Exhibit 10.17
Loan No. 00-0000000
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GENERAL ELECTRIC CAPITAL CORPORATION
(Lender)
to
XXXXXXX LAND & NURSERIES, INC.
(Borrower)
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LOAN AGREEMENT
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Dated as of: June 24, 1999
Property Location: East Granby/Windsor, Connecticut
DOCUMENT PREPARED BY:
Xxxxxxx & Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
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TABLE OF CONTENTS
Page
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ARTICLE 1 - CERTAIN DEFINITIONS................................................1
Section 1.1 Certain Definitions.................................1
ARTICLE 2 - LOAN TERMS.........................................................3
Section 2.1 The Loan............................................3
Section 2.2 Interest Rate; Late Charge..........................4
Section 2.3 Terms of Payment....................................4
Section 2.4 Security; Establishment of Funds....................4
ARTICLE 3 - INSURANCE, CONDEMNATION, AND IMPOUNDS .............................6
Section 3.1 Insurance...........................................6
Section 3.2 Use and Application of Insurance Proceeds...........7
Section 3.3 Condemnation Awards.................................7
Section 3.4 Impounds............................................8
ARTICLE 4 - ENVIRONMENTAL MATTERS .............................................8
Section 4.1 Certain Definitions.................................8
Section 4.2 Representations and Warranties on Environmental
Matters.............................................9
Section 4.3 Covenants on Environmental Matters..................9
Section 4.4 Allocation of Risks and Indemnity..................10
Section 4.5 No Waiver..........................................10
ARTICLE 5 - LEASING MATTERS ..................................................10
Section 5.1 Representations and Warranties on Leases...........10
Section 5.2 Standard Lease Form; Approval Rights...............10
Section 5.3 Covenants..........................................11
Section 5.4 Tenant Estoppels...................................11
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES ...................................11
Section 6.1 Organization, Power and Authority..................11
Section 6.2 Validity of Loan Documents.........................11
Section 6.3 Liabilities; Litigation............................11
Section 6.4 Taxes and Assessments..............................12
Section 6.5 Other Agreements; Defaults.........................12
Section 6.6 Compliance with Law................................12
Section 6.7 Location of Borrower..............................12
Section 6.8 ERISA..............................................12
Section 6.9 Forfeiture.........................................13
Section 6.10 Tax Filings........................................13
Section 6.11 Solvency...........................................13
Section 6.12 Full and Accurate Disclosure.......................13
Section 6.13 Flood Zone.........................................13
Section 6.14 Year 2000 Compliance...............................13
ARTICLE 7 - FINANCIAL REPORTING...............................................14
Section 7.1 Financial Statements...............................14
Section 7.2 Accounting Principles..............................14
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Section 7.3 Other Information; Access..........................14
Section 7.4 Annual Budget......................................14
ARTICLE 8 - COVENANTS.........................................................14
Section 8.1 Due On Sale and Encumbrance; Transfers of
Interests..........................................14
Section 8.2 Taxes; Utility Charges.............................14
Section 8.3 Control; Management................................15
Section 8.4 Operation; Maintenance; Inspection.................15
Section 8.5 Taxes on Security..................................15
Section 8.6 Legal Existence; Name, Etc.........................15
Section 8.7 Further Assurances.................................15
Section 8.8 Estoppel Certificates..............................15
Section 8.9 Notice of Certain Events...........................16
Section 8.10 Indemnification....................................16
Section 8.11 Cooperation........................................16
Section 8.12 Payment For Labor and Materials....................16
Section 8.13 Year 2000 Compliance...............................17
Section 8.14 Limitation on Additional Borrowing Secured by
Other Real Estate Indebtedness.....................17
Section 8.15 Limitation on Indebtedness.........................17
Section 8.16 Optional Letters of Credit.........................17
ARTICLE 9 - EVENTS OF DEFAULT.................................................18
Section 9.1 Payments...........................................18
Section 9.2 Insurance..........................................18
Section 9.3 Sale, Encumbrance, Etc.............................18
Section 9.4 Covenants..........................................18
Section 9.5 Representations and Warranties.....................18
Section 9.6 Other Encumbrances.................................18
Section 9.7 Involuntary Bankruptcy or Other Proceeding.........18
Section 9.8 Voluntary Petitions, etc...........................18
ARTICLE 10 - REMEDIES.........................................................19
Section 10.1 Remedies - Insolvency Events.......................19
Section 10.2 Remedies - Other Events............................19
Section 10.3 Lender's Right to Perform the Obligations..........19
ARTICLE 11 - MISCELLANEOUS....................................................19
Section 11.1 Notices............................................19
Section 11.2 Amendments and Waivers.............................20
Section 11.3 Limitation on Interest.............................20
Section 11.4 Invalid Provisions.................................21
Section 11.5 Reimbursement of Expenses..........................21
Section 11.6 Approvals; Third Parties; Conditions...............21
Section 11.7 Lender Not in Control; No Partnership..............21
Section 11.8 Contest of Certain Claims..........................22
Section 11.9 Time of the Essence................................22
Section 11.10 Successors and Assigns.............................22
Section 11.11 Renewal, Extension or Rearrangement................22
Section 11.12 Waivers............................................22
Section 11.13 Cumulative Rights; Joint and Several Liability.....22
Section 11.14 Singular and Plural................................22
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Section 11.15 Phrases............................................22
Section 11.16 Exhibits and Schedules.............................23
Section 11.17 Titles of Articles, Sections and Subsections.......23
Section 11.18 Promotional Material...............................23
Section 11.19 Survival...........................................23
Section 11.20 Waiver of Jury Trial...............................23
Section 11.21 Waiver of Punitive or Consequential Damages........23
Section 11.22 Governing Law......................................23
Section 11.23 Entire Agreement...................................23
Section 11.24 Counterparts.......................................24
ARTICLE 12 - LIMITATIONS ON LIABILITY.........................................24
Section 12.1 Limitation on Liability............................24
Section 12.2 Limitation on Liability of Lender's
Officers, Employees, etc...........................24
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL DESCRIPTION OF PROJECT
SCHEDULE I DEFEASANCE
SCHEDULE II REQUIRED REPAIRS
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LOAN AGREEMENT
This Loan Agreement (this "AGREEMENT") is entered into as of June 24,
1999 between GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("LENDER"), and XXXXXXX LAND & NURSERIES, INC., a Delaware corporation
("BORROWER").
ARTICLE 1
CERTAIN DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
"AGREEMENT" means this Loan Agreement, as amended from time to time.
"ASSIGNMENT OF LEASES AND RENTS" means the Assignment of Leases and
Rents, executed by Borrower for the benefit of Lender, and pertaining to leases
of space in the Project.
"AWARD" has the meaning assigned in Section 3.3.
"BANKRUPTCY PARTY" has the meaning assigned in Section 9.7.
"BUSINESS DAY" means a day other than a Saturday, a Sunday, or a legal
holiday on which national banks located in the State of New York are not open
for general banking business.
"CASUALTY" has the meaning assigned in Section 3.2.
"CLOSING DATE" means the date the Loan is funded by Lender.
"COMMITMENT" means the commitment letter, dated May 4, 1999, issued by
Lender and accepted by Borrower on May 6, 1999.
"CONDEMNATION" has the meaning assigned in Section 3.3.
"CONTRACT RATE" has the meaning assigned in Section 2.2.
"DEBT" means, for any Person, without duplication: (a) all indebtedness
of such Person for borrowed money, for amounts drawn under a letter of credit,
or for the deferred purchase price of property for which such Person or its
assets is liable, (b) 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 under the credit facility, (c) 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, (d)
all indebtedness guaranteed by such Person, directly or indirectly, (e) all
obligations under leases that constitute capital leases for which such Person is
liable, and (f) all obligations of such Person under interest rate swaps, caps,
floors, collars and other interest hedge agreements, in each case whether such
Person is liable contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person otherwise assures a creditor
against loss.
"DEBT SERVICE" means the aggregate interest, fixed principal, and other
payments due under the Loan, and on any other outstanding permitted Debt
relating to the Project approved by Lender for the period of time for which
calculated.
"DEFAULT RATE" means the lesser of (a) the maximum rate of interest
allowed by applicable law, and (b) five percent (5%) per annum in excess of the
Contract Rate.
"DEFEASANCE OPTION" has the meaning assigned in Section 2.3(c).
"ENVIRONMENTAL LAWS" has the meaning assigned in Section 4.1(a).
"ERISA" has the meaning assigned in Section 6.8.
"EVENT OF DEFAULT" has the meaning assigned in Article 9.
"FEDERAL EXPRESS ESCROW" has the meaning assigned in Section 2.4.
"FUNDS" means the Required Repair Fund, the Replacement Escrow Fund,
the Rollover Escrow Fund, the Hartford Insurance Rent Concession Escrow, the
Federal Express Escrow and the Hartford Insurance Termination Escrow.
"HARTFORD INSURANCE RENT CONCESSION ESCROW" has the meaning assigned in
Section 2.4.
"HARTFORD INSURANCE TERMINATION ESCROW" has the meaning assigned in
Section 2.4.
"HAZARDOUS MATERIALS" has the meaning assigned in Section 4.1(b).
"INSURANCE PREMIUMS" has the meaning assigned in Section 3.1(c).
"LETTER OF CREDIT" has the meaning assigned in Section 8.15.
"LIEN" means any interest, or claim thereof, in the Project securing an
obligation owed to, or a claim by, any Person other than the owner of the
Project, whether such interest is based on common law, statute or contract,
including the lien or security interest arising from a deed of trust, mortgage,
assignment, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting the Project.
"LOAN" means the loan made by Lender to Borrower under this Agreement
and all other amounts secured by the Loan Documents.
"LOAN DOCUMENTS" means: (a) this Agreement, (b) the Note, (c) the
Mortgage, (d) the Assignment of Leases and Rents, (e) Uniform Commercial Code
financing statements, (f) such assignments of management agreements, contracts
and other rights as may be required under the Commitment or otherwise requested
by Lender, (g) all other documents evidencing, securing, governing or otherwise
pertaining to the Loan, and (h) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing; provided however, in no
event shall the term "Loan Documents" include that certain Hazardous Materials
Indemnity Agreement (the "ENVIRONMENTAL INDEMNITY AGREEMENT") dated the date
hereof in favor of Lender.
"LOAN YEAR" means (a) for the first Loan Year, the period between the
date hereof and one calendar year from the last day of the month in which the
Closing Date occurs (unless the Closing Date is on the first day of a month, in
which case the first Loan Year shall commence on such Closing Date and end one
calendar year from the last day of the month immediately preceding the Closing
Date) and (b) each consecutive twelve month calendar period after the first Loan
Year until the Maturity Date.
"MATURITY DATE" means, as applicable, the earlier of (a) July 1, 2009,
or (b) any earlier date on which the entire Loan is required to be paid in full,
by acceleration or otherwise, under this Agreement or any of the other Loan
Documents.
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"MORTGAGE" means the Open-End Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, executed by Borrower in favor of Lender,
covering the Project.
"NOTE" means the Promissory Note of even date, in the stated principal
amount of $8,173,000, executed by Borrower, and payable to the order of Lender
in evidence of the Loan.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity.
"POTENTIAL DEFAULT" means the occurrence of any event or condition
which, with the giving of notice, the passage of time, or both, would constitute
an Event of Default.
"PROJECT" means collectively, the four properties located respectively
at 14, 15 and 00 Xxxxxxxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxxx, and 00
Xxxxxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx and any improvements now or hereafter
located on the real property described in EXHIBIT A.
"RATING AGENCIES" means each of Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx
Credit Rating Co. and Fitch IBCA, Inc., or any other nationally-recognized
statistical rating agency which has been approved by Lender;
"REPLACEMENT ESCROW FUND" has the meaning assigned in Section 2.4.
"REQUIRED REPAIR FUND" has the meaning assigned in Section 2.4.
"ROLLOVER ESCROW FUND" has the meaning assigned in Section 2.4.
"SECONDARY MARKET TRANSACTION" has the meaning assigned in Section
8.11.
"SITE ASSESSMENT" means an environmental engineering report for the
Project prepared at Borrower's expense by an engineer engaged by Borrower, or
Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably
satisfactory to Lender, based upon an investigation relating to and making
appropriate inquiries concerning the existence of Hazardous Materials on or
about the Project, and the past or present discharge, disposal, release or
escape of any such substances, all consistent with ASTM Standard E1527-93 (or
any successor thereto published by ASTM) and good customary and commercial
practice.
"STATE" means the State of Connecticut.
"TAX AND INSURANCE ESCROW FUND" has the meaning assigned in Section
3.4.
"TAXES" has the meaning assigned in Section 8.2.
"YEAR 2000 COMPLIANT" and "YEAR 2000 COMPLIANCE" means that (a) the
performance and functionality of the operating systems for Borrower's computers,
all software applications that run on Borrower's computers, all of Borrower's
machinery and equipment (including, without limitation, any machinery or
equipment with an embedded microprocessor) shall accurately process date data
(including, without limitation, dates prior to, during, spanning or after
January 1, 2000), and (b) Borrower's business operations and financial condition
will not be materially interrupted, delayed, decreased or otherwise materially
adversely affected by the advent of the Year 2000.
"YIELD MAINTENANCE AMOUNT" has the meaning assigned in SCHEDULE 1.
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ARTICLE 2
LOAN TERMS
SECTION 2.1 THE LOAN. Upon satisfaction of all the terms and conditions
set forth in the Commitment, Lender agrees to make a Loan of EIGHT MILLION ONE
HUNDRED SEVENTY THREE THOUSAND AND NO/100 DOLLARS ($8,173,000) to the Borrower,
which shall be funded in one advance and repaid in accordance with the terms of
this Agreement and the Note. Borrower hereby agrees to accept the Loan on the
Closing Date, subject to and upon the terms and conditions set forth herein.
SECTION 2.2 INTEREST RATE; LATE CHARGE. The outstanding principal
balance of the Loan shall bear interest at a rate of interest equal to eight and
fifty-four hundredths percent (8.54 %) per annum (the "CONTRACT RATE"). Interest
at the Contract Rate shall be computed on the basis of a fraction, the
denominator of which is three hundred sixty (360) days and the numerator of
which is the actual number of days elapsed from the date of the initial
disbursement under the Loan or the date of the preceding interest installment
due date, as the case may be, to the date of the next interest installment due
date or the Maturity Date. If Borrower fails to pay any installment of interest
or principal within five (5) days of (and including) the date on which the same
is due, Borrower shall pay to Lender a late charge on such past-due amount, as
liquidated damages and not as a penalty, equal to five percent (5%) of such
amount, but not in excess of the maximum amount of interest allowed by
applicable law. While any Event of Default exists, the Loan shall bear interest
at the Default Rate.
SECTION 2.3 TERMS OF PAYMENT. The Loan shall be payable as follows:
(a) INTEREST AND PRINCIPAL. A payment of interest only on the date
hereof for the period from the date hereof through the last day of the current
month. Thereafter, a constant payment of $63,075.14, on the first day of August,
1999, and on the first day of each calendar month thereafter; each of such
payments, to be applied (i) to the payment of interest computed at the Contract
Rate and (ii) the balance applied toward reduction of the principal sum. The
constant payment required hereunder is based on a thirty (30) year amortization
schedule.
(b) MATURITY. On the Maturity Date, Borrower shall pay to Lender all
outstanding principal, accrued and unpaid interest, default interest, late
charges and any and all other amounts due under the Loan Documents.
(c) PREPAYMENT. Except as set forth herein, the Loan is closed to
prepayment in whole or in part, until the ninety (90) day period prior to the
Maturity Date. Notwithstanding the foregoing, from the earlier to occur of (i)
two (2) years after the sale of the Loan in a Secondary Market Transaction or
(ii) the fourth (4th) anniversary of the Closing Date, provided no Event of
Default exists, Borrower may obtain the release of the Project from the lien of
the Mortgage in accordance with the terms and provisions of SCHEDULE I attached
hereto (the "DEFEASANCE OPTION").
If the Loan is accelerated for any reason other than casualty or
condemnation, and the Loan is otherwise closed to prepayment, Borrower shall
pay, in addition to all other amounts outstanding under the Loan Documents, a
prepayment premium equal to the sum of (A) the Yield Maintenance Amount, if any,
that would be required under the Defeasance Option and (B) five percent (5%) of
the outstanding balance of the Loan. If for any reason the Loan is prepaid on a
day other than a scheduled monthly payment date, the Borrower shall pay, in
addition to the principal, interest and premium, if any, required under this
Section, an amount equal to the interest that would have accrued on the Loan
from the date of prepayment to the next scheduled monthly payment date. In the
event of a prepayment resulting from Lender's application of insurance or
condemnation proceeds pursuant to Article 3 hereof, no prepayment penalty or
premium shall be imposed.
SECTION 2.4 SECURITY; ESTABLISHMENT OF FUNDS. (a) The Loan shall be
secured by the Mortgage creating a first lien on the Project, the Assignment of
Leases and Rents and the other Loan Documents. Borrower agrees to establish the
following reserves with Lender, to be held by Lender as further security for the
Loan: (i) on the Closing Date, Borrower shall deposit with Lender the amount of
$0 (the "REQUIRED REPAIR FUND") which shall be held by Lender for the completion
of the required repairs set forth on SCHEDULE II annexed hereto on or before six
(6) months
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from the date hereof; and (ii) Borrower shall deposit with Lender on the first
day of each calendar month a scheduled payment is due the amount of $1,980 which
shall be held by Lender for replacements and repairs required to be made to the
Project during the calendar year (the "REPLACEMENT ESCROW FUND"); (iii) Borrower
shall deposit with Lender on the first day of each calendar month a scheduled
payment is due the amount of $7,025 which shall be held by Lender for tenant
improvement and leasing commission obligations incurred following the date
hereof (the "ROLLOVER ESCROW FUND"); provided, however, a scheduled monthly
payment into the Rollover Escrow Fund shall not be required if the amount in the
Rollover Escrow Fund immediately prior to such monthly payment is at least
$100,000; (iv) on the Closing Date Borrower shall deposit with Lender the amount
of $25,000 (the "HARTFORD INSURANCE RENT CONCESSION ESCROW") which shall be
released to Borrower in one lump sum payment if Hartford Insurance does not
extend its lease for a seven year period on or before November 30, 1999, and the
Borrower has made the Hartford Insurance Termination Escrow or if the Hartford
Insurance lease is extended for seven years in monthly amounts of $309.08 (until
the entire Hartford Insurance Rent Concession Escrow is returned to Borrower);
(v) upon the receipt by Borrower of notice that Federal Express has exercised
the termination clause in its lease the Borrower shall deposit with Lender the
amount of $80,000 (the "FEDERAL EXPRESS ESCROW") which shall be held by Lender
until such vacated space is leased to a tenant acceptable to Lender pursuant to
a lease containing terms and provisions acceptable to Lender and such tenant has
occupied the premises and paid rent for at least three (3) consecutive months;
and (vi) upon the failure of the Hartford Insurance to timely exercise their
option to extend the term of their lease for seven (7) years, the Borrower shall
deposit the amount of $200,000 with Lender (the "HARTFORD INSURANCE TERMINATION
ESCROW") which shall be held by Lender until such vacated space is leased to a
tenant acceptable to Lender pursuant to a lease containing terms and provisions
acceptable to Lender and such tenant has occupied the premises and paid rent for
at least three consecutive months. Notwithstanding the above provisions, the
Borrower, in lieu of the Federal Express Escrow and/or the Hartford Insurance
Termination Escrow may deliver to Lender the letters of credit as provided in
Section 8.15 hereof.
(b) PLEDGE AND DISBURSEMENT OF FUNDS. Borrower hereby pledges to
Lender, and grants a security interest in, any and all monies now or hereafter
deposited in the Funds as additional security for the payment of the Loan.
Lender may reasonably reassess its estimate of the amount necessary for the
Funds from time to time and may adjust the monthly amounts required to be
deposited into the Funds upon thirty (30) days notice to Borrower. Lender shall
make disbursements from the Funds as requested by Borrower, and approved by
Lender in its reasonable discretion, on a quarterly basis in increments of no
less than $5,000.00 upon delivery by Borrower of Lender's standard form of draw
request accompanied by copies of paid invoices for the amounts requested and, if
required by Lender, lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
require an inspection of the Project at Borrower's expense prior to making a
quarterly disbursement in order to verify completion of replacements and repairs
for which reimbursement is sought. The Funds shall be held with interest in
Lender's name and may be commingled with Lender's own funds at financial
institutions selected by Lender in its reasonable discretion. All earnings or
interest on the Funds shall be added to and become a part of the applicable Fund
and shall be disbursed as set forth herein. Upon the occurrence of an Event of
Default, Lender may apply any sums then present in the Funds to the payment of
the Loan in any order in its reasonable discretion. Until expended or applied as
above provided, the Funds shall constitute additional security for the Loan.
Lender shall have no obligation to release any of the Funds while any Event of
Default or Potential Default exists or any material adverse change has occurred
in Borrower, or the Project. All reasonable costs and expenses incurred by
Lender in the disbursement of any of the Funds shall be paid by Borrower
promptly upon demand or, at Lender's sole discretion, deducted from the Funds.
(c) INTEREST PAYABLE BY LENDER. Lender shall cause all monies on
deposit in the Funds to be deposited into interest bearing accounts of the type
customarily maintained by Lender or its servicing agent for the investment of
(and may be commingled with) similar reserves, which accounts may not yield the
highest interest rate then available. The Funds shall be held in an account in
Lender's name (or such other account name as Lender may elect) at a financial
institution or other depository selected by Lender (or its servicer) in its sole
discretion (collectively, the "DEPOSITORY INSTITUTION"). Borrower shall earn no
more than an amount of interest on the Funds equal to an amount determined by
applying to the average monthly balance of such Funds the quoted interest rate
for the Depository Institution's money market savings account, as such rate is
determined from time to time (such allocated amount being referred to as
"BORROWER'S INTEREST"). Lender or its Depository Institution shall be entitled
to report under Borrower's Federal tax identification number the Borrower's
Interest on the Funds. If the Depository Institution does not have an
established
5
money market savings account (or if an interest rate for such account cannot
otherwise be determined in connection with the deposit of such Funds), a
comparable interest rate quoted by the Depository Institution and acceptable to
Lender (or its servicer) in its reasonable discretion shall be used. The amount
of Borrower's Interest allocated to Funds shall be added to the balance in the
applicable Fund, and shall be disbursed for payment of the items for which the
applicable Fund is to be disbursed. Any interest earned above the Borrower's
Interest shall be retained by Lender as compensation for its administration and
investment of such Funds.
ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
SECTION 3.1 INSURANCE. Borrower shall maintain insurance as follows:
(a) CASUALTY; BUSINESS INTERRUPTION. Borrower shall keep the Project
insured against damage by fire and the other hazards covered by a standard
extended coverage and all-risk insurance policy for the full insurable value
thereof on a replacement cost claim recovery basis (without reduction for
depreciation or co-insurance), and shall maintain such other casualty insurance
as reasonably required by Lender. Lender reserves the right to require from time
to time the following additional insurance: boiler and machinery; flood;
earthquake/sinkhole; worker's compensation and/or building law or ordinance.
Borrower shall keep the Project insured against loss by flood if the Project is
located currently or at any time in the future in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards and
in which flood insurance has been made 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 such acts may from time to time be
amended) in an amount at least equal to the lesser of (i) the maximum amount of
the Loan or (ii) the maximum limit of coverage available under said acts. Any
such flood insurance policy shall be issued in accordance with the requirements
and current guidelines of the Federal Insurance Administration. Borrower shall
maintain use and occupancy insurance covering, as applicable, rental income or
business interruption, with coverage in an amount not less than twelve (12)
months anticipated gross rental income or gross business earnings, as applicable
in each case, attributable to the Project. Borrower shall not maintain any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise reasonably satisfactory to Lender
in all respects. The proceeds of insurance paid on account of any damage or
destruction to the Project shall be paid to Lender to be applied as provided in
Section 3.2.
(b) LIABILITY. Borrower shall maintain (i) commercial general liability
insurance with respect to the Project providing for limits of liability of not
less than $5,000,000 for both injury to or death of a person and for property
damage per occurrence, and (ii) other liability insurance as reasonably required
by Lender.
(c) FORM AND QUALITY. All insurance policies shall be endorsed in form
and substance acceptable to Lender to name Lender as an additional insured, loss
payee or mortgagee thereunder, as its interest may appear, with loss payable to
Lender, without contribution, under a standard New York (or local equivalent)
mortgagee clause. All such insurance policies and endorsements shall be fully
paid for and contain such provisions and expiration dates and be in such form
and issued by such insurance companies licensed to do business in the State,
with a general company and financial size rating of "A-IX" or better as
established by Best's Rating Guide and "AA" or better by Standard & Poor's
Ratings Group. Each policy shall provide that such policy may not be canceled or
materially changed except upon thirty (30) days' prior written notice of
intention of non-renewal, cancellation or material change to Lender and that no
act or thing done by Borrower shall invalidate any policy as against Lender.
Blanket policies shall be permitted only if Lender receives appropriate
endorsements and/or duplicate policies containing Lender's right to continue
coverage on a pro rata pass-through basis and that coverage will not be affected
by any loss on other properties covered by the policies. Borrower authorizes
Lender to pay the premiums for such policies (the "INSURANCE PREMIUMS") from the
Tax and Insurance Escrow Fund as the same become due and payable annually in
advance. If Borrower fails to deposit funds into the Tax and Insurance Escrow
Fund sufficient to permit Lender to pay the premiums when due, Lender may obtain
such insurance and pay the premium therefor and Borrower shall, on demand,
reimburse Lender for all expenses incurred in connection therewith. Borrower
shall assign the policies or proofs of insurance to Lender, in such manner and
form that Lender and its successors and assigns shall at all times have and hold
the same as security
6
for the payment of the Loan. Borrower shall deliver copies of all original
policies certified to Lender by the insurance company or authorized agent as
being true copies, together with the endorsements required hereunder. The
proceeds of insurance policies coming into the possession of Lender shall not be
deemed trust funds, and Lender shall be entitled to apply such proceeds as
herein provided.
(d) ADJUSTMENTS. Borrower shall give immediate written notice of any
loss to the insurance carrier and to Lender. Borrower hereby irrevocably
authorizes and empowers Lender, as attorney-in-fact for Borrower coupled with an
interest, to make proof of loss, to adjust and compromise any claim under
insurance policies, to appear in and prosecute any action arising from such
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom Lender's reasonable expenses incurred in the collection of such
proceeds. Nothing contained in this Section 3.1(d), however, shall require
Lender to incur any expense or take any action hereunder.
SECTION 3.2 USE AND APPLICATION OF INSURANCE PROCEEDS.
(a) If the Project shall be damaged or destroyed, in whole or in part,
by fire or other casualty (a "CASUALTY"), Borrower shall give prompt notice
thereof to Lender. Following the occurrence of a Casualty, Borrower, provided
Lender makes insurance proceeds available to Borrower for such purposes, shall
promptly proceed to restore, repair, replace or rebuild the same to be of at
least equal value and of substantially the same character as prior to such
damage or destruction, all to be effected in accordance with applicable law.
(b) Lender shall apply insurance proceeds to costs of restoring the
Project or to the payment of the Loan as follows (unless existing tenant leases
require restoration of the Project in which case, the insurance proceeds shall
be used for restoration of the Property).
(i) if the loss is less than or equal to $200,000, Lender
shall apply the insurance proceeds to restoration provided (A) no Event
of Default or Potential Default exists, and (B) Borrower promptly
commences and is diligently pursuing restoration of the Project;
(ii) if the loss exceeds $200,000 but is not more than 33-1/3%
of the replacement value of the improvements, Lender shall apply the
insurance proceeds to restoration provided that (A) at all times during
such restoration no Event of Default or Potential Default exists; (B)
Lender determines throughout the restoration that there are sufficient
funds available to restore and repair the Project to a condition of at
least equal value and of substantially the same character as existed
prior to such damage; (C) Lender determines that the net operating
income of the Project during restoration, taking into account rent loss
or business interruption insurance, will be sufficient to pay Debt
Service; (D) Lender determines (based on leases which will remain in
effect after restoration is complete if the Project is not a
multi-family project) that after restoration the ratio of net operating
income to Debt Service will equal at least the ratio that existed on
the Closing Date; (E) Lender determines that the ratio of the
outstanding principal balance of the Loan to appraised value of the
Project after restoration will not exceed the loan-to-value ratio that
existed on the Closing Date; (F) Lender determines that restoration and
repair of the Project to a condition approved by Lender will be
completed within nine months after the date of loss or casualty and in
any event ninety (90) days prior to the Maturity Date; (G) Borrower
promptly commences and is diligently pursuing restoration of the
Project; and (H) the Project after the restoration will be in
compliance with and permitted under all applicable zoning, building and
land use laws, rules, regulations and ordinances; and
(iii) if the conditions set forth in (i) and (ii) above are
not satisfied in Lender's reasonable discretion, Lender may apply any
insurance proceeds it may receive to the payment of the Loan (unless
existing tenant leases require restoration of the Project, in which
case, the insurance proceeds shall be used for restoration of the
Project) or allow all or a portion of such proceeds to be used for the
restoration of the Project.
(c) Insurance proceeds applied to restoration will be disbursed on
receipt of reasonably satisfactory plans and specifications, contracts and
subcontracts, schedules, budgets, lien waivers and architects' certificates, and
otherwise
7
in accordance with prudent commercial construction lending practices for
construction loan advances (including appropriate retainages to ensure that all
work is completed in a workmanlike manner).
SECTION 3.3 CONDEMNATION AWARDS. Borrower shall promptly give Lender
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "CONDEMNATION") and shall deliver to Lender copies
of any and all papers served in connection with such Condemnation. Following the
occurrence of a Condemnation, Borrower, provided any award or compensation (an
"AWARD") is made available to Borrower, shall promptly proceed to restore,
repair, replace or rebuild the same to the extent practicable to be of at least
equal value and of substantially the same character as prior to such
Condemnation, all to be effected in accordance with applicable law. Lender may
participate in any such proceeding and Borrower will deliver to Lender all
instruments necessary or required by Lender to permit such participation.
Without Lender's prior consent, Borrower (a) shall not agree to any Award, and
(b) shall not take any action or fail to take any action which would cause the
Award to be determined. All Awards for the taking or purchase in lieu of
condemnation of the Project or any part thereof are hereby assigned to and shall
be paid to Lender. Borrower authorizes Lender to collect and receive such
Awards, to give proper receipts and acquittances therefor, and in Lender's sole
discretion to apply the same toward the payment of the Loan, notwithstanding
that the Loan may not then be due and payable, or to the restoration of the
Project; provided, however, if the Award is less than or equal to $100,000 and
Borrower requests that such proceeds be used for non-structural site
improvements (such as landscape, driveway, walkway and parking area repairs)
required to be made as a result of such condemnation, Lender will apply the
Award to such restoration in accordance with disbursement procedures applicable
to insurance proceeds provided there exists no Potential Default or Event of
Default. Borrower, upon request by Lender, shall execute all instruments
requested to confirm the assignment of the Awards to Lender, free and clear of
all liens, charges or encumbrances.
SECTION 3.4 IMPOUNDS. Borrower shall deposit with Lender, monthly, (a)
one-twelfth (1/12th) of the Taxes that Lender estimates will be payable during
the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Taxes at least thirty (30) days prior to their
respective due dates, and (b) one-twelfth (1/12th) of the Insurance Premiums
that Lender estimates will be payable for the renewal of the coverage afforded
by the insurance policies required by Lender upon the expiration thereof in
order to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to expiration (said amounts in (a) and
(b) above hereinafter called the "TAX AND INSURANCE ESCROW FUND"). At or before
the advance of the Loan, Borrower shall deposit with Lender a sum of money which
together with the monthly installments will be sufficient to make each of such
payments thirty (30) days prior to the date any delinquency or penalty becomes
due with respect to such payments. Deposits shall be made on the basis of
Lender's estimate from time to time of the charges for the current year (after
giving effect to any reassessment or, at Lender's election, on the basis of the
charges for the prior year, with adjustments when the charges are fixed for the
then current year). All funds so deposited shall be held by Lender, without
interest, and may be commingled with Lender's general funds. Borrower hereby
grants to Lender a security interest in all funds so deposited with Lender for
the purpose of securing the Loan. While an Event of Default exists, the funds
deposited may be applied in payment of the charges for which such funds have
been deposited, or to the payment of the Loan or any other charges affecting the
security of Lender, as Lender may elect, but no such application shall be deemed
to have been made by operation of law or otherwise until actually made by
Lender. Borrower shall furnish Lender with bills for the charges for which such
deposits are required at least thirty (30) days prior to the date on which the
charges first become payable. If at any time the amount on deposit with Lender,
together with amounts to be deposited by Borrower before such charges are
payable, is insufficient to pay such charges, Borrower shall deposit any
deficiency with Lender immediately upon demand. Lender shall pay such charges
when the amount on deposit with Lender is sufficient to pay such charges and
Lender has received a xxxx for such charges.
8
ARTICLE 4
ENVIRONMENTAL MATTERS
SECTION 4.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
(a) "ENVIRONMENTAL LAWS" means any federal, state or local law (whether
imposed by statute, ordinance, rule, regulation, administrative or judicial
order, or common law), now or hereafter enacted, governing health, safety,
industrial hygiene, the environment or natural resources, or Hazardous
Materials, including, without limitation, such laws governing or regulating (i
the use, generation, storage, removal, recovery, treatment, handling, transport,
disposal, control, release, discharge of, or exposure to, Hazardous Materials,
(ii the transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of such property, or (iii
requiring notification or disclosure of releases of Hazardous Materials or other
environmental conditions whether or not in connection with a transfer of title
to or interest in property.
(b) "HAZARDOUS MATERIALS" means (i petroleum or chemical products,
whether in liquid, solid, or gaseous form, or any fraction or by-product
thereof, (ii asbestos or asbestos-containing materials, (iii polychlorinated
biphenyls (pcbs), (iv radon gas, (v underground storage tanks, (vi any explosive
or radioactive substances, (vii lead or lead-based paint, or (viii any other
substance, material, waste or mixture which is or shall be listed, defined, or
otherwise determined by any governmental authority to be hazardous, toxic,
dangerous or otherwise regulated, controlled or giving rise to liability under
any Environmental Laws.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES ON ENVIRONMENTAL MATTERS. To
Borrower's knowledge, except as set forth in the Site Assessment, (a) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about the
Project or any property adjacent to the Project (except for cleaning and other
products currently used in connection with the routine maintenance or repair of
the Project in full compliance with Environmental Laws) and no Hazardous
Material was removed or transported from the Project, (b) all permits, licenses,
approvals and filings required by Environmental Laws have been obtained, and the
use, operation and condition of the Project does not, and did not previously,
violate any Environmental Laws, (c) no civil, criminal or administrative action,
suit, claim, hearing, investigation or proceeding has been brought or been
threatened, nor have any settlements been reached by or with any parties or any
liens imposed in connection with the Project concerning Hazardous Materials or
Environmental Laws; and (d) no underground storage tanks exist on any part of
the Project.
SECTION 4.3 COVENANTS ON ENVIRONMENTAL MATTERS.
(a) Borrower shall (i comply strictly and in all respects with
applicable Environmental Laws; (ii notify Lender immediately upon Borrower's
discovery of any spill, discharge, release or presence of any Hazardous Material
at, upon, under, within, contiguous to or otherwise affecting the Project; (iii
promptly remove such Hazardous Materials and remediate the Project in full
compliance with Environmental Laws or as reasonably required by Lender based
upon the recommendations and specifications of an independent environmental
consultant approved by Lender; and (iv promptly forward to Lender copies of all
orders, notices, permits, applications or other communications and reports in
connection with any spill, discharge, release or the presence of any Hazardous
Material or any other matters relating to the Environmental Laws or any similar
laws or regulations, as they may affect the Project or Borrower.
(b) Borrower shall not cause, shall prohibit any other Person within
the control of Borrower from causing, and shall use prudent, commercially
reasonable efforts to prohibit other Persons (including tenants) from (i causing
any spill, discharge or release, or the use, storage, generation, manufacture,
installation, or disposal, of any Hazardous Materials at, upon, under, within or
about the Project or the transportation of any Hazardous Materials to or from
the Project (except for cleaning and other products used in connection with
routine maintenance or repair of the Project in full compliance with
Environmental Laws), (ii installing any underground storage tanks at the
Project, or (iii conducting any activity that requires a permit or other
authorization under Environmental Laws.
9
(c) Borrower shall provide to Lender, at Borrower's expense promptly
upon the written request of Lender from time to time, a Site Assessment or, if
required by Lender, an update to any existing Site Assessment, to assess the
presence or absence of any Hazardous Materials and the potential costs in
connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or within the Project. Borrower shall pay the cost of no more than
one such Site Assessment or update in any twelve (12)-month period, unless
Lender's request for a Site Assessment is based on information provided under
Section 4.3(a), a reasonable suspicion of Hazardous Materials at or near the
Project, a breach of representations under Section 4.2, or an Event of Default,
in which case any such Site Assessment or update shall be at Borrower's expense.
(d) Within sixty (60) days after the date hereof, Borrower shall cause
to be prepared by environmental engineers approved by Lender, and Borrower shall
implement, an Operations and Maintenance Program (the "O&M PROGRAM") delivered
to and approved by Lender for the removal or encapsulation of, or other action
for handling, asbestos-containing materials for the building and improvements
located at 00 Xxxxxxxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxxx ("00 INTERNATIONAL
DRIVE"). Prior to the commencement of any construction, rehabilitation,
modification or renovation which requires the removal of any materials or
improvements containing asbestos-containing materials (the "ACM-RELATED WORK"),
all ACM-Related Work shall be implemented in accordance with the procedures and
programs in the O&M Program and all applicable governmental requirements. The
O&M Program and work resulting therefrom shall be conducted by an accredited,
licensed, abatement contractor using state-of-the-art work practices and
procedures and shall include all monitoring and project management performed by
an accredited asbestos consultant. Borrower shall deliver to Lender promptly
when available, copies of all reports, notices, submittals, permits, licenses,
and certificates relating to the O&M Program. Until all matters in the O&M
Program have been satisfied, Borrower shall deliver a certification to Lender,
on or before the first day of each Loan Year, addressing the status of affected
space requiring ACM-Related Work or other action with respect to Hazardous
Materials.
SECTION 4.4 ALLOCATION OF RISKS AND INDEMNITY. As between Borrower and
Lender, all risk of loss associated with non-compliance with Environmental Laws,
or with the presence of any Hazardous Material at, upon, within, contiguous to
or otherwise affecting the Project, shall lie solely with Borrower. Accordingly,
Borrower shall bear all risks and costs associated with any loss (including any
loss in value attributable to Hazardous Materials), damage or liability
therefrom, including all costs of removal of Hazardous Materials or other
remediation reasonably required by Lender or required by law. Borrower shall
indemnify, defend and hold Lender and its shareholders, directors, officers,
employees and agents harmless from and against all loss, liabilities, damages,
claims, costs and expenses (including reasonable costs of defense and consultant
fees, investigation and laboratory fees, court costs, and other litigation
expenses) arising out of or associated, in any way, with (a) the non-compliance
with Environmental Laws, or (b) the existence of Hazardous Materials in, on, or
about the Project, (c) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to Hazardous
Materials; (d) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Materials, (e) a breach of any
representation, warranty or covenant contained in this Article 4, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law, or (f) the imposition of any environmental lien
encumbering the Project; provided, however, Borrower shall not be liable under
such indemnification to the extent such loss, liability, damage, claim, cost or
expense results solely from Lender's gross negligence or willful misconduct.
Borrower's obligations under this Section 4.4 shall arise whether or not any
governmental authority has taken or threatened any action in connection with the
presence of any Hazardous Material, and whether or not the existence of any such
Hazardous Material or potential liability on account thereof is disclosed in the
Site Assessment and shall continue notwithstanding the repayment of the Loan or
any transfer or sale of any right, title and interest in the Project (by
foreclosure, deed in lieu of foreclosure or otherwise). Additionally, if any
Hazardous Materials affect or threaten to affect the Project, Lender may (but
shall not be obligated to) give such notices and take such actions as it deems
necessary or advisable at the expense of the Borrower in order to xxxxx the
discharge of any Hazardous Materials or remove the Hazardous Materials. Any
amounts payable to Lender by reason of the application of this Section 4.4 shall
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid. The obligations
and liabilities of Borrower under this Section 4.4 shall survive any
termination, satisfaction, assignment, entry of a judgment of foreclosure or
delivery of a deed in lieu of foreclosure.
10
SECTION 4.5 NO WAIVER. Notwithstanding any provision in this Article 4
or elsewhere in the Loan Documents, or any rights or remedies granted by the
Environmental Indemnity Agreement or the Loan Documents, Lender does not waive
and expressly reserves all rights and benefits now or hereafter accruing to
Lender under the "security interest" or "secured creditor" exception under
applicable Environmental Laws, as the same may be amended. No action taken by
Lender pursuant to the Environmental Indemnity Agreement or the Loan Documents
shall be deemed or construed to be a waiver or relinquishment of any such rights
or benefits under the "security interest exception."
ARTICLE 5
LEASING MATTERS
SECTION 5.1 REPRESENTATIONS AND WARRANTIES ON LEASES. Borrower
represents and warrants to Lender with respect to leases of the Project that:
(a) the rent roll delivered to Lender is true and correct, and the leases are
valid and in and full force and effect; (b) the leases (including amendments)
are in writing, and there are no oral agreements with respect thereto; (c) the
copies of the leases delivered to Lender are true and complete; (d) neither the
landlord nor any tenant is in default under any of the leases; (e) Borrower has
no knowledge of any notice of termination or default with respect to any lease;
(f) Borrower has not assigned or pledged any of the leases, the rents or any
interests therein except to Lender; (g) no tenant or other party has an option
to purchase all or any portion of the Project; (h) no tenant has the right to
terminate its lease prior to expiration of the stated term of such lease except
as set forth therein; (i) no tenant has prepaid more than one month's rent in
advance (except for bona fide security deposits not in excess of an amount equal
to two month's rent); and (j) all existing leases are subordinate to the
Mortgage either pursuant to their terms or a recorded subordination agreement.
SECTION 5.2 STANDARD LEASE FORM; APPROVAL RIGHTS. All leases and other
rental arrangements shall in all respects be approved by Lender and shall be on
a standard lease form approved by Lender with no material modifications (except
as approved by Lender, which approval will not be unreasonably withheld or
delayed). Such lease form shall provide that (a) the lease is subordinate to the
Mortgage, (b) the tenant shall attorn to Lender, and (c) that any cancellation,
surrender, or amendment of such lease without the prior written consent of
Lender shall be voidable by Lender. Borrower shall hold, in trust, all tenant
security deposits in a segregated account, and, to the extent required by
applicable law, shall not commingle any such funds with any other funds of
Borrower. Within ten (10) days after Lender's request, Borrower shall furnish to
Lender a statement of all tenant security deposits, and copies of all leases not
previously delivered to Lender, certified by Borrower as being true and correct.
Notwithstanding anything contained in the Loan Documents, Lender's approval
shall not be required for future leases or lease extensions if the following
conditions are satisfied: (i there exists no Potential Default or Event of
Default; (ii the lease is on the standard lease form approved by Lender with no
material modifications; (iii the lease does not conflict with any restrictive
covenant affecting the Project or any other lease for space in the Project; (iv
the lease provides for an effective rental rate that is a market rate; and (v
the lease is for less than 20,000 square feet. Leases that require the approval
of Lender shall be submitted to Lender and shall be deemed approved by Lender
unless Lender disapproves the same within ten (10) business days of receipt. All
costs and expenses incurred by Lender in its review and approval of any lease
shall be paid by Borrower promptly upon request.
SECTION 5.3 COVENANTS. Borrower (a) shall perform the obligations which
Borrower is required to perform under the leases; (b) shall enforce the
obligations to be performed by the tenants; (c) shall promptly furnish to Lender
any notice of default or termination received by Borrower from any tenant, and
any notice of default or termination given by Borrower to any tenant; (d) shall
not collect any rents for more than thirty (30) days in advance of the time when
the same shall become due, except for bona fide security deposits not in excess
of an amount equal to two month's rent; (e) shall not enter into any ground
lease or master lease of any part of the Project; (f) shall not further assign
or encumber any lease; (g) shall not, except with Lender's prior written
consent, cancel or accept surrender or termination of any lease; (h) shall not,
except with Lender's prior written consent, modify or amend any lease (except
for minor modifications and amendments entered into in the ordinary course of
business, consistent with prudent property management practices, not affecting
the economic terms of the lease); and (i) shall deposit with Lender
11
any lease termination or cancellation fees which shall be held in the Rollover
Escrow Fund. Any action in violation of clauses (e), (f), (g), and (h) of this
Section 5.3 shall be void at the election of Lender.
SECTION 5.4 TENANT ESTOPPELS. At Lender's request, Borrower shall
obtain and furnish to Lender, written estoppels in form and substance reasonably
satisfactory to Lender, executed by tenants under leases in the Project and
confirming the term, rent, and other provisions and matters relating to the
leases.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lender that:
SECTION 6.1 ORGANIZATION, POWER AND AUTHORITY.. Borrower (a) is duly
organized, validly existing and in good standing under the laws of the state of
its formation or existence, (b) is in compliance with all legal requirements
applicable to doing business in the State, and (c) has the necessary
governmental approvals to own and operate the Project and conduct the business
now conducted or to be conducted thereon. Borrower has the full power, authority
and right to execute, deliver and perform its obligations pursuant to this Loan
Agreement and the other Loan Documents, and to mortgage the Project pursuant to
the terms of the Mortgage and to keep and observe all of the terms of this Loan
Agreement and the other Loan Documents on Borrower's part to be performed.
Borrower is not a "foreign person" within the meaning of ss. 1445(f)(3) of the
Internal Revenue Code.
SECTION 6.2 VALIDITY OF LOAN DOCUMENTS. The execution, delivery and
performance by Borrower of the Loan Documents: (a) are duly authorized and do
not require the consent or approval of any other party or governmental authority
which has not been obtained; and (b) will not violate any law or result in the
imposition of any lien, charge or encumbrance upon the assets of any such party,
except as contemplated by the Loan Documents. The Loan Documents constitute the
legal, valid and binding obligations of Borrower, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, or similar
laws generally affecting the enforcement of creditors' rights.
SECTION 6.3 LIABILITIES; LITIGATION.
(a) The financial statements delivered by Borrower are true and correct
with no significant change since the date of preparation. Except as disclosed in
such financial statements, there are no liabilities (fixed or contingent)
affecting the Project or Borrower. Except as disclosed in such financial
statements, there is no litigation, administrative proceeding, investigation or
other legal action (including any proceeding under any state or federal
bankruptcy or insolvency law) pending or, to the knowledge of Borrower,
threatened, against the Project or Borrower which if adversely determined could
have a material adverse effect on such party, the Project or the Loan.
(b) Borrower is not contemplating either the filing of a petition by it
under state or federal bankruptcy or insolvency laws or the liquidation of all
or a major portion of its assets or property, and Borrower has no knowledge of
any Person contemplating the filing of any such petition against it.
SECTION 6.4 TAXES AND ASSESSMENTS. The Project is comprised of one or
more parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot. There are no pending or, to
Borrower's best knowledge, proposed, special or other assessments for public
improvements or otherwise affecting the Project, nor are there any contemplated
improvements to the Project that may result in such special or other
assessments.
SECTION 6.5 OTHER AGREEMENTS; DEFAULTS. Borrower is not a party to any
agreement or instrument or subject to any court order, injunction, permit, or
restriction which might adversely affect the Project or the business,
operations, or condition (financial or otherwise) of Borrower. Borrower is not
in violation of any agreement which violation would have an adverse effect on
the Project, Borrower, or any of Borrower's business, properties, or assets,
operations or condition, financial or otherwise.
12
SECTION 6.6 COMPLIANCE WITH LAW.
(a) Borrower has all requisite licenses, permits, franchises,
qualifications, certificates of occupancy or other governmental authorizations
to own, lease and operate the Project and carry on its business, and the Project
is in compliance with all applicable legal requirements and is free of
structural defects, and all building systems contained therein are in good
working order, subject to ordinary wear and tear. The Project does not
constitute, in whole or in part, a legally non-conforming use under applicable
legal requirements;
(b) No condemnation has been commenced or, to Borrower's knowledge, is
contemplated with respect to all or any portion of the Project or for the
relocation of roadways providing access to the Project; and
(c) The Project has adequate rights of access to public ways and is
served by adequate water, sewer, sanitary sewer and storm drain facilities. All
public utilities necessary or convenient to the full use and enjoyment of the
Project are located in the public right-of-way abutting the Project, and all
such utilities are connected so as to serve the Project without passing over
other property, except to the extent such other property is subject to a
perpetual easement for such utility benefiting the Project. All roads necessary
for the full utilization of the Project for its current purpose have been
completed and dedicated to public use and accepted by all governmental
authorities.
SECTION 6.7 LOCATION OF BORROWER. Borrower's principal place of
business and chief executive offices are located at the address stated in
Section 11.1.
SECTION 6.8 ERISA.
(a) As of the date hereof and throughout the term of the Loan, (i
Borrower is not and will not be an "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to Title I of ERISA, and (ii the assets of Borrower
do not and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of the Loan (i
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(3) of ERISA and (ii transactions by or with Borrower are not and will
not be subject to state statutes applicable to Borrower regulating investments
of and fiduciary obligations with respect to governmental plans.
SECTION 6.9 FORFEITURE. There has not been and shall never be committed
by Borrower or any other person in occupancy of or involved with the operation
or use of the Project any act or omission affording the federal government or
any state or local government the right of forfeiture as against the Project or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture.
SECTION 6.10 TAX FILINGS. Borrower has filed (or have obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and have paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by Borrower.
Borrower believes that its tax returns properly reflect the income and taxes of
Borrower for the periods covered thereby, subject only to reasonable adjustments
required by the Internal Revenue Service or other applicable tax authority upon
audit.
SECTION 6.11 SOLVENCY. Giving effect to the Loan, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making of
the Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured, Borrower's assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will,
13
incur Debts and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such Debts as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the
amounts to be payable on or in respect of obligations of Borrower). Except as
expressly disclosed to Lender in writing, no petition in bankruptcy has been
filed against Borrower in the last seven (7) years, and Borrower in the last
seven (7) years has never made an assignment for the benefit of creditors or
taken advantage of any insolvency act for the benefit of debtors.
SECTION 6.12 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
or on behalf of Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading.
There is no fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the Project or the business, operations or condition
(financial or otherwise) of Borrower.
SECTION 6.13 FLOOD ZONE. No portion of the improvements comprising the
Project is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1994, as amended,
or any successor law, or, if located within any such area, Borrower has obtained
and will maintain the insurance prescribed in Section 3.1 hereof.
SECTION 6.14 YEAR 2000 COMPLIANCE. Borrower has made (or will make on a
timely basis) written inquiry of each of its key suppliers, vendors, and
customers as to whether such persons will, on a timely basis, be Year 2000
Compliant in all material respects and on the basis of such inquiry believes
that all such persons will be Year 2000 Compliant. For purposes hereon, "key
suppliers, vendors and customers" refers to those suppliers, vendors, and
customers of Borrower whose business failure would, with reasonable probability,
result in a material adverse change in the business, properties, or condition
(financial or otherwise) of Borrower. Borrower reasonably anticipates that it
will be Year 2000 Compliant on a timely basis. Borrower shall permit Lender and
its agents, representatives and employees, upon reasonable prior notice to
Borrower, to enter the Project and conduct inspections relating to Year 2000
Compliance as Lender may require, from time to time, while the Loan remains
outstanding; however, to the extent Lender engages third party consultants to
conduct any testing of the building systems, Lender shall require such
consultants to conduct the tests at a time designed to minimize disruption of
the building's operations during normal business hours.
ARTICLE 7
FINANCIAL REPORTING
SECTION 7.1 FINANCIAL STATEMENTS.
(a) MONTHLY REPORTS. During the first six (6) months of the term of the
Loan, Borrower shall furnish to Lender within fifteen (15) days after the end of
each calendar month, a detailed operating statement of the Project (showing
monthly activity and year-to-date activity) stating operating revenues,
operating expenses, operating income and net cash flow for the calendar month
just ended.
(b) QUARTERLY REPORTS. Within forty-five (45) days after the end of
each fiscal quarter, Borrower shall furnish to Lender a detailed operating
statement (showing quarterly activity and year-to-date) stating operating
revenues, operating expenses, operating income and net cash flow for the fiscal
quarter just ended.
(c) ANNUAL REPORTS. Within ninety (90) days after the end of each
fiscal year of Borrower's operation of the Project, Borrower shall furnish to
Lender a current (as of the end of such fiscal year) balance sheet, a detailed
operating statement stating operating revenues, operating expenses, operating
income and net cash flow for each of Borrower and the Project, and, if required
by Lender, prepared on a review basis and certified by an independent public
accountant reasonably satisfactory to Lender. Additionally, Borrower shall
include with its annual financial statement (i a list of the tenants, if any,
occupying more than twenty percent (20%) of the total floor area of the Project,
(ii a breakdown showing the year in which each lease then in effect at the
Project expires, and (iii a breakdown of the
14
percentage of total floor area of the Project and the percentage of base rent
with respect to which leases shall expire in each year, each such percentage to
be expressed on both a per year and a cumulative basis.
(d) CERTIFICATION; SUPPORTING DOCUMENTATION. Each such financial
statement shall be in scope and detail reasonably satisfactory to Lender and
certified by the chief financial representative of Borrower.
SECTION 7.2 ACCOUNTING PRINCIPLES. All financial statements shall be
prepared in accordance with generally accepted accounting principles in the
United States of America in effect on the date so indicated and consistently
applied (or such other accounting basis reasonably acceptable for Lender).
SECTION 7.3 OTHER INFORMATION; ACCESS. Borrower shall deliver to Lender
such additional information regarding Borrower, its subsidiaries, its business
and the Project within 30 days after Lender's request therefor. Borrower shall
permit Lender to examine such records, books and papers of Borrower which
reflect upon its financial condition and the income and expenses of the Project.
SECTION 7.4 ANNUAL BUDGET. At least thirty (30) days prior to the
commencement of each fiscal year, Borrower will provide to Lender its proposed
annual operating and capital improvements budget for the Project for such fiscal
year for review and approval by Lender.
ARTICLE 8
COVENANTS
Borrower covenants and agrees with Lender as follows:
SECTION 8.1 DUE ON SALE AND ENCUMBRANCE; TRANSFERS OF INTERESTS.
Without the prior written consent of Lender, neither Borrower nor any other
Person having an ownership or beneficial interest in Borrower shall sell,
transfer, convey, mortgage, pledge, or assign any interest in the Project or any
part thereof or further encumber, alienate, xxxxx x Xxxx or xxxxx any other
interest in the Project or any part thereof, whether voluntarily or
involuntarily, in violation of the covenants and conditions set forth in the
Mortgage.
SECTION 8.2 TAXES; UTILITY CHARGES. Except to the extent sums
sufficient to pay all Taxes (defined herein) have been previously deposited with
Lender as part of the Tax and Insurance Escrow Fund and subject to Borrower's
right to contest in accordance with Section 11.8 hereof, Borrower shall pay
before any fine, penalty, interest or cost may be added thereto, and shall not
enter into any agreement to defer, any real estate taxes and assessments,
franchise taxes and charges, and other governmental charges (the "TAXES") that
may become a Lien upon the Project or become payable during the term of the
Loan. Borrower's compliance with Section 3.4 of this Agreement relating to
impounds for Taxes shall, with respect to payment of such Taxes, be deemed
compliance with this Section 8.2. Borrower shall not suffer or permit the joint
assessment of the Project with any other real property constituting a separate
tax lot or with any other real or personal property.
Borrower shall promptly pay for all utility services provided to the Project.
SECTION 8.3 CONTROL; MANAGEMENT. The Project is self managed by
Borrower. If Borrower retains another entity to manage the Project, such entity
shall be subject to the approval of Lender, which approval will not be
unreasonably withheld. Further such manager shall execute a subordination
agreement in form and substance reasonably acceptable to Lender. Each manager
shall hold and maintain all necessary licenses, certifications and permits
required by law. Borrower shall fully perform all of its covenants, agreements
and obligations under the management agreement. The management fee payable under
the management agreement shall not exceed five percent (5%) of rental
collections.
SECTION 8.4 OPERATION; MAINTENANCE; INSPECTION. Borrower shall observe
and comply with all legal requirements applicable to the ownership, use and
operation of the Project. Borrower shall maintain the Project in good condition
and promptly repair any damage or casualty. Borrower shall permit Lender and its
agents, representatives
15
and employees, upon reasonable prior notice to Borrower, to inspect the Project
and conduct such environmental and engineering studies as Lender may require,
provided such inspections and studies do not materially interfere with the use
and operation of the Project.
SECTION 8.5 TAXES ON SECURITY. Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect
to the Note or the Liens created or secured by the Loan Documents, other than
income, franchise and doing business taxes imposed on Lender. If there shall be
enacted any law (a) deducting the Loan from the value of the Project for the
purpose of taxation, (b) affecting any Lien on the Project, or (c) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts
secured by real property, or changing the manner of collecting any such taxes,
Borrower shall promptly pay to Lender, on demand, all taxes, costs and charges
for which Lender is or may be liable as a result thereof; however, if such
payment would be prohibited by law or would render the Loan usurious, then
instead of collecting such payment, Lender may declare all amounts owing under
the Loan Documents to be immediately due and payable.
SECTION 8.6 LEGAL EXISTENCE; NAME, ETC. Borrower shall preserve and
keep in full force and effect its entity status, franchises, rights and
privileges under the laws of the state of its formation, and all qualifications,
licenses and permits applicable to the ownership, use and operation of the
Project. Borrower shall not wind up, liquidate, dissolve, reorganize with or
into, or convey, sell, assign, transfer, lease, or otherwise dispose of all or
substantially all of its assets. Borrower shall not change its name, identity,
or organizational structure in any material manner, or the location of its
principal place of business unless Borrower (a) shall have obtained the prior
written consent of Lender to such change which consent shall not be unreasonably
withheld or delayed, and (b) shall have taken all actions necessary or requested
by Lender to file or amend any financing statement or continuation statement to
assure perfection and continuation of perfection of security interests under the
Loan Documents.
SECTION 8.7 FURTHER ASSURANCES. Borrower shall promptly (a) cure any
defects in the execution and delivery of the Loan Documents and the
Environmental Indemnity Agreement, and (b) execute and deliver, or cause to be
executed and delivered, all such other documents, agreements and instruments as
Lender may reasonably request to further evidence and more fully describe the
collateral for the Loan, to correct any omissions in the Loan Documents, to
perfect, protect or preserve any liens created under any of the Loan Documents
and the Environmental Indemnity Agreement, or to make any recordings, file any
notices, or obtain any consents, as may be necessary or appropriate in
connection therewith. Borrower grants Lender an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and
all rights and remedies available to Lender under the Loan Documents and the
Environmental Indemnity Agreement, at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to this Section
8.7.
SECTION 8.8 ESTOPPEL CERTIFICATES. Borrower, within ten (10) days after
request, shall furnish to Lender a written statement, duly acknowledged, setting
forth the amount due on the Loan, the terms of payment of the Loan, the date to
which interest has been paid, whether any offsets or defenses exist against the
Loan and, if any are alleged to exist, the nature thereof in detail, and such
other matters as Lender reasonably may request.
SECTION 8.9 NOTICE OF CERTAIN EVENTS. Borrower shall promptly notify
Lender of (a) any Potential Default or Event of Default, together with a
detailed statement of the steps being taken to cure such Potential Default or
Event of Default; (b) any notice of default received by Borrower under other
obligations relating to the Project or otherwise material to Borrower's
business; and (c) any threatened or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower and any governmental
authority, affecting Borrower or the Project.
SECTION 8.10 INDEMNIFICATION. Borrower shall protect, defend, indemnify
and save harmless Lender its shareholders, directors, officers, employees and
agents from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation
reasonable attorneys' fees and expenses), imposed upon or incurred by or
asserted against Lender by reason of (a) ownership of the Mortgage, the Project
or any interest therein or receipt of any rents; (b) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Project or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or
16
adjacent parking areas, streets or ways; (c) any use, nonuse or condition in, on
or about the Project or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (d) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Project or any part thereof; and (e) the failure of any Person to
file timely with the Internal Revenue Service an accurate Form 0000-X, Xxxxxxxxx
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with this Agreement, or to
supply a copy thereof in a timely fashion to the recipient of the proceeds of
the transaction in connection with which this Agreement is made. Any amounts
payable to Lender by reason of the application of this section shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid.
SECTION 8.11 COOPERATION. Borrower acknowledges that Lender and its
successors and assigns may (a) sell this Agreement, the Mortgage, the Note, the
other Loan Documents, and the Environmental Indemnity Agreement, and any and all
servicing rights thereto to one or more investors as a whole loan, (b)
participate the Loan to one or more investors, (c) deposit this Agreement, the
Note, other Loan Documents, and the Environmental Indemnity Agreement with a
trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (d) otherwise sell the Loan or interest therein
to investors (the transactions referred to in clauses (a) through (d) are
hereinafter each referred to as "SECONDARY MARKET TRANSACTION"). Borrower shall
cooperate with Lender in effecting any such Secondary Market Transaction and
shall cooperate to implement all requirements imposed by any Rating Agency
involved in any Secondary Market Transaction. Borrower shall provide such
information, legal opinions and documents relating to the Borrower, the Project
and any tenants of the Project as Lender may reasonably request in connection
with such Secondary Market Transaction at no third-party professional expense
unless otherwise required by the Loan Documents. In addition, Borrower shall
make available to Lender all information concerning its business and operations
that Lender may reasonably request. Lender shall be permitted to share all such
information with the investment banking firms, Rating Agencies, accounting
firms, law firms and other third-party advisory firms involved with the Loan and
the Loan Documents or the applicable Secondary Market Transaction. It is
understood that the information provided by Borrower to Lender may ultimately be
incorporated into the offering documents for the Secondary Market Transaction
and thus various investors may also see some or all of the information. Lender
and all of the aforesaid third-party advisors and professional firms shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies Lender as to any losses, claims, damages or liabilities
that arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such information 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 information or necessary in order to make the
statements in such information, or in light of the circumstances under which
they were made, not misleading.
SECTION 8.12 PAYMENT FOR LABOR AND MATERIALS. Subject to Borrower's
right to contest in accordance with Section 11.8 hereof, Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Project and never permit to
exist beyond the due date thereof in respect of the Project or any part thereof
any Lien, even though inferior to the Liens hereof, and in any event never
permit to be created or exist in respect of the Project or any part thereof any
other or additional Lien other than the Liens hereof, except for the Permitted
Encumbrances (defined in the Mortgage).
SECTION 8.13 YEAR 2000 COMPLIANCE. Borrower shall cause the Project and
Borrower's operations to be Year 2000 Compliant prior to September 30, 1999 and
at all times thereafter while the Loan remains outstanding.
SECTION 8.14 LIMITATION ON ADDITIONAL BORROWING SECURED BY OTHER REAL
ESTATE INDEBTEDNESS. Borrower shall not mortgage any of its property to an
extent greater than eighty percent (80%) loan-to-value (at the time the mortgage
is executed) or a debt service coverage ratio below 1.25x (at the time the
mortgage is executed) related to any property so mortgaged. This provision shall
be deleted from the Loan Agreement if the Project is transferred to a single
purpose entity by Borrower in accordance with Section 3.9 of the Mortgage.
SECTION 8.15 LIMITATION ON INDEBTEDNESS. Borrower shall not create,
assume, incur or have outstanding at any time liabilities in excess of sixty
percent (60%) of its total assets as reflected on its balance sheet. This
provision
17
shall be deleted from the Loan Agreement if the Project is transferred to a
single purpose entity by Borrower in accordance with Section 3.9 of the
Mortgage.
SECTION 8.16 OPTIONAL LETTERS OF CREDIT.
(a) As additional credit support for the Loan, Borrower may deliver to
Lender in lieu of the Federal Express Escrow and/or the Hartford Insurance
Termination Escrow the irrevocable and unconditional letters of credit drawn for
the Borrower's account from a bank reasonably acceptable to Lender in the amount
of the Federal Express Escrow ($80,000) and/or the Hartford Insurance
Termination Escrow ($200,000) as applicable (each a "LETTER OF CREDIT"). No less
than thirty (30) days prior to the expiration date of the Letter of Credit and
each renewal or extension thereof (until such time as the Letter of Credit has
been released by Lender as provided below), Borrower shall deliver to Lender a
renewal or extension of the Letter of Credit for a term of not less than one
year, in form, content and issued by a bank acceptable to Lender in its sole
discretion. If requested by Lender, the Letter of Credit (and each renewal or
extension thereof) shall, at Borrower's sole cost and expense, be accompanied by
an opinion of counsel regarding its due authorization, execution and
enforceability (which opinion shall be in form, content and from counsel
acceptable to Lender in its sole discretion).
(b) Lender shall be entitled to draw upon the Letter of Credit upon the
occurrence of any Event of Default (including, without limitation, Borrower's
failure to deliver a renewal or extension of the Letter of Credit in the time
and manner required hereinabove) or if Lender believes, in its sole judgment,
that its rights to draw on the Letter of Credit could be in jeopardy. Without
limiting the generality of the foregoing, Lender shall also be entitled to draw
if the credit rating or financial condition of the issuing bank is no longer
acceptable to Lender in its sole discretion.
(c) Proceeds of any draw upon the Letter of Credit (after reimbursement
of any costs and expenses, including but not limited to reasonable attorney's
fees and disbursements, incurred by Lender in connection with such draw) may be
applied to the Loan in such order and manner as Lender shall determine in its
sole discretion.
(d) Lender shall, upon request, release its rights in the Letter of
Credit and surrender the Letter of Credit to the issuing bank after the earlier
of:
(i) Payment in full of all sums due under this Agreement, the
Note and all other amounts secured by the Loan Documents; or
(ii) Satisfaction of the condition set forth in Section
2.4(a)(v) and (vi) respectively.
ARTICLE 9
EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default under the
Loan:
SECTION 9.1 PAYMENTS. Borrower's failure to pay any regularly scheduled
installment of principal, interest or other amount due under the Loan Documents
within five (5) days of (and including) the date when due, or Borrower's failure
to pay the Loan at the Maturity Date, whether by acceleration or otherwise.
SECTION 9.2 INSURANCE. Borrower's failure to maintain insurance as
required under Section 3.1 of this Agreement.
SECTION 9.3 SALE, ENCUMBRANCE, ETC. The sale, transfer, conveyance,
pledge, mortgage or assignment of any part or all of the Project, or any
interest therein, or of any interest in Borrower, in violation of the Mortgage.
SECTION 9.4 COVENANTS. Borrower's failure to perform or observe any of
the agreements and covenants contained in this Agreement or in any of the other
Loan Documents (other than payments under Section 9.1, insurance
18
requirements under Section 9.2, transfers and encumbrances under Section 9.3,
and the Events of Default described in Sections 9.7 and 9.8 below), and the
continuance of such failure for ten (10) days after notice by Lender to
Borrower; however, subject to any shorter period for curing any failure by
Borrower as specified in any of the other Loan Documents, Borrower shall have an
additional sixty (60) days to cure such failure if (a) such failure does not
involve the failure to make payments on a monetary obligation; (b) such failure
cannot reasonably be cured within ten (10) days; (c) Borrower is diligently
undertaking to cure such default; and (d) Borrower has provided Lender with
security reasonably satisfactory to Lender against any interruption of payment
or impairment of collateral as a result of such continuing failure.
SECTION 9.5 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made in any Loan Document proves to be untrue in any material respect
when made or deemed made.
SECTION 9.6 OTHER ENCUMBRANCES. Any default under any document or
instrument, other than the Loan Documents, evidencing or creating a Lien on the
Project or any part thereof, not cured within any applicable grace or cure
period therein.
SECTION 9.7 INVOLUNTARY BANKRUPTCY OR OTHER PROCEEDING. Commencement of
an involuntary case or other proceeding against Borrower, or any other Person
having an ownership or security interest in the Project (each, a "BANKRUPTCY
PARTY") which seeks liquidation, reorganization or other relief with respect to
it or its debts or other liabilities under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeks the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any of its
property, and such involuntary case or other proceeding shall remain undismissed
or unstayed for a period of 60 days; or an order for relief against a Bankruptcy
Party shall be entered in any such case under the Federal Bankruptcy Code.
SECTION 9.8 VOLUNTARY PETITIONS, ETC. Commencement by a Bankruptcy
Party of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official for it or any of its property, or consent by a Bankruptcy Party to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or the making
by a Bankruptcy Party of a general assignment for the benefit of creditors, or
the failure by a Bankruptcy Party, or the admission by a Bankruptcy Party in
writing of its inability, to pay its debts generally as they become due, or any
action by a Bankruptcy Party to authorize or effect any of the foregoing.
ARTICLE 10
REMEDIES
SECTION 10.1 REMEDIES - INSOLVENCY EVENTS. Upon the occurrence of any
Event of Default described in Section 9.7 or 9.8, all amounts due under the Loan
Documents immediately shall become due and payable, all without written notice
and without presentment, demand, protest, notice of protest or dishonor, notice
of intent to accelerate the maturity thereof, notice of acceleration of the
maturity thereof, or any other notice of default of any kind, all of which are
hereby expressly waived by Borrower; however, if the Bankruptcy Party under
Section 9.7 or 9.8 is other than Borrower, then all amounts due under the Loan
Documents shall become immediately due and payable at Lender's election, in
Lender's sole discretion.
SECTION 10.2 REMEDIES - OTHER EVENTS. Except as set forth in Section
10.1 above, while any Event of Default exists, Lender may (a) declare the entire
Loan to be immediately due and payable without presentment, demand, protest,
notice of protest or dishonor, notice of intent to accelerate the maturity
thereof, notice of acceleration of the maturity thereof, or other notice of
default of any kind, all of which are hereby expressly waived by Borrower, and
(b) exercise all rights and remedies therefor under the Loan Documents and at
law or in equity.
SECTION 10.3 LENDER'S RIGHT TO PERFORM THE OBLIGATIONS. If Borrower
shall fail, refuse or neglect to make any payment or perform any act required by
the Loan Documents, then while any Event of Default exists, and
19
without notice to or demand upon Borrower and without waiving or releasing any
other right, remedy or recourse Lender may have because of such Event of
Default, Lender may (but shall not be obligated to) make such payment or perform
such act for the account of and at the expense of Borrower, and shall have the
right to enter upon the Project for such purpose and to take all such action
thereon and with respect to the Project as it may deem necessary or appropriate.
If Lender shall elect to pay any sum due with reference to the Project, Lender
may do so in reliance on any xxxx, statement or assessment procured from the
appropriate governmental authority or other issuer thereof without inquiring
into the accuracy or validity thereof. Similarly, in making any payments to
protect the security intended to be created by the Loan Documents, Lender shall
not be bound to inquire into the validity of any apparent or threatened adverse
title, lien, encumbrance, claim or charge before making an advance for the
purpose of preventing or removing the same. Borrower shall indemnify Lender for
all losses, expenses, damages, claims and causes of action, including reasonable
attorneys' fees, incurred or accruing by reason of any acts performed by Lender
pursuant to the provisions of this Section 10.3. All sums paid by Lender
pursuant to this Section 10.3, and all other sums expended by Lender to which it
shall be entitled to be indemnified, together with interest thereon at the
Default Rate from the date of such payment or expenditure until paid, shall
constitute additions to the Loan, shall be secured by the Loan Documents and
shall be paid by Borrower to Lender upon demand.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 NOTICES. Any notice required or permitted to be given
under this Agreement shall be in writing and either shall be mailed by certified
mail, postage prepaid, return receipt requested, or sent by overnight air
courier service, or personally delivered to a representative of the receiving
party, or sent by telecopy (provided an identical notice is also sent
simultaneously by mail, overnight courier, or personal delivery as otherwise
provided in this Section 11.1). All such communications shall be mailed, sent or
delivered, addressed to the party for whom it is intended at its address set
forth below.
If to Borrower: Xxxxxxx Land & Nurseries, Inc.
000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to: Murtha, Cullina, Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telecopy: (000) 000-0000
If to Lender: General Electric Capital Corporation
_ GE Capital Loan Services, Inc.
000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Portfolio Manager/Access Program
Telecopy: (000) 000-0000
with a copy to: General Electric Capital Corporation
16479 Dallas Parkway, Suite 000
Xxx Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
20
Any communication so addressed and mailed shall be deemed to be given on the
earliest of (a) when actually delivered, (b) on the first Business Day after
deposit with an overnight air courier service, or (c) on the third Business Day
after deposit in the United States mail, postage prepaid, in each case to the
address of the intended addressee, and any communication so delivered in person
shall be deemed to be given when receipted for by, or actually received by
Lender or Borrower, as the case may be. If given by telecopy, a notice shall be
deemed given and received when the telecopy is transmitted to the party's
telecopy number specified above and confirmation of complete receipt is received
by the transmitting party during normal business hours or on the next Business
Day if not confirmed during normal business hours. Either party may designate a
change of address by written notice to the other by giving at least ten (10)
days prior written notice of such change of address.
SECTION 11.2 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of the Environmental Indemnity Agreement and the Loan Documents shall
be effective unless in writing and signed by the party against whom enforcement
is sought.
SECTION 11.3 LIMITATION ON INTEREST. It is the intention of the parties
hereto to conform strictly to applicable usury laws. Accordingly, all agreements
between Borrower and Lender with respect to the Loan are hereby expressly
limited so that in no event, whether by reason of acceleration of maturity or
otherwise, shall the amount paid or agreed to be paid to Lender or charged by
Lender for the use, forbearance or detention of the money to be lent hereunder
or otherwise, exceed the maximum amount allowed by law. If the Loan would be
usurious under applicable law (including the laws of the State and the laws of
the United States of America), then, notwithstanding anything to the contrary in
the Loan Documents: (a) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited on the Note by the holder thereof; and (b) if maturity is accelerated
by reason of an election by Lender, or in the event of any prepayment, then any
consideration which constitutes interest may never include more than the maximum
amount allowed by applicable law. In such case, excess interest, if any,
provided for in the Loan Documents or otherwise, to the extent permitted by
applicable law, shall be amortized, prorated, allocated and spread from the date
of advance until payment in full so that the actual rate of interest is uniform
through the term hereof. If such amortization, proration, allocation and
spreading is not permitted under applicable law, then such excess interest shall
be canceled automatically as of the date of such acceleration or prepayment and,
if theretofore paid, shall be credited on the Note. The terms and provisions of
this Section 11.3 shall control and supersede every other provision of the Loan
Documents. The Loan Documents are contracts made under and shall be construed in
accordance with and governed by the laws of the State, except that if at any
time the laws of the United States of America permit Lender to contract for,
take, reserve, charge or receive a higher rate of interest than is allowed by
the laws of the State (whether such federal laws directly so provide or refer to
the law of any state), then such federal laws shall to such extent govern as to
the rate of interest which Lender may contract for, take, reserve, charge or
receive under the Loan Documents.
SECTION 11.4 INVALID PROVISIONS. If any provision of any Loan Document
or the Environmental Indemnity Agreement is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; the Environmental
Indemnity Agreement and the Loan Documents shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
thereof; the remaining provisions thereof shall remain in full effect and shall
not be affected by the illegal, invalid, or unenforceable provision or by its
severance therefrom; and in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part of such Environmental
Indemnity Agreement and such Loan Document a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible to be legal,
valid and enforceable.
SECTION 11.5 REIMBURSEMENT OF EXPENSES. Borrower shall pay all
reasonable expenses incurred by Lender in connection with the Loan, including
reasonable fees and expenses of Lender's attorneys, environmental, engineering
and other consultants, and fees, charges or taxes for the recording or filing of
Loan Documents. Borrower shall pay all reasonable expenses of Lender in
connection with the administration of the Loan, including audit costs,
inspection fees, settlement of condemnation and casualty awards, and premiums
for title insurance and endorsements thereto. Borrower shall, upon request,
promptly reimburse Lender for all reasonable amounts expended, advanced or
21
incurred by Lender to collect the Note, or to enforce the rights of Lender under
this Agreement, the Environmental Indemnity Agreement, or any Loan Document, or
to defend or assert the rights and claims of Lender under the Environmental
Indemnity Agreement or the Loan Documents or with respect to the Project (by
litigation or other proceedings), which amounts will include all court costs,
reasonable attorneys' fees and expenses, fees of auditors and accountants, and
investigation expenses as may be incurred by Lender in connection with any such
matters (whether or not litigation is instituted), together with interest at the
Default Rate on each such amount from the date of disbursement until the date of
reimbursement to Lender, all of which shall constitute part of the Loan and
shall be secured by the Loan Documents.
SECTION 11.6 APPROVALS; THIRD PARTIES; CONDITIONS. All approval rights
retained or exercised by Lender with respect to leases, contracts, plans,
studies and other matters are solely to facilitate Lender's credit underwriting,
and shall not be deemed or construed as a determination that Lender has passed
on the adequacy thereof for any other purpose and may not be relied upon by
Borrower or any other Person. This Agreement is for the sole and exclusive use
of Lender and Borrower and may not be enforced, nor relied upon, by any Person
other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make advances, are imposed solely and
exclusively for the benefit of Lender, its successors and assigns, and no other
Person shall have standing to require satisfaction of such conditions or be
entitled to assume that Lender will refuse to make advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of such conditions, any
and all of which may be freely waived in whole or in part by Lender at any time
in Lender's sole discretion.
SECTION 11.7 LENDER NOT IN CONTROL; NO PARTNERSHIP. None of the
covenants or other provisions contained in this Agreement shall, or shall be
deemed to, give Lender the right or power to exercise control over the affairs
or management of Borrower, the power of Lender being limited to the rights to
exercise the remedies referred to in the Environmental Indemnity Agreement or
the Loan Documents. The relationship between Borrower and Lender is, and at all
times shall remain, solely that of debtor and creditor. No covenant or provision
of the Environmental Indemnity Agreement or the Loan Documents is intended, nor
shall it be deemed or construed, to create a partnership, joint venture, agency
or common interest in profits or income between Lender and Borrower or to create
an equity in the Project in Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any other person with respect to the
Project or the Loan, except as expressly provided in the Environmental Indemnity
Agreement and the Loan Documents; and notwithstanding any other provision of the
Environmental Indemnity Agreement or the Loan Documents: (a) Lender is not, and
shall not be construed as, a partner, joint venturer, alter ego, manager,
controlling person or other business associate or participant of any kind of
Borrower or its stockholders, members, or partners and Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any Debts,
expenses or losses incurred or sustained by Borrower; and (c) Lender shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Borrower or its stockholders, members, or partners. Lender and Borrower
disclaim any intention to create any partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower, or to create
an equity in the Project in Lender, or any sharing of liabilities, losses, costs
or expenses.
SECTION 11.8 CONTEST OF CERTAIN CLAIMS. Borrower may contest the
validity of Taxes or any mechanic's or materialman's lien asserted against the
Project so long as (a) Borrower notifies Lender that it intends to contest such
Taxes or liens, as applicable, (b) Borrower provides Lender with an indemnity,
bond or other security reasonably satisfactory to Lender assuring the discharge
of Borrower's obligations for such Taxes or liens, as applicable, including
interest and penalties, (c) Borrower is diligently contesting the same by
appropriate legal proceedings in good faith and at its own expense and concludes
such contest prior to the tenth (10th) day preceding the earlier to occur of the
Maturity Date or the date on which the Project is scheduled to be sold for
non-payment, (d) Borrower promptly upon final determination thereof pays the
amount of any such Taxes or liens, as applicable, together with all costs,
interest and penalties which may be payable in connection therewith, and (e)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay any such Taxes or liens, as applicable, notwithstanding such contest if, in
the opinion of Lender, the Project or any part thereof or interest therein may
be in danger of being sold, forfeited,
22
foreclosed, terminated, canceled or lost. Lender may pay over any cash deposit
or part thereof to the claimant entitled thereto at any time when, in the
reasonable judgment of Lender, the entitlement of such claimant is established.
SECTION 11.9 TIME OF THE ESSENCE. Time is of the essence with respect
to this Agreement.
SECTION 11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Lender and Borrower and their respective
successors and assigns, provided that Borrower shall not, without the prior
written consent of Lender, assign any rights, duties or obligations hereunder.
SECTION 11.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of
the Environmental Indemnity Agreement and the Loan Documents shall apply with
equal effect to each and all promissory notes and amendments thereof hereinafter
executed which in whole or in part represent a renewal, extension, increase or
rearrangement of the Loan.
SECTION 11.12 WAIVERS. No course of dealing on the part of Lender, its
officers, employees, consultants or agents, nor any failure or delay by Lender
with respect to exercising any right, power or privilege of Lender under the
Environmental Indemnity Agreement and any of the Loan Documents, shall operate
as a waiver thereof.
SECTION 11.13 CUMULATIVE RIGHTS; JOINT AND SEVERAL LIABILITY. Rights
and remedies of Lender under the Environmental Indemnity Agreement and the Loan
Documents shall be cumulative, and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy. If
more than one person or entity has executed this Agreement as "Borrower," the
obligations of all such persons or entities hereunder shall be joint and
several.
SECTION 11.14 SINGULAR AND PLURAL. Words used in this Agreement, the
other Loan Documents, and the Environmental Indemnity Agreement in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular in this Agreement, the other
Loan Documents, and the Environmental Indemnity Agreement shall apply to such
words when used in the plural where the context so permits and vice versa.
SECTION 11.15 PHRASES. Except as otherwise expressly provided herein,
when used in this Agreement, the other Loan Documents, and the Environmental
Indemnity Agreement, the phrase "including" shall mean "including, but not
limited to," the phrase "satisfactory to Lender" shall mean "in form and
substance satisfactory to Lender in all respects," the phrase "with Lender's
consent" or "with Lender's approval" shall mean such consent or approval at
Lender's sole discretion, and the phrase "acceptable to Lender" shall mean
"acceptable to Lender at Lender's sole discretion."
SECTION 11.16 EXHIBITS AND SCHEDULES. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.
SECTION 11.17 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement, the other Loan Documents, and the Environmental Indemnity Agreement
or the exhibits hereto and thereto are only for the convenience of the parties
and shall not be construed to have any effect or meaning with respect to the
other content of such articles, sections, subsections or other divisions, such
other content being controlling as to the agreement between the parties hereto.
SECTION 11.18 PROMOTIONAL MATERIAL. Borrower authorizes Lender to issue
press releases, advertisements and other promotional materials in connection
with Lender's own promotional and marketing activities, including in connection
with a Secondary Market Transaction, and such materials may describe the Loan in
general terms or in detail and Lender's participation therein in the Loan. All
references to Lender contained in any press release, advertisement or
promotional material issued by Borrower shall be approved in writing by Lender
in advance of issuance.
23
SECTION 11.19 SURVIVAL. All of the representations, warranties,
covenants, and indemnities hereunder (including environmental matters under
Article 4), under the indemnification provisions of the other Loan Documents and
under the Environmental Indemnity Agreement, shall survive the repayment in full
of the Loan and the release of the liens evidencing or securing the Loan, and
shall survive the transfer (by sale, foreclosure, conveyance in lieu of
foreclosure or otherwise) of any or all right, title and interest in and to the
Project to any party, whether or not an affiliate of Borrower.
SECTION 11.20 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR
THE ENVIRONMENTAL INDEMNITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS AND
THE ENVIRONMENTAL INDEMNITY AGREEMENT OR IN ANY WAY RELATING TO THE LOAN OR THE
PROJECT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS
AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS
FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN.
SECTION 11.21 WAIVER OF PUNITIVE OR CONSEQUENTIAL DAMAGES. Neither
Lender nor Borrower shall be responsible or liable to the other or to any other
Person for any punitive, exemplary or consequential damages which may be alleged
as a result of the Loan or the transaction contemplated hereby, including any
breach or other default by any party hereto.
SECTION 11.22 GOVERNING LAW. The Loan Documents and the Environmental
Indemnity Agreement shall be governed by and construed in accordance with the
laws of the State and the applicable laws of the United States of America.
SECTION 11.23 ENTIRE AGREEMENT. This Agreement, the other Loan
Documents and the Environmental Indemnity Agreement embody the entire agreement
and understanding between Lender and Borrower and supersede all prior agreements
and understandings between such parties relating to the subject matter hereof
and thereof. Accordingly, the Loan Documents and the Environmental Indemnity
Agreement may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. If any conflict or inconsistency exists between
the Commitment and this Agreement, any of the other Loan Documents, or the
Environmental Indemnity Agreement, the terms of this Agreement, the other Loan
Documents, and the Environmental Indemnity Agreement shall control.
SECTION 11.24 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.
ARTICLE 12
LIMITATIONS ON LIABILITY
00
XXXXXXX 00.0 XXXXXXXXXX XX LIABILITY. Except as provided below,
Borrower shall not be personally liable for amounts due under the Loan
Documents. Borrower shall be personally liable to Lender for any deficiency,
loss or damage suffered by Lender because of: (a) Borrower's commission of a
criminal act; (b) the failure to comply with provisions of the Loan Documents
prohibiting the sale, transfer or encumbrance of the Project, any other
collateral, or any direct or indirect ownership interest in Borrower; (c) the
misapplication by Borrower of any funds derived from the Project, including
security deposits, insurance proceeds and condemnation awards in violation of
this Agreement or any of the other Loan Documents; (d) the fraud or
misrepresentation by Borrower made in or in connection with the Loan Documents
or the Loan; (e) Borrower's collection of rents more than one month in advance
or entering into or modifying leases, or receipt of monies by Borrower in
connection with the modification of any leases, in violation of this Agreement
or any of the other Loan Documents; (f) Borrower's failure to apply proceeds of
rents or any other payments in respect of the leases and other income of the
Project or any other collateral when received to the costs of maintenance and
operation of the Project and to the payment of taxes, lien claims, insurance
premiums, Debt Service, the Funds, and other amounts due under the Loan
Documents to the extent the Loan Documents require such proceeds to be then so
applied; (g) Borrower's interference with Lender's exercise of rights under the
Assignment of Leases and Rents; (h) Borrower's failure to maintain insurance as
required by this Agreement; (i) damage or destruction to the Project caused by
the acts or omissions of Borrower, its agents, employees, or contractors; (j)
Borrower's obligations with respect to environmental matters under Article 4;
(k) Borrower's failure to pay for any loss, liability or expense (including
attorneys' fees) incurred by Lender arising out of any claim or allegation made
by Borrower, its successors or assigns, or any creditor of Borrower, that this
Agreement or the transactions contemplated by the Loan Documents and the
Environmental Indemnity Agreement establishes a joint venture, partnership or
other similar arrangement between Borrower and Lender; or (l) any brokerage
commission or finder's fees claimed in connection with the transactions
contemplated by the Loan Documents. Nothing herein shall be deemed to be a
waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b)
or any other provision of the United States Bankruptcy Code, to file a claim for
the full amount due to Lender under the Loan Documents or to require that all
collateral shall continue to secure the amounts due under the Loan Documents.
SECTION 12.2 LIMITATION ON LIABILITY OF LENDER'S OFFICERS, EMPLOYEES,
ETC. Any obligation or liability whatsoever of Lender which may arise at any
time under this Agreement, any other Loan Document, or the Environmental
Indemnity Agreement shall be satisfied, if at all, out of the Lender's assets
only. No such obligation or liability shall be personally binding upon, nor
shall resort for the enforcement thereof be had to, the property of any of
Lender's shareholders, directors, officers, employees or agents, regardless of
whether such obligation or liability is in the nature of contract, tort or
otherwise.
[SIGNATURE PAGE FOLLOWS]
25
EXECUTED as of the date first written above.
LENDER: GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx, Authorized Signatory
BORROWER: XXXXXXX LAND & NURSERIES, INC., a Delaware
corporation
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Vice President and Chief Financial
Officer
26
SCHEDULE I
DEFEASANCE
1. In accordance with Section 2.3 of the Loan Agreement, Borrower may
obtain the release of the Project from the lien of the Mortgage upon the
satisfaction of the following conditions precedent:
(a) not less than thirty (30) days prior written notice to
Lender specifying a regularly scheduled payment date (the "RELEASE DATE
") on which the Defeasance Deposit (hereinafter defined) is to be made;
(b) the payment to Lender of interest accrued and unpaid on
the principal balance of the Note to and including the Release Date;
(c) the payment to Lender of all other sums, not including
scheduled interest or principal payments, due under the Note, the
Mortgage, the Assignment of Leases and Rents, and the other Loan
Documents;
(d) the payment to Lender of the Defeasance Deposit;
(e) the delivery by Borrower to Lender of:
i) a security agreement in form and substance
satisfactory to Lender, creating a first
priority lien on the Defeasance Deposit and the
U.S. Obligations (hereinafter defined)
purchased on behalf of Borrower with the
Defeasance Deposit in accordance with this
provision of this Schedule I (the "SECURITY
AGREEMENT");
ii) a release of the Project from the lien of the
Mortgage (for execution by Lender) in a form
appropriate for the jurisdiction in which the
Project is located;
iii) an officer's certificate of Borrower certifying
that the requirements set forth in this
paragraph (e) have been satisfied;
iv) an opinion of counsel for Borrower in form
satisfactory to Lender stating, among other
things, that Lender has a perfected first
priority security interest in the Defeasance
Deposit and the U.S. Obligations purchased by
Lender on behalf of Borrower;
v) evidence in writing from the applicable Rating
Agencies to the effect that such release will
not result in a re-qualification, reduction or
withdrawal of any rating in effect immediately
prior to such defeasance for any securities
issued in connection with a Secondary Market
Transaction; and
vi) such other certificates, documents or
instruments as Lender may reasonably request.
(f) if the Loan has been sold in a Secondary Market
Transaction, Lender shall have received an opinion of
counsel acceptable to Lender in form satisfactory to
Lender stating, among other things, that the
substitution of collateral shall not cause the holder
of the Loan to fail to maintain its status as a real
estate mortgage investment conduit; and
(g) Lender shall have received a certificate from an
independent certified public accountant acceptable to
Lender, in form and substance satisfactory to Lender,
certifying that the U.S. Obligations purchased with the
Defeasance Deposit will generate sufficient sums to
satisfy the obligations of Borrower under the Note as
and when such obligations become due.
In connection with the conditions set forth in paragraph 1(e) above, Borrower
hereby appoints Lender as its agent and attorney-in-fact for the purpose of
using the Defeasance Deposit to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled payment
dates after the Release Date upon which interest and principal payments are
required under the Note (including the amounts due on the Maturity Date) and in
amounts equal to the scheduled payments due on such dates under the Note (the
"SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the Security Agreement
or other appropriate document, shall authorize and direct that the payments
received from the U.S. Obligations may be made directly to Lender and applied to
satisfy the obligations of Borrower under the Note.
2. Upon compliance with the requirements of this Schedule I, the
Project shall be released from the lien of the Mortgage and the pledged U.S.
Obligations shall be the sole source of collateral securing the Note. Any
portion of the Defeasance Deposit in excess of the amount necessary to purchase
the U.S. Obligations required by the preceding paragraph and to otherwise
satisfy the Borrower's obligations under this Schedule I shall be remitted to
Borrower with the release of the Project from the lien of the Mortgage. In
connection with such release, Lender shall establish or designate a successor
entity (the "SUCCESSOR BORROWER") and Borrower shall transfer and assign all
obligations, rights and duties under and to the Note together with the pledged
U.S. Obligations to such Successor Borrower. The obligation of Lender to
establish or designate a Successor Borrower shall be retained by Lender
notwithstanding the sale or transfer of the Mortgage unless such obligation is
specifically assumed by the transferee. Such Successor Borrower shall assume the
obligations under the Note and the Security Agreement and Borrower shall be
relieved of its obligations thereunder. Borrower shall pay $1,000.00 to any such
Successor Borrower as consideration for assuming the obligations under the Note
and the Security Agreement. Notwithstanding anything in the Mortgage to the
contrary, no other assumption fee shall be payable upon a transfer of the Note
in accordance with this paragraph, but Borrower shall pay all costs and expenses
incurred by Lender, including Lender's reasonable attorneys' fees and expenses,
incurred in connection with this Schedule.
3. For purposes of this Schedule I, the following terms shall have the
following meanings:
(a) The term "DEFEASANCE DEPOSIT" shall mean an amount equal
to the remaining principal amount of the Note, the Yield Maintenance
Amount, any costs and expenses incurred or to be incurred in the
purchase of U.S. Obligations necessary to meet the Scheduled Defeasance
Payments and any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection with the transfer of the Note or
otherwise required to accomplish the agreements of this Schedule I.
(b) The term "YIELD MAINTENANCE AMOUNT" shall mean the amount
(if any) which, when added to the remaining principal amount of the
Note, will be sufficient to purchase U.S. Obligations providing the
required Scheduled Defeasance Payments; and
(c) The term "U.S. OBLIGATIONS" shall mean direct non-callable
obligations of the United States of America.
