are not subject to state
statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans.
3.1.9 Compliance.
Except as set forth on Schedule 3 attached hereto, to Borrower's
knowledge, Borrower and the Property and the use thereof comply in all
Page 37
material respects with all applicable Legal Requirements, including,
without limitation, building and zoning ordinances and codes. Except as set
forth on Schedule 3 attached hereto, to Borrower's knowledge, Borrower is
not in default or violation of any order, writ, injunction, decree or
demand of any Governmental Authority, the violation of which might
materially adversely affect the condition (financial or otherwise) or
business of Borrower. Borrower has not committed any act which may give any
Governmental Authority the right to cause Borrower to forfeit the Property
or any part thereof or any monies paid in performance of Borrower's
obligations under any of the Loan Documents.
3.1.10 Financial Information.
All financial data, including, without limitation, the statements
of cash flow and income and operating expense, that have been delivered to
Lender in respect of the Property (i) is fairly stated in all material
respects, (ii) accurately represents the financial condition of the
Property as of the date of such reports, and (iii) have been prepared in
accordance with GAAP throughout the periods covered.
3.1.11 Condemnation.
To Borrower's knowledge, no Condemnation or other proceeding has
been commenced or is contemplated with respect to all or any portion of the
Property or for the relocation of roadways providing access to the
Property.
3.1.12 Utilities and Public Access.
The Property has rights of access to public ways and is served by
water, sewer, sanitary sewer and storm drain facilities adequate to service
the Property for its intended uses.
3.1.13 Separate Lots.
The Property is comprised of one (1) or more parcels which
constitutes a separate tax lot and does not constitute a portion of any
other tax lot not a part of the Property.
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3.1.14 Assessments.
To Borrower's knowledge, there are no pending or proposed special
or other assessments for public improvements or otherwise affecting the
Property, nor are there any contemplated improvements to the Property that
may result in such special or other assessments.
3.1.15 Enforceability.
The Loan Documents are not subject to any right of rescission,
setoff, counterclaim or defense by Borrower, including the defense of
usury, nor would the operation of any of the terms of the Loan Documents,
or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission,
setoff, counterclaim or defense with respect thereto.
3.1.16 Assignment of Leases.
The Assignment of Leases creates a valid assignment of, or a
valid security interest in, certain rights under the Leases, subject only
to a license granted to Borrower to exercise certain rights and to perform
certain obligations of the lessor under such Leases, including the right to
operate the Property. No Person other than Lender has any interest in or
assignment of Borrower's interest in the Leases or any portion of the Rents
due and payable or to become due and payable thereunder.
3.1.17 Insurance.
Each building or other improvement located on the Property is
insured by a fire and extended perils insurance policy, in an amount not
less than the replacement cost thereof; the Property is also covered by
business interruption insurance and comprehensive general liability
insurance in amounts generally required by institutional lenders for
similar properties; all premiums on such insurance policies required to be
paid as of the date hereof have been paid; such insurance policies require
prior notice to the insured of termination or cancellation, and no such
notice has been received.
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3.1.18 Licenses.
All permits and approvals, including without limitation,
certificates of occupancy required by any Governmental Authority for the
use, occupancy and operation of the Property in the manner in which the
Property is currently being used, occupied and operated have been obtained
and are in full force and effect.
3.1.19 Flood Zone.
None of the Improvements on the Property are located in an area
identified by the Federal Emergency Management Agency as a special flood
hazard area.
3.1.20 Physical Condition.
To the best of Borrower's knowledge, the Property, including,
without limitation, all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems,
fire protection systems, electrical systems, equipment, elevators, exterior
sidings and doors, landscaping, irrigation systems and all structural
components, is in good condition, order and repair in all material
respects; there exists no structural or other material defects or damages
in the Property, whether latent or otherwise, and Borrower has not received
notice from any insurance company or bonding company of any defects or
inadequacies in the Property, or any part thereof, which would materially
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.
3.1.21 Boundaries.
Except as set forth on the Survey, to Borrower's knowledge, all
of the Improvements lie wholly within the boundaries and building
restriction lines of the Property, and no improvements on adjoining
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properties encroach upon the Property, and no easements or other
encumbrances affecting the Property encroach upon any of the Improvements,
so as to affect the value or marketability of the Property except those
which are insured against by title insurance.
3.1.22 Leases.
To Borrower's knowledge, the Property is not subject to any
Leases other than the Leases described in Schedule 4 attached hereto and
made a part hereof. To Borrower's knowledge, except as set forth on
Schedule 4A attached hereto, the Leases identified on Schedule 4 are in
full force and effect and there are no defaults thereunder by either party.
No Rent (including security deposits) has been paid more than one (1) month
in advance of its due date. All work which was to have been performed by
Borrower by the date of this Agreement under each Lease has been performed
as required and has been accepted by the applicable tenant, and any
payments, free rent, partial rent, rebate of rent or other payments,
credits, allowances or abatements required to have been given by Borrower
to any tenant through the date of this Agreement has already been received
by such tenant.
3.1.23 Taxes.
All transfer taxes, deed stamps, intangible taxes or other
amounts in the nature of transfer taxes required to have been paid under
applicable Legal Requirements in connection with the transfer of the
Property to Borrower have been paid. All mortgage, mortgage recording,
stamp, intangible or other similar tax required to have been paid under
applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Mortgage, have been
paid. All taxes and governmental assessments due and owing in respect of
Property have been paid, or an escrow of funds in an amount sufficient to
cover such payments has been established hereunder or are insured against
by the title insurance policy to be issued in connection with the Mortgage.
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3.1.24 Single Purpose.
Borrower hereby represents and warrants to, and covenants with,
Lender that as of the date hereof and until such time as the Debt shall be
paid in full:
(a) Borrower does not own and will not own any asset or property
other than (i) the Property, and (ii) incidental personal property
necessary for the ownership or operation of the Property.
(b) Borrower will not engage in any business other than the
ownership, management and operation of the Property and Borrower will
conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with
any Affiliate of Borrower, any constituent party of Borrower or any
Affiliate of any constituent party, except upon terms and conditions that
are intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than any such
party; provided, however, that that certain Management Agreement dated as
of January 13, 2000 between Borrower and Manager is hereby approved by
Lender.
(d) Borrower has not incurred and will not incur any
Indebtedness, secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation) other than (i) the Debt,
(ii) unsecured trade payables not more than sixty (60) days past due
incurred in the ordinary course of business in an aggregate amount not
exceeding $1,000,000 exclusive of any amount that Borrower is disputing in
good faith and (iii) Affiliate Loans, provided, however, notwithstanding
the foregoing, that (x) all such Affiliate Loans shall at all times be
Subordinate and Junior in Right of Payment and the Affiliate Creditor
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which makes such Affiliate Loan executes and delivers a subordination agreement
to Lender in substantially the form attached as Exhibit D hereto (the
"Subordination Agreement"), (y) outside counsel to the Affiliate Creditor which
makes such Affiliate Loan executes and delivers to Lender an opinion letter
satisfactory to Lender regarding the due authorization, execution, delivery and
enforceability of such Subordination Agreement and (z) the sum of all amounts
referenced in clauses (i), (ii) and (iii) above shall not exceed 75% of the
current appraised value of the Property. No Indebtedness other than the Debt may
be secured (subordinate or pari passu) by the Property.
(e) Borrower has not made and will not make any loans or advances
to any third party (including any Affiliate or constituent party), and
shall not acquire obligations or securities of any third party (including
any Affiliate or constituent party).
(f) Borrower is and will remain solvent and Borrower will pay its
debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Each of Borrower and SPC Member has done or caused to be done
and will do all things necessary to observe limited liability company and
other organizational formalities and preserve its existence, and Borrower
and SPC Member will not, nor will Borrower or SPC Member permit any
constituent party to, amend, modify or otherwise change the partnership
certificate, partnership agreement, articles of incorporation and bylaws,
operating agreement, trust or other organizational documents of Borrower,
SPC Member or such constituent party without the prior written consent of
Lender.
(h) Borrower will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates and any
constituent party and Borrower will file its own tax returns. Borrower
shall maintain its books, records, resolutions and agreements as official
records.
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(i) Borrower will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any constituent party of Borrower),
shall correct any known misunderstanding regarding its status as a separate
entity, shall conduct business in its own name, shall not identify itself
or any of its Affiliates as a division or part of the other and shall
maintain and utilize a separate telephone number and separate stationery,
invoices and checks.
(j) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations.
(k) None of Borrower, SPC Member or any constituent party will
seek or effect the liquidation, dissolution, winding up, liquidation,
consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of
Borrower with those of any Affiliate or constituent party or any other
Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify
its individual assets from those of any Affiliate or constituent party or
any other Person.
(n) Borrower does not and will not hold itself out to be
responsible for or have its credit available to satisfy the debts or
obligations of any other Person.
(o) Borrower shall have as its sole member a Delaware limited
liability company (the "SPC Member") which is a single purpose entity whose
sole asset is its interest in Borrower (which interest shall not be less
than one-hundred percent (100%) of the ownership interest in Borrower).
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Borrower and SPC Member shall each have as an independent manager (each an
"Independent Manager") a Delaware corporation which is a single purpose
entity whose sole asset is its interest in the Borrower; each of such
Independent Managers shall be different corporate entities. Each
Independent Manager will at all times comply, and will cause Borrower and
SPC Member to comply, with each of the representations, warranties and
covenants contained in this Section 3.1.24 as if such representation,
warranty or covenant was made directly by the Independent Managers and the
SPC Member. As used in this subsection 3.1.24, the term "single purpose
entity" shall mean an entity whose organizational documents contain
restrictions on its activities and impose requirements intended to preserve
separateness that are substantially similar to those of Borrower and
provide, inter alia, that it: (a) is organized for a limited purpose; (b)
has restrictions on its ability to incur indebtedness, dissolve, liquidate,
consolidate, merge and/or sell assets; (c) may not file voluntarily a
bankruptcy petition without the consent of independent managers or
independent directors and (d) shall conduct itself in accordance with
certain "separateness covenants", including, but not limited to, the
maintenance of its books, records, bank accounts, and assets separate from
those of any other Person.
(p) Borrower and SPC Member shall at all times cause there to be
at least two duly appointed members of the board of directors (each an
"Independent Director") of the Independent Managers of Borrower and SPC
Member, respectively, reasonably satisfactory to Lender who shall not have
been at the time of such individual's appointment, will not be while
serving and may not have been at any time during the preceding five years
(i) a stockholder, director (other than an Independent Director), manager,
member, officer, employee, partner, attorney or counsel of such
corporation, Borrower, the SPC Member, or any Affiliate of any of them,
(ii) a customer, supplier or other Person who derives any of its purchases
or revenues from its activities with such corporation, Borrower, the SPC
Member or any Affiliate of any of them, other than fees received in its
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capacity as an Independent Director, (iii) a Person or other entity
controlling or under common control with any such stockholder, partner,
customer, supplier or other Person, or (iv) a member of the immediate
family of any such stockholder, director, officer, employee, partner,
customer, supplier or other Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management, policies or activities of
a Person, whether through ownership of voting securities, by contract or
otherwise.
(q) Borrower and SPC Member shall not cause or permit the board
of directors of the Independent Manager of Borrower or SPC Member,
respectively, to take any action which, under the terms of any certificate
of incorporation, by-laws or any voting trust agreement with respect to any
common stock, requires a vote of the board of directors of the Independent
Manager of Borrower or SPC Member, as the case may be, unless at the time
of such action there shall be at least two members who are Independent
Directors.
(r) Borrower and its Independent Manager shall conduct its
business so that the assumptions made with respect to Borrower in that
certain bankruptcy nonconsolidation opinion letter dated the date hereof
(the "Insolvency Opinion") delivered by Xxxxx & Xxxxxx P.C. in connection
with the Loan shall be true and correct in all respects.
(s) Borrower will permit only duly authorized officers of
Borrower to have access to its bank accounts.
(t) Borrower shall pay the salaries of its own employees and
maintain a sufficient number of employees in light of its contemplated
business operations.
(u) Borrower shall compensate each of its consultants and agents
from its funds for services provided to it and pay from its own assets all
obligations of any kind incurred. Upon the withdrawal or the disassociation
of the Independent Manager of either Borrower or SPC Member, Borrower and
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SPC Member, as the case may be, shall immediately appoint a new member
whose articles of incorporation are substantially similar to those of the
Independent Manager and, in the event a non-consolidation opinion has been
provided to Lender, Borrower shall deliver a new non-consolidation opinion
to the Rating Agency or Rating Agencies, as applicable, with respect to the
new single purpose entity and its equity owners.
(v) Borrower and SPC Member shall each have at all times at least
two persons who shall automatically become members having a 0% economic
interest in Borrower and SPC Member, respectively (each, a "Springing
Member"), simultaneously upon the occurrence of any event which would cause
the sole member of Borrower or SPC Member to cease to be a member of
Borrower or SPC Member, as the case may be (a "Springing Event"); provided
that if a single purpose entity serves as a Springing Member, only one
Springing Member shall be required. Upon the occurrence of a Springing
Event, Borrower and SPC Member shall be continued without dissolution and
each Springing Member shall, without any action of any person or entity,
automatically become a member of Borrower or SPC Member, as the case may
be, having a 0% economic interest in Borrower or SPC Member, as the case
may be, and the personal representative(s) (as defined in the Act) of each
member shall automatically become an unadmitted assignee of each member
respectively, being entitled thereby only to the distributions to which
such member was entitled pursuant to the operating agreement of Borrower or
SPC Member, as the case may be, and any other right conferred thereupon by
the Act. Pursuant to Section 18-301 of the Act, each Springing Member shall
not be required to make any capital contributions to Borrower or SPC
Member, as the case may be, and shall not receive any limited liability
company interest in Borrower or SPC Member, as the case may be. Prior to
its admission to Borrower or SPC Member, as the case may be, as a member of
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Borrower or SPC Member, as the case may be, pursuant to this subparagraph
(v), each Springing Member shall have no interest (economic or otherwise)
and is not a member of Borrower or SPC Member. 1350 Corp., a Delaware
corporation, shall be the initial Springing Member of Borrower, and 1350
Mezzanine Corp., a Delaware corporation, shall be the initial Springing
Member of SPC Member; provided however, that such initial Springing Members
shall not be admitted as a member of Borrower or SPC Member, as the case
may be, until a Springing Event shall have occurred. Upon the death,
resignation, dissolution or other event that causes a Springing Member to
be unable to fulfill its obligations under the operating agreement of
Borrower or SPC Member, as the case may be, or, if admitted as a member of
Borrower or SPC Member, it shall cease to be a member of Borrower or SPC
Member, as the case may be, a new Springing Member shall be appointed and
sign an amendment to the operating agreement of Borrower or SPC Member, as
the case may be, acknowledging such an appointment. The Bankruptcy (as
defined in Sections 18-101(1) and 18-304 of the Act) of any member or
Springing Member shall not cause such member or Springing Member to cease
to be a member of Borrower or SPC Member, as the case may be, and upon the
occurrence of such an event, the business of Borrower or SPC Member, as the
case may be, shall continue without dissolution.
Section 3.2 Survival of Representations.
The representations and warranties set forth in Section 3.1 shall
survive for so long as any amount remains payable to Lender under this
Agreement or any of the other Loan Documents.
IV BORROWER COVENANTS
Section 4.1 Borrower Affirmative Covenants.
Borrower hereby covenants and agrees with Lender that:
4.1.1 Existence; Compliance with Legal Requirements.
Borrower shall do or cause to be done all things necessary to
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preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements
applicable to it and the Property.
4.1.2 Taxes and Other Charges.
Borrower shall pay all Taxes and Other Charges now or hereafter
levied or assessed or imposed against the Property or any part thereof as
the same become due and payable. Borrower shall furnish to Lender receipts
for the payment of the Taxes and the Other Charges prior to the date the
same shall become delinquent; provided, however, that Borrower is not
required to furnish such receipts for payment of Taxes in the event that
such Taxes have been paid by Lender pursuant to Section 6.2 hereof.
Borrower shall not permit or suffer and shall promptly discharge any lien
or charge against the Property other than the Permitted Encumbrances. After
prior notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, conducted in good faith and with due
diligence, the amount or validity of any Taxes or Other Charges, provided
that either (a) such contested Taxes or Other Charges have been paid in
full or (b) (i) no Event of Default has occurred and remains uncured; (ii)
such proceeding shall be permitted under and be conducted in accordance
with all applicable statutes, laws and ordinances; (iii) the Property or
any part thereof or interest therein will not be in danger of being sold,
forfeited, terminated, canceled or lost; (iv) Borrower shall promptly upon
final determination thereof pay the amount of any such Taxes or Other
Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (v) such proceeding shall suspend the
collection of Taxes or Other Charges from the Property; and (vi) Borrower
shall deposit with Lender cash, or other security as may be reasonably
approved by Lender, in an amount equal to one hundred twenty-five percent
(125%) of the unpaid contested amount, to insure the payment of any such
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Taxes or Other Charges, together with all interest and penalties thereon.
Lender may pay over any such cash or other security held by Lender to the
claimant entitled thereto at any time when, in the judgment of Lender, the
entitlement of such claimant is established.
4.1.3 Litigation.
Borrower shall give prompt notice to Lender of any litigation or
governmental proceedings pending or threatened in writing against Borrower
which, if adversely determined, would materially adversely affect the
Property or Borrower's ability to perform its obligations hereunder or
under the other Loan Documents.
4.1.4 Access to Property.
Subject to the rights of the tenants under the Leases, Borrower
shall permit agents, representatives and employees of Lender to inspect the
Property or any part thereof at reasonable hours upon reasonable advance
notice.
4.1.5 Further Assurances; Supplemental Mortgage Affidavits.
Borrower shall, at Borrower's sole cost and expense:
(a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts
necessary or desirable, to evidence, preserve and/or protect the collateral
at any time securing or intended to secure the obligations of Borrower
under the Loan Documents, as Lender may reasonably require; and
(b) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying
out of the intents and purposes of this Agreement and the other Loan
Documents, as Lender shall reasonably require from time to time.
4.1.6 Financial Reporting.
(a) Borrower shall keep and maintain or will cause to be kept and
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maintained proper and accurate books and records, in accordance with GAAP,
reflecting the financial affairs of Borrower. Lender shall have the right
from time to time during normal business hours upon reasonable notice to
Borrower to examine such books and records at the office of Borrower or
other Person maintaining such books and records and to make such copies or
extracts thereof as Lender shall desire.
(b) Borrower shall furnish Lender annually, within ninety (90)
days following the end of each Fiscal Year of Borrower, a complete copy of
Borrower's annual financial statements audited by a "Big Five" accounting
firm or other independent certified public accountant reasonably acceptable
to Lender prepared in accordance with GAAP covering the Property for such
financial statements to include statements of income and expense and cash
flow for Borrower and the Property and a balance sheet for Borrower. Such
statements shall set forth Underwritable Net Operating Income, Gross
Revenue and Operating Expenses for the Property. Borrower's annual
financial statements shall be accompanied by a certificate executed by an
officer of Borrower (without personal recourse to such officer) stating
that such annual financial statement fairly states the financial condition
and the results of operations of Borrower and the Property. Together with
Borrower's annual financial statements, Borrower shall furnish to Lender an
Officer's Certificate certifying as of the date thereof whether to the best
of Borrower's knowledge there exists an event or circumstance which
constitutes a Default or Event of Default by Borrower under the Loan
Documents and if such Default or Event of Default exists, the nature
thereof, the period of time it has existed and the action then being taken
to remedy the same.
(c) So long as the Loan is outstanding, Borrower will furnish
Lender on or before the forty-fifth (45th) day after the end of each fiscal
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quarter (based on Borrower's Fiscal Year), the following items, accompanied
by certificate from an officer of Borrower (without personal recourse to
such officer), certifying that such items are fairly stated and fairly
present the financial condition and results of the operations of Borrower
and the Property in accordance with GAAP as applicable:
(i) quarterly and year-to-date statements of income and expense
and cash flow prepared for such quarter with respect to the Property, with
a balance sheet for such quarter for Borrower; and
(ii) a current rent roll for the Property.
(d) Borrower will furnish Lender on or before the thirty-fifth
(35th) day after the end of each calendar month, statements substantially
in the form of those attached as Exhibit A hereto, accompanied by a
certificate from an officer of Borrower (without personal recourse to such
officer), certifying that such items fairly state the financial condition
and results of the operations of Borrower and the Property in a manner
consistent with GAAP, as applicable.
(e) Borrower will promptly furnish Lender copies of any notice
received from a tenant under a Lease threatening non-payment of rent or
other default, alleging or acknowledging a default by landlord, requesting
a termination of a Lease or a material modification of any Lease or
notifying Borrower of the exercise or non-exercise of any option provided
for in such tenant's Lease, or any other similar material correspondence
received by Borrower from tenants during the subject month.
(f) Borrower shall submit the Annual Budget to Lender not later
than thirty (30) days prior to the commencement of each Fiscal Year. Lender
shall have no right to approve the Annual Budget.
(g) Borrower shall furnish to Lender, within ten (10) Business
Days after request (or as soon thereafter as may be reasonably possible),
such further detailed information with respect to the operation of the
Property and the financial affairs of Borrower as may be reasonably
requested by Lender.
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4.1.7 Title to the Property.
Borrower will warrant and defend the validity and priority of the
Lien of the Mortgage and the Assignment of Leases on the Property against
the claims of all Persons whomsoever, subject only to Permitted
Encumbrances.
4.1.8 Estoppel Statement.
(a) After request by Lender, Borrower shall within five (5)
Business Days furnish Lender with a statement, duly acknowledged and
certified, stating (i) the unpaid principal amount of the Note, (ii) the
Applicable Interest Rate of the Note, (iii) the date installments of
interest and/or principal were last paid, (iv) any offsets or defenses to
the payment of the Debt, if any, and (v) that this Agreement and the other
Loan Documents have not been modified or if modified, giving particulars of
such modification. After request by Borrower, Lender shall within five (5)
Business Days furnish Borrower with a statement, duly acknowledged and
certified, stating (i) the unpaid principal amount of the Note; (ii) the
date installments of interest and/or principal were last paid; (iii) the
Applicable Interest Rate of the Note; and (iv) that this Agreement and the
other Loan Documents have not been modified or if modified, giving
particulars of such modification.
(b) Borrower shall use reasonable efforts to deliver to Lender,
upon request, an estoppel certificate from each tenant under any Lease
which requires tenant to provide such certificate to Borrower; provided
that such certificate shall be in the form required under such Lease;
provided further that Borrower shall not be required to deliver such
certificates more than one (1) time hereunder.
4.1.9 Leases.
(a) All Major Leases and all renewals, amendments and
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modifications thereof executed after the date hereof shall be subject to
Lender's prior approval, not to be unreasonably withheld, to the extent
such Major Leases or renewals, amendments or modifications thereof are not
at market rates and on market terms.
(b) Borrower may terminate or accept a surrender of one or more
Leases demising up to 100,000 square feet on an aggregate basis without
Lender's approval. Borrower shall not terminate or accept a surrender of
Leases demising more than 100,000 square feet on an aggregate basis without
Lender's prior approval, not to be unreasonably withheld. Each request by
Borrower for approval of any termination or surrender of any Lease shall be
made by written notice to Lender and must include a statement in bold face
type that if Lender shall fail to approve or disapprove such termination or
surrender within ten (10) Business Days after receipt by Lender of such
request, such termination or surrender shall be deemed to have been
approved. If Lender fails to respond to such notice within such ten (10)
day period, time being of the essence, Lender shall be conclusively deemed
to have approved such termination or surrender.
(c) Borrower (i) shall observe and perform the obligations
imposed upon the lessor under the Leases in a commercially reasonable
manner; (ii) shall enforce the terms, covenants and conditions contained in
the Leases upon the part of the lessee thereunder to be observed or
performed in a commercially reasonable manner, provided, however, that
Borrower shall comply with the provisions of paragraph (b) above; (iii)
shall not collect any of the rents more than one (1) month in advance
(other than security deposits); and (iv) shall not execute any assignment
of lessor's interest in the Leases or the Rents (except as contemplated by
the Loan Documents).
(d) Upon request, Borrower shall furnish Lender with executed
copies of all Leases.
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(e) Upon request from Borrower, Lender shall provide (i) a
subordination, nondisturbance and attornment agreement on Lender's standard
form to each lessee under any Lease executed in accordance with the terms
of this Agreement after the date hereof and which demises at least 12,500
rentable square feet of space in the Property and (ii) a subordination,
nondisturbance and attornment agreement to each lessee under any Lease
existing as of the date hereof to the extent such Lease requires the
delivery of such an agreement.
4.1.10 Alterations.
Lender's prior approval (not to be unreasonably withheld) shall
be required in connection with any alterations to any Improvements on the
Property (a) that may have a material adverse effect on Borrower's
financial condition, the value of the Property or the Underwritable Net
Operating Income or (b) the cost of which (including any related
alteration, improvement or replacement) is reasonably anticipated to exceed
the Alteration Threshold; provided, however, that no consent shall be
required in respect of any tenant improvement work required to be performed
by Borrower under any Major Lease approved by Lender or under any other
Lease not requiring the consent of Lender pursuant to the terms of this
Loan Agreement. If the (x) total unpaid amounts with respect to alterations
to the Improvements shall at any time exceed the Alteration Threshold and
(y) a DSC Trigger Event has occurred, Borrower shall promptly deliver to
Lender as security for the payment of such amounts and as additional
security for Borrower's obligations under the Loan Documents any of the
following: (i) cash, (ii) U.S. Obligations, (iii) other securities
acceptable to Lender, provided that the applicable Rating Agencies have
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confirmed in writing that the form and issuer of same will not, in and of
itself, result in a downgrade, withdrawal or qualification of the then
current ratings assigned in connection with any Securitization, or (iv) a
completion bond, the form and issuer of which the Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the then current ratings assigned in
connection with any Securitization. Such security shall be in an amount
equal to the excess of the total unpaid amounts with respect to alterations
to the Improvements on the Property (other than such amounts to be paid or
reimbursed by tenants under the Leases) over the Alteration Threshold.
Section 4.2 Borrower Negative Covenants.
Borrower covenants and agrees with Lender that:
4.2.1 Operation of the Property.
Except as expressly permitted by Section 7.2 of this Agreement,
Borrower shall not terminate the Management Agreement or otherwise replace
the Manager or enter into any other management agreement with respect to
the Property.
4.2.2 Liens.
Borrower shall not create, incur, assume or suffer to exist any
Lien on any portion of the Property except for Permitted Encumbrances.
4.2.3 Dissolution.
Borrower shall not (i) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (ii) engage
in any business activity not related to the ownership and operation of the
Property, (iii) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially all of the properties or
assets of Borrower except to the extent expressly permitted by the Loan
Documents, or (iv) cause, permit or suffer the SPC Member to (A) dissolve,
wind up or liquidate or take any action, or omit to take an action, as a
result of which the SPC Member would be dissolved, wound up or liquidated
in whole or in part, or (B) amend, modify, waive or terminate the
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certificate of incorporation or bylaws of the SPC Member, in each case,
without obtaining the prior written consent of Lender or Lender's designee,
which consent shall not be unreasonably withheld so long as such action or
inaction does not cause Borrower or the SPC Member, as applicable, to
violate the terms of Section 3.1.24 of this Agreement.
4.2.4 Change in Business.
Borrower shall not enter into any line of business other than the
ownership and operation of the Property.
4.2.5 Debt Cancellation.
Borrower shall not cancel or otherwise forgive or release any
claim or debt (other than termination of Leases in accordance herewith)
owed to Borrower by any Person, except for adequate consideration and in
the ordinary course of Borrower's business.
4.2.6 Affiliate Transactions.
Borrower shall not enter into, or be a party to, any transaction
with an Affiliate of Borrower or any of the members of Borrower except (i)
in the ordinary course of business and on terms which are no less favorable
to Borrower or such Affiliate than would be obtained in a comparable
arm's-length transaction with an unrelated third party or (ii) as otherwise
approved by Lender.
4.2.7 Zoning.
Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under
any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a
nonconforming use under any zoning ordinance or any other applicable land
use law, rule or regulation, without the prior consent of Lender, not to be
unreasonably withheld.
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4.2.8 Assets.
Borrower shall not purchase or own any properties other than the
Property.
4.2.9 No Joint Assessment.
Borrower shall not suffer, permit or initiate the joint
assessment of the Property (i) with any other real property constituting a
tax lot separate from the Property, and (ii) with any portion of the
Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.
4.2.10 Principal Place of Business.
Borrower shall not change its principal place of business set
forth on the first page of this Agreement without first giving Lender ten
(10) Business Days prior notice.
4.2.11 ERISA.
Borrower shall not engage in any transaction which would cause
any obligation, r action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Agreement or the other
Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
(a) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term
of the Loan, as requested by Lender in its sole discretion, that (A)
Borrower is not and does not maintain an "employee benefit plan" as defined
in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
"governmental plan" within the meaning of Section 3(3) of ERISA; (B)
Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) one or
more of the following circumstances is true:
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(i) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R.ss.2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R.ss.2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. ss.2510.3-101(c)
or (e).
V INSURANCE, CASUALTY AND CONDEMNATION
Section 5.1 Insurance.
5.1.1 Insurance Policies.
(a) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least the
following coverages:
(i) comprehensive all risk insurance on the Improvements and the
personal property at the Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements, in each case (A) in an amount equal to one
hundred percent (100%) of the "Full Replacement Cost," which for purposes
of this Agreement shall mean actual replacement value (exclusive of costs
of excavations, foundations, underground utilities and footings) with a
waiver of depreciation, but the amount shall in no event be less than the
outstanding principal balance of the Loan; (B) containing an agreed amount
endorsement with respect to the Improvements and personal property at the
Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Ten Thousand and No/100 Dollars ($10,000) for all
such insurance coverage; and (D) containing an "Ordinance or Law Coverage"
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or "Enforcement" endorsement if any of the Improvements or the use of the
Property shall at any time constitute legal non-conforming structures or
uses; provided, however, Borrower shall be permitted a deductible of
$50,000 for insurance covering damage to boilers and machinery. In
addition, Borrower shall obtain: (y) if any portion of the Improvements is
currently or at any time in the future located in a federally designated
"special flood hazard area", flood hazard insurance in an amount equal to
the lesser of (1) the outstanding principal balance of the Note or (2) the
maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as each may be amended or such
greater amount as Lender shall require; and (z) earthquake insurance in
amounts and in form and substance satisfactory to Lender in the event the
Property is located in an area with a high degree of seismic activity,
provided that the insurance pursuant to clauses (y) and (z) hereof shall be
on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about the Property, such insurance (A) to be on the so-called
"occurrence" form with a combined limit of not less than One Million and
No/100 Dollars ($1,000,000); (B) to continue at not less than the aforesaid
limit until required to be changed by Lender in writing by reason of
changed economic conditions making such protection inadequate; and (C) to
cover at least the following hazards: (1) premises and operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; (4) blanket contractual liability for all legal contracts; and
(5) contractual liability covering all insured contracts contained in
Section 32 of the Mortgage to the extent the same is available;
(iii) business income insurance (A) with loss payable to Lender;
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(B) covering all risks required to be covered by the insurance provided for
in subsection (i) above; and (C) in an amount sufficient to satisfactorily
address the recovery period identified below, until the earlier of (x) the
date that such income returns to the level it was at prior to the loss and
(y) the expiration of twelve (12) months from the date of loss, plus an
extended period of indemnity of not less than 180 days, which extended
period of indemnity shall not commence until the property is fully repaired
and/or replaced, notwithstanding that the policy may expire prior to the
end of such period. The amount of such business income insurance shall be
determined prior to the date hereof and at least once each year thereafter
based on Borrower's reasonable estimate of the gross income from the
Property for the succeeding twenty-four (24) month period. All proceeds
payable to Lender pursuant to this subsection shall be held by Lender and
shall be applied to the obligations secured by the Loan Documents from time
to time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;
(iv) at all times during which structural construction, repairs
or alterations are being made with respect to the Improvements, and only if
the Property coverage form does not otherwise apply, (A) owner's contingent
or protective liability insurance covering claims not covered by or under
the terms or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in subsection (i)
above written in a so-called builder's risk completed value form (1) on
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a non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above, (3) including permission to occupy the Property, and (4)
with an agreed amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of the
state in which the Property is located, and employer's liability insurance
with a limit of at least Five Hundred Thousand and No/100 Dollars
($500,000) per accident and per disease per employee, and Five Hundred
Thousand and No/100 Dollars ($500,000) for disease aggregate in respect of
any work or operations on or about the Property, or in connection with the
Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if applicable,
in amounts as shall be reasonably required by Lender on terms consistent
with the commercial property insurance policy required under subsection (i)
above;
(vii) umbrella liability insurance in addition to primary
coverage in an amount not less than Fifty Million and No/100 Dollars
($50,000,000) per occurrence on terms consistent with the commercial
general liability insurance policy required under subsection (ii) above;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing minimum
limits per occurrence, including umbrella coverage, of Fifty Million and
No/100 Dollars ($50,000,000); and
(ix) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Property located
in or around the region in which the Property is located.
(b) insurance provided for in Section 5.1.1(a) shall be obtained
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under valid and enforceable policies (collectively, the "Policies" or in
the singular, the "Policy"), and shall be subject to the reasonable
approval of Lender as to deductibles, loss payees and insureds. Not less
than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder (the "Insurance Premiums"), shall be delivered by
Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate to
the Property the amount of coverage from time to time required hereunder
and shall otherwise provide the same protection as would a separate Policy
insuring only the Property in compliance with the provisions of Section
5.1.1(a).
(d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v),
shall name Borrower as the insured and Lender and its successors and/or
assigns as the additional insured, as its interests may appear, and in the
case of property damage, boiler and machinery, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder
shall be payable to Lender.
(e) All Policies of insurance provided for in Section 5.1.1(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of
the insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
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(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty
(30) days' prior written notice to Lender and any other party named therein
as an additional insured; provided, however, that with respect to
non-payment of premium by Borrower, Lender and any other party named
therein as an additional insured shall receive no less than ten (10) days'
prior written notice; and
(iii) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Lender
shall have the right, with notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, the obtaining of such insurance coverage as Lender in
its sole discretion deems appropriate and all premiums incurred by Lender
in connection with such action or 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 Mortgage and shall bear interest at the Default
Rate.
(g) In the event of foreclosure of the Mortgage, or other
transfer of title to the Property in extinguishment in whole or in part of
the Debt all right, title and interest of Borrower in and to the Policies
that are not blanket Policies then in force concerning the Property and all
proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other
transfer of title.
5.1.2 Insurance Company.
The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the state in which the
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Property is located and having a claims paying ability rating of "AA" or
better by the Rating Agencies (each, an "AA Company"). Notwithstanding the
foregoing, Borrower shall be permitted to maintain its Policy with American
Protection Insurance Company ("American") for so long as American maintains
its current claims paying ability rating. In the event American is
downgraded from its current claims paying ability rating, Borrower shall
replace American with an AA Company.
Section 5.2 Casualty and Condemnation.
5.2.1 Casualty.
If the Property shall sustain a Casualty, Borrower shall give
prompt notice of such Casualty to Lender and shall (or shall cause the
tenants to) promptly commence and diligently prosecute to completion the
repair and restoration of the Property as nearly as possible to the
condition the Property was in immediately prior to such Casualty (a
"Restoration") and otherwise in accordance with Section 5.3. Borrower shall
pay all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to, make proof of loss if
not made promptly by Borrower.
5.2.2 Condemnation.
Borrower shall give Lender prompt notice of any actual or
threatened in writing Condemnation by any Governmental Authority of all or
any part of the Property and shall deliver to Lender a copy of any and all
papers served in connection with such proceedings. Lender may participate
in any such proceedings, and Borrower shall from time to time deliver to
Lender all instruments requested by Lender to permit such participation.
Borrower shall, at its expense, diligently prosecute any such proceedings,
and shall consult with Lender, its attorneys and experts, and cooperate
with them in the carrying on or defense of any such proceedings.
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Notwithstanding any Condemnation or the payment of any Award by any
Governmental Authority, Borrower shall continue to pay the Debt at the time
and in the manner provided for its payment in the Note and in this
Agreement. If the Property or any portion thereof is taken by any
Governmental Authority, Borrower shall (or shall cause the tenants to)
promptly commence and diligently prosecute the Restoration of the Property
and otherwise comply with the provisions of Section 5.3. If the Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of
the Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.
Section 5.3 Delivery of Net Proceeds.
5.3.1 Minor Casualty or Condemnation.
If a Casualty or Condemnation has occurred to the Property and
the Net Proceeds shall be less than the Restoration Threshold and the costs
of completing the Restoration shall be less than the Restoration Threshold,
and provided no Event of Default shall have occurred and remain uncured,
the Net Proceeds will be disbursed by Lender to Borrower. Promptly after
receipt of the Net Proceeds, Borrower shall commence and satisfactorily
complete with due diligence the Restoration in accordance with the terms of
this Agreement.
5.3.2 Major Casualty or Condemnation.
(a) If a Casualty or Condemnation has occurred to the Property
and the Net Proceeds are equal to or greater than the Restoration Threshold
or the costs of completing the Restoration is equal to or greater than the
Restoration Threshold, Lender shall make the Net Proceeds available for the
Restoration, provided that each of the following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
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(ii) (A) in the event the Net Proceeds are insurance proceeds,
less than twenty-five percent (25%) of the total floor area of the
Improvements at the Property has been materially damaged, destroyed or
rendered unusable as a result of such Casualty or (B) in the event the Net
Proceeds are an Award, less than twenty-five percent (25%) of the land
constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements
is the subject of the Condemnation;
(iii) Leases requiring payment of annual rent equal to
seventy-five percent (75%) of the Gross Revenue received by Borrower during
the twelve (12) month period immediately preceding the Casualty or
Condemnation and all Major Leases shall remain in full force and effect
during and after the completion of the Restoration without abatement of
rent beyond the time required for Restoration, notwithstanding the
occurrence of such Casualty or Condemnation.
(iv) Borrower shall commence the Restoration as soon as
reasonably practicable and shall diligently pursue the same to satisfactory
completion;
(v) Lender shall be reasonably satisfied that any operating
deficits and all payments of principal and interest under the Note will be
paid during the period required for Restoration from (A) the Net Proceeds,
or (B) other funds of Borrower (which funds may include funds available to
Borrower under any line of credit to the extent that Lender is provided
with a written agreement in form and substance satisfactory to Lender from
parties approved by Lender that such funds will be reserved for Borrower
and made available to Borrower for such purpose);
(vi) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (A) the Maturity Date, (B)
such time as may be required under applicable Legal Requirements in order
to repair and restore the Property to the condition it was in immediately
prior to such Casualty or to as nearly as possible the condition it was in
immediately prior to such Condemnation, as applicable or (C) the expiration
of the insurance coverage referred to in Section 5.1.1(a)(iii) (as such
insurance coverage may be extended);
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(vii) the Property and the use thereof after the Restoration will
be in compliance with and permitted under all applicable Legal
Requirements;
(viii) the Restoration shall be done and completed by Borrower in
an expeditious and diligent fashion and in compliance with all applicable
Legal Requirements; and
(ix) such Casualty or Condemnation, as applicable, does not
result in the loss of access to the Property or the related Improvements.
(b) The Net Proceeds shall be paid directly to Lender and held by
Lender in an interest-bearing account and, until disbursed in accordance
with the provisions of this Section 5.3.2, shall constitute additional
security for the Debt. The Net Proceeds shall be disbursed by Lender to, or
as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of (i) evidence reasonably satisfactory to Lender
that all requirements set forth in Section 5.3.2(a) have been satisfied,
(ii) a certificate from an officer of Borrower certifying that all
materials installed and work and labor performed (except to the extent that
they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid in full and (iii) evidence reasonably
satisfactory to Lender that there exist no notices of pendency, stop
orders, mechanic's or materialman's liens or notices of intention to file
same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration which have not either been fully
bonded to the satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title
company issuing the Title Insurance Policy.
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(c) All plans and specifications required in connection with the
Restoration shall be subject to reasonable prior approval by Lender and by
an independent architect selected by Borrower which shall be reasonably
acceptable to Lender (the "Casualty Consultant"). The identity of the
contractors, subcontractors and materialmen engaged in the Restoration, as
well as the contracts under which they have been engaged, shall be subject
to reasonable approval by Lender and the Casualty Consultant. All
out-of-pocket costs and expenses actually incurred by Lender in connection
with recovering, holding and advancing the Net Proceeds for the Restoration
including, without limitation, reasonable out-of-pocket attorneys' fees and
disbursements and the Casualty Consultant's fees and disbursements, shall
be paid by Borrower.
(d) In no event shall Lender be obligated to make disbursements
of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as
certified by the Casualty Consultant, less the Casualty Retainage. The term
"Casualty Retainage" shall mean an amount equal to ten percent (10%) of the
costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until the Restoration has been
completed; provided, however, that upon completion of 50% of the work to be
performed by any contractor (as such percentage of completion is determined
by the Casualty Consultant), Lender shall, upon the written request of
Borrower, reduce the Casualty Retainage with respect to future advances
allocable to such contractor to five percent (5%). The Casualty Retainage
shall in no event, and notwithstanding anything to the contrary set forth
above in this Section 5.3.2(d), be less than the amount actually held back
by Borrower from contractors, subcontractors and materialmen engaged in the
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Restoration. The Casualty Retainage shall not be released until the
Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 5.3.2(d) and
that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate Governmental Authorities, and
Lender receives evidence reasonably satisfactory to Lender that the costs
of the Restoration have been paid in full or will be paid in full out of
the Casualty Retainage; provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of
the date upon which the Casualty Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily completed all
work and has supplied all materials in accordance with the provisions of
the contractor's, subcontractor's or materialman's contract, the
contractor, subcontractor or materialman delivers the lien waivers and
evidence of payment in full of all sums due to the contractor,
subcontractor or materialman as may be reasonably requested by Lender or by
the title company issuing the Title Insurance Policy, and Lender receives a
search prepared by the title company issuing the Title Insurance Policy or
other evidence satisfactory to Lender that there has not been filed with
respect to the Property any mechanic's lien or other lien, affidavit or
instrument asserting any lien or any lien rights with respect to the
Property. If required by Lender, the release of any such portion of the
Casualty Retainage shall be approved by the surety company, if any, which
has issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.
(e) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation
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with the Casualty Consultant, be sufficient to pay in full the balance of the
costs which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower shall deposit the
deficiency (the "Net Proceeds Deficiency") with Lender before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with Lender shall be held by Lender and shall be disbursed for costs
actually incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Section 5.3.2 shall constitute additional security for the
Debt. Borrower shall have the option of securing payment of the Net Proceeds
Deficiency by delivering to Lender a letter of credit (in lieu of cash) issued
by a financial institution and pursuant to a letter of credit acceptable to
Lender in its sole discretion.
(g) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender
(including all interest accrued thereon, if any) after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 5.3.2, and the receipt by
Lender of evidence reasonably satisfactory to Lender that all costs
incurred in connection with the Restoration have been paid in full, shall
be remitted by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under any of the Loan Documents.
(h) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 5.3.2(g) may be retained and applied by Lender toward
the payment of the Debt whether or not then due and payable in such order,
priority and proportions as Lender in its sole discretion shall deem
proper, or, at the discretion of Lender, the same may be paid, either in
whole or in part, to Borrower for such purposes as Lender shall designate.
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VI CASH MANAGEMENT
Section 6.1 [Intentionally Omitted]
Section 6.2 [Intentionally Omitted]
Section 6.3 [Intentionally Omitted]
Section 6.4 Cash Management.
6.4.1 Lockbox Account.
Within ten (10) Business Days after receiving written notice of
the occurrence of either an Event of Default or a DSC Trigger Event (the
"Lockbox Trigger Date"), Borrower shall open an account (the "Lockbox
Account") with Agent. The Lockbox Account shall be in Lender's name, or at
Lender's option, in the Servicer's name. The Lockbox Account shall be under
the sole dominion and control of Lender. The Lockbox Account will be opened
and maintained as an Eligible Account. Borrower shall pledge, assign and
grant a first-priority security interest in all of Borrower's right, title
and interest in and to the Lockbox Account to Lender, as security for
payment of the Debt and the performance of all other terms, conditions and
covenants of the Loan Documents on Borrower's part to be paid and
performed, on a date which is no later than the Lockbox Trigger Date.
6.4.2 Cash Management Agreement.
Borrower shall provide Lender with an original copy of the Cash
Management Agreement, substantially in the form attached as Exhibit B
hereto and otherwise satisfactory to Lender in its sole discretion,
executed by Borrower and Agent, on a date which is no later than the
Lockbox Trigger Date.
6.4.3 Deposits into Lockbox Account.
From and after the Lockbox Trigger Date, Borrower shall cause all
Tenants at the Property to pay Rent directly into the Lockbox Account on or
before the date such Rent is due under the terms of the applicable Lease.
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Borrower shall send a notice, substantially in the form of Exhibit C
hereto, on a date which is no later than the Lockbox Trigger Date to all
Tenants at the Property directing them to pay all Rent into the Lockbox
Account. Neither the Lockbox Account nor the Cash Management Agreement
shall alter or diminish in any way Borrower's obligation to make timely
payment and deposits to all sums required to be paid or deposited under any
Loan Document.
VII PROPERTY MANAGEMENT
Section 7.1 The Management Agreement.
Borrower shall cause Manager to manage the Property in accordance
with the Management Agreement. Borrower shall (i) diligently perform and
observe all of the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed and observed (ii)
promptly notify Lender of any notice to Borrower of any default by Borrower
in the performance or observance of any of the terms, covenants or
conditions of the Management Agreement on the part of Borrower to be
performed and observed. If Borrower shall default in the performance or
observance of any material term, covenant or condition of the Management
Agreement on the part of Borrower to be performed or observed beyond the
expiration of any applicable notice and grace periods, then, without
limiting Lender's other rights or remedies under this Agreement or the
other Loan Documents, and without waiving or releasing Borrower from any of
its obligations hereunder or under the Management Agreement, Lender shall
have the right, but shall be under no obligation, to pay any sums and to
perform any act as may be appropriate to cause all the material terms,
covenants and conditions of the Management Agreement on the part of
Borrower to be performed or observed.
Section 7.2 Prohibition Against Termination or Modification.
Subject to the Assignment of Management Agreement, Borrower shall
not (a) surrender the Management Agreement, (b) consent to the assignment
by the Manager of its interest under the Management Agreement, (c)
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terminate or cancel the Management Agreement, (d) materially modify,
change, supplement, alter or amend the Management Agreement, (e) change,
replace or terminate the Manager or (f) enter into a new management
agreement; provided, however, that the Management Agreement may be assigned
without material modification by the Manager to an Affiliate of Manager or
Borrower so long as such Affiliate (i) assumes all of Manager's rights and
obligations under the Management Agreement in writing and (ii) executes and
delivers to Lender a Replacement Assignment (as defined in the Assignment
of Management Agreement).
Section 7.3 Replacement of Manager.
Lender shall have the right to require Borrower to replace the
Manager with a Person chosen by Borrower and approved by Lender upon the
occurrence of any one or more of the following events: (i) at any time
following the occurrence of an Event of Default and/or (ii) at any time
that the Manager has engaged in (x) gross negligence, (y) fraud or (z)
willful misconduct.
VIII PERMITTED TRANSFERS
Section 8.1 Permitted Transfers of Indirect Interest in Borrower.
Notwithstanding anything to the contrary contained in this
Agreement or in Section 7 of the Mortgage, without the consent of Lender:
(i) interests in SPC Member and other indirect interests in
Borrower may be Transferred provided no Event of Default has occurred and
is continuing and if after giving effect to such Transfer (A) Borrower and
SPC Member shall continue to satisfy in all respects the provisions of
Section 3.1.24 and (B) one or more Qualified Equityholders in the aggregate
shall, directly or indirectly, (1) control the operation and management of
Borrower and (2) own more than 50% of the equity interests in Borrower;
(ii) shares of common or preferred stock of Reckson shall be
freely Transferable;
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(iii) limited partnership interests in the Operating Partnership
shall be freely Transferable; and
(iv) Crescent's preferred equity interest in Metropolitan shall
be freely Transferable.
IX SALE AND SECURITIZATION OF MORTGAGE
Section 9.1 Sale of Mortgage and Securitization.
(a) Lender shall have the right (i) to sell or otherwise transfer
the Loan or any portion thereof as a whole loan or parts thereof, (ii) to
sell participation interests in the Loan to any entity other than to a
publicly traded real estate investment trust of which the majority of its
assets are office properties or (iii) to securitize the Loan in a single
asset securitization or a pooled loan securitization. (The transaction
referred to in clauses (i), (ii) and (iii) shall hereinafter be referred to
collectively as "Secondary Market Transactions" and the transactions
referred to in clause (iii) shall hereinafter be referred to as a
"Securitization". Any certificates, notes or other securities issued in
connection with a Securitization are hereinafter referred to as
"Securities".)
(b) If requested by Lender, Borrower shall assist Lender in
satisfying the market standards to which Lender customarily adheres or
which may be reasonably required in the marketplace or by the Rating
Agencies in connection with any Secondary Market Transactions, including,
without limitation, to:
(i) (A) provide updated financial and other information with
respect to the Property, the business operated at the Property, Borrower
and the Manager, and (B) provide updated budgets relating to the Property
and (C) provide updated appraisals, market studies, environmental reviews
(Phase I's and, if applicable, Phase II's), property condition reports and
other due diligence investigations of the Property (the "Updated
Information"), together, if customary, with appropriate verification of the
Updated Information through letters of auditors or opinion of counsel
acceptable to Lender and the Rating Agencies;
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(ii) (A) provide the Insolvency Opinion or any changes or
modifications thereto requested by Lender or the Ratings Agencies and (B)
cooperate with Lender in obtaining any other opinions of counsel, which may
be relied upon by Lender, the Rating Agencies and their respective counsel,
agents and representatives, as to non-consolidation, fraudulent conveyance,
true sale or any other opinion customary in Secondary Market Transactions
or required by the Rating Agencies with respect to the Property and,
Borrower and Affiliates which counsel and opinions shall be satisfactory to
Lender and the Rating Agencies;
(iii) provide updated, as of the closing date of the Secondary
Transaction, representations and warranties made in the Loan Documents and
such additional representations and warranties as the Rating Agencies may
require; and
(iv) execute amendments to the Loan Documents and Borrower's
organizational documents reasonably requested by Lender; provided, however,
that Borrower shall not be required to modify or amend any Loan Document if
such modification or amendment would (A) change the interest rate, the
stated maturity or the amortization of principal as set forth herein or in
the Note, or (B) except as expressly permitted by the Cooperation
Agreement, modify or amend any other material economic term of the Loan
(including, without limitation, the provisions of Article VIII above;
provided, however, that to the extent Borrower is required to incur more
than a de minimis cost or expense to satisfy a request made by Lender after
the Closing Date with respect to a Secondary Market Transaction, Lender
shall be responsible for reimbursing Borrower for any such reasonable cost
or expense incurred.
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Section 9.2 Securitization Indemnification.
(a) Borrower understands that information provided to Lender by
Borrower and its agents, counsel and representatives may be included in
disclosure documents in connection with the Securitization, including,
without limitation, an offering circular, a prospectus, prospectus
supplement, private placement memorandum or other offering document (each,
a "Disclosure Document") and may also be included in filings with the
Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), or the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), and may be made available to
investors or prospective investors in the Securities, the Rating Agencies,
and service providers relating to the Securitization.
(b) Borrower agrees to provide in connection with each of (i) a
preliminary and a final private placement memorandum or (ii) a preliminary
and final prospectus or prospectus supplement, as applicable, an agreement
(A) certifying that Borrower has examined such Disclosure Documents
specified by Lender and that each such Disclosure Document, as it relates
to Borrower, Borrower Affiliates, the Property, Manager and all other
aspects of the Loan, does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were
made, not misleading, (B) indemnifying Lender (and for purposes of this
Section 9.2, Lender hereunder shall include its officers and directors),
the Affiliate of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. ("Xxxxxx Xxxxxxx") that
has filed the registration statement relating to the Securitization (the
"Registration Statement"), each of its directors, each of its officers who
have signed the Registration Statement and each Person that controls the
Affiliate within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (collectively, the "Xxxxxx Xxxxxxx Group"), and
Xxxxxx Xxxxxxx, each of its directors and each Person who controls Xxxxxx
Xxxx 77
Xxxxxxx within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act (collectively, the "Underwriter Group") for any
losses, claims, damages or liabilities (collectively, the "Liabilities") to
which Lender, the Xxxxxx Xxxxxxx Group or the Underwriter Group may become
subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in such sections or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated in such
sections or necessary in order to make the statements in such sections, in
light of the circumstances under which they were made, not misleading and
(C) agreeing to reimburse Lender, the Xxxxxx Xxxxxxx Group and/or the
Underwriter Group for any legal or other expenses reasonably incurred by
Lender, the Xxxxxx Xxxxxxx Group and the Underwriter Group in connection
with investigating or defending the Liabilities; provided, however, that
Borrower will be liable in any such case under clauses (B) or (C) above
only to the extent that any such loss claim, damage or liability arises out
of or is based upon any such untrue statement or omission made therein in
reliance upon and in conformity with information furnished to Lender by or
on behalf of Borrower in connection with the preparation of the Disclosure
Document or in connection with the underwriting or closing of the Loan,
including, without limitation, financial statements of Borrower, operating
statements, rent rolls, appraisals, market studies, environmental site
assessment reports and property condition reports with respect to the
Property. This indemnity agreement will be in addition to any liability
which Borrower may otherwise have. Lender will provide Borrower with copies
of any third party reports concerning the Property received by Lender and
not Borrower to the extent the information contained in any such report
will be used in connection with the preparation of the Disclosure
Documents.
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(c) In connection with any filing under or pursuant to the
Exchange Act in connection with or relating to a Securitization, Borrower
shall (i) indemnify Lender, the Xxxxxx Xxxxxxx Group and the Underwriter
Group for Liabilities to which Lender, the Xxxxxx Xxxxxxx Group or the
Underwriter Group may become subject insofar as the Liabilities arise out
of or are based upon the omission or alleged omission to state in the
Disclosure Document a material fact required to be stated in the Disclosure
Document in order to make the statements in the Disclosure Document, in
light of the circumstances under which they were made, not misleading and
(ii) reimburse Lender, the Xxxxxx Xxxxxxx Group or the Underwriter Group
for any legal or other expenses reasonably incurred by Lender, the Xxxxxx
Xxxxxxx Group or the Underwriter Group in connection with defending or
investigating the Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9.2, notify the indemnifying party in
writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability which the indemnifying party may have to any indemnified party
hereunder except to the extent that failure to notify causes prejudice to
the indemnifying party. In the event that any action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent
that it (or they) may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party. After notice from the indemnifying party to such
indemnified party under this Section 9.2, such indemnified party shall
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pay for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section
9.2(b) or (c) is for any reason held to be unenforceable as to an
indemnified party in respect of any losses, claims, damages or liabilities
(or action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 9.2(b) or (c), the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, the following
factors shall be considered: (i) Xxxxxx Xxxxxxx'x and Borrower's relative
knowledge and access to information concerning the matter with respect
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to which the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f) The liabilities and obligations of both Borrower and Lender
under this Section 9.2 shall survive the termination of this Agreement and
the satisfaction and discharge of the Debt.
X DEFAULTS
Section 10.1 Event of Default.
(a) Each of the following events shall constitute an event of
default hereunder (an "Event of Default"):
(i) if any portion of the Debt is not paid when due;
(ii) if any of the Taxes or Other Charges are not paid when due;
provided, however, that it shall not be an Event of Default if (A) Tax
Funds have been retained by Lender in accordance with the terms of the Cash
Management Agreement, (B) such Tax Funds are available to Lender under the
Cash Management Agreement in an amount sufficient to make any payment of
Taxes when due and (C) Lender fails to make any payment of Taxes when due;
(iii) if the Policies are not kept in full force and effect;
(iv) if Borrower or SPC Member breaches or permits or suffers a
breach of Section 3.1.24 hereof or Section 7 of the Mortgage;
(v) if Borrower breaches or permits or suffers of breach of
Section 6.4.1 or Section 6.4.2 hereof;
(vi) if any representation or warranty made by Borrower herein or
in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender
shall have been false or misleading in any material respect as of the date
the representation or warranty was made;
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(vii) if Borrower or SPC Member shall make an assignment for the
benefit of creditors;
(viii) if a receiver, liquidator or trustee shall be appointed
for Borrower or Metropolitan or if Borrower or Metropolitan shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to,
or acquiesced in by, Borrower or Metropolitan, or if any proceeding for the
dissolution or liquidation of Borrower or Metropolitan shall be instituted;
provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower or
Metropolitan, as applicable, upon the same not being discharged, stayed or
dismissed within thirty (30) days;
(ix) if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(x) if any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Lender in
connection with the Loan, or in any other non-consolidation delivered
subsequent to the closing of the Loan, is or shall become untrue in any
material respect;
(xi) if Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement not specified in
subsections (i) to (x) above, for seven (7) Business Days after notice to
Borrower from Lender, in the case of any Default which can be cured by the
payment of a sum of money, or for thirty (30) days after notice from Lender
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in the case of any other Default; provided, however, that if such nonmonetary
Default is susceptible of cure but cannot reasonably be cured within such 30-day
period and provided further that Borrower shall have commenced to cure such
Default within such 30-day period and thereafter diligently and expeditiously
proceeds to cure the same, such 30-day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed 180 days; or
(xii) if there shall be a default under any of the other Loan
Documents beyond any applicable cure periods contained in such documents,
whether as to Borrower or the Property, or if any other such event shall
occur or condition shall exist, if the effect of such event or condition is
to accelerate the maturity of any portion of the Debt or to permit Lender
to accelerate the maturity of all or any portion of the Debt.
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vii), (viii) or (ix) above) and at
any time thereafter Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or
at law or in equity, take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower
and in and to all or any portion of the Property, including, without
limitation, declaring the Debt to be immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents against Borrower and any portion of the
Property, including, without limitation, all rights or remedies available
at law or in equity; and upon any Event of Default described in clauses
(vii), (viii) or (ix) above, the Debt and all other obligations of Borrower
hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and
Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary
notwithstanding.
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Section 10.2 Remedies.
(a) Upon the occurrence of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to
Lender against Borrower under this Agreement or any of the other Loan
Documents executed and delivered by, or applicable to, Borrower or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and payable,
and whether or not Lender shall have commenced any foreclosure proceeding
or other action for the enforcement of its rights and remedies under any of
the Loan Documents with respect to the Property. Any such actions taken by
Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order
as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights
and remedies of Lender permitted by law, equity or contract or as set forth
herein or in the other Loan Documents. Without limiting the generality of
the foregoing, Borrower agrees that if an Event of Default is continuing
(i) Lender is not subject to any "one action" or "election of remedies" law
or rule, and (ii) all liens and other rights, remedies or privileges
provided to Lender shall remain in full force and effect until Lender has
exhausted all of its remedies against the Property and the Mortgage has
been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full.
(b) With respect to Borrower and the Property, Lender may seek
satisfaction out of the Property or any part thereof, in its absolute
discretion, in respect of the Debt. In addition, Lender shall have the
right from time to time to partially foreclose the Mortgage in any manner
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and for any amounts secured by the Mortgage then due and payable as
determined by Lender in its sole discretion including, without limitation,
the following circumstances: (i) in the event Borrower defaults beyond any
applicable grace period in the payment of one or more scheduled payments of
principal or interest, Lender may foreclose the Mortgage to recover such
delinquent payments, or (ii) in the event Lender elects to accelerate less
than the entire outstanding principal balance of the Loan, Lender may
foreclose the Mortgage to recover so much of the principal balance of the
Loan as Lender may accelerate and such other sums secured by the Mortgage
as Lender may elect. Notwithstanding one or more partial foreclosures, the
Property shall remain subject to the Mortgage to secure payment of sums
secured by the Mortgage and not previously recovered.
(c) Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents (the "Severed Loan Documents") in
such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided
hereunder. Borrower shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance
described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints
Lender as its true and lawful attorney, coupled with an interest, in its
name and stead to make and execute all documents necessary or desirable to
effect the aforesaid severance, Borrower ratifying all that its said
attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days
after notice has been given to Borrower by Lender of Lender's intent to
exercise its rights under such power. Except as may be required in
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connection with a Securitization pursuant to Section 9.1 hereof, (i)
Borrower shall not be obligated to pay any costs or expenses incurred in
connection with the preparation, execution, recording or filing of the
Severed Loan Documents, and (ii) the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the
Loan Documents and any such representations and warranties contained in the
Severed Loan Documents will be given by Borrower only as of the Closing
Date.
(d) Any amounts recovered from the Property or any other
collateral for the Loan after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any
other amounts due under the Loan Documents in such order, priority and
proportions as Lender in its sole discretion shall determine.
Section 10.3 Remedies Cumulative.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy
which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise.
Lender's rights, powers and remedies may be pursued singly, concurrently or
otherwise, at such time and in such order as Lender may determine in
Lender's sole discretion. No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any
such remedy, right or power may be exercised from time to time and as often
as may be deemed expedient. A waiver of one Default or Event of Default
with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon.
XI MISCELLANEOUS
Section 11.1 Successors and Assigns.
All covenants, promises and agreements in this Agreement, by or
on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.
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Section 11.2 Lender's Discretion.
Whenever pursuant to this Agreement Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or
to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be
in the sole discretion of Lender and shall be final and conclusive. Prior
to a Securitization, whenever pursuant to this Agreement the Rating
Agencies are given any right to approve or disapprove, or any arrangement
or term is to be satisfactory to the Rating Agencies, the decision of
Lender to approve or disapprove or to decide whether arrangements or terms
are satisfactory or not satisfactory, based upon Lender's determination of
Rating Agency criteria, shall be substituted therefore.
Section 11.3 Governing Law.
THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT
EXCLUDING, TO THE EXTENT PERMITTED BY LAW, ALL OTHER CHOICE OF LAW AND
CONFLICT OF LAW RULES. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE
LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE. ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX XXXX,
PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUIT, ACTION OR PROCEEDING.
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Section 11.4 Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement or of any other Loan Document,
nor consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to, or
demand on Borrower, shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances.
Section 11.5 Delay Not a Waiver.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege hereunder,
or under any other Loan Document, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under this Agreement or
any other Loan Document, Lender shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due
under this Agreement or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount.
Section 11.6 Notices.
All notices, demands, requests, consents, approvals or other
communications (any of the foregoing, a "Notice") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with
answer back acknowledged) or by registered or certified mail, postage
prepaid, return receipt requested or delivered by hand or reputable
overnight courier addressed to the party to be so notified at its address
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hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 11.6. Any Notice
shall be deemed to have been received three (3) days after the date such
Notice is mailed or on the date of sending by telefax or delivery by hand
or the next Business Day if sent by an overnight commercial courier
addressed to the parties as follows:
If to Lender: Xxxxxx Financial Corporation
c/o Morgan Xxxxxxx Xxxx Xxxxxx Mortgage
Capital Inc.
0000 Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile No. (000) 000-0000
with a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No. (000) 000-0000
If to Borrower: Reckson Associates Realty Corp.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx III and
Xxxxx Xxxxxxx, Esq.
Facsimile No. (000) 000-0000
with a copy to: Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile No. (000) 000-0000
Section 11.7 Trial by Jury.
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO
THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
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CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL
BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY BORROWER.
Section 11.8 Headings.
The Article and/or Section headings and the Table of Contents in
this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
Section 11.9 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
Section 11.10 Preferences.
Except as otherwise explicitly set forth in this Agreement,
Lender shall have the continuing and exclusive right to apply or reverse
and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment
or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or part thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or
proceeds had not been received by Lender.
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Section 11.11 Waiver of Notice.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide
for the giving of notice by Lender to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. Borrower hereby
expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement or the other Loan Documents do not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
Section 11.12 Remedies of Borrower.
In the event that a claim or adjudication is made that Lender or
its agents have acted unreasonably or unreasonably delayed acting in any
case where, by law or under this Agreement or the other Loan Documents,
Lender or such agent, as the case may be, has an obligation to act
reasonably or promptly, Borrower agrees that neither Lender nor its agents
shall be liable for any monetary damages, and Borrower's sole remedy shall
be limited to commencing an action seeking injunctive relief or declaratory
judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an
action seeking declaratory judgment.
Section 11.13 Expenses; Indemnity.
(a) Except as expressly set forth in this Agreement, Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse
Lender upon receipt of written notice from Lender, for all reasonable costs
and expenses (including reasonable attorneys' fees and disbursements)
incurred by Lender in connection with (i) Borrower's ongoing performance of
and compliance with Borrower's agreements and covenants contained in this
Page 91
Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation,
confirming compliance with environmental and insurance requirements; (ii)
Lender's ongoing performance of and compliance with all agreements and
covenants contained in this Agreement and the other Loan Documents on its
part to be performed or complied with after the Closing Date; (iii) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters requested by
Borrower; (iv) the filing and recording fees and expenses, title insurance
and reasonable fees and expenses of counsel for providing to Lender all
required legal opinions, and other similar expenses incurred, in creating
and perfecting the Liens in favor of Lender pursuant to this Agreement and
the other Loan Documents; (v) enforcing or preserving any rights, in
response to third party claims (as to third party claims, to the extent
that Borrower has not promptly undertaken to defend such claims and
diligently prosecuted such defense in a manner and with counsel reasonably
satisfactory to Lender) or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any
other security given for the Loan; and (vi) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Property or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "workout" or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct
of Lender. Any costs due and payable to Lender may be paid from the Lockbox
Account.
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(b) Borrower shall indemnify, defend and hold harmless Lender
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for Lender in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not Lender shall be designated a party
thereto), that may be imposed on, incurred by, or asserted against Lender
in any manner relating to or arising out of (i) any breach by Borrower of
its obligations under, or any material misrepresentation by Borrower
contained in, this Agreement or the other Loan Documents, or (ii) the use
or intended use of the proceeds of the Loan (collectively, the "Indemnified
Liabilities"); provided, however, that Borrower shall not have any
obligation to Lender hereunder to the extent that such Indemnified
Liabilities arise from the gross negligence, illegal acts, fraud or willful
misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall
pay the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Lender.
Section 11.14 Schedules Incorporated.
The Schedules annexed hereto are hereby incorporated herein as a
part of this Agreement with the same effect as if set forth in the body
hereof.
Section 11.15 Offsets, Counterclaims and Defenses.
Any assignee of Lender's interest in and to this Agreement and
the other Loan Documents which is not an Affiliate of Lender shall take the
Page 93
same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense
shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to
interpose or assert any such unrelated offset, counterclaim or defense in
any such action or proceeding is hereby expressly waived by Borrower;
provided, however, that an Affiliate of Lender shall not be deemed to
include any transferee of Lender's interest in and to this Agreement and
the other Loan Documents in connection with a Securitization.
Section 11.16 No Joint Venture or Partnership; No Third Party
Beneficiaries.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy in common, or joint tenancy relationship between
Borrower and Lender nor to grant Lender any interest in the Property other
than that of mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and nothing contained in this Agreement or the other
Loan Documents shall be deemed to confer upon anyone other than Lender any
right to insist upon or to enforce the performance or observance of any of
the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have
standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Lender will refuse to make the
Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in
part by Lender if, in Lender's sole discretion, Lender deems it advisable
or desirable to do so.
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Section 11.17 Publicity.
Except as required by law, all news releases, publicity or
advertising, in each case, initiated by Borrower or its Affiliates, through
any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender,
Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc., or any of their
Affiliates shall be subject to the prior approval of Lender, not to be
unreasonably withheld or delayed. If Lender shall fail to disapprove any
written request regarding a news release, publicity or advertising within
three (3) Business Days of Lender's receipt of such request, Lender shall
be conclusively deemed to have approved such news release, publicity or
advertising.
Section 11.18 Waiver of Marshalling of Assets.
To the fullest extent permitted by law, Borrower, for itself and
its successors and assigns, waives all rights to a marshalling of the
assets of Borrower, Borrower's partners and others with interests in
Borrower, and of the Property, or to a sale in inverse order of alienation
in the event of foreclosure of the Mortgage, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the
Property for the collection of the Debt without any prior or different
resort for collection or of the right of Lender to the payment of the Debt
out of the net proceeds of the Property in preference to every other
claimant whatsoever.
Page 95
Section 11.19 Waiver of Counterclaim.
Borrower hereby waives the right to assert a counterclaim, other
than a compulsory counterclaim, in any action or proceeding brought against
it by Lender or its agents.
Section 11.20 Conflict; Construction of Documents; Reliance.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this
Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation,
drafting and execution of the Loan Documents and that such Loan Documents
shall not be subject to the principle of construing their meaning against
the party which drafted same. Borrower acknowledges that, with respect to
the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under
any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary
or Affiliate of Lender of any equity interest any of them may acquire in
Borrower, and Borrower hereby irrevocably waives the right to raise any
defense or take any action on the basis of the foregoing with respect to
Lender's exercise of any such rights or remedies. Borrower acknowledges
that Lender engages in the business of real estate financings and other
real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.
Section 11.21 Brokers and Financial Advisors.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Lender
Page 96
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including Lender's
attorneys' fees and expenses) in any way relating to or arising from a
claim by any Person that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein. The provisions of
this Section 11.21 shall survive the expiration and termination of this
Agreement and the payment of the Debt.
Section 11.22 Exculpation.
Subject to the qualifications below, (i) Lender shall not enforce
the liability and obligation of Borrower to perform and observe the
obligations contained in the Note, this Agreement, the Mortgage or the
other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against any of the members of Borrower or any direct or
indirect partner, shareholder, member, manager, owner, officer, director,
trustee or employee in or of Borrower (collectively, the "Exculpated
Parties") or Borrower, except that Lender may bring a foreclosure action,
an action for specific performance or any other appropriate action or
proceeding to enable Lender to enforce and realize upon its interest under
the Note, this Agreement, the Mortgage and the other Loan Documents, or in
the Property, the Rents, or any other collateral given to Lender pursuant
to the Loan Documents, (ii) except as specifically provided herein, any
judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower's interest in the Property, in the
Rents and in any other collateral given to Lender, and Lender, by accepting
the Note, this Agreement, the Mortgage and the other Loan Documents, agrees
that it shall not xxx for, seek or demand any deficiency judgment against
Page 97
Borrower or any Exculpated Parties in any such action or proceeding under
or by reason of or under or in connection with the Note, this Agreement,
the Mortgage or the other Loan Documents and (iii) none of the Exculpated
Parties shall have any personal liability in any respect for the Loan or
the obligations of Borrower contained in the Loan Documents. The provisions
of this Section shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan
Documents; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for foreclosure and sale under the
Mortgage; (c) affect the validity or enforceability of or any guaranty made
in connection with the Loan (including, without limitation, the Guaranty)
or any of the rights and remedies of Lender thereunder, or be taken to
prevent recourse against any guarantor (including, without limitation,
Metropolitan) under any guaranty made in connection with the Loan
(including, without limitation, the Guaranty); (d) impair the right of
Lender to obtain the appointment of a receiver; (e) impair the enforcement
of the Assignment of Leases; (f) constitute a prohibition against Lender to
seek a deficiency judgment against Borrower in order to fully realize the
security granted by the Mortgage or to commence any other appropriate
action or proceeding in order for Lender to exercise its remedies against
the Property; or (g) constitute a waiver of the right of Lender to enforce
the liability and obligation of Borrower, by money judgment or otherwise,
to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys' fees and costs
reasonably incurred) arising out of or in connection with any of the
following:
(i) fraud or intentional misrepresentation by Borrower or any
guarantor in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgage
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;
Page 98
(iv) the removal or disposal of any portion of the Property after
an Event of Default without replacing the same with an item or items of
comparable value;
(v) the misapplication or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Property, (B) any Awards or other amounts received in connection with the
Condemnation of all or a portion of the Property, or (C) any Rents
following an Event of Default;
(vi) failure to pay charges for labor or materials or other
charges that can create liens on any portion of the Property;
(vii) any security deposits, advance deposits or any other
deposits collected with respect to the Property which are not delivered to
Lender upon a foreclosure of the Property or action in lieu thereof, except
to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of
the Event of Default that gave rise to such foreclosure or action in lieu
thereof;
(viii) Borrower's indemnification of Lender set forth in Section
9.2 hereof;
(ix) failure to maintain Borrower's status as a single purpose
entity; and
(x) failure to permit on-site inspections of the Property,
failure to provide financial information or failure to appoint a new
Manager in accordance with the terms of this Agreement upon the request of
Lender after an Event of Default, each as required by, and in accordance
with, the terms and provisions of, this Agreement and the Mortgage, if such
condition shall continue for five (5) Business Days after notice thereof.
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Notwithstanding anything to the contrary in this Agreement, the
Note or any of the Loan Documents, (A) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Code to file a claim for
the full amount of the Debt or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the
Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the
event: (i) Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Property; or
(ii) Borrower fails to obtain Lender's prior written consent to any
assignment, transfer, or conveyance of the Property or any interest therein
as required by the Mortgage or this Agreement.
Section 11.23 Prior Agreements.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between
such parties, whether oral or written, including, without limitation, the
Letter dated April 5, 2001 between Borrower and Xxxxxx Xxxxxxx, are
superseded by the terms of this Agreement and the other Loan Documents.
Section 11.24 Servicer.
At the option of Lender, the Loan may be serviced (at Lender's
cost and expense) by a servicer (the "Servicer") selected by Lender and
Lender may delegate all or any portion of its responsibilities under this
Agreement and the other Loan Documents to the Servicer pursuant to a
servicing agreement (the "Servicing Agreement") between Lender and
Servicer.
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Section 11.25 Assignment to Successor Lender.
Lender shall, upon (i) payment in full of the Debt and (ii) the
written request of Borrower, assign the Mortgage and the Note without
recourse, representation or warranty of any kind to an assignee designated
by Borrower; provided, however, that Borrower shall pay all third party,
out-of-pocket costs or expenses incurred by Lender (including reasonable
attorney's fees of outside counsel) in connection with such assignment.
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all
as of the day and year first above written.
LENDER:
------
XXXXXX FINANCIAL CORPORATION, a
Pennsylvania corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
BORROWER:
--------
1350 LLC, a Delaware limited liability company
By: 1350 Mezzanine LLC, a Delaware limited
liability company
By: Metropolitan Operating Partnership,
L.P., a Delaware limited partnership
By: Metropolitan Partners LLC,
a Delaware limited
liability company
By:
-------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
Page 101
SCHEDULE 1
----------
ANNUAL BUDGET
SCHEDULE 2
----------
MONTHLY DEBT SERVICE PAYMENT AMOUNT
SCHEDULE 3
----------
NON-COMPLIANCE
NONE
SCHEDULE 4
----------
LEASES
SCHEDULE 4A
-----------
DEFAULTED LEASES
Metro Cash Card International (120 Days Late)
EXHIBIT A
---------
FORM OF FINANCIAL STATEMENTS
EXHIBIT B
---------
FORM OF CASH MANAGEMENT AGREEMENT
EXHIBIT C
---------
LETTER OF INSTRUCTION
-----------------, ----, -----
[Tenants under Leases]
Re: Lease dated between
-------- ---------------,
as Landlord, and as Tenant,
---------------,
concerning premises known as
---------------------------- ---------------------
Ladies and Gentlemen:
This letter shall constitute notice to you that the undersigned
has granted a security interest in the captioned lease and all rents,
additional rent and all other monetary obligations to landlord thereunder
(collectively, "Rent") in favor of Xxxxxx Financial Corporation, as lender
("Lender"), to secure certain of the undersigned's obligations to Lender.
The undersigned hereby irrevocably instructs and authorizes you to
disregard any and all previous notices sent to you in connection with Rent
and hereafter to deliver by wire transfer of immediately available funds
all Rent as follows:
Account No.
-----------------
[Bank with Operating Account]
[Bank's Address]
Attention:
-----------------
ABA#
-----------------
You hereby agree that you have no right of offset against the
Rent and shall not exercise or attempt to exercise any such right against
the Rent.
Page
----
The instructions set forth herein are irrevocable and are not subject
to modification in any manner, except that Xxxxxx Financial Corporation, under
that certain Consolidated, Amended and Restated Mortgage, Security Agreement and
Fixture Filing, dated as of the date hereof, from the undersigned in favor of
Lender, or any successor lender so identified by Lender, may by written notice
to you rescind the instructions contained herein.
Sincerely,
1350 LLC
By:
--------------------------
Name:
Title:
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges notice of the security interest of Lender
and hereby confirms that the undersigned has received no notice of any other
pledge or assignment of the Rent and will honor the above instructions. All
payments made by the undersigned to Lender shall be made irrespective of, and
without deduction for, any counterclaim, defense, recoupment or setoff.
Tenant]
By:
---------------------------
Name:
Title:
Dated as of:
--------------, --, ----
Page
----
EXHIBIT D
FORM OF SUBORDINATION AGREEMENT
