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EXHIBIT 10.4
LOAN AGREEMENT
by and between
ARDEN REALTY FINANCE III, L.L.C.
AS BORROWER,
and
XXXXXX BROTHERS REALTY CORPORATION
AS LENDER
Dated as of June 8, 1998
$136,100,000
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TABLE OF CONTENTS
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1. DEFINITIONS AND REFERENCES.........................................................2
1.1. Defined Terms.............................................................2
1.2. Definitions Incorporated by Reference....................................21
1.3. Other Definitional Provisions............................................21
2. THE LOAN..........................................................................21
2.1. Making the Loan..........................................................21
2.2. Mortgage Note............................................................22
2.3. Use of Loan Proceeds.....................................................22
2.4. Payment of Principal and Interest........................................23
2.5. Defeasance...............................................................26
2.6. Release of Property......................................................28
2.7. Partial Release in Connection with a Casualty or Taking before
Defeasance Period........................................................28
2.8. Release of All the Properties during Defeasance Period...................29
2.9. Release of Individual Mortgaged Properties During the Defeasance
Period...................................................................30
2.10. Partial Release after Defeasance Period..................................30
2.11. Yield Maintenance........................................................32
2.12. Successor Borrower.......................................................33
3. REPRESENTATIONS AND WARRANTIES....................................................33
3.1. Organization and Power of Borrower and Managing Member...................33
3.2. Due Authorization and Execution..........................................34
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3.3. No Consents Required; No Contravention..................................34
3.4. Title to Properties.....................................................35
3.5. Management Agreement....................................................35
3.6. Leases..................................................................35
3.7. Utilities...............................................................36
3.8. No Violations...........................................................36
3.9. Other Agreements........................................................36
3.10. Payment of Taxes........................................................37
3.11. Litigation..............................................................37
3.12. Regulation U............................................................37
3.13. Investment Company Act..................................................38
3.14. Transactions with Affiliates............................................38
3.15. Business Purpose; Non-Subordination.....................................38
3.16. Permits and Licenses....................................................38
3.17. Patents and Trademarks..................................................39
3.18. Insurance...............................................................39
3.19. ERISA...................................................................39
3.20. No Notice of Non-Compliance.............................................39
3.21. Compliance With Laws....................................................39
3.22. Compliance with Environmental Laws......................................39
3.23. Concerning Mortgaged Properties; Financial Statements...................40
3.24. Access..................................................................41
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3.25. No Liens.................................................................41
3.26. Accuracy of Information..................................................41
3.27. Mortgage and Security Interests..........................................41
3.28. Assignment of Leases and Rents...........................................42
3.29. Foreign Person...........................................................42
3.30. No Defaults..............................................................42
3.31. No Fraudulent Conveyance.................................................42
4. CLOSING; CONDITIONS PRECEDENT.....................................................43
4.1. Representations, Warranties and Covenants................................43
4.2. Borrower's Actions.......................................................43
4.3. Delivery of Documents....................................................43
4.4. Evidence of Authorization; Related Documents.............................48
4.5. Closing Certificate......................................................49
4.6. Management Agreement.....................................................49
4.7. Existing Debt............................................................49
4.8. Payment of Lender Costs and Origination Fee..............................49
4.9. Independent Directors....................................................49
4.10. TI Reserve Requirement...................................................49
5. AFFIRMATIVE COVENANTS.............................................................50
5.1. Timely Payment of Amounts Due............................................50
5.2. Proceeds of the Loan.....................................................50
5.3. Management Agreement.....................................................50
5.4. Financial and Other Information..........................................52
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5.5. Maintenance of Existence, Etc............................................55
5.6. Compliance with Applicable Laws..........................................55
5.7. Maintenance of Books; Inspection of Properties and Books.................55
5.8. Notice of Litigation; Disputes...........................................56
5.9. Mortgaged Property Operations; Maintenance...............................56
5.10. Separate Existence.......................................................57
5.11. Cash Management..........................................................57
5.12. Independent Director.....................................................57
5.13. Reserve Requirement......................................................58
5.14. Repair Expenditures......................................................58
6. NEGATIVE COVENANTS................................................................58
6.1. Limitation on Indebtedness...............................................59
6.2. Limitation on Liens......................................................59
6.3. Merger or Consolidation; Permitted Reorganization........................59
6.4. Single Purpose...........................................................59
6.5. Amendments to Agreements.................................................60
6.6. Distributions............................................................60
6.7. Permitted Transfers......................................................60
7. EVENTS OF DEFAULT.................................................................61
7.1. Default; an Event of Default.............................................61
7.2. Remedies.................................................................64
7.3. Remedies Cumulative......................................................65
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7.4. Default Interest.........................................................65
7.5. Default Indemnity........................................................66
8. INSURANCE........................................................................66
8.1. Maintenance of Insurance.................................................66
8.2. Payment and Application of Insurance Proceeds............................66
8.3. Earthquake Insurance.....................................................67
9. SECURITIZATION...................................................................67
9.1. Securitization...........................................................67
9.2. No Assignment by Borrower................................................68
9.3. Method of Payment........................................................68
10. ASSIGNMENT AND PARTICIPATION.....................................................69
11. SUBSTITUTION OF PROPERTIES.......................................................69
12. MISCELLANEOUS....................................................................77
12.1. Limitation on Liability..................................................77
12.2. Entire Agreement, Amendments.............................................78
12.3. Notices..................................................................78
12.4. No Waiver; Cumulative Remedies...........................................79
12.5. Waiver of Jury Trial.....................................................79
12.6. Governing Law; Consent to Jurisdiction...................................79
12.7. Payment of Expenses......................................................80
12.8. Severability.............................................................80
12.9. Gender, Etc..............................................................81
12.10. Headings.................................................................81
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12.11. Counterparts; Facsimiles...............................................81
12.12. No Third Party Beneficiary.............................................81
12.13. No Liability of Lender.................................................81
12.14. Confidentiality........................................................82
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT") is entered into as of June
8, 1998, by and between ARDEN REALTY FINANCE III, L.L.C., a Delaware limited
liability company having its principal office at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("BORROWER"), and XXXXXX BROTHERS REALTY
CORPORATION, a Delaware corporation, having an office at Three World Financial
Center, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("LENDER").
WHEREAS, Borrower has requested Lender to make a loan (the
"LOAN") to Borrower, and Lender has agreed to make the Loan to Borrower, for the
purposes and on the terms and conditions described herein;
WHEREAS, the Loan is evidenced by that certain Mortgage Note
dated as of the date hereof by Borrower to the order of Lender and its
successors and assigns in the principal amount of One Hundred Thirty-Six Million
One Hundred Thousand and No/100 Dollars ($136,100,000), which is to be secured
by, among other things, first-priority liens on Borrower's assets, consisting
primarily of 22 office and industrial properties and related assets;
WHEREAS, the parties hereto desire to set forth their agreement
regarding the making of the Loan and the terms and conditions upon which the
Loan shall be made and repaid;
WHEREAS, without limiting any other rights that Lender has to
assign the Mortgage Note and the other Loan Documents (as hereinafter defined),
Lender may assign the Mortgage Note and the other Loan Documents, together with
mortgage loans made to other borrowers, to, among others, a Trustee (as
hereinafter defined) for the benefit of the Holders (as hereinafter defined),
who may appoint a Servicer (as hereinafter defined) and, following such
assignment, all rights of Lender hereunder will inure to the benefit of the
Trustee, for the benefit of the Holders, and to the Servicer, on behalf of the
Trustee, and the term "Lender" as used herein, shall, following such assignment,
include the Trustee and the Servicer, on behalf of the Trustee; and
WHEREAS, unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in SECTION 1.1 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS AND REFERENCES
1.1. DEFINED TERMS
Unless the context otherwise requires, capitalized terms used
herein shall have the respective meanings specified in this SECTION 1.1 (such
definitions to be equally applicable to both the singular and plural forms of
the terms defined).
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"ACCOUNT" means the Lockbox Account, the Cash Collateral Account,
the TI Reserve Account, the Tax and Insurance Escrow Account or any subaccount
of any of them or any other account or subaccount thereof created pursuant to
the Cash Management Procedures or otherwise in accordance with the terms hereof.
"ACCOUNTING PERIOD" shall mean each calendar month.
"ACCOUNTING QUARTER" shall mean each of the fiscal quarters in a
calendar or a conventional three hundred sixty-five (365)-day fiscal year (i.e.,
there shall be four consecutive Accounting Quarters of three (3) months each).
"ACCRUED INTEREST" has the meaning ascribed to it in SECTION
2.4.4(C) hereof.
"ADJUSTED INTEREST RATE" means the rate per annum determined on
the Anticipated Repayment Date as the greater of (i) eleven and 74/100 percent
(11.74%) and (ii) the sum of (A) five percentage points (5%) and (B) the
average, calculated by linear interpolation (rounded to three decimal places),
of the yields of the United States Treasury Constant Maturities with the terms
(one longer and one shorter) most nearly approximating those of U.S. Obligations
having maturities as close as possible to the twentieth (20th) anniversary of
the Anticipated Repayment Date, as determined by Lender on the basis of Federal
Reserve Statistical Release H.15-Selected Interest rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or such other recognized
source of financial market information as may reasonably be selected by Lender,
in each case on the last Business Day of the week immediately prior to the
Anticipated Repayment Date.
"AFFILIATE" means, as to any Person, (a) any Person directly or
indirectly owning, controlling, or holding power to vote ten percent (10%) or
more of the outstanding equity securities as to the Person in question; (b) any
Person ten percent (10%) or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held with power to vote by the
Person in question; (c) any Person directly or indirectly controlling,
controlled by, or under common control with the Person in question; (d) if the
Person in question is a corporation or limited liability company, any executive
officer, director, member or manager of the Person in question or of any
corporation or limited liability company directly or indirectly controlling,
controlled by, or under common control with the Person in question; and (e) if
the Person in question is a partnership, any general partner of such
partnership. As used in this definition of "AFFILIATE," the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"AGREEMENT" means this Loan Agreement, as it may be amended,
supplemented or modified from time to time.
"ALLOCATED LOAN AMOUNT" means, for any Mortgaged Property, the
portion of the Loan that is allocated to a particular Mortgaged Property, as set
forth on SCHEDULE 1.1 hereof, or if a Mortgaged Property is a Substitute
Property, the amount allocated thereto pursuant to SECTION 11 hereof.
"ANNUAL APPROVED BUDGET" shall have the meaning ascribed to such
term in SECTION 5.4.3 hereof.
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"ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for the Mortgaged Properties prepared by Borrower
for the applicable Fiscal Year or portion thereof.
"ANTICIPATED REPAYMENT DATE" means April 16, 2008.
"ARDEN OP" means Arden Realty Limited Partnership, a Maryland
limited partnership.
"XXXXX XXXX" means Arden Realty, Inc., a Maryland corporation
that is the general partner of Arden OP.
"ASSIGNMENT OF LEASES AND RENTS" means that certain Assignment of
Leases and Rents dated as of the date hereof made by Borrower to the Lender with
respect to the Mortgaged Properties.
"AUTHORIZED ACCOUNTING OFFICER" means the officer of Borrower who
has primary responsibility for accounting matters, or one of his or her duly
authorized representatives who, as set forth in a written notice of such officer
to the Lender, is duly authorized to act on behalf of such officer in connection
with this Agreement and the other Loan Documents.
"AWARD" has the meaning ascribed to it in the Mortgage.
"BANKRUPTCY LAW" means title 11, United States Code, or any
similar federal, state or foreign law for the relief of creditors.
"BASE RATE" means six and 74/100 percent (6.74%) per annum.
"BORROWER" has the meaning ascribed to it in the preamble hereto.
"BORROWER DOCUMENTS" has the meaning ascribed to it in SECTION
3.26 hereof.
"BUILDING EQUIPMENT" means all machinery, equipment, fixtures
(including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every kind
and nature whatsoever owned by Borrower, or in which Borrower has or shall have
an interest, now or hereafter located upon the Land and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Land and the Improvements.
"BUSINESS DAY" means a day other than (i) a Saturday or a Sunday
or (ii) a day on which federally insured depository institutions in the states
of New York and Illinois and the Commonwealth of Pennsylvania are required or
authorized by law, governmental decree or executive order to be closed.
"CASH COLLATERAL ACCOUNT" has the meaning specified in SCHEDULE
5.11 hereto.
"CASH EXPENSES" shall mean, for any period after the Anticipated
Repayment Date, the Operating Expenses for the operation of the Mortgaged
Properties as set forth in an
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Approved Annual Budget to the extent that such expenses are actually incurred by
Borrower minus payments into the Tax and Insurance Escrow Account and the TI
Reserve Account.
"CASH MANAGEMENT PROCEDURES" shall mean the provisions of
SCHEDULE 5.11 hereto.
"CASUALTY" has the meaning ascribed to it in the Mortgage.
"CERTIFICATES" has the meaning ascribed to it in SECTION 9.1
hereof.
"CLOSING" has the meaning ascribed to it in the first paragraph
of SECTION 4 hereof.
"CLOSING DATE" has the meaning ascribed to is in the first
paragraph of SECTION 4 hereof.
"CODE" means the Internal Revenue Code of 1986, as the same may
be amended from time to time, and any successor statute of similar import, and
the regulations thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to any
successor sections and all related regulations.
"COLLATERAL" means the "PROPERTY" (as defined in the Mortgage,
whether individually or taken as a group, as the context may require), together
with such other collateral or property as may be pledged, liened or encumbered
from time to time as security for the Loan under any other Security Documents.
"COLLATERAL ASSIGNMENT OF MANAGEMENT AGREEMENT" means that
certain Collateral Assignment of Management Agreement and Subordination
Agreement, dated as of the Closing Date, by and among Borrower, Manager, and
Lender in favor of Lender.
"CONTRIBUTION AGREEMENT" means that certain Property Contribution
Agreement dated as of the Closing Date by and among Arden OP and Borrower,
pursuant to which Arden OP agrees to contribute to Borrower, and Borrower agrees
to accept from Arden OP, the Mortgaged Properties and all operating assets
related thereto, and assume the liabilities associated with such Mortgaged
Properties.
"COOPERATION AGREEMENT" means that certain Cooperation Letter
Agreement dated as of the Closing Date, by and among Borrower, Arden OP, Xxxxx
XXXX and Lender.
"DEBT" means the obligations of Borrower under the Loan
Documents, together with all interest thereon, and all other sums, including,
without limitation, fees, expenses, commissions, premiums and indemnities, which
may or shall become due under any of the Loan Documents, including the costs and
expenses of enforcing any provision of the Loan Documents that may be
reimbursable hereunder.
"DEBT SERVICE" shall mean, with respect to any particular period
of time, scheduled interest payments under the Mortgage Note.
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the
applicable period in
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which:
(a) the numerator is the Net Operating Income
(excluding interest on credit accounts) for such
period; and
(b) the denominator is the aggregate amount of Monthly
Debt Service Payments due and payable on the
Mortgage Note or, in the event a Defeasance Event
has occurred, the Undefeased Note, for such period.
"DEBT SERVICE PERIOD" means the period commencing on (and
including) the first day of each calendar month (or with respect to the first
Debt Service Period, the period commencing on (and including) the Closing Date)
and ending on (and including) the last day of such calendar month.
"DEFAULT" has the meaning ascribed to it in SECTION 7.1 hereof.
"DEFAULT INTEREST" means (i) interest accruing on any overdue
principal amount of the Mortgage Note at a rate per annum equal to the
difference between the Default Interest Rate minus the Interest Rate, and (ii)
interest accruing on any overdue interest and any other overdue payments under
any Loan Documents at the Default Interest Rate.
"DEFAULT INTEREST RATE" has the meaning ascribed to it in SECTION
7.4 hereof.
"DEFEASANCE DATE" has the meaning ascribed to it in SECTION
2.5(a)(i).
"DEFEASANCE DEPOSIT" means an amount equal to the amount
necessary to purchase U.S. Obligations necessary to meet the Scheduled
Defeasance Payments, any costs and expenses incurred or to be incurred in the
purchase of such U.S. Obligations and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Mortgage Note or the Defeased Note, as applicable, the creation of the
Defeased Note, if applicable, or otherwise required to accomplish the agreements
of SECTION 2.5, SECTION 2.8, and SECTION 2.9.
"DEFEASANCE EVENT" has the meaning ascribed to it in SECTION
2.5(a).
"DEFEASANCE PERIOD" has the meaning ascribed to it in SECTION
2.5(a) hereof.
"DEFEASANCE SECURITY AGREEMENT" has the meaning ascribed to it in
SECTION 2.5(a)(vi) hereof.
"DEFEASED NOTE" has the meaning ascribed to it in SECTION
2.5(a)(v) hereof.
"DUE DATE" means the first (1st) day of each calendar month, or,
if in any calendar month the first (1st) day is not a Business Day, the Business
Day immediately succeeding the first (1st) day.
"ERISA" means the Employee Retirement Income Security Act of 1974
(together with all rules and regulations promulgated thereunder), as amended,
supplemented, or modified
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from time to time.
"ERISA AFFILIATE" means any trade or business under common
control (as it is defined in Section 414(b) or 414(c) of the Code or Section
4001(b)(1) of ERISA) with Borrower.
"ELIGIBLE ACCOUNT" means either (i) an account maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the long-term unsecured debt obligations of the holding company of
which) are rated by each Rating Agency in one of its two highest rating
categories (or such other ratings as will not result in the rating of any of the
Certificates being reduced below their respective ratings on the Closing Date
and as to which the Rating Agencies may otherwise agree) or the short-term
unsecured debt obligations of such depository institution or trust company or
holding company, as the case may be, are rated not lower than A-1+ by the
applicable Rating Agencies, or (ii) a segregated trust account maintained with
the trust department of a federal or state chartered depository institution or
trust company acting in its fiduciary capacity provided that such account is
subject to fiduciary funds on deposit regulations (or internal guidelines)
substantially similar to 12 C.F.R. Section 9.10(b), or (iii) an account in any
other insured depository institution reasonably acceptable to Lender, so long as
prior to the establishment of an account in any such other depository
institution each of the Rating Agencies shall have delivered a Rating Comfort
Letter with respect thereto.
"ENGINEERING SURVEYS" means those reports of recent date prior to
the Closing Date prepared by those companies listed on SCHEDULE 3.23a concerning
the physical condition of the Mortgaged Properties.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means the Environmental
Indemnity Agreement, dated as of the date hereof between Borrower and Lender.
"ENVIRONMENTAL LAWS " has the meaning ascribed to it in the
definition of "Hazardous Materials" herein.
"EQUITY MEMBER" means Arden OP in its capacity as equity member
of Borrower.
"EVENT OF DEFAULT" has the meaning ascribed to it in SECTION 7.1
hereof.
"EXCESS CASH FLOW" means, for any Accounting Period, the
difference between (i) Net Operating Income and (ii) the sum of (A) the Monthly
Debt Service Payments, (B) other Debt then due and payable to the Lender
pursuant to this Agreement or any of the other Loan Documents (other than
Default Interest, Accrued Interest, Late Payment Fees and payments required
under SECTION 2.4.4(c) hereof), and (C) in the event a Lockbox Event has
occurred, to the extent not duplicative of the foregoing, withdrawals from the
Cash Collateral Account applied pursuant to clauses (e) through (j) of SECTION
4.4 of the Cash Management Procedures.
"EXISTING DEBT" means indebtedness owed to Lender and secured by
one or more of the Mortgaged Properties, the obligation to repay such
indebtedness having been assumed by Borrower pursuant to the Contribution
Agreement.
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"EXTRAORDINARY EXPENSE" shall have the meaning ascribed to such
term in SECTION 5.4.3(b) hereof.
"FINAL MATURITY DATE" means April 16, 2028.
"FINANCIAL STATEMENTS" means the financial statements of Borrower
furnished to Lender from time to time pursuant to SECTIONS 5.4.1 AND 5.4.2
hereof.
"FISCAL YEAR" means the period beginning January 1 of each year
through and including December 31 of such year.
"FORCE MAJEURE" means acts of God, acts of war, civil
disturbance, or governmental action, excluding any casualty customarily covered
by insurance.
"GAAP" means generally accepted accounting principles in the
United States of America (as such principles may change from time to time)
applied on a consistent basis (except for changes in application as to which
Borrower's independent certified public accountants concur), both as to
classification of items and amounts, within any applicable period and as to
prior periods.
"GOVERNMENTAL AUTHORITY" means any nation, government, state, or
political subdivision of any thereof, including any court or any other entity
exercising executive, legislative, regulatory, judicial, or administrative
functions of, or pertaining to, government.
"GROSS INCOME FROM OPERATIONS" shall mean all income of Borrower,
computed in accordance with GAAP, derived from the ownership and operation of
the Mortgaged Properties from whatever source, including, but not limited to,
Rents, utility charges, escalations, forfeited security deposits, interest on
credit accounts, service fees or charges, license fees, parking fees, rent
concessions or credits, and other required pass-throughs but excluding sales,
use and occupancy or other taxes on receipts required to be accounted for by
Borrower to any government or governmental agency, refunds and uncollectible
accounts, sales of furniture, fixtures and equipment, proceeds of casualty
insurance and condemnation awards (other than business interruption or other
loss of income insurance), and any disbursements to the Borrower from the Tax
and Insurance Escrow Account, the TI Reserve Account or any other escrow fund
established by the Loan Documents.
"HAZARDOUS MATERIALS" means any substances, materials, or wastes,
whether solids, liquids or gases, that are defined as "hazardous wastes,"
"hazardous substances," "toxic substances," "radioactive materials," or other
substantially similar designations in, or otherwise subject to regulation under,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act
of 1986 ("XXXX"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control
Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802 et seq.; the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. Section 9601 et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.;
or other applicable Laws pertaining to the regulation of hazardous, toxic or
dangerous materials or wastes or the protection of the environment, including
any plans, rules, regulations, orders or ordinances adopted, or other criteria
and guidelines promulgated, pursuant to such laws,
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whether now or hereafter in effect (collectively referred to herein as
"ENVIRONMENTAL LAWS"). Hazardous Materials includes, but is not limited to,
polychlorinated biphenyls (PCBs), petroleum and petroleum products and
byproducts, and asbestos.
"HOLDERS" means the holders of record from time to time of the
Certificates.
"IMPROVEMENTS" means all buildings, structures, paving,
sidewalks, parking garages and other parking areas, curbing, landscaping,
signage, lighting, utilities and other improvements from time to time located on
all or any part of the Land (including, without limitation, the office and/or
industrial buildings that are located on the Land and any parking structures and
other parking facilities located on any of the Land), and any modifications,
additions, restorations or replacements of the whole or any part thereof.
"IMPOSITIONS" has the meaning ascribed to it in the Mortgage.
"INDEBTEDNESS" of any Person means (a) any liabilities and
obligations of such Person, contingent or otherwise, (i) in respect of borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), (ii) evidenced by bonds, notes,
debentures, or similar instruments, (iii) representing the balance deferred and
unpaid of the purchase price of any property or services, except those incurred
in the ordinary course of such Person's business that would constitute
ordinarily a trade payable to trade creditors, (iv) evidenced by bankers'
acceptances, (v) for the payment of money relating to a capitalized lease
obligation or sale/leaseback obligation, or (vi) evidenced by a letter of credit
or a reimbursement obligation of such person with respect to any letter of
credit or (b) any liabilities and obligations of others of the kind described in
the preceding clause (a) that such Person has guaranteed or that are otherwise
its legal liability or which are secured by any assets or property of such
Person, including, without limitation, any obligations to purchase, redeem, or
acquire any capital stock or similar interests.
"INDEPENDENT MANAGER" means a person who is not, and has not
within the past five (5) years been, (i) an officer, director, employee,
partner, member, stockholder or beneficial-interest holder of Borrower, Arden OP
or Xxxxx XXXX; (ii) an officer, director, employee, partner, member,
beneficial-interest holder or stockholder of any "Affiliate" (as defined below)
of Borrower, Arden OP or Xxxxx XXXX; (iii) a customer or supplier of Borrower or
any Affiliate thereof; or (iv) a spouse, parent, sibling, or child of any person
described in (i), (ii), or (iii); provided, however, that a person shall not be
deemed to be a director of an Affiliate solely by reason of such person being a
director of a single-purpose entity that would otherwise be deemed to be an
Affiliate because they are under common control. For the purpose of this
definition alone, "Affiliate" means any person or entity (i) which owns
beneficially, directly or indirectly, more than ten percent (10%) of the
outstanding shares of common stock of the general partner of the Equity Member
or which is otherwise in control of Equity Member, (ii) of which more than ten
percent (10%) of the outstanding voting securities are owned beneficially,
directly or indirectly, by any person or entity described in clause (i) above,
or (iii) which is controlled by, or under common control with, any person or
entity described in clause (i) above; the terms "control" and "controlled by"
shall have the meanings assigned to them in Rule 405 under the Securities Act of
1933.
"INFORMATION" has the meaning ascribed to it in SECTION 5.4
hereof.
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"INSURANCE PROCEEDS" has the meaning ascribed to it in the
Mortgage.
"INTEREST RATE" means (i) prior to the Anticipated Repayment
Date, the Base Rate and (ii) from and after the Anticipated Repayment Date, the
Adjusted Interest Rate.
"LAND" means the parcels of land on which the Mortgaged
Properties are located, as more fully described on EXHIBIT A attached hereto.
"LAWS" means any statute or law, or any rules, regulations,
orders or determinations made by any applicable Governmental Authority,
including as to real property, but without limitation, any applicable
Environmental Laws and any zoning, building, subdivision or land use laws,
rules, or ordinances.
"LEASE" means any lease or other agreement (other than a Ground
Lease) affecting the use, enjoyment or occupancy of the Land or the
Improvements.
"LENDER" initially means Xxxxxx Brothers Realty Corporation,
together with its successors and assigns, including, without limitation,
following the assignment and transfer contemplated by SECTION 9.1 hereof, (a)
the Trustee, on behalf of the Trust, or any of its successors and assigns, and
(b) the Servicer, on behalf of the Trustee.
"LENDER COSTS" means all of the costs and expenses of the Lender
of the kind described in SECTION 12.7.1 hereof.
"LIEN" means any mortgage, deed of trust, deed to secure debt,
lien, claim, option, security interest, pledge, preference, priority,
hypothecation, installment sale agreement, repurchase agreement or other
encumbrance or security arrangement of any kind or nature whatsoever, including,
without limitation, any conditional sale or title retention arrangement, and any
assignment, deposit arrangement, lease or other arrangement intended as, or
having the effect, of security.
"LLC AGREEMENT" means the Limited Liability Company Agreement of
Borrower dated June 4, 1998 by and between Borrower and Xxxxx XXXX.
"LOAN" means the loan made by Lender to Borrower pursuant to
SECTION 2.1 hereof.
"LOAN AMOUNT" means One Hundred Thirty-Six Million One Hundred
Thousand and No/100 Dollars ($136,100,000).
"LOAN DOCUMENTS" means this Agreement, the Mortgage Note, the
Environmental Indemnity Agreement, the Collateral Assignment of Management
Agreement, the Security Agreement, the Mortgage, the Assignment of Leases and
Rents, and all of the other Security Documents, and any and all other documents,
agreements, certificates, notes or other instruments delivered pursuant to, or
in connection with, the Loan.
"LOCKBOX ACCOUNT" has the meaning specified in SECTION 1.1 of
SCHEDULE 5.11 of this Loan Agreement.
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"LOCKBOX EVENT" has the meaning ascribed to such term in SCHEDULE
5.11 of this Loan Agreement.
"MANAGEMENT AGREEMENT" means that certain Management Agreement
dated as of the Closing Date by and between Borrower and Arden OP, as "Manager"
or any management agreement entered into between Borrower and a substitute
manager in accordance with SECTION 5.3 hereof.
"MANAGER" has the meaning ascribed to it in the definition of
"Management Agreement" herein, or any successor thereto, or any other Person who
becomes the manager of one or more of the Mortgaged Properties in compliance
with this Agreement.
"MEMBERS" shall mean Equity Member and Special Member in their
capacity as members of Borrower.
"MONTHLY DEBT SERVICE PAYMENT" means (i) prior to the fifth
anniversary of the date hereof, the Monthly Interest Payment, and (ii)
thereafter, the Scheduled Principal and Interest Payment.
"MONTHLY INTEREST PAYMENT" has the meaning ascribed to it in
SECTION 2.4.4.(b) hereof.
"MORTGAGE" means the Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing executed by Borrower and delivered
to Lender or certain trustees for the benefit of Lender with respect to the
Mortgaged Properties, which is to be recorded in the land records of each
jurisdiction in which one or more of the Mortgaged Properties are located, as
security for the Loan.
"MORTGAGE NOTE" means the promissory note described in SECTION
2.2 hereof; provided, however, that if the principal amount of such promissory
note shall be divided at any time into one or more Defeased Notes and one or
more Undefeased Notes pursuant to SECTION 2.5(a)(v) hereof, "MORTGAGE NOTE"
shall mean, collectively, all such Undefeased Note(s) and Defeased Note(s).
"MORTGAGED PROPERTIES" means the twenty-two (22) office and
industrial properties transferred by Arden OP to Borrower, as of the Closing
Date, pursuant to the Contribution Agreement, including, without limitation,
Borrower's fee interest in the land associated with said office properties and
Borrower's ownership interest in all Improvements, which Mortgaged Properties
are identified on SCHEDULE 4.3.2 attached hereto.
"NET OPERATING INCOME" means, for any period the amount obtained
by subtracting Operating Expenses from Gross Income from Operations.
"NET SALES PROCEEDS" means the aggregate amount of cash received
by Borrower in respect of the sale of any Mortgaged Property and related assets
less (i) the sum of all reasonable and customary out-of-pocket payments, fees,
commissions and expenses, plus interest thereon, if applicable (including,
without limitation, fees, commissions and expenses of legal counsel and
investment bankers) paid or payable to third parties and incurred in connection
with such sale, including, without limitation, the Lender, the Trustee (if any),
and the
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Servicer (if any), and (ii) the amount (estimated reasonably and in good faith
by Borrower) of income, franchise, sales and other applicable taxes required to
be paid by Borrower in connection with such sale.
"NEW NOTE" has the meaning ascribed to it in SECTION 2.2 hereof.
"OFFICER'S CERTIFICATE" means a certificate delivered to Lender
by Borrower which is signed by an authorized representative of Borrower.
"OPERATING EXPENSES" means the total of expenses, computed in
accordance with GAAP, of whatever kind relating to the operation, maintenance
and management of the Mortgaged Properties that are incurred on a regular
monthly or other periodic basis, including without limitation, utilities,
ordinary repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees, payroll and related taxes,
computer processing charges, operational equipment or other lease payments as
approved by Lender, and other similar costs, but excluding depreciation, Debt
Service, capital expenditures and contributions to the TI Reserve Account, the
Tax and Insurance Escrow Account and any other reserves required under the Loan
Documents.
"ORIGINATION FEE" means a fee equal to Eight Hundred Forty-Five
Thousand Nine Hundred Forty-Five and No/100 Dollars ($845,945.00) to be paid by
Borrower to Lender on the Closing Date.
"PAYMENT DIFFERENTIAL" has the meaning ascribed to it in SECTION
2.11.1 hereof.
"PERMITTED DEBT" means, as to Borrower:
(i) unsecured trade indebtedness incurred by Borrower for
or in respect of the operation of the Mortgaged Properties in the
ordinary course of business, but only to the extent used to pay
Operating Expenses, which Indebtedness shall be paid not more
than sixty (60) days after the date incurred and which
Indebtedness may not be evidenced by any form of promissory note;
(ii) if no Default or Event of Default has occurred and is
continuing, purchase money Indebtedness and capitalized lease
obligations up to an aggregate amount not in excess of $3,000,000
outstanding at any one time, in each case, for the purchase or
lease of Building Equipment in the ordinary course of business
(and not inconsistent with customary industry practices), which
Indebtedness may be secured by a first priority lien on the goods
and equipment that have been so purchased or leased, provided, no
such Indebtedness shall be evidenced by a promissory note; and
(iii) if no Event of Default has occurred and is
continuing, (a) unsecured Indebtedness payable or reimbursable to
a tenant under a Lease, payable or reimbursable to such tenant on
account of work performed or costs incurred (including tenant
improvements) by such tenant in connection with its occupancy of
space at a Mortgaged
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Property, provided such Lease is consistent with, or has been
approved by Lender if required by, Section 1.20.11.3 of the
Mortgage, which Indebtedness may not be evidenced by any form of
promissory note and the aggregate outstanding amount of which
Indebtedness at any one time may not exceed $5,000,000;
(iv) Indebtedness solely in respect of surety and appeal
bonds, performance bonds and other obligations of a like nature
(to the extent that such incurrence does not result in the
incurrence of any obligation to repay any obligation relating to
borrowed money of others), all in the ordinary course of business
in accordance with customary industry practices and, if not in
the ordinary course, in an individual amount not to exceed
$1,000,000;
"PERMITTED DEBT" means, as to a Member, any liability of a Member in its
capacity as a Member of Borrower for Permitted Debt of Borrower.
"PERMITTED INVESTMENTS" means any one or more of the following
obligations or securities which are payable on demand or available for
withdrawal, in each case without penalty, or which have a scheduled maturity on
or prior to the Business Day preceding the following Due Date, and having at all
times the required ratings, if any, provided for in this definition, unless each
Rating Agency shall have confirmed in writing to the Lender that a lower rating
would not result in the withdrawal, downgrading or qualification of the ratings
then assigned to the Certificates (and investments will not be disqualified as
"Permitted Investments" solely because they are issued by Lender or an Affiliate
of Lender):
(i) direct obligations of, or obligations guaranteed as to
full and timely payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided that
such obligations are backed by the full faith and credit of the
United States of America, provided, however, that the investments
described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change,
(B) if rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must
not be subject to liquidation prior to their maturity;
(ii) direct obligations of, or obligations guaranteed as
to timely payment of principal and interest by, FHLMC, FNMA or
the Federal Farm Credit System, provided that any such obligation
is qualified by each Rating Agency as an investment of funds
backing securities having a long-term unsecured debt rating of
"AAA", provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index,
and (D) such investments must not be subject to liquidation prior
to their maturity;
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(iii) demand and time deposits in, or demand notes of, or
certificates of deposit of, or bankers' acceptances having
maturities of not more than three hundred sixty-five (365) days
issued by, any bank or trust company, savings and loan
association or savings bank, provided that the commercial paper
or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of such
holding company) are then rated not lower than the highest rating
category of each Rating Agency, in the case of commercial paper,
or in the highest category in the case of long-term debt
obligations, or such lower categories as will not result (as
evidenced in writing by each Rating Agency) in the withdrawal,
downgrading or qualification of the rating then assigned (or,
prior to the Securitization, proposed to be assigned) to the
Certificates by each Rating Agency, or, in the case of short-term
debt obligations which have maturities of thirty (30) days or
less, a rating of "A-1," provided, however, that the investments
described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change,
(B) if rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must
not be subject to liquidation prior to their maturity;
(iv) general obligations of, or obligations guaranteed by,
any state of the United States or the District of Columbia
receiving long-term debt ratings by each Rating Agency equal to
the highest rating then assigned (or, prior to the
Securitization, proposed to be assigned) to any Class of
Certificates by such Rating Agency or such lower category as will
not result in the withdrawal, downgrading, or qualification of
the rating then assigned (or, prior to the Securitization,
proposed to be assigned) to the Certificates by each Rating
Agency (as evidenced in writing by each Rating Agency) which
obligations shall have maturities of not more than three hundred
sixty-five (365) days, provided, however, that the investments
described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change,
(B) if rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must
not be subject to liquidation prior to their maturity;
(v) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more
than one (1) year after the date of issuance thereof) that is
rated by each Rating Agency in its highest short-term unsecured
rating category, and is issued by a corporation the outstanding
senior debt obligations of which are then rated by each Rating
Agency in its highest short-term unsecured rating category or its
highest long-term unsecured rating category, as applicable,
provided, however, that the investments described in this clause
must (A) have a predetermined fixed dollar of principal due at
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maturity that cannot vary or change, (B) if rated by S&P, must
not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to
their maturity;
(vi) repurchase obligations maturing in three hundred
sixty-five (365) days or less from the date of investment with
respect to any security described in clause (i) or (ii) above
entered into with a depository institution or trust company
(acting as principal) meeting the rating standards described in
(iii) above, provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with
that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(vii) debt securities (other than stripped bonds or
stripped coupons) maturing in thirty (30) days or less from the
date of investment bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any state thereof and rated by each
Rating Agency in its highest long-term unsecured rating category;
provided, however, that securities issued by any such corporation
will not be Permitted Investments to the extent that investment
therein would cause the outstanding principal amount of
securities issued by such corporation that are then held as part
of any Account, to exceed twenty percent (20%) of the aggregate
principle amount of all Permitted Investments then held in the
Accounts, provided, further, that the investments described in
this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with
that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(viii) any money market funds rated "AAAm" or "AAAm-G" (or
equivalent), provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with
that index, and (D) such investments must not be subject to
liquidation prior to their maturity; and
(ix) such other obligations as are acceptable as Permitted
Investments to each Rating Agency, as evidenced by the delivery
by each Rating Agency of a Rating Comfort Letter;
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provided, however, that each such instrument continues to qualify as a "cash
flow investment" pursuant to Code Section 860G(a)(6) earning a passive return in
the nature of interest and that no instrument or security shall be a Permitted
Investment if (i) such instrument or security evidences a right to receive only
interest payments or (ii) the right to receive principal and interest payments
derived from the underlying investment provides a yield to maturity in excess of
one hundred twenty percent (120%) of the yield to maturity at par of such
underlying investment; and provided, further, that (a) variable interest on any
such investment shall be based on a single index and vary proportionally with
such index, and no such instrument or investment shall have a rating by the
Rating Agencies with the "r" symbol (or equivalent symbol) attached.
"PERMITTED LIENS" means any of the following:
(i) the Liens of the Mortgage and other Security
Documents;
(ii) Liens for taxes, assessments and other governmental
charges not yet due and payable or due and payable, but not yet
delinquent, or that are being contested in good faith by
appropriate proceedings and as to which adequate deposits have
been made with Lender as required by SECTION 6.2;
(iii) deposits or pledges to secure the payment of
workmen's compensation, unemployment insurance or other social
security benefits or obligations, or to secure the performance of
trade contracts, leases, public or statutory obligations, surety
or appeal bonds or other obligations of a like general nature
incurred in the ordinary course of business;
(iv) landlords', mechanics', materialmen's,
warehousemen's, carriers', or other like Liens arising in the
ordinary course of business securing obligations which are not
overdue for a period longer than thirty (30) days, or which are
being contested in good faith by appropriate proceedings which
are being diligently pursued (with deposits having been made with
Lender as required by SECTION 6.2) or as to which the Liens are
bonded to the satisfaction of Lender;
(v) easements, rights of way, zoning, similar
restrictions, and other similar encumbrances or title defects
that, singly or in the aggregate, do not in any case materially
detract from the value of the property subject thereto (as such
property is used by Borrower);
(vi) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount, and for a period
not resulting in an Event of Default with respect thereto;
(vii) Liens securing capitalized lease obligations insofar
as such Liens cover assets acquired pursuant to such capitalized
lease obligations and such capitalized lease obligations
constitute Permitted Debt; and
(viii) Liens securing assets acquired pursuant to purchase
money Indebtedness, which Indebtedness constitutes Permitted
Debt.
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"PERSON" means an individual, a partnership, a corporation, a
trust, an unincorporated organization, a joint venture or other business entity,
a limited liability company, or a government or any department, agency or
political subdivision thereof.
"PLAN" means any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as it is defined in ERISA and
(a) that was or is established or maintained by Borrower or any ERISA Affiliate;
(b) under which Borrower or any ERISA Affiliate has contributed or has been
obligated to contribute or to fund or provide benefits, or under which Borrower
or any ERISA Affiliate has any liability; or (c) that provides or promises
benefits to any person who performs or has performed services for Borrower or
any ERISA Affiliate who, because of such services, is or was a participant
therein or entitled to benefits thereunder.
"POOLING AND SERVICING AGREEMENT" has the meaning ascribed to it
in SECTION 9.1 hereof.
"PREPAYMENT DATE" means the date on which any voluntary or
involuntary prepayment of principal is made or required to be made.
"PRIME RATE" means the rate that is published from time to time
as the "prime rate" in The Wall Street Journal listing of "Money Rates" and
shall be the average of all such rates in effect at any one time if more than
one rate is quoted. If this index ceases to be published in The Wall Street
Journal, an alternate index of similar nature will be selected by Lender in its
reasonable discretion.
"QUALIFIED INSURANCE COMPANIES" has the meaning ascribed to it in
the Mortgage.
"QUALIFIED MANAGER" has the meaning ascribed to such term in
SECTION 5.3.2 hereof.
"REMIC" has the meaning ascribed to it in SECTION 2.5 hereof.
"RATING AGENCIES" shall mean (i) prior to the Securitization,
Standard & Poor's Ratings Services, a division of the XxXxxx-Xxxx Companies,
Inc., and Xxxxx'x Investors Services, Inc. (except that, where a particular
provision in any Loan Document specifies one or more Rating Agencies by name,
"RATING AGENCIES" shall mean the rating agency or rating agencies so specified)
and (ii) after the Securitization, such of the following as actually rate the
securities issued in connection with the Securitization: Standard & Poor's
Ratings Services, a division of the XxXxxx-Xxxx Companies, Inc., Xxxxx'x
Investors Service, Inc., Duff & Xxxxxx Credit Rating Co., Fitch Investors
Service, L.P., or any other nationally recognized statistical rating agency
selected by Lender.
"RATING COMFORT LETTER" with respect to any event or proposed
course of action or inaction, means a written confirmation from the Rating
Agencies that no rating assigned by such Rating Agencies to any of the
Certificates will be downgraded, qualified or withdrawn, or placed on a credit
watch with negative implications, as a result of such event or proposed action
or inaction; provided that if the Securitization has not taken (or as certified
by Lender, will not take) the form of a transaction rated by the Rating
Agencies, then "RATING COMFORT LETTER" shall instead mean that the matter in
question shall be subject to the prior approval of Lender,
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which shall not be unreasonably withheld unless expressly stated to be in
Lender's sole and absolute discretion.
"REFERENCE PERIOD" means the twelve (12) full consecutive
calendar months ended immediately preceding the date as of which any
determination with respect to a Reference Period is made hereunder and for which
internal financial statements of Borrower are available. As used herein, the
Reference Period "applicable" to any sale of a Mortgaged Property, Release, or
other event shall mean the Reference Period immediately preceding such event for
which internal financial statements of the Borrower are available.
"REINVESTMENT YIELD" has the meaning ascribed to it in SECTION
2.11.2 hereof.
"RELEASE" means the release of one or more Mortgaged Properties
from the Lien of the Mortgage and the other Security Documents pursuant to the
provisions of SECTION 2.7, SECTION 2.8, SECTION 2.9 or SECTION 2.10 hereof.
"RELEASED" shall have a correlative meaning.
"RELEASE PRICE" means, with respect to a specified Mortgaged
Property, one hundred twenty-five percent (125%) of the Allocated Loan Amount
for such Mortgaged Property, provided, however, that in no event shall the
Release Price for a Mortgaged Property be greater than the then outstanding
aggregate principal amount of the Loan.
"REMAINING MORTGAGED PROPERTIES" means the Mortgaged Properties
that will remain subject to the Lien of any Mortgage following a Release or
several Releases to be made on the same day.
"RENTS" means all rents, rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents, royalties (including, without
limitation, all oil and gas or other mineral royalties and bonuses, if any),
income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other consideration of whatever form
or nature received by or paid to or for the account of or benefit of Borrower or
its agents or employees from any and all sources arising from or attributable to
the Mortgaged Properties, or any portion thereof, and proceeds, if any, from
business interruption or other loss of income insurance.
"RESTORATION" has the meaning ascribed to it in the Mortgage.
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc.
"SCHEDULED DEFEASANCE PAYMENTS" has the meaning ascribed to it in
SECTION 2.5(b) hereof.
"SCHEDULED PRINCIPAL AND INTEREST PAYMENT" shall have the meaning
set forth in SECTION 2.4.4(b) hereof.
"SEC" means the Securities and Exchange Commission of the United
States of America.
"SECURITIZATION" has the meaning ascribed to it in SECTION 9.1
hereof.
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"SECURITY AGREEMENT" means that certain Security Agreement dated
as of even date herewith between Borrower and the Lender.
"SECURITY DOCUMENTS" means, collectively or individually, as the
context may require, the Mortgage, the Collateral Assignment of Management
Agreement, the Assignment of Leases and Rents, the Security Agreement, and such
other documents as are executed and delivered by any Person to grant additional
security for the repayment of the Loan.
"SERVICER" has the meaning ascribed to it in SECTION 9.1 hereof.
"SINGLE PURPOSE" means, with respect to a Person, that such
Person, (A) at all times since its formation, except as otherwise permitted in
or contemplated by the Loan Documents (i) has been a duly formed and existing
limited partnership, limited liability company, or corporation, as the case may
be; (ii) has observed all customary formalities regarding its partnership,
limited liability company or corporate existence; (iii) has maintained financial
statements, accounting records, and other partnership, limited liability
company, or corporate documents separate from those of any other Person
(provided that nothing shall prohibit such Person from being included in the
consolidated financial statements or tax group of another Person); (iv) has not
commingled its assets with those of any other Person; (v) has paid its own
liabilities out of its own funds, including funds contributed to its capital by
its respective equity holders, and all such capital contributions have been
reflected properly in its books and records; (vi) has allocated fairly and
reasonably any overhead for shared office expenses; (vii) has identified itself
in all dealings with the public, under its own name and as a separate and
distinct entity (provided that nothing shall prohibit such Person from engaging
a manager to represent such Person with respect to tenants, vendors, and other
parties, in accordance with standard industry practice); (viii) has not
identified itself as being a division or part of any other Person; (ix) has not
identified any other Person as being a division or part of such Person; (x) has
corrected any known misunderstanding regarding their separate identities; (xi)
has been adequately capitalized in light of the nature of its business; (xii)
has not assumed or guaranteed the obligations of any other Person (other than by
virtue of being a general partner of such other Person but only if such other
Person is Borrower and provided, that this clause shall not be deemed to be
violated by reason of joint and several liabilities arising as a matter of law);
and (xiii) has not engaged in any other business other than as permitted by the
Loan Documents, (B) such person has agreed to or is subject to covenants
substantially to the effect of SECTIONS 5.10, 5.12, 6.1, 6.3, 6.4 AND 6.5 hereof
and (C) if such Person is an entity, such person's organizational documents
contain restrictions similar to those contained in Article X of the LLC
Agreement as in effect on the date hereof.
"SPECIAL MEMBER" means the person acting as the special member of
Borrower under the LLC Agreement or a successor special member admitted in
accordance with the terms of the LLC Agreement and this Agreement.
"SUBSTANTIVE NON-CONSOLIDATION OPINION" means an opinion of
counsel substantially similar to the provisions of the opinion of Borrower's
counsel delivered on the Closing Date to the effect that the assets and
liabilities of Borrower will not be substantively consolidated with those of
Arden OP or Xxxxx XXXX in the event that Arden OP or Xxxxx XXXX were to become
the subject of bankruptcy or insolvency proceedings (with such changes as are
necessary to reflect the identity and operations of the parties addressed in
such Substantive Non-Consolidation Opinion).
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"SUBSTITUTE PROPERTY" has the meaning ascribed to it in SECTION
11 hereof.
"SUBSTITUTED PROPERTY" has the meaning ascribed to it in SECTION
11 hereof.
"SUBSTITUTION CONDITIONS" has the meaning ascribed to it in
SECTION 11 hereof.
"SUCCESSOR BORROWER" has the meaning ascribed to it in SECTION
2.12 hereof.
"TAKING" has the meaning ascribed to it in any applicable
Mortgage.
"TAX AND INSURANCE ESCROW ACCOUNT" shall have the meaning
ascribed to such term in SECTION 5.11 hereof.
"TI RESERVE ACCOUNT" has the meaning ascribed to such term in
SCHEDULE 5.11 of this Loan Agreement.
"TI RESERVE REQUIREMENT" means Two Million Seven Hundred Thirty
Thousand and No/100 Dollars ($2,730,000).
"TITLE COMPANY" has the meaning ascribed to it in SECTION 4.3.2
hereof.
"TITLE INSURANCE POLICY" and "TITLE INSURANCE POLICIES" have the
meanings ascribed to them in SECTION 4.3.2 hereof.
"TRANSACTION DOCUMENTS" means the Loan Documents, the
Contribution Agreement, and all documents to be delivered pursuant to the terms
hereof and thereof or that are executed and delivered by Borrower in connection
with the transactions contemplated hereby or thereby.
"TREASURY RATE" has the meaning ascribed to it in SECTION 2.11.2
hereof.
"TRUST FUND" has the meaning ascribed to it in SECTION 12.7.2
hereof.
"TRUSTEE" has the meaning ascribed to it in SECTION 9.1 hereof.
"U.C.C." or "UNIFORM COMMERCIAL CODE" means the Uniform
Commercial Code as in effect in the State of New York or, in the case of any
particular item of real or tangible personal property, in the State in which
such property is located.
"U.S. OBLIGATIONS" means direct, non-callable obligations of the
United States of America.
"UNDEFEASED NOTE" has the meaning ascribed to it in SECTION
2.5(a)(v) hereof.
"YIELD MAINTENANCE PAYMENT" has the meaning ascribed to it in
SECTION 2.11.1 hereof.
1.2. DEFINITIONS INCORPORATED BY REFERENCE
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Any term defined in SECTION 1.1 by reference to another
agreement, instrument or other document shall mean such agreement, instrument or
document as it may be amended, supplemented or modified from time to time, but
only to the extent such amendment, supplement or modification is permitted by
the terms hereof. If any such agreement, instrument or other document shall be
replaced or superseded in accordance with the terms hereof (for example, if the
Management Agreement is replaced by an agreement with another Qualified Manager,
the definition incorporated by reference in SECTION 1.1 to such agreement,
instrument or other document shall thereafter have the meaning established under
the replaced or superseded document, with any such changes as (a) shall be
necessary to conform to the replacement or superseding agreement, instrument or
document or (b) are otherwise agreed to by the Lender in writing.
1.3. OTHER DEFINITIONAL PROVISIONS
The terms defined in SECTION 1.1 hereof may not comprise all of
the defined terms contained in this Agreement. Capitalized terms not defined in
SECTION 1.1 hereof shall have the meanings ascribed to them elsewhere herein.
Accounting terms used in this Agreement but not defined herein shall have the
respective meanings given to them under GAAP. The words "hereof," "herein" and
"hereunder" and words of similar character when used in this Agreement shall
refer to this Agreement as a whole and shall not be limited to any particular
provision of this Agreement.
2. THE LOAN
2.1. MAKING THE LOAN
In reliance upon the representations, warranties, covenants and
agreements of Borrower contained herein and in the other Loan Documents, and
upon full satisfaction by Borrower of the terms and conditions precedent set
forth in ARTICLE 4 of this Agreement, Lender agrees to make a loan (the "LOAN")
to Borrower, which Loan shall be advanced to Borrower in a single advance of
immediately available funds equal to the Loan Amount. The Loan Amount shall be
used solely for the purposes described in SECTION 2.3 hereof. The Loan will be
secured by, among other things, a Mortgage encumbering the Mortgaged Properties
and other Improvements and granting a lien on and security interest in certain
other Property described in the Mortgage and by other Security Documents
effecting and granting a lien on and security interest in such other Collateral,
and shall bear interest at the rates per annum specified in SECTION 2.4 hereof.
2.2. MORTGAGE NOTE
The obligation of Borrower to repay the full Loan Amount,
together with interest thereon, and Yield Maintenance Payments, Defeasance
Deposits and other charges, if any, related thereto, shall be evidenced by that
certain Mortgage Note made by Borrower as of the Closing Date to the order of
Lender (the "MORTGAGE NOTE"), substantially in the form of EXHIBIT B attached
hereto and incorporated herein, in the original principal amount of One Hundred
Thirty-Six Million One Hundred Thousand and No/100 Dollars ($136,100,000).
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The Borrower hereby irrevocably appoints the Lender and its
successors and assigns, with full power of substitution, as its
attorney-in-fact, solely for the purpose, from time to time in connection with a
foreclosure on any Mortgaged Property following an Event of Default and/or
acceleration of the maturity of the Loan, of executing two or more promissory
notes (each, a "NEW NOTE") substantially in the form of EXHIBIT B, with an
aggregate face principal balance equal to the principal amount then outstanding
under the Mortgage Note (with a notation on each such New Note as to the
outstanding principal amount of the Loan allocated to each such New Note) and
marking each promissory note that is to be replaced with such New Notes (whether
the original Mortgage Note or any Defeased Note or Undefeased Note)
"SUBSTITUTED." Such power of attorney is a limited power of attorney coupled
with an interest.
2.3. USE OF LOAN PROCEEDS
Borrower agrees that the proceeds of the Loan shall be used
solely for the purpose of repaying or causing repayment of a portion of the
Existing Debt (the obligation to repay such indebtedness having been assumed by
Borrower pursuant to the Contribution Agreement), including the payment of fees
and expenses associated therewith, for the purposes of paying certain fees and
expenses associated with the Loan, for the purpose of the funding of the TI
Reserve Account and for general limited liability company purposes not
inconsistent with the terms of this Agreement.
2.4. PAYMENT OF PRINCIPAL AND INTEREST
2.4.1. PAYMENTS ON THE MORTGAGE NOTE
All payments made on the Mortgage Note shall be made in the
manner, and subject to the conditions, provided in this Agreement and the
Mortgage Note. The Mortgage Note shall not be prepayable except as expressly
provided for in this SECTION 2.4.1, and in SECTION 2.5, SECTION 2.7, SECTION
2.8, SECTION 2.9 and SECTION 2.10 hereof. On any Due Date occurring on or after
the Anticipated Repayment Date, the Mortgage Note may be prepaid, at the option
of the Borrower, in full or in part, without penalty or premium. To the extent
not previously paid, the entire Debt shall be due and payable on the Final
Maturity Date.
2.4.2. INTEREST
(a) Except as set forth in SECTIONS 2.4.4(b) with respect to
interest accruing at the Default Interest Rate, the Debt shall bear interest for
each Debt Service Period at the applicable Interest Rate then in effect and
shall be payable as provided herein.
(b) Calculations of interest shall be made on the basis of a
three hundred sixty (360) day year and the actual number of days elapsed during
each Debt Service Period.
2.4.3. PAYMENTS WITHOUT DEDUCTION, ETC.
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All payments of the Debt to Lender shall be absolute and
unconditional, shall be paid strictly in accordance with the terms of the Loan
Documents without being subject to any claim, set-off, defense or other right
which Borrower may have against Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
other circumstance or happening whatsoever. Borrower shall pay such payments to
the Lender free and clear of, and without deduction for, any and all present or
future taxes, levies, imposts, deductions, charges, penalties or withholdings,
and any liabilities with respect thereto, by whomever imposed, other than
present or future taxes on the income of Lender or franchise taxes imposed on
Lender as a result of its conducting business in specific jurisdictions.
Borrower shall pay and indemnify and hold Lender harmless from and against, any
present or future claim or liability for United States, state or local taxes or
assessments on the ownership by Lender of the debt obligations of Borrower
evidenced by the Mortgage Note, or on the principal, interest, fees or other
amounts payable under any Loan Documents or otherwise in respect of the Debt
(other than income or franchise taxes imposed on the Lender or its Affiliates by
any jurisdiction). The obligations of the Borrower hereunder shall survive
repayment of the Debt and termination of the Loan Documents.
2.4.4. PERIODIC PAYMENTS
(a) On July 1, 1998, Borrower shall pay to Lender interest on the
Mortgage Note at the Base Rate for the period commencing on the Closing Date and
ending on June 30, 1998.
(b) On August 1, 1998 and on each Due Date thereafter that occurs
on or prior to April 16, 2003 (the "INTEREST ONLY EXPIRATION DATE"), Borrower
shall pay interest on the outstanding principal of the Mortgage Note at the Base
Rate for the prior Debt Service Period (the "MONTHLY INTEREST PAYMENT"). On each
Due Date that occurs on or after the Interest Only Expiration Date, Borrower
shall pay to Lender a monthly payment of principal and interest (the "SCHEDULED
PRINCIPAL AND INTEREST PAYMENT") in an amount equal to the amount of the monthly
payment that would be necessary to fully amortize the outstanding principal
balance of the Loan as of the Interest Only Expiration Date over a twenty-five
(25) year period assuming a rate of interest per annum equal to the Base Rate
(with interest calculated on the basis of actual number of days elapsed and a
three hundred sixty (360) day year).
At any time while an Event of Default has occurred and is
continuing, the Borrower shall, in addition to the Monthly Debt Service Payment
and other amounts due hereunder, be liable for the payment of interest at the
Default Interest Rate (rather than the Interest Rate) (which interest is payable
both before and after Lender has obtained a judgment with respect to the Loan);
provided, however, that for the purposes of this sentence, an Event of Default
shall be considered to have occurred and be continuing only until such Event of
Default has been cured, including, without limitation, pursuant to the
provisions of SECTION 7.1.3 hereof, if applicable. Following the occurrence of a
Lockbox Event, the priority of payment of Default Interest shall be as set forth
in the Cash Management Procedures attached as Schedule 5.11 hereto). Payment or
acceptance of the increased rates provided for in this SECTION 2.4.4(b) is not a
permitted alternative to timely payment or full performance by Borrower and
shall not constitute a waiver of any Default or Event of Default or an amendment
to this Agreement or any other Loan Document and shall not otherwise prejudice
or limit any rights or remedies of Lender.
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(c) From and after the Anticipated Repayment Date, interest shall
accrue on the outstanding principal balance of the Mortgage Note at the Adjusted
Interest Rate. Payment of all interest accruing in respect of the Mortgage Note
after the Anticipated Repayment Date in the amount equal to the difference
between the amount that accrues at the Adjusted Interest Rate and the amount
that is paid (whether as part of each Scheduled Principal and Interest Payment,
if applicable, or otherwise) at the Base Rate ("ACCRUED INTEREST") shall be (a)
deferred, and (b) to the extent permitted by applicable law, accrue interest at
the Adjusted Interest Rate. If not sooner paid, all Accrued Interest together
with interest thereon (to the extent permitted by applicable law) shall be due
and payable in full on the Final Maturity Date. From and after the Anticipated
Repayment Date, Borrower shall pay to Lender on each Due Date (without
duplication), until the entire Debt is repaid in full, Excess Cash Flow for the
Debt Service Period relating to such Due Date; each monthly payment of Excess
Cash Flow made by Borrower under the Mortgage Note after the Anticipated
Repayment Date shall be applied first to the reduction of the outstanding
principal balance of the Mortgage Note and after the principal balance of the
Mortgage Note has been paid in full to the reduction of the outstanding amount
of Accrued Interest (together with any interest thereon).
(d) In addition to Default Interest, in the event Borrower fails
to make any Monthly Debt Service Payment, Yield Maintenance Payment or other
payment hereunder when due, Borrower shall be liable for the payment of a late
charge equal to five percent (5%) of the amount of the payment (the "LATE
PAYMENT FEE"); provided, however, prior to a Securitization, Borrower shall not
be liable to pay a Late Payment Fee the first time Borrower fails to make a
Monthly Debt Service Payment when due. Following the occurrence of a Lockbox
Event, the priority of payment of a Late Payment Fee shall be as set forth in
the Cash Management Procedures. Payment or acceptance of a Late Payment Fee
under this SECTION 2.4.4(d) is not a permitted alternative to timely payment or
full performance by Borrower and shall not constitute a waiver of any Default or
Event of Default or an amendment to this Agreement or any other Loan Document
and shall not otherwise prejudice or limit any rights or remedies of Lender.
Borrower acknowledges that its obligation to pay a Late Payment Fee may be
separated from the other obligations of Borrower hereunder, and may be held or
transferred separately from the other obligations of Borrower hereunder.
(e) Notwithstanding the foregoing SECTION 2.4.4(c), at the option
of Lender, which option shall be exercised prior to the Securitization, Lender
may require that the applicable provisions of Section 2.4.4(c) (and the
equivalent provisions of the Note) be modified to provide that all Monthly Debt
Service Payments from and after the Anticipated Repayment Date shall be interest
only. Borrower agrees to enter into such modifications to the Loan Documents as
may be requested by Lender in order to effectuate the foregoing.
2.4.5. INSUFFICIENT PAYMENTS
In the event that Borrower fails to pay all amounts due and
payable on the Mortgage Note on any Due Date, unless otherwise determined by
Lender, all cash paid by the Borrower on such date and all proceeds realized on
the sale of Collateral pursuant to any of the Loan Documents shall be applied in
the following order of priority to the extent of the cash so paid or proceeds
realized:
FIRST: to pay (a) all amounts that are due and unpaid under
SECTION 12.7.1 hereof and under SECTION 7.5 hereof, if applicable, (b)
all costs, if any, incurred
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by Lender in acting on behalf of Borrower as provided in the Loan
Documents and (c), if applicable, all costs and expenses incurred by the
Lender in enforcing this Loan Agreement and any of the other Loan
Documents, including all costs and expenses of the foreclosure and/or
sale of the Collateral or any part thereof or any interest therein, and
all costs and expenses of entering upon, taking possession of, removing,
holding, constructing improvements on, and operating and managing the
Collateral or any part thereof, and all costs and expenses of repairs,
renewals, replacements, additions, betterments, and improvements to the
Collateral, in each case in accordance with the Loan Documents, and all
reasonable attorneys' and accountants' fees and disbursements, including
any appraisals that may reasonably be required by Lender, incurred in
connection with any of the foregoing, together with any compensation
payable under SECTION 4.3 of the Mortgage;
SECOND: to pay interest at the Base Rate then due and payable on
the Mortgage Note;
THIRD: to pay all amounts of principal due and payable on the
Mortgage Note (whether at maturity, on a date fixed for any payment or
prepayment thereof, upon acceleration, or otherwise), until the
principal balance has been reduced to zero;
FOURTH: to pay any Yield Maintenance Payments then due and
payable;
FIFTH: to pay any Default Interest and Late Payment Fees then due
and payable; and
SIXTH: to pay Accrued Interest, if any (plus interest thereon at
the Adjusted Rate).
All proceeds realized upon the sale of Collateral pursuant to any of the Loan
Documents shall be applied in accordance with the foregoing as of the Due Date
next occurring following any such sale.
2.5. DEFEASANCE
(a) At any time during the period commencing on (i) the first
Business Day after the date that is the earlier of (A) two (2) years after the
"startup day," within the meaning of Section 860G(a)(9) of the Code, of a "real
estate mortgage investment conduit," within the meaning of Section 860D of the
Code (a "REMIC"), that holds the Mortgage Note and (B) three (3) years after the
Closing Date, and ending on (ii) the Anticipated Repayment Date (such period
being sometimes referred to herein as the "DEFEASANCE PERIOD"), and provided no
Event of Default has occurred and is continuing (other than an Event of Default
that will be cured by the release of a Mortgaged Property or Mortgaged
Properties from the Lien of the Security Documents pursuant to the provisions of
SECTION 7.1.3 hereof), Borrower may voluntarily defease all or any portion of
the Loan by providing Lender with the Defeasance Deposit (hereinafter, a
"DEFEASANCE EVENT"). Each Defeasance Event by the Borrower shall be subject to
the satisfaction of the following conditions precedent:
(i) Borrower shall provide not less than twenty (20) days prior
written notice
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to Lender specifying a regularly scheduled payment date (the "DEFEASANCE
DATE") on which the Defeasance Event is to occur. Such notice shall
indicate the principal amount of the Mortgage Note to be defeased;
(ii) Borrower shall pay to Lender all accrued and unpaid interest
on the principal balance of the Mortgage Note to but not including the
Defeasance Date. If for any reason the Defeasance Date is not a regularly
scheduled payment date, the Borrower shall also pay interest that would
have accrued on the Mortgage Note through the next regularly scheduled
payment date;
(iii) Borrower shall pay to Lender all other sums, not including
scheduled interest or principal payments, due under the Mortgage Note,
this Agreement, the Mortgage, and the other Loan Documents;
(iv) Borrower shall pay to Lender the required Defeasance Deposit
for the Defeasance Event;
(v) In the event only a portion of the Loan is the subject of
the Defeasance Event, Borrower shall prepare all necessary documents to
amend and restate the Note and issue two substitute notes, one note having
a principal balance equal to the defeased portion of the original Note
(the "DEFEASED NOTE") and the other note having a principal balance equal
to the undefeased portion of the Note (the "UNDEFEASED NOTE"). The
Defeased Note and Undefeased Note shall have identical terms as the Note
except for the principal balance. A Defeased Note cannot be the subject of
any further Defeasance Event;
(vi) Borrower shall execute and deliver a security agreement, in
form and substance satisfactory to Lender, creating a first priority lien
on the Defeasance Deposit and the U.S. Obligations purchased with the
Defeasance Deposit in accordance with this provision of this SECTION 2.5
(the "DEFEASANCE SECURITY AGREEMENT");
(vii) Borrower shall deliver an opinion of counsel for Borrower
in form satisfactory to Lender in its sole discretion stating, among other
things, that Borrower has legally and validly transferred and assigned the
U.S. Obligations and all obligations, rights and duties under and to the
Mortgage Note or Defeased Note (as applicable) to the Successor Borrower,
that Lender has a perfected first priority security interest in the
Defeasance Deposit and the U.S. Obligations delivered by Borrower, that
such Defeasance will not adversely affect the status of the entity holding
the interest in the Mortgage Note as a REMIC (assuming for such purpose
that such entity otherwise qualifies as a REMIC) and that such Defeasance
will not result in a deemed exchange of the Certificates pursuant to
Section 1001 of the Code;
(viii) Borrower shall deliver a Rating Comfort Letter from the
Rating Agencies in connection with the Defeasance Event. If required by
the applicable Rating Agencies, Borrower shall also deliver or cause to be
delivered a Substantive Non-Consolidation Opinion with respect to the
Successor Borrower in form and substance satisfactory to Lender and the
applicable Rating Agencies;
(ix) Borrower shall deliver an Officer's Certificate certifying
that the
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requirements set forth in this SECTION 2.5(a) have been satisfied;
(x) Borrower shall deliver to Lender a certificate of Borrower's
independent certified public accountant certifying that the U.S.
Obligations purchased with the Defeasance Deposit will generate monthly
amounts equal to or greater than the required Scheduled Defeasance
Payments;
(xi) Borrower shall deliver such other certificates, documents or
instruments as Lender may reasonably request; and
(xii) Borrower shall pay all costs and expenses of Lender
incurred in connection with the Defeasance Event, including any costs and
expenses associated with a release of the Lien of the Mortgage as provided
in SECTION 2.8 hereof or SECTION 2.9 hereof, as applicable, as well as
reasonable attorneys' fees and expenses.
(b) In connection with each Defeasance Event, 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 Due Dates after the
Defeasance Date upon which interest payments are required under the Mortgage
Note, in the case of a Defeasance Event for the entire outstanding principal
balance of the Loan, or the Defeased Note, in the case of a Defeasance Event for
only a portion of the outstanding principal balance of the Loan, as applicable,
and in amounts equal to the scheduled payments due on such Due Dates under the
Mortgage Note or the Defeased Note, as applicable, and assuming such Mortgage
Note or Defeased Note is paid in full on the Anticipated Repayment Date (the
"SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the Defeasance Security
Agreement or other appropriate document, shall authorize and direct that the
payments received from the U.S. Obligations may be made directly to the Cash
Collateral Account (unless otherwise directed by Lender) and applied to satisfy
the obligations of Borrower under the Mortgage Note or the Defeased Note, as
applicable.
2.6. RELEASE OF PROPERTY
Except as set forth in SECTION 2.7, SECTION 2.8, SECTION 2.9 or
SECTION 2.10, no repayment, prepayment or defeasance of all or any portion of
the Mortgage Note shall cause, give rise to a right to require, or otherwise
result in, the release of the Lien of the Mortgage on any of the Mortgaged
Properties.
2.7. PARTIAL RELEASE IN CONNECTION WITH A CASUALTY OR TAKING BEFORE
DEFEASANCE PERIOD
In the event that, prior to (a) the first day of the Defeasance
Period, a Mortgaged Property has suffered a total or substantial Taking or
Casualty (in each case, as to which Restoration is not required or permitted
under the Mortgage) or (b) a Securitization, a Default of the type described in
SECTION 7.1.3 occurs that can be cured by a Release of a Mortgaged Property from
the lien of the Security Documents, Borrower shall cause the Release of such
Mortgaged Property from the Lien of the Security Documents upon the satisfaction
of the following conditions:
(a) Borrower shall provide not less than thirty (30) days notice
to Lender specifying a Due Date on which the amount set forth in clause (c)
below is to be provided to Lender, which notice shall be accompanied by a
certificate of Borrower, signed by a duly
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authorized officer of Borrower, to the effect that no Default or Event of
Default has occurred and is continuing (or, in the case of a Default or Event of
Default that shall be cured or avoided by the Release of the affected Mortgaged
Property, describing the nature of such Default or Event of Default, and
certifying that such Default or Event of Default shall be cured by such Release)
and that such Release will comply with all applicable requirements of this
SECTION 2.7;
(b) Borrower shall pay to Lender all interest that is accrued and
unpaid on the principal balance of the Mortgage Note and all other sums due
under the Loan Documents, through and including such Due Date, including,
without limitation, all reasonable costs and expenses of Lender incurred in
connection with the Release, including any costs and expenses associated with a
release of the Lien of the Security Documents and reasonable attorneys' fees and
expenses;
(c) Borrower shall pay to Lender, to be applied to prepayment of
the outstanding principal balance of the Loan, an amount equal to (1) in the
case of a prepayment pursuant to clause (b) of the first paragraph of this
SECTION 2.7, the Release Price and the Yield Maintenance Payment for such
Mortgaged Property or (2) in the case of a Release pursuant to clause (a) of the
first paragraph of this SECTION 2.7, an amount equal to the greater of (a) and
(b), in which (a) is the Allocated Loan Amount for such Mortgaged Property and
(b) is the lesser of (x) the Release Price for such Mortgaged Property and (y)
the sum of the Net Sales Proceeds received by Borrower from the sale of the
Mortgaged Property or the part thereof that remains following the Taking or
Casualty, plus the remaining Award or Insurance Proceeds not previously applied
to repayment of the Loan or Restoration;
(d) Borrower shall deliver to Lender, for execution, forms of
release of such Mortgaged Property from the Lien of the Security Documents
appropriate for the jurisdiction in which such Mortgaged Property is located;
(e) if the Release is being requested in order to avoid an Event
of Default pursuant to SECTION 7.1.3 hereof, Borrower shall deliver to Lender
evidence reasonably satisfactory to Lender, that after giving effect to such
Release, the Debt Service Coverage Ratio for the Remaining Mortgaged Properties
shall be equal to the greater of (i) 2.22:1 (on or before April 16, 2003) or
1.81:1 (on or after April 17, 2003) and (ii) the Debt Service Coverage Ratio for
the Remaining Mortgaged Properties and the Mortgaged Properties to be released
for the twelve (12) full calendar months immediately preceding the release of
the Mortgaged Properties to be released;
(f) Borrower shall provide to Lender an opinion of counsel in
form and substance, and from a firm, acceptable to Lender in the exercise of its
sole discretion, that such Release would not adversely affect the status of the
entity holding the interest in the Mortgage Note as a REMIC (assuming for such
purpose that such entity otherwise qualifies as a REMIC) and that such Release
will not result in a deemed exchange of the Certificates pursuant to Section
1001 of the Code.
2.8. RELEASE OF ALL THE PROPERTIES DURING DEFEASANCE PERIOD
(a) At any time during the Defeasance Period, if Borrower has
elected to defease the entire outstanding principal balance of the Mortgage Note
and the requirements of
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SECTION 2.5 have been satisfied, all of the Mortgaged Properties shall be
released from the Lien of the Mortgage and the U.S. Obligations, pledged
pursuant to the Defeasance Security Agreement, shall be the sole source of
collateral securing the Note.
(b) In connection with the release of the Lien, Borrower shall
submit to Lender, not less than thirty (30) days prior to the Release Date, a
release of Lien (and related Loan Documents) for each Mortgaged Property for
execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which a Mortgaged Property is located and satisfactory to Lender
in its sole discretion. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release, together with an Officer's Certificate certifying
that such documentation (i) is in compliance with all Laws, and (ii) will effect
such Releases in accordance with the terms of this Agreement.
2.9. RELEASE OF INDIVIDUAL MORTGAGED PROPERTIES DURING THE
DEFEASANCE PERIOD
At any time during the Defeasance Period, in connection with any
Defeasance of less than the entire principal balance of the Mortgage Note,
Borrower may obtain (i) the Release of one or more Mortgaged Properties from the
Lien of the Mortgage thereon (and related Loan Documents) and (ii) the release
of Borrower's obligations under the Loan Documents with respect to such
Mortgaged Properties (other than those expressly stated to survive), upon
satisfaction of each of the following conditions:
(a) the principal balance of the Defeased Note issued in
connection with such Defeasance shall equal or exceed the aggregate Release
Prices for the Mortgaged Properties then being Released;
(b) the requirements of SECTION 2.5 have been satisfied;
(c) Borrower shall submit to Lender, not less than thirty (30)
days prior to the date of such Release, a release of Lien (and related Loan
Documents) for each such Mortgaged Property for execution by Lender. Such
release shall be in a form appropriate in the jurisdiction in which such
Mortgaged Property is located and satisfactory to Lender in its sole discretion.
In addition, Borrower shall provide all other documentation Lender reasonably
requires to be delivered by Borrower in connection with such release, together
with an Officer's Certificate certifying that such documentation (i) is in
compliance with all Laws, (ii) will effect such release in accordance with the
terms of this Agreement, and (iii) will not impair or otherwise adversely affect
the Liens, security interests and other rights of Lender under the Loan
Documents not being released (or as to the parties to the Loan Documents and
Mortgaged Properties subject to the Loan Documents not being released); and
(d) After giving effect to such release, the Debt Service
Coverage Ratio for the Remaining Mortgaged Properties shall be equal to the
greater of (i) 2.22:1 (on or before April 16, 2003) or 1.81:1 (on or after April
17, 2003), and (ii) the Debt Service Coverage Ratio for the Remaining Mortgaged
Properties and the Mortgaged Properties to be released for the twelve (12) full
calendar months immediately preceding the release of the Mortgaged Properties to
be released.
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2.10. PARTIAL RELEASE AFTER DEFEASANCE PERIOD
On any Due Date occurring on or after the last day of the
Defeasance Period, upon the sale of any Mortgaged Property to any Person,
Borrower may cause the Release of such Mortgaged Property from the Lien of the
Security Documents upon the satisfaction of the following conditions:
(a) Borrower shall provide not less than thirty (30) days notice
to Lender specifying a Due Date on which the amount set forth in clause (c)
below is to be provided to Lender, which notice shall be accompanied by a
certificate of Borrower, signed by a duly authorized officer of Borrower, to the
effect that no Default or Event of Default has occurred and is continuing (or,
in the case of a Default or Event of Default that shall be cured or avoided by
the Release of the affected Mortgaged Property, describing the nature of such
Default or Event of Default, and certifying that such Default or Event of
Default shall be cured by such Release) and that such Release will comply with
all applicable requirements of this SECTION 2.10;
(b) Borrower shall pay to Lender all interest that is accrued and
unpaid on the principal balance of the Mortgage Note and all other sums due
under the Loan Documents, through and including such Due Date;
(c) Borrower shall pay to Lender, to be applied to the
outstanding principal balance of the Loan, an amount equal to the Release Price
of such Mortgaged Property; provided, however, that (A) if a Mortgaged Property
is released pursuant to this SECTION 2.10 as a result of a Casualty or a Taking
as to which Restoration is not required or permitted under the Mortgage, such
payment shall be an amount equal to the greater of (a) and (b), in which (a) is
the Allocated Loan Amount for such Mortgaged Property and (b) is the lesser of
(x) the Release Price for such Mortgaged Property and (y) the sum of the Net
Sales Proceeds received by Borrower from the sale of the Mortgaged Property or
the part thereof that remains following the Taking or Casualty plus the
remaining Award or Insurance Proceeds not previously applied to repayment of the
Loan or Restoration;
(d) Borrower shall deliver to Lender, for execution, forms of
release of such Mortgaged Property from the Lien of the Security Documents
appropriate for the jurisdiction in which such Mortgaged Property is located;
(e) unless the Release is being made in connection with a
Casualty or Taking (as to which Restoration is not required or permitted under
the Mortgage), after giving effect to such Release, the Debt Service Coverage
Ratio for the Remaining Mortgaged Properties shall be at least equal to the
greater of (i) 2.22:1 (on or before April 6, 2003) or 1.81:1 (on or after April
17, 2003), and (ii) the Debt Service Coverage Ratio for the Remaining Mortgaged
Properties and the Mortgaged Property to be released for the twelve (12) full
calendar months immediately preceding the release of the Mortgaged Property to
be released; and
(f) Borrower shall provide to Lender an opinion of counsel in
form and substance, and from a firm, acceptable to Lender in the exercise of its
sole discretion, that such Release would not adversely affect the status of the
entity holding the interest in the Mortgage Note as a REMIC (assuming for such
purpose that such entity otherwise qualifies as a REMIC) and that such
Defeasance will not result in a deemed exchange of the Certificates pursuant to
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Section 1001 of the Code.
Sales of personal property at a Mortgaged Property in the
ordinary course of business may be made pursuant to SECTION 1.23 of the Mortgage
without regard to SECTION 2.7, SECTION 2.8, SECTION 2.9 OR SECTION 2.10 hereof.
2.11. YIELD MAINTENANCE
2.11.1.
If all or any part of the principal amount of the Loan is prepaid
after the Closing Date but prior to the last day of the Defeasance Period as a
result of the acceleration of the maturity of the Mortgage Note after an Event
of Default (or if a Mortgaged Property is released for the purpose set forth in
SECTION 7.1.3 after the Closing Date but prior to the Securitization), Borrower
shall be required to pay a prepayment premium (the "YIELD MAINTENANCE PAYMENT")
on the Mortgage Note equal to the greater of (A) one percent (1%) of the amount
of the principal prepayment that is to be applied to the Mortgage Note and (B)
the present value as of the end of the applicable Debt Service Period,
discounted at the Reinvestment Yield, of a series of payments each equal to the
Payment Differential on each of the remaining Due Dates prior to and including
the Anticipated Repayment Date, after giving effect to the regularly scheduled
payment of principal that is to be made on the Prepayment Date. No Yield
Maintenance Payment shall be required in connection with prepayments made on or
after the last day of the Defeasance Period.
2.11.2.
Promptly following the acceleration of the Mortgage Note or
following the occurrence of any other event, the occurrence of which obligates
Borrower to make a Yield Maintenance Payment, Lender shall notify Borrower of
the amount and basis of determination of the applicable Yield Maintenance
Payment promptly upon determining the Treasury Rate, as contemplated below.
Absent manifest error, Borrower shall not dispute Lender's calculations
hereunder.
For purposes of this SECTION 2.11, the following terms shall have
the meanings ascribed to them below:
"PAYMENT DIFFERENTIAL" means, an amount equal to (x) the Base
Rate, minus the Reinvestment Yield, divided by (y) 12, and multiplied by
(z) the amount of the principal prepayment.
"REINVESTMENT YIELD" is the Treasury Rate converted to a monthly
compounded nominal annual yield.
"TREASURY RATE" is equal to the lesser of (A) the annual yield on
the United States Treasury issue (primary issue) with a maturity date
closest to the Final Maturity Date and (B) the yield on the United
States Treasury issue (primary issue) with a maturity equal to the
remaining average life of the Mortgage Note, with each such yield being
based on the bid price for such issue as published in The Wall Street
Journal on the date that is fourteen (14) days prior to (x) the
applicable Prepayment Date set forth
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in the notice of prepayment provided by the Borrower or (y) the date of
acceleration by the Lender (or if such bid price is not published on
that date, the next preceding date on which such bid price is so
published).
2.12. SUCCESSOR BORROWER
In connection with any release of a Lien under SECTION 2.8 or
SECTION 2.9, Lender shall establish or designate a successor entity (the
"SUCCESSOR BORROWER") which shall be a single purpose bankruptcy remote entity
approved by Lender, and Borrower shall transfer and assign all obligations,
rights and duties under and to the Mortgage Note (in the event of a Release
pursuant to SECTION 2.8) or the Defeased Note (in the event of a Release
pursuant to SECTION 2.9), as applicable, together with the pledged U.S.
Obligations to such Successor Borrower. Such Successor Borrower shall assume the
obligations under the Mortgage Note or the Defeased Note, as applicable, and the
Defeasance Security Agreement and Borrower shall be relieved of its obligations
under such documents. The Borrower shall pay $1,000 to any such Successor
Borrower as consideration for assuming the obligations under the Mortgage Note
or the Defeased Note, as applicable, and the Defeasance Security Agreement.
Notwithstanding anything in this Agreement to the contrary, no other assumption
fee shall be payable upon a transfer of the Mortgage Note in accordance with
this SECTION 2.12, but Borrower shall pay all costs and expenses incurred by
Lender, including Lender's attorneys' fees and expenses, incurred in connection
therewith.
3. REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and the other Loan
Documents and to make the Loan to Borrower, Borrower makes the following
representations and warranties. For purposes of this Article 3, references to
the knowledge of Borrower or to information known by Borrower, shall be deemed
to include the knowledge of, or information known by, Arden OP and Xxxxx XXXX.
3.1. ORGANIZATION AND POWER OF BORROWER AND EQUITY MEMBER
Borrower (i) is duly organized and validly existing as a limited
liability company in good standing under the laws of the State of Delaware, (ii)
has full power and authority to enter into, execute, deliver and perform this
Agreement, the Mortgage Note, and the other Loan Documents and Transaction
Documents and to consummate the transactions contemplated hereby and thereby,
(iii) has full power and authority to mortgage or assign all of its right, title
and interest in and to the Mortgaged Properties and the other Collateral, (iv)
has full power and authority to transact the business in which it is now
engaged, or proposes to engage, (v) has power and authority and is duly
qualified to transact such business as a foreign limited liability company under
the laws of all jurisdictions in which the Mortgaged Properties are located, and
in all jurisdictions where the nature of Borrower's business or the character of
properties owned, leased, operated or otherwise held by Borrower makes such
qualification necessary and (vi) is a special purpose entity established for the
sole purpose of owning and operating the Mortgaged Properties or causing the
Mortgaged Properties to be operated and entering into the transactions
contemplated by the Transaction Documents and performing activities incidental
and related to the operation of the Mortgaged Properties. All of the membership
interests in
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Borrower have been duly and validly authorized and issued and are owned by the
Equity Member and Special Member free and clear of any liens, encumbrances,
equities or claims. The Equity Member (i) is duly organized and validly existing
as a limited partnership in good standing under the laws of the State of
Maryland, (ii) has full power and authority to execute, deliver, and perform
this Agreement and the other Loan Documents and Transaction Documents to which
it is a party, whether for itself or on behalf of Borrower, and (iii) is duly
qualified to transact business as a foreign limited partnership in good standing
under the laws of each jurisdiction which requires such qualification, except
when the failure to be so qualified, considering all such failures in the
aggregate, would not be reasonably likely to have a material adverse effect on
the financial condition, business or results of operations of Equity Member or
Borrower or on the ownership, use or value of any of the Mortgaged Properties.
Borrower has its principal place of business, principal office and office where
it keeps its records and other documents and instruments relating to the
Mortgaged Properties (except for certain records, documents and instruments kept
at the Mortgaged Properties) at its address set forth in SECTION 12.3.
3.2. DUE AUTHORIZATION AND EXECUTION
The execution, delivery and performance by Borrower of this
Agreement and each of the other Loan Documents and Transaction Documents have
been duly authorized by all requisite actions by and on behalf of Borrower and
are within the limited liability company power of Borrower, and this Agreement
and all other Loan Documents and Transaction Documents executed and delivered by
Borrower have been duly executed by Borrower and constitute the valid and
binding obligations of Borrower, enforceable against Borrower, in accordance
with their respective terms, subject to the effects of applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights generally and general principles of
equity (whether considered in a proceeding in equity or at law).
3.3. NO CONSENTS REQUIRED; NO CONTRAVENTION
Except for consents and approvals that have already been obtained
and are in full force and effect, no consent, license, approval or authorization
of, or registration or declaration with, any Governmental Authority, commission,
bureau, agency or other Person is required in connection with the execution,
delivery and performance of this Agreement, the Mortgage Note, or any of the
other Loan Documents or Transaction Documents or the consummation of the
transactions contemplated hereby and thereby. Neither the execution and delivery
by Borrower of this Agreement nor of the other Loan Documents or other
Transaction Documents, the consummation of the transactions contemplated hereby
or thereby, nor the fulfillment by Borrower of, or compliance by Borrower with,
the terms and conditions of this Agreement or the Loan Documents or other
Transaction Documents:
(a) will result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any Laws or any judgment, decree
or order binding on Borrower or its properties or assets;
(b) will conflict with or result in any breach or violation of
any of the terms, conditions or provisions of the organizational documents of
Borrower; or
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(c) will result in a breach or violation of or constitute a
default under any existing material agreement or instrument to which Borrower or
its assets are a party or by which Borrower is bound.
3.4. TITLE TO PROPERTIES
Borrower has good and marketable title to the Mortgaged
Properties, including good and marketable fee simple in and to the Land, and
good and marketable title in and to the Improvements located thereon, in each
case free and clear of all Liens except for Permitted Liens, and Borrower has
good title in all other assets that serve as Collateral for the Loan (which, in
the case of assets leased by Borrower, shall mean a good and valid leasehold
interest in such assets), free and clear of all Liens except Permitted Liens.
The Permitted Liens do not and will not materially and adversely affect (i) the
ability of Borrower to pay in full the principal and interest when due on the
Mortgage Note or (ii) the use of the Mortgaged Properties for the use currently
being made thereof or the operation of the Mortgaged Properties as they
currently are being operated. Borrower has no interest in real property other
than the Mortgaged Properties, including the Land and Improvements related
thereto. Each Mortgaged Property constitutes one or more separate tax lots that
do not share tax liability with other real property except property that is (a)
owned in full by Borrower and (b) encumbered by a Lien in favor of the Lender
securing the Loan.
3.5. MANAGEMENT AGREEMENT
The execution, delivery and performance by Borrower of the
Management Agreement has been duly authorized by all requisite actions by and on
behalf of Borrower and are within the limited liability company power of
Borrower and the Management Agreement has been duly executed by Borrower and the
Manager and constitute the valid and binding obligations of Borrower and the
Manager, enforceable against Borrower and the Manager in accordance with their
terms, subject to the effects of applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, and similar laws relating to or
affecting creditors' rights generally and general principles of equity (whether
considered in a proceeding in equity or at law).
3.6. LEASES
(a) Borrower is the sole owner of the entire lessor's interest in
the Leases; (b) the Leases are valid and enforceable subject to the effects of
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights
generally and general principles of equity (whether considered in a proceeding
in equity or at law); (c) the material economic terms of all alterations,
modifications and amendments to the Leases are reflected in the certified
occupancy statement delivered to and approved by Lender; (d) none of the rents
reserved in the Leases have been assigned or otherwise pledged or hypothecated
(other than to Lender); (e) except as may otherwise be permitted herein, none of
the Rents have been collected for more than one (1) month in advance; (f) the
premises demised under the Leases have been completed and the tenants under the
Leases have been accepted the same and have taken possession of the same on a
rent-paying basis except as otherwise shown on SCHEDULE 3.6 attached hereto and
except for
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tenant improvement work that is in process that has been previously disclosed to
Lender; (g) there currently exist no offsets or defenses to the payment of any
portion of the Rents, except as otherwise shown on SCHEDULE 3.6 attached hereto;
(h) no Lease contains an option to purchase, right of first refusal to purchase,
or any other similar provision; and (i) no person or entity has any possessory
interest in, or right to occupy, the Property except under and pursuant to a
Lease.
3.7. UTILITIES
(i) All utility services and facilities (including water,
sanitary sewer, storm sewer, gas and electrical services and facilities)
necessary for the present and proposed use of the Mortgaged Properties are
available to the Mortgaged Properties and, except as shown on the surveys or
title reports for the Mortgaged Properties, enter the Mortgaged Properties
either through adjoining public streets or through private lands pursuant to
valid, unsubordinated, perpetual, enforceable and recorded public or private
easements; (ii) all utility connections for the Mortgaged Properties have been
completed, installed and paid for; (iii) except as shown on the surveys or title
reports for the Mortgaged Properties and except for encroachments that would not
reasonably be expected to materially and adversely affect the operation of the
applicable Mortgaged Property, no Improvements on the Land are located upon any
public utility lines or upon any private utility lines serving property other
than the Mortgaged Properties, or encroach upon any property adjoining the
Mortgaged Properties or encroach upon any utility easements or rights-of-way;
and (iv) neither Borrower nor Equity Member has received any notice from any
utility that any utility services utilized by the Mortgaged Properties will be
revoked or otherwise terminated.
3.8. NO VIOLATIONS
No notices of any material violation of law or municipal
ordinances or of federal, state, county or municipal or other governmental
agency regulations, orders or requirements relating to the Collateral have been
entered against or received by Borrower or Equity Member and neither Borrower
nor Equity Member has reason to believe that any such notice may or will be
entered or received.
3.9. OTHER AGREEMENTS
Neither Borrower nor Equity Member is a party to any agreement,
instrument, indenture, or other contract or subject to any charter or other
restriction that could materially adversely affect, or threaten to materially
adversely affect, its business, operations, prospects, properties, assets or
condition (financial or otherwise). No material default by Borrower or Xxxxx
XXXX has occurred or is continuing (nor has there occurred any continuing event
which, with giving of notice or the passage of time or both, would constitute
such a default) under any material contracts, material agreements or material
orders to which Borrower or Equity Member, as the case may be, is a party or by
which it is bound and, to the knowledge of Borrower, no material default by a
third party has occurred or is continuing (nor has there occurred any continuing
event which, with the giving of notice or the passage of time, or both, would
constitute such a default) under any such contracts, agreements or orders. No
holder of any indebtedness of Borrower or Equity Member has given notice of any
default thereunder,
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and no liquidation or dissolution of Borrower or Equity Member, and no
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings relative to Borrower or Equity Member or any of their properties, is
pending or, to the knowledge of Borrower or Equity Member, threatened against
them or their properties.
3.10. PAYMENT OF TAXES
(i) Borrower and Equity Member have filed or have caused to be
filed all federal, state, local, and foreign income, excise, property and other
tax returns with respect to their operations, that are required to be filed,
(ii) all such returns are true and correct in all material respects, and (iii)
Borrower and Equity Member have paid or caused to be paid in full all taxes as
shown on such returns or on any assessment received by them, to the extent that
such taxes have become due. Except as so disclosed, the amounts reserved as a
liability for income and other taxes that may become payable are sufficient for
the payment of all such unpaid taxes of Borrower or Equity Member, whether or
not disputed, for which Borrower or Equity Member may be liable in its own right
or as a transferee of the assets of, or as successor to, any other person or
entity.
3.11. LITIGATION
There is no legal or governmental action, suit or proceeding
(including any condemnation proceeding) pending to which Borrower or Equity
Member is a party or of which any property of Borrower or Equity Member is
subject which, if determined adversely to Borrower or Equity Member, as the case
may be, would individually or in the aggregate have a material adverse effect on
the Mortgaged Properties, or on the financial position, business or results of
operations of Borrower or Equity Member or that might affect in any material
respect the transactions contemplated by this Agreement and, to the knowledge of
Borrower and Equity Member, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
3.12. REGULATION U
Neither Borrower nor Equity Member is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as now and
from time to time hereafter in effect, and no proceeds of the Loan will be used
for any purpose (and Borrower has not taken or will take any action) which might
cause this Agreement or any Loan Document to violate said Regulation U or any
other regulation of the Board of Governors of the Federal Reserve System (in
each case as in effect on the date hereof or as the same may hereinafter be in
effect).
3.13. INVESTMENT COMPANY ACT
Neither Borrower nor the Equity Member is an "investment company"
or a company "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended and none is an open-ended
investment company, unit trust or face-amount certificate company that is or is
required to be registered under Section 8 of the
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Investment Company Act.
3.14. TRANSACTIONS WITH AFFILIATES
Excluding all transactions contemplated by the Loan Documents, no
officer of Borrower, and no other Affiliate of Borrower or of any such officer,
is currently a party to any transaction with Borrower, including any contract,
agreement or other arrangement providing for the employment of, furnishing of
advisory or other services by, purchase or lease of real or personal property
from, or otherwise requiring payments to, any such officer or Affiliate, except
on terms that are fair and reasonable and no less favorable to Borrower than
would be expected in arms-length transactions with third parties where neither
party is under duress or under any extraordinary compulsion to enter into such
contract, agreement or arrangement.
3.15. BUSINESS PURPOSE; NON-SUBORDINATION
The Loan is solely for the business purpose of Borrower, and is
not for personal, family, household or agricultural purposes. The obligations of
Borrower under this Agreement, the Mortgage Note, and each of the other Loan
Documents, and the indebtedness evidenced by the Mortgage Note, are not
subordinated in right of payment or otherwise to any other obligation of
Borrower or to any rights of others.
3.16. PERMITS AND LICENSES
Borrower has all material permits, licenses and authorizations
necessary to conduct its business in the same manner as the business conducted
by Arden OP and Xxxxx XXXX immediately prior to the transfer of the Mortgaged
Properties to Borrower. No proceedings are pending or, to the best of Borrower's
and Equity Member's knowledge, threatened seeking the revocation or suspension
of any permits, licenses or approvals issued with respect to the Mortgaged
Properties the revocation of which might reasonably be expected to result in any
material adverse change in the business, operations, prospects, properties,
assets or condition (financial or otherwise) of Borrower or any of the Mortgaged
Properties. No such permits, licenses or approvals shall be altered or amended
in any materially adverse respect, nor shall Borrower or Equity Member make any
attempt to alter or amend the same, in any materially adverse respect, without
the prior written consent of Lender, which shall not be unreasonably withheld.
3.17. PATENTS AND TRADEMARKS
Borrower owns or possesses the right to use all patents,
trademarks, service marks, trade names, copyrights, licenses, franchises,
permits and rights with respect to the foregoing, necessary to own and operate
its properties and to carry on its business as presently conducted and presently
planned to be conducted without conflict with any rights of others.
3.18. INSURANCE
Borrower has obtained or caused to be obtained all insurance
policies required by SECTION 8.1 hereof and by each of the Mortgages, in each
case with Qualified Insurance
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Companies and all such policies are in full force and effect.
3.19. ERISA
Borrower has no employees, and Borrower does not maintain or
sponsor any Plan. Borrower is not obligated to make contributions on behalf of
the employees of any Person to any Plan.
3.20. NO NOTICE OF NON-COMPLIANCE
Neither Borrower nor Equity Member nor Xxxxx XXXX has received
any notice from any insurance company which has issued a policy with respect to
the Mortgaged Properties or from any State Board of Fire Underwriters (or any
other body exercising similar functions) requiring the performance of any
repairs, alterations or other work, which repairs, alterations or other work
have not been completed at the Mortgaged Properties. Neither Borrower nor Equity
Member nor Xxxxx XXXX has received any notice of default or breach which has not
been cured under any covenant, condition, restriction, right-of-way, reciprocal
easement agreement or other easement or agreement affecting the Mortgaged
Properties which is to be performed or complied with by it.
3.21. COMPLIANCE WITH LAWS
Borrower and each Mortgaged Property is in compliance with all
Laws, except for such non-compliance as would not reasonably be expected, singly
or in the aggregate, to materially and adversely affect any Mortgaged Property
or the business, operations, prospects, assets, properties or condition
(financial or otherwise) of Borrower.
3.22. COMPLIANCE WITH ENVIRONMENTAL LAWS
To the best of Borrower's knowledge, each of the Mortgaged
Properties is in compliance in all material respects with, all applicable
Environmental Laws, except for such matters as may be described in the reports
listed on SCHEDULE 3.22 and in reports previously delivered to Lender. There are
not pending (and, to the best of Borrower's knowledge, there are not
threatened), any actions, suits, claims, legal proceedings or any other
proceedings claiming or involving the presence on, at or under the Mortgaged
Properties, or any part thereof, of any Hazardous Materials (other than
Hazardous Materials in quantities customary in operations similar to the
operation of the Mortgaged Properties that are contained, stored and used in
compliance in all material respects with applicable Environmental Laws or
claiming violation of Environmental Laws relating to the Mortgaged Properties or
any part thereof, and neither Borrower nor Xxxxx XXXX has received, directly or
indirectly, formal or informal notice of any complaint, order directive,
citation, notice of responsibility, notice of potential responsibility, or
information request from any Governmental Authority or any other person or
entity relating to the foregoing.
3.23. CONCERNING MORTGAGED PROPERTIES; FINANCIAL STATEMENTS
(a) All certifications, permits, licenses and approvals required
for the legal use,
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occupancy and operation of each Mortgaged Property as used immediately prior to
the transfer of such Mortgaged Property to Borrower including any applicable
certificate of completion and occupancy permit, have been obtained and are in
full force and effect; (b) Engineering Surveys have been performed by a surveyor
or registered professional engineer duly licensed in the jurisdictions in which
the Mortgaged Properties are situated for each of the Mortgaged Properties and,
except as set forth in the Engineering Surveys or in reports previously
delivered by Borrower to Lender, the Mortgaged Properties and other Improvements
are in sound condition and repair and neither Borrower nor Equity Member has
knowledge that any such Engineering Survey contains any material inaccuracy or
omission; (c) there are no proceedings pending or, to the best of Borrower's or
Equity Member's knowledge, threatened for the total or partial condemnation of
or affecting, any Mortgaged Property; (d) the Mortgaged Properties are not
subject to any leases, licenses or other use or occupancy agreements other than
the Leases, and leases of Building Equipment described on SCHEDULE 3.23B; (e)
other than the tenants pursuant to the Leases, no Person has any possessory
interest in any Mortgaged Property or right to occupy any portion thereof except
under and pursuant to the provisions of the Leases; (f) Borrower does not have
on the date hereof any contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments which in each case are known to Borrower and which, in
Borrower's opinion, are reasonably likely to result in a material adverse effect
on the Mortgaged Properties or the operation thereof, except as referred to or
reflected or provided for in the financial statements heretofore furnished to
Lender or as otherwise disclosed to Lender herein; (g) since the last date of
such financial statements, (i) Borrower has not entered into any material
transaction or incurred any material liability or obligation, contingent or
otherwise, other than in the ordinary course of business, except as disclosed to
Lender and (ii) there has not been any material adverse change in the condition
(financial or otherwise), business, net worth or results of operations of
Borrower or the condition (financial or otherwise) of the Mortgaged Properties;
and (h) no Mortgaged Property is located in a flood hazard area as defined by
the Federal Insurance Administration.
3.24. ACCESS
Each Mortgaged Property has access and is contiguous to publicly
dedicated streets, roads or highways, or if not so contiguous, access to and
from each Mortgaged Property and publicly dedicated streets, roads or highways
is available through private lands pursuant to valid, perpetual, enforceable and
recorded public or private easements or rights-of-way; and pedestrian and
vehicular access to and from each Mortgaged Property via the easements or
rights-of-way is not limited or restricted in any unreasonable manner.
3.25. NO LIENS
There are no Liens of any type with respect to any of the
Mortgaged Properties, except the Liens created by the Loan Documents and the
Permitted Liens. There has been no construction or other activities at any of
the Mortgaged Properties within such periods of time as would permit the
imposition of any mechanics' or materialmen's Liens on any of the Mortgaged
Properties except as set forth on SCHEDULE 3.25.
3.26. ACCURACY OF INFORMATION
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To the best knowledge of Borrower and Equity Member, neither the
Loan Documents nor any document, agreements, instrument, schedule, certificates,
statements, or cash flow schedules (collectively, the "BORROWER DOCUMENTS")
furnished by Borrower, Arden OP or Xxxxx XXXX to Lender contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading. Since the furnishing of the Borrower
Documents, there has been no change nor any development or event involving a
prospective change known to Borrower or Equity Member which would render any of
the Borrower Documents untrue or misleading in any material respect.
3.27. MORTGAGE AND SECURITY INTERESTS
When executed and delivered, and, if necessary under applicable
laws, recorded, the Mortgage will create valid mortgage, deed of trust, or
similar Liens upon the Mortgaged Properties, the Land underlying them and the
Improvements and valid security interests in the fixtures located thereon, and
the Mortgage and accompanying financing statements (if any) will be recorded and
filed in such places as may be required and, where appropriate, applicable
mortgage, transfer, recording and UCC taxes and fees will be paid, such that the
Mortgage will constitute valid first priority mortgage, deed of trust, or
similar Liens on the Land and Mortgaged Properties and will create valid
perfected first priority security interests of record with respect to the
respective Mortgaged Property and related Collateral (except Collateral as to
which a security interest cannot be created and perfected by a Mortgage or the
filing of a financing statement under the U.C.C.), subject only to the Permitted
Liens.
When executed and delivered, and, if necessary under applicable
laws, when appropriate filings of financing statements are made, the Security
Agreement by and between Borrower and Lender will create valid first priority
security interests with respect to the Collateral named therein, which security
interests shall be perfected to the extent that security interests in such
Collateral can be perfected by the filing of a financing statement under the
U.C.C.
3.28. ASSIGNMENT OF LEASES AND RENTS
When executed and delivered by Borrower and the other parties
thereto, the Assignment of Leases and Rents will create a valid assignment of
the Collateral described therein. The Assignment of Leases and Rents, and
accompanying financing statements (if any) will be recorded by the Title Company
and filed in such places as may be required so that all such documents will
create valid assignments of record with respect to the Collateral described
therein, subject only to the Permitted Liens.
3.29. FOREIGN PERSON
Borrower is not a "foreign person" as defined in Section 1445 of
the Internal Revenue Code of 1986 and any regulations promulgated thereunder
(including temporary or proposed regulations).
3.30. NO DEFAULTS
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No Default or Event of Default exists hereunder or under the
other Loan Documents.
3.31. NO FRAUDULENT CONVEYANCE
Borrower (i) is entering into this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby in good faith and
with no actual intent to disturb, hinder, delay, or defraud any present or
future creditor of Borrower, Equity Member or any other Person, and (ii) has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. After giving effect to the transactions contemplated by the Loan
Documents, the fair salable value of Borrower's assets exceeds and will,
immediately following the execution and delivery of the Loan Documents, exceed
Borrower's total liabilities, including subordinated, unliquidated, disputed or
contingent liabilities known to Borrower. The fair salable value of Borrower's
assets is and will, immediately following the execution and delivery of the Loan
Documents, be greater than Borrower's probable liabilities, including the
maximum amount of its contingent liabilities known to the Borrower or its debts
as such debts become absolute and matured. Borrower's assets do not and,
immediately following the execution and delivery of the Loan Documents will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted. Borrower does not intend to, and does not believe
it will, 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 to be payable on or in respect of obligations of
Borrower).
4. CLOSING; CONDITIONS PRECEDENT
The Loan shall be made at a closing (the "CLOSING") on a date
(the "CLOSING DATE") that coincides with the closing of the transactions
contemplated by the Contribution Agreement. Without limiting the foregoing, the
obligation of Lender to make the Loan to Borrower and to proceed with the
Closing is subject to the satisfaction on or before the Closing Date of each and
all of the following conditions (and the occurrence of the Closing shall be
conclusive evidence that all such conditions have been satisfied in full or
knowingly waived):
4.1. REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations and warranties of Borrower and Equity Member
made in this Agreement or in any other Loan Document shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects on the Closing Date, with the same effect as if such
representations and warranties were made on the Closing Date. As of the Closing
Date, Borrower shall each have performed and complied in all material respects
with all covenants and agreements required by this Agreement or by any other
Loan Document to be performed or complied with by Borrower as of such date.
4.2. BORROWER'S ACTIONS
Borrower shall have taken all actions under the laws of any state
having jurisdiction over Borrower necessary to effectuate the transactions
contemplated by this Agreement and by the other Loan Documents.
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4.3. DELIVERY OF DOCUMENTS
The Borrower shall have delivered to the Lender the following
documents, instruments and agreements, each of which shall be in form and
substance reasonably satisfactory to the Lender:
4.3.1.
All Loan Documents, fully executed by the Borrower and, as
applicable, Equity Member, including the following;
(i) This Agreement;
(ii) The Mortgage Note;
(iii) The Mortgage;
(iv) The Environmental Indemnity Agreement;
(v) The Collateral Assignment of Management Agreement
(and the Manager's consent to same);
(vi) The Security Agreement;
(vii) The Assignment of Leases and Rents; and
(viii) The Cooperation Agreement;
4.3.2.
Mortgagee's forms of title insurance policies (each a "TITLE
INSURANCE POLICY" and, collectively, the "TITLE INSURANCE POLICIES"), or
marked-up commitments evidencing such policies, each in form and content
reasonably acceptable to the Lender, and each in an amount not less than the
Allocated Loan Amount applicable to the particular Mortgaged Property (as
specified in SCHEDULE 1.1 attached hereto), with premiums fully paid, insuring
that (i) each Mortgage constitutes a valid first priority mortgage or similar
lien on, and security interest in, the Land and the Improvements and all rights
appurtenant thereto described therein, in each case free and clear of all
defects and encumbrances other than as set forth in SCHEDULE B to the applicable
Title Insurance Policy, and containing, to the extent such coverage is available
in the state in which the particular Mortgaged Property is located, (A) full
coverage (by affirmative insurance) against liens of mechanics, materialmen,
laborers, and any other Persons who might claim statutory or other common law
liens relating to services performed prior to Closing; (B) no survey exceptions
other than those set forth in SCHEDULE B to each Title Insurance Policy; (C)
such other endorsements as the Lender may deem reasonably necessary to insure
that any off-site easements benefiting any of the Mortgaged Properties are valid
and enforceable in accordance with their terms; (D) a "tie-in" endorsement
aggregating the insurance amount indicated for the applicable Mortgaged Property
with the amounts indicated for other Mortgaged Properties; and (E) such other
endorsements as are required by Lender. Such Title Insurance Policies shall be
issued by Commonwealth Land Title Insurance Company or any other
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nationally recognized title insurance company (the "TITLE COMPANY") reasonably
satisfactory to Lender.
4.3.3.
Evidence reasonably satisfactory to the Lender that the
requirements set forth in SECTION 8.1 and SECTION 8.3 hereof have been complied
with and that all policies of insurance required by SECTION 8.1 and SECTION 8.3
are in full force and effect;
4.3.4.
Evidence reasonably satisfactory to Lender that funds necessary
to pay all taxes related to the Mortgage and all other recording and filing fees
and other expenses necessary in connection with the recordation of the Mortgage
and the perfection of the security interests under all of the other Security
Documents have been paid to the Title Company, or to other Persons reasonably
satisfactory to the Lender, for payment to the applicable taxing authorities or
recording officials;
4.3.5.
A certificate of Borrower, dated as of the Closing Date (together
with copies of the documents referred to therein) certifying that: (i) attached
thereto is a true and complete copy of the LLC Agreement, together with all
amendments thereto, (ii) the LLC Agreement has not been amended since the date
of the last amendment attached to the certificate, and (iii) the LLC Agreement
is in full force and effect;
4.3.6. [INTENTIONALLY DELETED]
4.3.7.
A certified copy of the certificate of formation of Borrower,
certified as of a date no more than two weeks prior to the Closing Date by the
Delaware Secretary of State as being a true and complete copy of such
certificate as on file in such state, and a certificate of a duly authorized
officer of Borrower, dated as of the Closing Date (together with copies of the
documents referred to therein) certifying that: (i) attached thereto are true
and complete copies of the Borrower's certificate of formation, together with
all amendments thereto, (ii) the certificate of formation has not been amended
since the date of the last amendment attached to the certificate, and (iii) the
certificate of formation is in full force and effect;
4.3.8.
A certified copy of the articles of incorporation of Xxxxx XXXX,
certified as of a date no more than two weeks before the Closing Date by the
Maryland State Department of Assessments and Taxation as being a true and
complete copy of such articles as on file in such State, and a certificate of a
duly authorized officer of Xxxxx XXXX, dated as of the Closing Date (together
with copies of the documents referred to therein) certifying that: (i) attached
thereto is a true and complete copy of such company's articles of incorporation,
together with all amendments thereto, (ii) attached thereto is a true and
complete copy of such company's bylaws, together with all amendments thereto,
(iii) such organizational documents and bylaws
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have not been amended since the date of the last amendment attached to the
certificate, (iv) such organizational documents and bylaws are in full force and
effect, and (v) attached thereto are currently effective resolutions of the
board of directors of such company authorizing the consummation of the
transactions contemplated hereby by Xxxxx XXXX on its own behalf and as the sole
general partner of Arden OP;
4.3.9.
A certified copy of the certificate of limited partnership of
Arden OP, certified as of a date no more than two weeks prior to the Closing
Date by the Maryland State Department of Assessments and Taxation as being a
true and complete copy of such certificate as on file in such state, and a
certificate of a duly authorized office or Xxxxx XXXX, as sole general partner
of Arden OP, dated as of the Closing Date (together with copies of the documents
referred to therein) certifying that: (i) attached thereto are true and complete
copies of Arden OP's limited partnership agreement and certificate of limited
partnership, together with all amendments thereto, (ii) the limited partnership
agreement has not been amended since the date of the last amendment attached to
the certificate, and (iii) the limited partnership agreement is in full force
and effect.
4.3.10.
Original fictitious name certificates, certificates of existence
and, if available, certificates of good standing for Borrower and Equity Member
from the Secretary of State's office (or equivalent) of their respective
jurisdictions of organization, as well as certificates of qualification to
transact business in California, for Borrower and Equity Member from the
Secretary of State for the State of California, each dated as of a date recent
to the Closing Date.
4.3.11.
Certificates of each of Borrower and Manager, each dated as of
the Closing Date (together with copies of the documents referred to therein)
certifying that: (i) attached thereto is a true and complete copy of the
Management Agreement, together with all amendments thereto, (ii) the Management
Agreement has not been amended since the date of the last amendment attached to
the certificate, (iii) the Management Agreement is in full force and effect,
(iv) no notice of default under the Management Agreement has been given or
received by such party, and neither such party nor, to the best knowledge of
such party, the other party is in default with respect to any obligation under
the Management Agreement, and (v) such party does not claim to have any defense,
counterclaim or right of offset with respect to any of its obligations under the
Management Agreement.
4.3.12.
As-built surveys for each Mortgaged Property that conform to the
1992 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys and
that meet the accuracy standards of an Urban Land Survey, each such survey to be
prepared by a surveyor registered in California, and to contain a certificate
from such surveyor to Lender and the Title Company,
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dated within ninety (90) days immediately preceding the Closing Date, in form
and content reasonably acceptable to Lender and the Title Company. Each survey
shall show (i) the boundaries of the applicable Land, (ii) the location and
dimension of all Improvements located on the Land, (iii) the location and
identity of all visible or recorded easements and rights-of-way across or
serving the Land, (iv) that the Improvements comply with all setback
requirements and zoning restrictions, except for violations that do not
materially adversely affect the Mortgaged Properties or as to which Lender is
affirmatively insured under the applicable Title Insurance Policy, (v) that the
Improvements do not encroach on adjoining property or on any easement or right
of way, except for encroachments that do not materially adversely affect the
Mortgaged Properties or as to which Lender is affirmatively insured under the
applicable Title Insurance Policy, (vi) that there are no encroachments on the
Land, except for encroachments that do not materially adversely affect the
Mortgaged Properties or as to which Lender is affirmatively insured under the
applicable Title Insurance Policy, (vii) that the Land is not located within any
flood plain area (unless flood insurance reasonably satisfactory to Lender is
provided), and (viii) any other matters that Lender may reasonably require;
4.3.13.
A report of the Title Company or a professional records-search
firm stating that a search of the public records in each state and county in
which a Mortgaged Property is located, disclosed no conditional sales contracts,
chattel mortgages, leases of personalty, financing statements or title retention
agreements, that affect any Mortgaged Property or Land or any other Collateral
assigned or pledged to Lender, except such matters as may be listed in such
report, and such matters must be reasonably acceptable to Lender;
4.3.14.
A copy of the certificate of occupancy for each Mortgaged
Property and the Improvements located on each parcel of Land, or evidence
satisfactory to Lender that no certificate of occupancy is required by
applicable Laws, and a copy of all licenses and permits required for the legal
operation of each Mortgaged Property and all other Improvements located on each
parcel of Land, or evidence satisfactory to Lender that no other licenses or
permits are required by applicable Laws or that the absence of particular
licenses or permits will not have a materially adverse effect on the business,
properties, prospects, assets or condition (financial or otherwise) of the
Mortgaged Property;
4.3.15.
The Engineering Surveys for all of the Mortgaged Properties,
which shall show that no material defects or conditions affect any of the
Mortgaged Properties.
4.3.16.
Seismic studies showing probable maximum loss with respect to
each Mortgaged Property;
4.3.17.
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Current reports prepared by an environmental surveying firm
reasonably satisfactory to Lender and in form and scope reasonably satisfactory
to Lender;
4.3.19.
Estoppel certificates, in form and content substantially in
accordance with the form attached hereto as EXHIBIT C, from (i) each tenant of
each Mortgaged Property that accounted for more than five percent (5%) of the
gross rents from such Mortgaged Property during the most recently completed four
full Accounting Quarters and (ii) tenants of each Mortgaged Property that
accounted, in the aggregate, for at least seventy-five percent (75%) of the
gross rents from such Mortgaged Property for the most recently completed four
full Accounting Quarters;
4.3.20.
Letters from the holders of the Existing Debt showing the amounts
necessary to pay such indebtedness in full as of the Closing Date, together with
evidence that the Title Company has received into escrow from such holders all
instruments of release, in recordable form, necessary to release any Liens
securing such debt immediately following the Closing;
4.3.21.
The Management Agreement duly executed by Borrower and Manager.
4.4. EVIDENCE OF AUTHORIZATION; RELATED DOCUMENTS
Lender shall also have received:
4.4.1.
A certificate of the corporate secretaries of Borrower, Xxxxx
XXXX and the Manager certifying as to the incumbency and genuine signature of
each officer of such corporation executing any of the Loan Documents or other
statements, reports, certificates and documents called for by the terms of the
Loan Documents and who will otherwise act under the Loan Documents for and on
behalf of Borrower or any such entity, including specimen signatures of each
individual that will be signing any of the Loan Documents on behalf of Borrower
or Manager, which specimen signatures shall be certified by an appropriate
officer to be a true specimen thereof (and the signature, authority and
incumbency of the certifying officer shall be similarly certified).
4.4.2.
One or more written opinions addressed to Lender, dated as of the
Closing Date, from Xxxxxx & Xxxxxxx, special counsel to Borrower, and from
Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel to Borrower, in form and
substance reasonably acceptable to Lender;
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4.4.3.
One or more written opinions addressed to Lender, dated as of the
Closing Date, from Ballard, Spahr, Xxxxxxx & Xxxxxxxxx, special Maryland counsel
to Equity Member and Xxxxx XXXX, in form and substance acceptable to Lender.
4.5. CLOSING CERTIFICATE
The Lender shall have received a certificate of Borrower signed
by a duly authorized officer of Borrower, dated as of even date herewith,
stating that:
(i) The representations and warranties of Borrower and Equity
Member contained in each of the Loan Documents to which Borrower or Equity
Member is a party, and in all certificates, documents and instruments delivered
by Borrower or Equity Member pursuant to the Loan Documents are true and correct
in all material respects on and as of the Closing Date; and
(ii) All conditions precedent to be performed by the Borrower or
Equity Member have been satisfied as of the Closing Date.
4.6. MANAGEMENT AGREEMENT
The Management Agreement shall be in full force and effect.
4.7. EXISTING DEBT
All actions necessary to repay the Existing Debt, and to release
all mortgages or other Liens relating thereto, shall have been taken, and Lender
shall have received evidence reasonably satisfactory to the Lender to that
effect.
4.8. PAYMENT OF LENDER COSTS AND ORIGINATION FEE
Borrower shall pay at the Closing, (i) the Origination Fee and
(ii) all Lender Costs, the amounts of which are known to the Lender at such
time. In the event that the amounts paid or withheld by Lender at the Closing
are insufficient to pay all such Lender Costs, Borrower shall promptly, upon
demand, provide additional funds to Lender to pay such Lender Costs.
4.9. INDEPENDENT MANAGER
Borrower shall have at least one Independent Manager.
4.10. TI RESERVE REQUIREMENT
An amount at least equal to the TI Reserve Requirement shall have
been deposited in the TI Reserve Account.
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4.11. ENVIRONMENTAL RESERVE REQUIREMENT
An amount at least equal to the Environmental Reserve Requirement
shall have been deposited in the Environmental Reserve Account.
5. AFFIRMATIVE COVENANTS
Borrower agrees that, so long as any amount of principal,
interest, Yield Maintenance Payment, or any other charges relating to the Loan
shall be outstanding, or so long as there exist any other charges owing on or
under this Agreement, the Mortgage Note, or any other Loan Document, Borrower
shall comply with all of the following:
5.1. TIMELY PAYMENT OF AMOUNTS DUE
Borrower shall duly pay or cause to be paid, when due, the
principal of, interest on, Yield Maintenance Payments, if any, and other amounts
payable under or in connection with this Agreement, the Mortgage Note and each
other Loan Document in accordance with the terms hereof and thereof, at the
times and places and in the manner provided herein or therein.
5.2 PROCEEDS OF THE LOAN
Borrower shall apply the Loan Amount solely for the purposes set
forth in SECTION 2.3 hereof.
5.3. MANAGEMENT AGREEMENT
5.3.1.
Borrower shall duly and punctually pay all sums required to be
paid by Borrower under the Management Agreement and otherwise perform in all
material respects the obligations contemplated to be performed by it under the
Management Agreement, subject to the provisions of the Collateral Assignment of
Management Agreement, and will, with due diligence and in a reasonable and
prudent manner, enforce its rights under the Management Agreement to the extent
failure to perform or protect its rights thereunder might materially and
adversely affect the business, operations, prospects, assets, properties or
condition (financial or otherwise) of Borrower. Without limiting the foregoing,
Borrower agrees that:
(a) Borrower shall at all times promptly and faithfully keep,
perform and comply with, or cause to be kept, performed and complied
with, prior to the expiration of any applicable grace period, the
provisions of the Management Agreement to be complied with by it.
(b) Borrower shall give Lender prompt notice of any notice of
default given to or received from the Manager under the Management
Agreement, which notice shall include a copy of such notice whether or
not Lender may be entitled to such notice directly from the Manager.
Borrower shall promptly furnish to Lender upon Lender's reasonable
request any and all information concerning the performance by it of the
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provisions of the Management Agreement and shall permit Lender or its
representative at all reasonable times to make investigation or
examination concerning the performance by it of the provisions of the
Management Agreement. Within ten (10) days after receipt by Borrower,
Borrower shall deliver to Lender a copy of any notice, communication,
plan, specification or other instrument or document received or given by
it in any way relating to or affecting the Management Agreement which
may materially concern or affect the rights of Borrower under the
Management Agreement.
(c) If any legal action or proceeding shall be instituted to
terminate the Management Agreement, or for any other purpose materially
affecting the Management Agreement, Borrower will, promptly upon service
thereof on or to it, deliver to Lender a copy of each petition, summons,
complaint, notice of motion, order to show cause and of all other
provisions, pleadings and papers, however designated, served in any such
action or proceeding. Borrower will consult with Lender before
instituting suit against the Manager.
(d) Notwithstanding any other provision of this Agreement, of the
Management Agreement, if Borrower shall fail so to do, Lender may (but
shall not be obligated to) take any such action as Lender reasonably
deems required to prevent, mitigate or cure, in whole or in part, any
default by Borrower under the Management Agreement, and upon the receipt
by Lender from Borrower or the Manager, of any written notice of default
by Borrower under the Management Agreement, Lender may rely thereon, and
such notice shall constitute full authority and protection to Lender for
any action taken by the Lender or its agents in good faith reliance
thereon. All expenses, including reasonable attorneys' fees, incurred by
Lender to prevent, mitigate or cure any such default, or to sustain the
Lien of Lender on or security interest in the Management Agreement or
the applicable Mortgaged Property, or the priority thereof, together
with interest thereon at the Default Interest Rate, shall be deemed
secured by the Security Documents and shall be payable within fifteen
(15) days after demand. Nothing in this paragraph (d) shall limit
Borrower's right under the Management Agreement to contest issues
concerning requirements of law or other similar matters to the extent
permitted by the Management Agreement. Without limiting the foregoing,
Lender shall, upon ten (10) days prior written notice to Borrower
(except in the case of an emergency) have the absolute and immediate
right (but shall not be obligated) to enter in and upon the Mortgaged
Properties or any part thereof to such extent and as often as Lender, in
its reasonable judgment, deems necessary or desirable to prevent or cure
any such default or condition reasonably believed by Lender to
constitute a material default by Borrower.
(e) Borrower shall give Lender prompt notice of the commencement
of, and consult with Lender in connection with the conduct of, any
arbitration or appraisal proceeding under and pursuant to the provisions
of the Management Agreement.
(f) Borrower shall do, or cause to be done, all things necessary
to preserve and keep unimpaired its rights under the Management
Agreement and its rights and will enforce the obligations of the Manager
under the Management Agreement to the end that it may enjoy all of the
rights granted to it thereunder.
5.3.2. SUBSTITUTE MANAGER
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Notwithstanding the foregoing SECTION 5.3.1, Borrower may replace
the Manager and designate and retain a substitute manager for all (but not less
than all) of the Mortgaged Properties on the following terms and conditions:
(i) no Default or Event of Default shall have occurred and be
continuing;
(ii) the substitute manager shall either be (x) a manager that
is an Affiliate of Xxxxx XXXX and in which Xxxxx XXXX owns
directly or indirectly at least a seventy-five percent
(75%) economic or beneficial interest or (y) a third party
manager of recognized standing and experience in the
management of office and industrial properties comparable
to the Mortgaged Properties that is acceptable to Lender;
(iii) Lender shall have approved the management agreement to be
entered into between Borrower and the substitute manager;
(iv) the fee payable to the substitute manager shall not exceed
the five percent (5%) of the Gross Income from Operations
from the Mortgaged Properties; and
(v) if the Securitization has occurred, each of the Rating
Agencies delivers to Lender a Rating Comfort Letter with
respect thereto.
5.4. FINANCIAL AND OTHER INFORMATION
Borrower shall furnish to Lender the Financial Statements,
notices, and other items described below in this SECTION 5.4 (the "INFORMATION")
at the times indicated. Whenever any Financial Statements, notice or other item
shall be stated to be due on a day other than a Business Day, such Financial
Statement, notice or other item shall be due on the next succeeding Business
Day. All Financial Statements relating to earnings and expenses shall set forth
separately, or otherwise identify all extraordinary and non-recurring items to
the extent required by GAAP.
5.4.1. QUARTERLY FINANCIAL STATEMENTS
Borrower shall furnish to Lender, as soon as practicable, and in
any event within thirty (30) days after the end of each Accounting Quarter
(other than the last Accounting Quarter in any Fiscal Year), an unaudited
consolidated balance sheet of Borrower as at the end of such Accounting Quarter
and unaudited consolidated statement of income and expense of Borrower for each
such Accounting Quarter, and for that part of the Fiscal Year to date, and an
unaudited consolidated statement of cash flow of Borrower for that part of the
Fiscal Year to date, all in the form that would be required of Borrower if
Borrower were required to file quarterly reports with the SEC on Form 10-Q,
setting forth in each case, in comparative form, the corresponding figures for
the corresponding period(s) of the preceding Borrower Fiscal Year, which
statements shall, as a whole, fairly present the financial position of Borrower
as at the end of the periods indicated and the results of the operations of
Borrower for such periods and which shall be certified by an Authorized
Accounting Officer as having been prepared under his or her supervision in
accordance with GAAP, subject to year-end audit adjustments, and stating that
such Authorized Accounting Officer knows of no facts inconsistent with such
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Financial Statements and that such Financial Statements, as a whole, fairly
present the financial position of Borrower as of the end of the periods
indicated and the results of the operations of Borrower for such periods. Any
financial statements furnished pursuant to this Section shall be accompanied by
a certificate of an Authorized Accounting Officer stating that, to his or her
knowledge, no Default or Event of Default has occurred and is continuing or, if
a Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof, the period of its existence, and the action that Borrower
has taken or proposes to take with respect thereto.
5.4.2. BORROWER'S ANNUAL FINANCIAL STATEMENTS
Borrower shall furnish to Lender, as soon as practicable, and in
any event within seventy-five (75) days after the end of each Fiscal Year of
Borrower, a consolidated balance sheet of Borrower as at the end of such Fiscal
Year and a consolidated statement of income, partners' capital or deficit and
consolidated cash flow of Borrower for such Fiscal Year, setting forth in each
case, in comparative form, the corresponding figures for the preceding Fiscal
Year, prepared in accordance with GAAP, and in the form that would be required
of Borrower if Borrower were required to file annual reports with the SEC on
Form 10-K. Such Financial Statements shall be accompanied by (A) (1) an audit
report and opinion in respect of such Financial Statements of Ernst & Young or
other "Big Six" independent certified public accounting firm selected by
Borrower and reasonably acceptable to Lender, which report and opinion shall be
unqualified as to the scope of the audit and reasonably satisfactory to Lender,
and (2) the written statement of the accountants described in clause (1) that,
in making the examination necessary for their report and opinion on such
Financial Statements, they have obtained no knowledge of any condition, event or
act that constitutes a Default or Event of Default, or, if such accountants
shall have obtained such knowledge, a statement as to the nature and status
thereof, and (B) a certificate of an Authorized Accounting Officer, stating that
(1) such Financial Statements have been prepared under his or her supervision in
accordance with GAAP and that he or she knows of no facts inconsistent with such
Financial Statements and (2) to his or her knowledge, no Default or Event of
Default has occurred is continuing or, if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof, the period of
its existence, and the action that Borrower has taken or proposes to take with
respect thereto.
5.4.3. BUDGETS
(a) For the partial year period commencing on the Anticipated
Repayment Date, and for each Fiscal Year thereafter, Borrower shall submit to
Lender for Lender's written approval the Annual Budget not later than thirty
(30) days prior to the commencement of such period or Fiscal Year. Such Annual
Budget shall be in form and substance reasonably satisfactory to Lender setting
forth in reasonable detail budgeted monthly operating income and monthly
operating capital and monthly operating and other expenses for the Mortgaged
Properties, including all planned capital expenditures in respect of the
Mortgaged Properties for such period or Fiscal Year. Each such Annual Budget
approved by Lender shall hereinafter be referred to as an "APPROVED ANNUAL
BUDGET". Until such time that Lender approves a proposed Annual Budget, the most
recently Approved Annual Budget shall apply; provided that, such Approved Annual
Budget shall be adjusted from time to time to reflect actual increases in
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real estate taxes, insurance premiums and utilities expenses.
(b) In the event that, after the Anticipated Repayment Date,
Borrower must incur an extraordinary operating expense or capital expense not
set forth in the Annual Budget (each an "EXTRAORDINARY EXPENSE"), then the
Borrower shall promptly deliver to Lender a reasonably detailed explanation of
such proposed Extraordinary Expense for the Lender's approval.
5.4.4. PROPERTY OPERATING STATISTICS
Borrower shall furnish to Lender operating statements setting
forth the Net Operating Income and occupancy statements for each Mortgaged
Property for each calendar month together with rent rolls (which rent rolls
shall contain the same information as the rent rolls provided by Borrower to
Lender in connection with the Closing) within fifteen (15) days following the
end of such calendar month in each case certified as true and correct by an
Authorized Accounting Officer and accompanied by a calculation of the Debt
Service Coverage Ratio as of the end of such calendar month.
5.4.5. CERTIFICATES REGARDING DEFAULTS
Within five (5) Business Days after any officer of Borrower
obtains knowledge of any Default or Event of Default, Borrower shall furnish to
Lender a statement of such officer specifying the nature of such Default or
Event of Default, the period of existence thereof, and the action that Borrower
has taken or proposes to take with respect thereto.
5.4.6. PROPOSED AMENDMENTS TO LLC AGREEMENT
Not less than ten (10) days prior to the execution thereof,
Borrower shall furnish to Lender a true and complete copy of any proposed
amendment to the LLC Agreement, which proposed amendments shall be subject to
the provisions of SECTION 6.5.1 hereof.
5.4.7. ENVIRONMENTAL CONDITIONS
Within five (5) Business Days after any officer of Borrower
obtains knowledge of or discovers any occurrence or condition on any real
property adjoining or in the vicinity of any Mortgaged Property that might
reasonably be expected to cause such Mortgaged Property or the Land on which it
is located to be subject to any investigation or cleanup pursuant to any
Environmental Law which could reasonably be expected to lead or result in a
material adverse effect upon the business, operations, prospects, assets,
properties or condition (financial or otherwise) of Borrower or any Mortgaged
Property, Borrower shall furnish to Lender written notice thereof describing the
nature thereof and the actions, if any, that Borrower proposes to take to
address it.
5.4.8. EVIDENCE OF TAX PAYMENTS
Concurrently with the delivery of Financial Statements required
by SECTIONS 5.4.1 and 5.4.2, Borrower shall provide to Lender evidence of the
payment of all real estate taxes that were due and payable on the Mortgaged
Properties during the preceding Accounting Quarter.
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5.5. MAINTENANCE OF EXISTENCE, ETC.
At all times (a) maintain its principal place of business,
principal office, and office where it keeps its records and other documents and
instruments, relating to the Mortgaged Properties (except for certain records,
documents and instruments kept at the Mortgaged Properties) at its address set
forth in SECTION 12.3 hereof or such other address of which Lender may be given
written notice not less than thirty (30) days prior to the date on which a
change of location is to occur; (b) obtain and maintain in full force and effect
all authorizations, consents, approvals, licenses, exemptions and other actions
by, and all registrations, qualifications, designations, declarations and other
filings, if any, with, any governmental or administrative board, body,
commission, authority, bureau, or agency necessary (i) in connection with the
execution and delivery of this Agreement, the Mortgage Note, and the other Loan
Documents, the consummation of the transactions contemplated herein or therein,
and the performance of or compliance with the terms and conditions thereof, or
(ii) to ensure the legality, validity and enforceability hereof or thereof; and
(c) maintain in effect its existence pursuant to the LLC Agreement and cause
Equity Member to (x) maintain its partnership existence in effect and in good
standing and (y) comply with all requirements of Law material to the conduct of
its business (including continuing to be qualified to engage in business in each
jurisdiction where such qualification is required) and the performance of the
obligations of Borrower or Equity Member under the Loan Documents to which
Borrower or Equity Member is a party.
5.6. COMPLIANCE WITH APPLICABLE LAWS
Comply in all material respects with all requirements of Law
applicable to the conduct of its business (including continuing to be registered
or qualified to do business in each jurisdiction where such registration or
qualification is required), the operation of the Mortgaged Properties, and the
performance of the obligations of Borrower under the Loan Documents to which
Borrower is a party, including Environmental Laws, rules, regulations and orders
of any governmental authority.
5.7. MAINTENANCE OF BOOKS; INSPECTION OF PROPERTIES AND BOOKS
Keep and maintain adequate and proper records and books of
account, in which complete entries are made in accordance with GAAP and in
accordance with all applicable laws and regulations, and permit authorized
representatives of Lender to discuss the business, operations, prospects,
assets, properties and condition (financial or otherwise) of Borrower with its
officers and employees and, at reasonable times and on reasonable notice (except
during the existence of an Event of Default, in which case no notice shall be
required) to examine its books of account and other records and make copies
thereof or extracts therefrom, all at such reasonable times as Lender may
request.
5.8. NOTICE OF LITIGATION; DISPUTES
Give written notice to Lender within five (5) Business Days after
learning of:
(i) Any action, suit or proceeding instituted against
Borrower or any action, suit or proceeding instituted by Borrower in any federal
or state court or before any
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commission or other regulatory body (federal, state or local, domestic or
foreign), or any such proceedings threatened against Borrower (including (i) any
proceeding initiated by any party with respect to the presence or release, or
alleged presence or release, of any Hazardous Materials at, on, under, from or
about any Mortgaged Property or the Land on which any Mortgaged Property is
located and (ii) any claim made or threatened by any third party against
Borrower or any such Mortgaged Property or Land relating to any loss or injury
resulting from any Hazardous Materials) an adverse determination of which could
reasonably be expected to lead to or result in a material adverse effect upon
the business, operations, prospects, assets, properties or condition (financial
or otherwise) of Borrower or any Mortgaged Property, in each case containing the
details thereof;
(ii) The filing, recording or assessment of any Federal,
state or local tax lien against it, or any of its assets, an adverse
determination of which could reasonably be expected to lead to or result in a
material adverse effect upon the business, operations, prospects, assets,
properties or condition (financial or otherwise) of Borrower or any Mortgaged
Property;
(iii) Any dispute between Borrower and any Governmental
Authority or other Person which, if adversely determined, could reasonably be
expected to materially interfere with the normal business operations of Borrower
or any Mortgaged Property.
Borrower shall permit Lender to join and participate as a party,
if Lender so elects, in any legal proceedings or actions initiated with respect
to any Mortgaged Property or the Land on which any Mortgaged Property is located
in connection with any Environmental Law or Hazardous Materials.
5.9. MORTGAGED PROPERTY OPERATIONS; MAINTENANCE
At all times, (a) conduct continuously and operate actively its
business at the Mortgaged Properties (subject to temporary cessation of, or
other limitations on, its activities due to strikes, lockouts, casualties,
events of Force Majeure, or other causes beyond the reasonable control of
Borrower, provided prompt written notice thereof is given to Lender); (b) keep
in full force and effect and existence all rights, licenses, permits and
franchises required for the use or operation of the Mortgaged Properties; (c)
maintain the Mortgaged Properties in good and clean order and condition such
that the utility and operation of the Mortgaged Properties will not be affected
in any material and adverse respect, subject to ordinary wear and tear and
damage caused by fire or other casualty; (d) make or cause to be made all
necessary or appropriate repairs, replacements and renewals to the Mortgaged
Properties in the manner and within the periods required by the Management
Agreement and the applicable Mortgage; and (iii) not commit or permit any waste
to the Mortgaged Properties or any part thereof.
5.10. SEPARATE EXISTENCE
Borrower is familiar with all of the criteria of the Rating
Agencies required to qualify as a special-purpose bankruptcy-remote entity and
Borrower shall preserve and keep in full force and effect its existence as a
Single Purpose Entity. Borrower shall (i) maintain its books and records and
bank accounts separate from any other person or entity (except that, for
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accounting and reporting purposes, Borrower may be included in the consolidated
financial statements of Xxxxx XXXX in accordance with generally accepted
accounting principles); (ii) maintain an arm's length relationship with its
members, Affiliates and any other party furnishing services to it; (iii)
maintain its books, records, resolutions and agreements as official records;
(iv) conduct its business in its own name and through its own authorized
officers and agents; (v) prepare and maintain its financial statements,
accounting records and other limited liability company or corporation documents
separate from those of any other Person (except for inclusion of Borrower in
consolidated financial statements of Xxxxx XXXX); (vi) pay its own liabilities
out of its own funds and other assets; (vii) observe all limited liability
company formalities necessary to maintain its identity as an entity separate and
distinct from Xxxxx XXXX, Xxxxx OP and all other Affiliates; (viii) participate
in the fair and reasonable allocation of any and all overhead expenses and other
common expenses for facilities, goods or services provided to multiple entities;
(ix) use its own stationery, invoices and checks (except when acting in a
representative capacity); (x) hold and identify itself as a separate and
distinct entity under its own name and not as a division or part of any other
Person (except for inclusion of Borrower in consolidated financial statements of
Xxxxx XXXX); (xi) comply, with the provisions of its certificate of formation
and LLC Agreement, and the laws of its jurisdiction of organization relating to
limited liability companies; (xii) at all times continue to be, adequately
capitalized in light of the nature of its business; and (xiii) hold its assets
in its own name. Borrower shall comply with all of the assumptions set forth in
the Substantive Non-Consolidation Opinion delivered by Borrower's counsel at
Closing.
5.11. CASH MANAGEMENT
Borrower will comply with, and will direct the Manager to comply
with, the provisions of SCHEDULE 5.11 hereto, which shall govern the collection
and application of Operating Income, Awards, and Insurance Proceeds and the
administration of the TI Reserve Account, the Cash Collateral Account, and the
Lockbox Account. Lender agrees that it shall administer the Cash Collateral
Account, the TI Reserve Account, and the Lockbox Account in accordance with the
provisions of SCHEDULE 5.11 hereto.
5.12. INDEPENDENT MANAGER
Borrower shall have an Independent Manager acceptable to Lender
at all times, or if the Independent Manager has resigned or otherwise is no
longer the Special Member of Borrower, Borrower shall not take any action which
may not be taken pursuant to the organizational documents of Borrower without
the consent of the Independent Manager, until such new Independent Manager shall
have been appointed as Independent Manager of Borrower and admitted to Borrower
as the Special Member.
5.13. TI RESERVE REQUIREMENT
(a) If, at any time, the amount on deposit in the TI Reserve
Account is less than the TI Reserve Requirement, the Excess Cash Flow for each
Accounting Period shall be deposited into the TI Reserve Account until the
amount on deposit in the TI Reserve Account equals the TI Reserve Requirement
(provided, that following the occurrence of a Lockbox Event, any deficiency in
the TI Reserve Account shall be paid pursuant to Section 4.4 of the
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Cash Management Procedures).
(b) Borrower shall not make any distributions to its Members at
any time that the amount on deposit in the TI Reserve Account is less than the
TI Reserve Requirement.
5.14. REPAIR EXPENDITURES
Not later than June 8 1999, Borrower shall have expended for
repairs at each Mortgaged Property in at least the amount set forth next to the
name of each Mortgaged Property on SCHEDULE 5.14 hereto; provided, in the event
for any of the Mortgaged Properties Borrower shall have failed to expend at
least the amount for such Mortgaged Property set forth on SCHEDULE 5.14 on or
before June 8, 1999, Borrower, if then requested by Lender, shall deposit any
deficiency with Lender. Lender shall establish an account into which any such
deficiencies shall be deposited; such account shall be an Eligible Account and
shall otherwise be similar to Accounts established pursuant to the Cash
Management Procedures; such account shall be in the name of Lender, under the
sole dominion and control of Lender and shall be pledged to Lender as additional
security for the obligations of Borrower under the Loan Documents. The amount
deposited by Borrower in such account for a particular Mortgaged Property shall
be released to Borrower upon presentation by Borrower to Lender of evidence that
Borrower has expended at least the amount of the deficiency for repairs at such
Mortgaged Property (which amount shall be released only so long as no Event of
Default shall have occurred and be continuing).
6. NEGATIVE COVENANTS
Borrower agrees that, so long as this Agreement shall remain in
effect, or so long as there exists any principal, interest or Yield Maintenance
Payment due or outstanding under the Mortgage Note, or any other unpaid charges
or amounts under this Agreement or under any other Loan Document, then:
6.1. LIMITATION ON INDEBTEDNESS
Borrower shall not incur, create or assume any Indebtedness of
any kind, provided that Borrower may incur, create or assume any Permitted Debt.
6.2. LIMITATION ON LIENS
Borrower shall not create, assume or suffer to exist, any Lien of
any kind, upon any of its properties, assets or Collateral, whether now owned or
hereafter acquired, except Permitted Liens.
In the event Borrower contests the payment of a tax, assessment
or other governmental charge or contests a landlords', mechanics',
materialmen's, warehousemen's, carriers', or other like Lien, Borrower, prior to
the commencement of such contest and prior to the date such payment would
otherwise be due and payable, shall deposit with Lender (or, following the
assignment contemplated by SECTION 9.1 hereof, deposit with the Servicer) an
amount equal to one hundred twenty-five percent (125%) of the amount of the
contested
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payment, to be held in a segregated subaccount of the Cash Collateral Account;
provided, however, Borrower shall not be required to make such a deposit so long
as the aggregate of all such Liens that Borrower is contesting without deposit
is less than Fifty Thousand Dollars ($50,000). Upon the conclusion of such
contest and upon written request by Borrower accompanied by supporting
documentation, Lender (or the Servicer) shall disburse from the deposit made by
Borrower with Lender (or the Servicer) any amounts required to be paid by
Borrower and shall remit the excess to Borrower. Notwithstanding the foregoing,
Lender (or the Servicer) may pay over to the appropriate Person any or all of
the funds on deposit with Lender (or the Servicer) when, in Lender's (or the
Servicer's) reasonable judgment, the entitlement of such Person to such funds is
firmly established or if necessary to avoid the foreclosure of a Lien that
secures the contested payment.
6.3. MERGER OR CONSOLIDATION; PERMITTED REORGANIZATION
Borrower shall not be a party to any merger or consolidation.
6.4. SINGLE PURPOSE
Borrower shall not engage in any business or operate for any
purpose other than as set forth in the LLC Agreement as in effect on the date
hereof and shall not have or create any subsidiaries. Borrower will not: (i)
seek or consent to any dissolution, winding up, liquidation, consolidation,
merger or sale of all or substantially all of its assets; (ii) fail to correct
any known misunderstanding regarding its separate identity; (iii) commingle its
funds or other assets with those of any other Person; (iv) assume or guarantee
or become obligated for the debts of any other Person or hold out its credit as
being available to satisfy the obligations of any other Person (other than as
permitted by the Loan Documents); (v) acquire obligations or securities of its
members; (vi) pledge any of its assets for the benefit of any other Person other
than Lender (except as permitted by the Loan Documents); (vii) make any loans to
any other Person; (viii) identify its members or any of its Affiliates as a
division or part of it (except for inclusion of the Borrower in consolidated
financial statements of Xxxxx XXXX); (ix) engage (either as transferor or
transferee) in any material transaction with any Affiliate other than for fair
value and on terms similar to those obtainable in arms-length transactions with
unaffiliated parties, or engage in any transaction with any Affiliate involving
any intent to hinder, delay or defraud any entity; (x) engage in any business
activity or operate for any purpose other than as stated in Section X of its LLC
Agreement as in effect on the date hereof or (xi) without the consent of all its
members and managers including the consent of an Independent Manager, file a
bankruptcy or insolvency petition or otherwise institute bankruptcy proceedings.
Borrower will not acquire any assets not related to the business and operation
of the Mortgaged Properties.
6.5. AMENDMENTS TO AGREEMENTS
6.5.1.
Borrower shall not, without the consent of Lender, (i) amend,
modify or alter the terms of the LLC Agreement, (ii) admit any additional
members, (iii) cancel, release, terminate or surrender the Management Agreement,
or permit any cancellation, release, termination or surrender of the Management
Agreement or (iv) amend, modify or alter the terms of the
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Management Agreement in any material respect; provided that Borrower shall be
entitled to cancel, release, terminate, surrender, amend, modify or alter the
Management Agreement in connection with the replacement of the Manager if,
before the date on which the Manager ceases to be the Manager of any Mortgaged
Property, (a) Borrower causes such Mortgaged Property to come under management
by a third party property manager in accordance with the provisions of clauses
(i), (ii)(y), (iii), (iv) and (v) of SECTION 5.3.2 above, (b) each of the Rating
Agencies delivers to the Lender a Rating Comfort Letter with respect thereto.
6.5.2.
[INTENTIONALLY DELETED]
6.6. DISTRIBUTIONS
Borrower shall make no distributions of cash or other assets to
the Members if an Event of Default has occurred and is continuing.
6.7. PERMITTED TRANSFERS
Borrower shall not transfer, pledge, hypothecate or assign any of
the Mortgaged Properties except (a) to Lender or (b) in connection with the
simultaneous Release of such Mortgaged Property pursuant to SECTION 2.7, SECTION
2.8, SECTION 2.9, SECTION 2.10 or SECTION 11 hereof.
7. EVENTS OF DEFAULT
7.1. DEFAULT; AN EVENT OF DEFAULT
The occurrence of any of the following events beyond any
applicable notice and cure period set forth in this SECTION 7.1 shall be an
"EVENT OF DEFAULT" hereunder (and the occurrence of any of the following which,
with the giving of notice or the passage of time, or both, would become an Event
of Default shall, prior to the giving of such notice or the passage of such
time, be a "DEFAULT" hereunder).
7.1.1.
Borrower shall fail to pay, when due, any principal or interest
on the Mortgage Note or any Yield Maintenance Payment or Defeasance Deposit that
may be due.
7.1.2.
Borrower shall fail to pay, when due, any other amount due under
or pursuant to the Mortgage Note, this Agreement, or any of the other Loan
Documents (other than principal, interest, and any Yield Maintenance Payments or
Defeasance Deposits).
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7.1.3.
Borrower shall fail to perform or observe in any material and
adverse respect any of the covenants and agreements of Borrower set forth in
this Agreement, or any representation and warranty made by Borrower in this
Agreement or in any of the other Loan Documents shall fail to have been true in
any material and adverse respect when made and, in either case, such failure
shall continue uncured for a period of more than (i) ten (10) days with respect
to any failure or breach of covenant relating to the payment of taxes or the
maintenance of insurance, or (ii) with respect to all other such failures or
breaches, thirty (30) days following Borrower's receipt of written notice
thereof from Lender; provided that with respect to clause (ii) above, it shall
not be an Event of Default hereunder if (a) such failure is curable but is not
reasonably capable of being cured within such thirty (30)-day period and
Borrower shall have promptly commenced to cure such failure (including by
consummation of a sale of the affected Mortgaged Properties and the payment of
the applicable Release Price, Defeasance Deposit and Yield Maintenance Payment,
if any) and thereafter shall diligently pursue such cure to completion, but in
no event later than ninety (90) days after the date on which Borrower received
such written notice from Lender.
7.1.4.
The Manager shall cease to be Manager of all of the Mortgaged
Properties or the Management Agreement shall terminate with respect to one or
more Mortgaged Properties, unless, before the date on which the Manager ceases
to be the Manager of any such Mortgaged Property, or the Management Agreement
terminates with respect to any such Mortgaged Property, (a) Borrower causes such
Mortgaged Property to come under management by a third party property manager in
accordance with clauses (i), (ii)(y), (iii), (iv) and (v) of SECTION 5.3.2,
hereof, and (b) if the Securitization has occurred, each of the Rating Agencies
delivers to Lender a Rating Comfort Letter with respect thereto.
7.1.5.
Borrower shall default in its payment of any Indebtedness with an
aggregate principal amount in excess of $2,000,000.
7.1.6.
If at any one time there shall be any final nonappealable
judgment or judgments rendered by any court or Governmental Authority not
covered by insurance aggregating in excess of $5,000,000 against Borrower, which
shall not have been satisfied, fully stayed or bonded within sixty (60) days
after the entry thereof.
7.1.7.
Either of the following shall occur with respect to Borrower:
(a) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating Borrower as
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of Borrower under any Bankruptcy Law, and
such decree or order shall have continued
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undischarged and unstayed for a period of sixty (60) consecutive
days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency for Borrower, or any
substantial part of the property of Borrower, or for the winding
up or liquidation of the affairs of Borrower, and such decree,
judgment, or order shall have remained in force undischarged and
unstayed for a period of sixty (60) days; or
(b) Borrower shall institute proceedings to be adjudicated
a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any Bankruptcy
Law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a custodian, receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of
it or any substantial part of its assets or property, or shall
make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due, or shall, within the meaning of any Bankruptcy Law,
become insolvent, fail generally to pay its debts as they become
due, or shall, within the meaning of any Bankruptcy Law, become
insolvent, fail generally to pay its debts as they become due, or
take any corporate action in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing.
7.1.8.
Unless Borrower causes all of the Mortgaged Properties to come
under management by a third party manager in accordance with clauses (i),
(ii)(y), (iii), (iv) and (v) of SECTION 5.3.2 hereof, either of the following
shall occur with respect to the Manager:
(a) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Manager as
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Manager under any Bankruptcy Law,
and such decree or order shall have continued undischarged and
unstayed for a period of sixty (60) consecutive days; or a
decree, judgment or order of a court of competent jurisdiction
appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Manager, or any substantial part
of the property of the Manager, or for the winding up or
liquidation of the affairs of the Manager shall have been
entered, and such decree, judgment, or order shall have remained
in force undischarged and unstayed for a period of sixty (60)
days; or
(b) the Manager shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition
or answer or consent seeking reorganization under any Bankruptcy
Law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a custodian, receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of
it or any substantial part of its assets or property, or shall
make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due, or
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shall, within the meaning of any Bankruptcy Law, become
insolvent, fail generally to pay its debts as they become due, or
take any corporate action in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing.
7.1.9.
An Event of Default shall occur under any other Loan Document.
7.1.10.
If a Securitization has not yet occurred, Borrower shall default
in a material respect under the Cooperation Agreement after the giving of any
required notice and/or the expiration of any required cure period.
7.1.11.
The Special Member shall cease to be a member of Borrower or
Borrower shall fail to have at least one member who is an Independent Manager,
other than as a result of the resignation or removal of an Independent Manager,
so long as Borrower is then diligently searching for a new Independent Manager.
7.1.12.
Borrower acquires any assets not related to the business and
operation of the Mortgaged Properties (other than a direct or indirect interest
in a residual class certificate issued pursuant to the Securitization).
7.1.13. [INTENTIONALLY DELETED]
7.1.14.
Following the occurrence of a Lockbox Event, the willful failure
of Borrower to instruct tenants of the Mortgaged Properties to make payments of
Rents into the Lockbox Account or the failure of Borrower or Manager to deposit
payments of Rents received by Borrower or Manager into the Lockbox Account
promptly upon receipt thereof.
7.1.15.
In the event Borrower shall fail to perform or observe any of the
covenants set forth in SECTION 5.10 or SECTION 6.4 hereof.
7.2. REMEDIES
If an Event of Default shall have occurred and be continuing,
Lender shall have the right, in its sole discretion, by written notice to
Borrower (except upon the occurrence of an Event of Default under SECTION 7.1.7
affecting Borrower, in which case all principal and accrued interest thereon
will be immediately due and payable on the Mortgage Note without any declaration
or other act on the part of Lender) to take one or more of the following
actions:
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7.2.1.
To declare the principal of and all amounts accrued but unpaid
under the Mortgage Note, this Agreement and the other Loan Documents, together
with a Yield Maintenance Payment calculated in accordance with SECTION 2.11
hereof, to be immediately due and payable, and such amounts shall thereupon
become immediately due and payable, without presentment, demand, protest or
notice of any kind, other than any notice specifically required by this SECTION
7.2, all of which are hereby expressly waived by Borrower.
7.2.2.
Pursue such rights and remedies against Borrower, or otherwise,
as are provided under and pursuant to this Agreement, the Mortgage or any of the
other Loan Documents and as may be available to the Lender at law or in equity.
7.2.3.
If the Event of Default involves Borrower's failure to pay any
tax, assessment, encumbrance or other imposition binding on Borrower or any of
the Collateral or to perform its obligation to furnish insurance hereunder, or
to perform or observe any other covenant, condition or term in any Loan Document
or in the Management Agreement, Lender may, at its option, without waiving or
affecting any of its other rights or remedies hereunder, pay, perform or observe
the same, and, in connection therewith, Lender shall be entitled to rely on any
representations and statements of the Manager under the Management Agreement in
regard to alleged breaches or violations thereof, and all payments made or costs
or expenses incurred by Lender in connection therewith shall be repaid by
Borrower to Lender within fifteen (15) days after demand therefor, together with
interest at the Default Interest Rate, and shall be added to and become a part
of the Indebtedness secured by the Mortgage and other Security Documents. Lender
is hereby empowered to enter and to authorize others to enter upon any Land and
all Improvements located on any Land for the purpose of performing or observing
any such defaulted covenant, condition or term, without thereby becoming liable
to Borrower or any Person in possession holding under Borrower.
7.2.4.
Appoint as a matter of right, without notice, to the fullest
extent permitted under applicable law, a receiver for Borrower or for all or any
part of the Collateral, whether such receivership be incidental to a proposed
sale of the Collateral or otherwise. All disbursements made by the receiver and
the expenses of receivership, shall be added to and be a part of the principal
amount of the obligations secured by the Security Documents, and, whether or not
said principal sum, including such disbursements and expenses, exceeds the
indebtedness originally intended to be secured thereby, the entire amount of
said sum, including such disbursements and expenses, shall bear interest at the
Default Interest Rate, be secured by the Security Documents and shall be due and
payable within fifteen (15) days after demand therefor.
7.3. REMEDIES CUMULATIVE
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Each of the rights, powers, and remedies provided herein are
intended and are hereby deemed to be cumulative, concurrent and in addition to,
and not in limitation of, those rights, powers, and remedies provided elsewhere
hereunder or in any other Loan Document or now or hereafter existing at law or
in equity or by statute or otherwise. No waiver of any Event of Default in one
instance shall constitute a waiver of any other or any succeeding Event of
Default, except to the extent provided in such waiver.
7.4. DEFAULT INTEREST
In addition to the provisions of SECTION 2 hereof, if Borrower
shall fail to make payment when and as due of any amounts due hereunder (whether
at the stated date for payment, or earlier upon an acceleration hereunder),
Borrower shall pay, to the fullest extent permitted by applicable law, interest
to Lender on such past due amounts beginning on the date such payment becomes
past due at a per annum rate of interest (the "DEFAULT INTEREST RATE") equal to
the greater of (a) the Interest Rate in effect from time to time plus three
percentage points (3%) and (b) the Prime Rate plus two percentage points (2%).
Borrower acknowledges that its obligation to pay Default Interest may be
separated from the other obligations of Borrower hereunder, and may be held or
transferred separately from the other obligations of the Borrower hereunder.
7.5. DEFAULT INDEMNITY
Borrower hereby agrees to, and shall, indemnify and hold harmless
Lender against the reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and expenses) which it may sustain or incur as a
consequence of any Default or Event of Default hereunder and in the enforcement
of Lender's rights and remedies in connection therewith. Lender shall provide to
Borrower a satisfactory statement, signed by an officer of Lender and supported,
where applicable, by documentary evidence, explaining the amount of all such
costs or expenses. Any amounts that Borrower must pay to Lender under this
SECTION 7.5 shall bear interest at the Default Interest Rate and shall be due
fifteen (15) days after demand therefor accompanied by documentation sufficient
to establish the amount of Borrower's liability, and shall be added to and
become a part of the Indebtedness secured by the Mortgage and other Security
Documents.
8. INSURANCE
8.1. MAINTENANCE OF INSURANCE
Borrower shall maintain at all times with Qualified Insurance
Companies all policies of insurance required under the Mortgage, which policies
shall name Lender, as an additional insured or loss payee, as applicable, as
their interests may appear. Each policy of insurance required hereunder shall
require the insurer to give not less than thirty (30) days prior written notice
to Lender in the event of cancellation of such policy for any reason whatsoever
(ten (10) days in the case of non-payment of premium) and, with respect to
property insurance, shall provide that the interest of the additional insureds
or loss payees thereunder shall not be impaired or invalidated by any act or
neglect of Borrower or the owner of any of the insured property or by the
occupation of the premises wherein such property is located for purposes
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more hazardous than are permitted by such policy. If Borrower fails to provide
and pay for such insurance, Lender may, at Borrower's expense, procure the same,
but shall not be required to do so, and any amounts reasonably expended by
Lender to do so, together with interest at the Default Interest Rate shall
become part of the debt secured by the Security Documents.
8.2 PAYMENT AND APPLICATION OF INSURANCE PROCEEDS
Insurance proceeds payable with respect to damage to or
destruction of any Mortgaged Property or the Improvements related thereto,
including damage by earthquake, if in effect, shall be applied in accordance
with the terms of the applicable Mortgage. All other insurance proceeds shall be
payable in accordance with the provisions of the applicable policy.
8.3. EARTHQUAKE INSURANCE
Borrower shall maintain at all times or cause to be maintained
for its benefit with a Qualified Insurance Company, a blanket policy of
insurance insuring all of the Mortgaged Properties against damage by earthquake
in an aggregate insured amount not less than $22,300,000 and having a deductible
of not more than five percent (5%) per unit of earthquake insurance subject to a
$100,000 minimum (a unit being defined as each individual building on each
Mortgaged Property). Such earthquake insurance shall otherwise comply with the
requirements of SECTION 1.7.3 of the Mortgage.
9. SECURITIZATION
9.1. SECURITIZATION
Borrower shall use commercially reasonable best efforts to
cooperate with Lender in its activities in connection with the sale of the Loan
as a whole loan or any securitization of the Loan (the "SECURITIZATION"),
including obtaining ratings by the Rating Agencies in accordance with the terms
hereof and in accordance with the Cooperation Agreement. The Securitization will
involve the issuance of rated single- or multi-class securities secured by or
evidencing ownership interests in the Loan Documents (the "CERTIFICATES").
Borrower acknowledges and agrees that, in connection with the Securitization,
(a) this Agreement, the Mortgage Note, the Security Documents and the other Loan
Documents may be assigned, pursuant to the assignment, to a trustee (the
"TRUSTEE"), as trustee under a pooling and servicing agreement (the "POOLING AND
SERVICING AGREEMENT") in form substantially similar to those commonly used in
rated commercial mortgage-backed securities offerings and (b) pursuant to the
Pooling and Servicing Agreement, a professional loan servicer of recognized
standing (the "SERVICER") would be appointed to service the Loan, this Agreement
and the Loan Documents as provided therein. The addresses of the Trustee and the
Servicer will be provided to Borrower in writing before the Securitization is
consummated. Upon such assignment, the Trustee shall for all purposes be the
sole Lender hereunder and the sole mortgagee or beneficiary under the Mortgage
(and all references herein to the "Lender" shall be deemed to refer to the
Trustee) and shall, together with the Servicer, among other things, (i) have the
sole and exclusive benefit of and the right and power to exercise, or to direct
the exercise of, all the rights and remedies of Lender hereunder and under the
Security Documents, including the right to inspect the Collateral, to receive
notices and financial
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information, to grant or withhold consents or approvals, to benefit from
indemnities, to receive, hold and apply proceeds or any other amount or property
provided by Borrower hereunder, and, upon the occurrence and during the
continuation of an Event of Default, to take any action required or permitted of
Lender with respect thereto, all in the Trustee's own name, and to exercise all
other rights and remedies of Lender hereunder and under the Security Documents,
and (ii) be bound by all the terms hereof which apply to Lender. Borrower hereby
acknowledges the foregoing and agrees to be bound to the Trustee, upon such
assignment, recognizing the Trustee as Lender hereunder as if the Trustee were
named in this Agreement as Lender, recognizing that the Servicer shall be
entitled to act on behalf of the Trustee and the Holders under and as provided
in the Pooling and Servicing Agreement and shall be entitled to and shall
receive all notices, financial and other information, agreements and other
documents to be delivered to Lender or the Trustee hereunder or under any of the
other Loan Documents and accepting and agreeing to all of the terms reasonably
set forth in the Pooling and Servicing Agreement and the exhibits thereto, all
of which shall be secured under the Security Documents. Upon such assignment,
Borrower's obligations to Lender specified in this Agreement shall be satisfied
by Borrower's tendering full and timely payment or performance thereof to the
Trustee or, if directed by the Trustee, to the Servicer. With respect to the
delivery of documents and other written material, the Trustee and the Servicer
shall have only the obligations expressly required of Lender herein or in the
other Loan Documents or of the Trustee or the Servicer in the Pooling and
Servicing Agreement. All rights and remedies of the Trustee as Lender hereunder,
including all indemnities running to Lender, shall also operate for the benefit
of the Servicer and the Holders, as provided in the Pooling and Servicing
Agreement, and shall be exercised by the Trustee and the Servicer in accordance
with and subject to the terms and conditions set forth in the Pooling and
Servicing Agreement. Borrower acknowledges and agrees that, until Borrower has
received notice from the Trustee to the contrary, and subject to the terms and
conditions set forth in the Pooling and Servicing Agreement to the contrary, all
deliveries and notifications to be made by Borrower to the Trustee, as Lender,
pursuant to this Agreement or any other Loan Document shall be made to the
Servicer only and not to the Trustee.
Borrower will cooperate with Lender to retain the Rating Agencies
to provide rating surveillance services on any Certificates issued in a
Securitization. Such rating surveillance shall be at the expense of Borrower.
Prior to the Securitization (or in the event the Securitization does not occur),
Lender may appoint a professional loan servicer of recognized standing to
service the Loan, this Agreement and the Loan Documents on terms and conditions
acceptable to Lender. The costs, fees and expenses of any such servicer shall be
paid by Lender.
9.2. NO ASSIGNMENT BY BORROWER
The rights and obligations of Borrower under this Agreement are
personal to Borrower and, accordingly, Borrower shall not assign this Agreement
or any other Loan Document or any other right, interest, or obligation of
Borrower hereunder or thereunder, either in whole or in part, to any Person
whatsoever.
9.3. METHOD OF PAYMENT
Following the assignment contemplated by SECTION 9.1 hereof,
Borrower shall
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make or cause to be made all payments under the Mortgage Note, and any other
payments required to be made by Borrower to or on behalf of Lender hereunder or
pursuant to any other Loan Document, to the Servicer by application of the
provisions of SCHEDULE 5.11 hereto or by wire transfer through the Federal
Reserve Bank of New York of immediately available funds in lawful tender of the
United States of America, in accordance with instructions provided by the
Servicer, which payments shall be held and applied by the Servicer in accordance
with the Pooling and Servicing Agreement.
10. ASSIGNMENT AND PARTICIPATION
Notwithstanding anything to the contrary set forth herein or in
any other Loan Document, Lender and any assignee of Lender shall have the right
at any time and from time to time to (a) assign (and thereafter, at any time and
from time to time, repurchase) all or any portion of its rights and obligations
with respect the Loan, including, without limitation, all or any portion of the
outstanding principal balance of the Loan and thereafter be released from its
rights and obligations as Lender in respect of such portion of the Loan (except
to the extent such portion of the Loan is repurchased by Lender or such
assignee), and (b) sell participations in the Loan. If requested by Lender,
Borrower shall execute and deliver a written acknowledgment acknowledging the
assignment of all or a portion of the Loan to an assignee.
11. SUBSTITUTION OF PROPERTIES
Subject to the terms and conditions set forth in this Section, at
any time following the commencement of the Defeasance Period, Borrower may
obtain a release of the Lien of the Mortgage (and the related Loan Documents) to
the extent it encumbers one or more Mortgaged Properties (a "SUBSTITUTED
PROPERTY") by substituting therefor one or more office properties acquired by
Borrower (individually, a "SUBSTITUTE PROPERTY" and collectively, the
"SUBSTITUTE PROPERTIES"), provided that (a) the Substitution Conditions are
satisfied with respect to the Substitute Properties, (b) no such substitution
may occur after the Anticipated Repayment Date, (c) such substitution shall not
be allowed more than two (2) times during the term of the Loan and (d) not more
than five (5) Mortgaged Properties may be released from the Lien of the Mortgage
(and the related Loan Documents) during the term of the Loan pursuant to this
SECTION 11. Any such substitution shall be subject, in each case, to the
satisfaction of the following conditions precedent (collectively, the
"SUBSTITUTION CONDITIONS"):
(i) Lender shall have received a copy of a deed conveying
all of Borrower's right, title and interest in and to
the Substituted Property or Substituted Properties then
being Released to an entity other than Borrower and a
letter from Borrower countersigned by the Title Company
acknowledging receipt of such deed or assignment and
assumption, as applicable, and agreeing to record such
deed or assignment and assumption, as applicable, in the
real estate records for the county in which the
Substituted Property is located or in the counties in
which the Substituted Properties are located;
(ii) Lender shall have received an appraisal of the
Substitute Property or
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Substitute Properties, as applicable, dated no more than
sixty (60) days prior to the substitution by an
appraiser acceptable to the Rating Agencies, indicating
an appraised value of the Substitute Property or
Substitute Properties, as applicable, that is equal to
or greater than the Release Price of the Substituted
Property or Substituted Properties, then being Released,
determined by Lender as of the Closing Date;
(iii) after giving effect to the substitution, the Debt
Service Coverage Ratio for the Mortgaged Properties
(including the Substitute Properties but excluding the
Substituted Properties) shall be at least equal to the
greater of (i) 2.22:1 (on or before April 16, 2003) or
1.81:1 (on or after April 17, 2003), and (ii) the Debt
Service Coverage Ratio for the Loan for all of the
Mortgaged Properties immediately preceding the
substitution;
(iv) the Net Operating Income for any Substitute Property
does not show a downward trend over the three (3) years
immediately prior to the date of substitution or, with
respect to a Substitute Property for which information
regarding the Net Operating Income of such Substitute
Property for the three (3) years immediately prior to
the date of substitution cannot be obtained by Borrower
after Borrower's exercise of diligent efforts, the Net
Operating Income shall not show a downward trend for
such period of time immediately prior to the date of
substitution as may be determined from the information
regarding such Net Operating Income available (which
period of time, in any event, shall not be less than one
(1) year);
The Net Operating Income for a Substitute Property shall
be deemed to show a downward trend, if the Net Operating
Income for the Substitute Property for each
Determination Period (as defined below) was less than
the Net Operating Income for the immediately preceding
Determination Period, commencing with the Determination
Period that commenced on the date that is three (3)
years prior to the first day of the calendar month in
which the substitution is to occur. A "Determination
Period" is a twelve (12) month period that commences on
a prior anniversary of the first day of the calendar
month in which the substitution is to occur and ends on
the last day of the calendar month (or prior anniversary
thereof) immediately preceding the month in which the
substitution is to occur;
(v) the Net Operating Income and Debt Service Coverage Ratio
(for the twelve (12) month period immediately preceding
the substitution) for the Substitute Property or
Substituted Properties, as applicable, is greater than
one hundred twenty-five percent (125%) of the Net
Operating Income and Debt Service Coverage Ratio (for
the twelve (12) month period immediately preceding the
substitution) for the Substituted Property or
Substituted Properties then being substituted. For
purposes of this clause (v), the Debt Service Coverage
Ratio with respect to a Substitute Property (or
Substitute Properties, as applicable) or
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a Substituted Property (or Substituted Properties, as
applicable) shall be calculated using the Net Operating
Income with respect to such Substitute Property (or
Substitute Properties, as applicable) or Substituted
Property, (or Substituted Properties, as applicable) and
the principal, if any, and interest due and payable on
the Mortgage Note allocable to the Release Price for the
Substitute Property or Substituted Property, as
applicable (or the aggregate Release Prices for the
Substitute Properties or Substituted Properties, as
applicable);
(vi) Lender shall have received a Rating Comfort Letter from
each Rating Agency with respect to the substitution;
(vii) no Default or Event of Default shall have occurred and
be continuing and Borrower shall be in compliance with
all terms and conditions set forth in this Agreement and
in each Loan Document on Borrower's part to be observed
or performed. Lender shall have received a certificate
from Borrower confirming the foregoing, stating that the
representations and warranties of Borrower contained in
this Agreement and the other Loan Documents are true and
correct in all material respects on and as if made on
the date of the substitution with respect to Borrower,
the Mortgaged Properties and each Substitute Property
and containing any other representations and warranties
with respect to Borrower, the Mortgaged Properties, each
Substitute Property and the Loan as the Rating Agencies
may require, such certificate to be in form and
substance satisfactory to the Rating Agencies;
(viii) Borrower shall have executed, acknowledged and delivered
to Lender (A) a Mortgage, an Assignment of Leases and
Rents and one or more UCC Financing Statements with
respect to each Substitute Property, together with a
letter from Borrower countersigned by the Title Company
acknowledging receipt of such Mortgage, Assignment of
Leases and Rents and UCC-1 Financing Statements and
agreeing to record or file, as applicable, such
Mortgage, Assignment of Leases and Rents and, if
applicable, one of the UCC-1 Financing Statements in the
real estate records for the county in which such
Substitute Property is located and agreeing to file one
of the UCC-1 Financing Statements in the office of the
Secretary of State of the State in which such Substitute
Property is located, so as to effectively create upon
such recording and filing valid and enforceable Liens
upon such Substitute Property, of the requisite
priority, in favor of Lender (or such other trustee as
may be desired under local law), subject only to
Permitted Encumbrances and Permitted Liens and (B) a
Security Agreement and an Environmental Indemnity
Agreement with respect to such Substitute Property. The
Mortgage, Assignment of Leases and Rents, UCC-1
Financing Statements, Security Agreement and
Environmental Indemnity Agreement shall be the same in
form and substance as the counterparts of such documents
executed and delivered on the Closing Date subject to
modifications reflecting such Substitute Property as a
Mortgaged Property that is the subject of such documents
and such modifications reflecting the laws of the state
in which such Substitute Property is located as shall be
recommended by the counsel admitted to practice in such
state and delivering the opinion
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as to the enforceability of such documents required
pursuant to clause (xv) below. Borrower shall also have
executed, acknowledged and delivered any amendments to
the Loan Documents required in connection with a
substitution and, where applicable, a letter from
Borrower countersigned by the Title Company agreeing to
record such amendments in the real estate records for
each county where the Mortgage was recorded. The
Mortgage encumbering the Substitute Property shall
secure all amounts evidenced by the Mortgage Note. The
amount of the Loan allocated to the Substitute Property
or Substitute Properties (such amount being hereinafter
referred to as the "Substitute Release Amount") shall
equal the Allocated Loan Amount of the Substitute
Property or Substituted Properties then being Released
(and, if applicable, equitably allocated among the
Substitute Properties);
(ix) Lender shall have received (A) any "tie-in" or similar
endorsement to each Title Insurance Policy insuring the
Lien of the existing Mortgage as of the date of the
substitution available with respect to the Title
Insurance Policy insuring the Lien of the Mortgage with
respect to each Substitute Property and (B) a Title
Insurance Policy (or a marked, signed and redated
commitment to issue such Title Insurance Policy)
insuring the Lien of the Mortgage encumbering each
Substitute Property, issued by the Title Company
insuring the Lien of the existing Mortgage and dated as
of the date of the substitution, with reinsurance and
direct access agreements that replace such agreements
issued in connection with the Title Insurance Policy
insuring the Lien of the Mortgage encumbering the
Substituted Property. The Title Insurance Policy issued
with respect to each Substitute Property shall (1)
provide coverage in the amount of the Loan Amount of the
"tie-in" or similar endorsement described above, (2)
insure Lender that the relevant Mortgage creates a valid
first lien on the Substitute Property encumbered
thereby, free and clear of all exceptions from coverage
other than Permitted Encumbrances (as modified by the
terms of any endorsements), (3) contain such
endorsements and affirmative coverages as are contained
in the Title Insurance Policies insuring the Liens of
the existing Mortgage, and (4) name Lender as the
insured. Lender also shall have received copies of paid
receipts showing that all premiums in respect of such
endorsements and Title Insurance Policies have been
paid;
(x) Lender shall have received a current title survey for
each Substitute Property, certified to the Title Company
and Lender and their successors and assigns, in the same
form and having the same content as the certification of
the Survey of the Substituted Property prepared by a
professional land surveyor licensed in the state in
which the Substitute Property is located and acceptable
to the Rating Agencies in accordance with the 1992
Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. Such survey shall reflect the same legal
description contained in the Title Insurance Policy
relating to such Substitute Property and shall include,
among other things, a metes and bounds
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description of the real property comprising part of such
Substitute Property. The surveyor's seal shall be
affixed to each survey and each survey shall certify
that the surveyed property is not located in a "one
hundred year flood hazard area;"
(xi) Lender shall have received valid certificates of
insurance indicating that the requirements for the
policies of insurance required for an Mortgaged Property
hereunder have been satisfied with respect to the
Substitute Property and evidence of the payment of all
premiums payable for the existing policy period;
(xii) Lender shall have received a Phase I environmental
report and, if recommended under the Phase I
environmental report, a Phase II environmental report
(in each case prepared by an environmental consultant
acceptable to Lender), which conclude that the
Substitute Property does not contain any Hazardous
Materials (as defined in the Mortgage) and is not
subject to any risk of contamination from any off-site
Hazardous Materials;
(xiii) Borrower shall deliver or cause to be delivered to
Lender (A) updates certified by Borrower of all
organizational documentation related to Borrower and/or
the formation, structure, existence, good standing
and/or qualification to do business delivered to Lender
in connection with the closing of the Loan; (B) good
standing certificates, certificates of qualification to
do business in the jurisdiction in which the Substitute
Property is located (if required in such jurisdiction)
and (C) resolutions of Borrower authorizing the
substitution and any actions taken in connection with
such substitution;
(xiv) Lender shall have received the following opinions of
Borrower's counsel: (A) an opinion or opinions of
counsel admitted to practice under the laws of the state
in which the Substitute Property is located stating that
the Loan Documents delivered with respect to the
Substitute Property pursuant to clause (viii) above are
valid and enforceable in accordance with their terms,
subject to the laws applicable to creditors' rights and
equitable principles, and that Borrower is qualified to
do business and in good standing under the laws of the
jurisdiction where the Substitute Property is located;
(B) an opinion of counsel acceptable to the Rating
Agencies stating that the Loan Documents delivered with
respect to the Substitute Property pursuant to clause
(viii) above were duly authorized, executed and
delivered by Borrower and that the execution and
delivery of such Loan Documents and the performance by
Borrower of its obligations thereunder will not cause a
breach of, or a default under, any agreement, document
or instrument to which Borrower is a party or to which
it or its properties are bound; (C) an opinion of
counsel acceptable to the Rating Agencies stating that
subjecting the Substitute Property to the Lien of the
related Mortgage and the execution and delivery of the
related Loan Documents does not and will not affect or
impair the ability of Lender to enforce its remedies
under all of the Loan Documents or to
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realize the benefits of the cross-collateralization
provided for thereunder; (D) an update of the
Substantive Non-Consolidation Opinion indicating that
the substitution does not affect the opinions set forth
therein; (E) an opinion of counsel acceptable to the
Rating Agencies stating that the substitution and the
related transactions do not constitute a fraudulent
conveyance under applicable bankruptcy and insolvency
laws or other evidence pertaining thereto acceptable to
the Rating Agencies and (F) an opinion of counsel
acceptable to the Rating Agencies stating that the
substitution would not adversely affect the status of
the entity holding the interest in the Mortgage Note as
a REMIC (assuming for such purpose that such entity
otherwise qualifies as a REMIC) and that such
substitution will not result in a deemed exchange of the
Certificates pursuant to Section 1001 of the Code;
(xv) all real estate taxes due and payable with respect to
the Substitute Property shall have been paid and
Borrower shall have delivered evidence thereof to
Lender;
(xvi) Borrower shall have paid or reimbursed Lender for all
costs and expenses incurred by Lender (including,
without limitation, reasonable attorneys fees and
disbursements) in connection with the substitution and
Borrower shall have paid all recording charges, filing
fees, taxes or other expenses (including, without
limitation, mortgage and intangible taxes and
documentary stamp taxes) payable in connection with the
substitution. Borrower shall have paid all costs and
expenses of the Rating Agencies incurred in connection
with the substitution;
(xvii) Lender shall have received annual operating statements
and occupancy statements for each Substitute Property
for the most recently completed Fiscal Year and an
operating statement for each Substituted Property for
all Accounting Periods and Accounting Quarters for which
such statements have been prepared, each certified to
Lender as being true and correct and certificate from
Borrower certifying that there has been no adverse
change in the financial condition of such Substitute
Property since the date of such operating statements;
(xviii) Borrower shall have delivered to Lender estoppel
certificates from (i) each tenant of each Substitute
Property that accounted more than five percent (5%) of
the gross rents from the Substitute Property during the
most recently completed four full Accounting Quarters
("Major Tenants"), and (ii) tenants of the Substitute
Property that accounted, in the aggregate, for at least
seventy-five percent (75%) of the gross rents from the
Substitute Property for the most recently completed for
full accounting quarters. All such estoppel certificates
shall be in the form attached hereto as EXHIBIT C and
shall indicate that (1) the subject lease is a valid and
binding obligation of the tenant thereunder, (2) there
are no defaults under such lease on the part of the
landlord or tenant thereunder, (3) the tenant thereunder
has no defense or offset to the payment of rent under
such leases, (4) no rent under such lease has been paid
more than one
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(1) month in advance, (5) the tenant thereunder has no
option or right of first refusal under such lease to
purchase all or any portion of the Substitute Property
and (6) all tenant improvement work required under such
lease has been completed and the tenant under such lease
is in actual occupancy of its leased premises. If an
estoppel certificate indicates that all tenant
improvement work required under the subject lease has
not yet been completed, Borrower shall, if required by
the Rating Agencies, deliver to Lender financial
statements indicating that Borrower has adequate funds
to pay all costs related to such tenant improvement work
as required under such lease;
(xix) Lender shall have receive copies of all tenant leases
and any ground leases affecting the Substitute Property
certified by Borrower as being true and correct. Lender
shall have received a current rent roll of the
Substitute Property certified by Borrower as being true
and correct;
(xx) Lender shall have received subordination, nondisturbance
and attornment agreements in the form attached hereto as
EXHIBIT D with respect to each of the Material Leases
affecting the Substitute Property other than such Leases
that are, by their terms, subordinate to the Mortgage
with respect to the Substitute Property;
(xxi) Lender shall have received (A) an endorsement to the
Title Insurance Policy insuring the Lien of the Mortgage
encumbering the Substitute Property insuring that the
Substitute Property constitutes a separate tax lot or,
if such an endorsement is not available in the state in
which the Substitute Property is located, a letter from
the Title Company issuing such Title Insurance Policy
stating that the Substitute Policy constitutes a
separate tax lot or (B) a letter from the appropriate
taxing authority stating that the Substitute Property
constitutes a separate tax lot;
(xxii) Lender shall have received a physical conditions report
(substantially similar in form and scope to the physical
conditions report delivered with respect to the
Substituted Property in connection with the Closing)
with respect to the Substitute Property stating that the
Substitute Property and its use comply in all material
respects with all applicable Laws (including, without
limitation, zoning, subdivision and building laws) and
that the Substitute Property is in good condition and
repair and free of material damage or waste. If
compliance with Laws is not addressed by the physical
conditions report, such compliance shall be confirmed by
delivery to Lender of a certificate of an architect
licensed in the state in which the Substitute Property
is located, a letter from the municipality in which such
Property is located, a certificate of a surveyor that is
licensed in the state in which the Substitute Property
is located (with respect to zoning and subdivision
laws), an ALTA 3.1 zoning endorsement to the Title
Insurance Policy delivered pursuant to clause (ix) above
(with respect to zoning laws) or a subdivision
endorsement to the Title Insurance Policy delivered
pursuant to clause (ix) above (with respect to
subdivision laws). If the physical conditions report
recommends that any
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repairs be made with respect to the Substitute Property,
such physical conditions report shall include an
estimate of the cost of such recommended repairs and
Borrower shall deposit with Lender an amount equal to
one hundred fifty percent (150%) of such estimated cost,
which deposit shall constitute additional security for
the Loan and shall be released to Borrower upon the
delivery to Lender of (A) an update to such physical
conditions report or a letter from the engineer that
prepared such physical conditions report indicating that
the recommended repairs were completed in good and
workmanlike manner and (B) paid receipts indicating that
the costs of all such repairs have been paid;
(xxiii) Lender shall have received a certified copy of an
amendment to the Management Agreement reflecting the
deletion of the Substituted Property and the addition of
the Substitute Property as a property managed pursuant
thereto and Manager shall have executed and delivered to
Lender an amendment to the Collateral Assignment of
Management Agreement reflecting such amendment to the
Management Agreement;
(xxiv) Lender shall have received such other and further
approvals, opinions, documents and information in
connection with the substitution as the Rating Agencies
have requested;
(xxv) Lender shall have received copies of all contracts and
agreements relating to the leasing and operation of the
Substitute Property (other than the Management
Agreement) together with a certification of Borrower
attached to each such contract or agreement certifying
that the attached copy is a true and correct copy of
such contract or agreement and all amendments thereto;
(xxvi) Borrower shall submit to Lender, not less than thirty
(30) days prior to the date of such substitution, a
release of Lien (and related Loan Documents) for the
Substituted Property for execution by Lender. Such
release shall be in a form appropriate for the
jurisdiction in which the Substituted Property is
located and satisfactory to Lender in its sole
discretion. Borrower shall deliver an Officer's
Certificate certifying that the requirements set forth
in this SECTION 11 have been satisfied.
Upon the satisfaction of the foregoing conditions precedent, Lender will release
its Lien from the Substituted Property or Substituted Properties, as applicable,
to be released and the Substitute Property or Substitute Properties, as
applicable, shall be deemed to be an Mortgaged Property for purposes of this
Agreement and the Allocated Loan Amount with respect to such Substituted
Property or Substituted Properties, as applicable, shall be deemed to be the
Allocated Loan Amount with respect to such Substitute Property(or the aggregate
Allocated Loan Amounts for such Substitute Properties, as applicable) for all
purposes hereunder (and, if there is more than one Substitute Properties, the
Allocated Loan Amounts for such Substitute Properties shall be equitably
determined).
12. MISCELLANEOUS
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12.1. LIMITATION ON LIABILITY
Notwithstanding any contrary provision in any of the Loan
Documents, it is hereby expressly agreed that, except as otherwise provided in
this SECTION 12.1 or in any Section of any Loan Document that is substantially
similar to this SECTION 12.1, there shall be no recourse to the assets of
Borrower or any of its Members (other than against the Collateral and any other
property given as security for the payment of the Mortgage Note) for (i) the
payment of principal, interest, Defeasance Deposits, Yield Maintenance Payments
or other charges under this Agreement or the Mortgage Note or for any other
amount that is or may become due and owing to Lender by Borrower under this
Agreement or any of the other Loan Documents or (ii) the performance or
discharge of any covenant or undertaking hereunder or under the other Loan
Documents, and in the event of any Event of Default hereunder or thereunder,
Lender agrees to proceed solely against the Collateral and any other property
given as security for payment of the Mortgage Note, and Lender shall not seek or
claim recourse against Borrower or either Member (other than against the
Collateral and any other property given as security for payment of the Mortgage
Note) for any deficiency or for any personal judgment after a foreclosure of the
lien of the Mortgage or other Security Documents or for the performance or
discharge of any covenants or undertakings of Borrower hereunder or under any of
the other Loan Documents (except that Borrower may be made a party to a
proceeding to the extent legally necessary for the conduct of a foreclosure or
the exercise of other similar remedies under the Mortgage or other Security
Documents). Notwithstanding the foregoing, nothing contained in this SECTION
12.1 shall relieve Borrower or either Member of any personal liability for any
loss, cost, expense, damage or liability arising or resulting from (A) any
breach of any representation or warranty made in this Agreement that was
materially incorrect when made and that was made with fraudulent intent, (B) any
amount paid or distributed to the Members, the Manager or any Affiliate of any
of them in violation of the provisions of the Loan Documents, (C) fraud or
breach of trust, including misapplication of Loan proceeds or any Insurance
Proceeds or Awards or other sums that are part of the Collateral that may come
into the possession or control of Borrower or either Member or any Affiliate of
any of them, (D) liability of such Person under the Environmental Indemnity
Agreement or (E) following the occurrence of a Lockbox Event, the willful
failure of Borrower to instruct tenants of the Mortgaged Properties to make
payments of Rents into the Lockbox Account or the failure of Borrower or Manager
to deposit payments of Rents received by Borrower or Manager into the Lockbox
Account promptly upon receipt thereof. It is hereby expressly agreed that no
director, officer, shareholder, partner, member or employee of Borrower or a
Member, nor the legal or personal representative, successor or assign of any of
the foregoing, nor any other principal of Borrower or either Member, whether
disclosed or undisclosed, shall have any personal liability under this Agreement
or any of the other Loan Documents, except as personal liability may be
specifically imposed upon a signatory to any Loan Document. It is the intention
of the parties hereto that this SECTION 12.1 shall govern every other provision
of the Loan Documents and that the absence of explicit reference to this SECTION
12.1 in any provision of the Loan Documents or the absence of any Section
similar to this SECTION 12.1 in any Loan Document shall not be construed to deny
the application of this SECTION 12.1 to such provision, notwithstanding the
presence of explicit reference to this SECTION 12.1 in other provisions of the
Loan Documents.
12.2. ENTIRE AGREEMENT, AMENDMENTS
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This Agreement, including the Schedules and Exhibits hereto and
the other instruments and documents referred to herein or delivered pursuant
hereto, contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior oral or written agreements,
commitments or understandings with respect to such matters. No amendment,
modification or discharge of this Agreement shall be valid or binding unless set
forth in writing and duly executed by both parties.
12.3. NOTICES
All notices, requests and demands to or upon the respective
parties hereto shall be in writing (except as is otherwise specifically provided
in this Agreement) and shall be deemed to have been duly given or made when
received (or when delivery thereof is refused by the intended recipient) if
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid, or sent by facsimile transmission, with confirmation of receipt
or delivery, or sent by nationally recognized overnight courier, delivery
charges prepaid or delivered by hand, in each case addressed or directed as
follows (or to such other address or facsimile transmission number as may be
hereafter designated in writing by the respective parties hereto):
IF TO BORROWER: Arden Realty Finance III, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
IF TO LENDER: Xxxxxx Brothers Realty Corporation
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Mortgage Loan
Surveillance
Fax: (000) 000-0000
12.4. NO WAIVER; CUMULATIVE REMEDIES
No delay or failure on the part of any party hereto in exercising
any right, power or privilege under this Agreement or under any other instrument
or document given in connection with or pursuant to this Agreement shall impair
any such right, power or privilege or be construed as a waiver of any default or
any acquiescence therein. No single or partial exercise of any such right, power
or privilege shall preclude the further exercise of such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any party hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then only to the
extent expressly specified therein. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
12.5. WAIVER OF JURY TRIAL
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Each of the parties hereto (i) covenants and agrees not to elect
trial by jury of any issue triable of right by a jury and (ii) waives any rights
to trial by jury to the full extent that any such right shall now or hereafter
exist. This waiver of right to trial by jury is separately given, knowingly and
voluntarily, by each party hereto, and this waiver is intended to encompass
individually each instance and each issue as to which the right to a jury trial
would otherwise accrue. The parties are hereby authorized to submit this
Agreement to any court having jurisdiction over the subject matter so as to
serve as conclusive evidence of the other party's herein contained waiver of the
right to jury trial. Further, each party hereto certifies that no representative
of the other party (including such other party's counsel) has represented,
expressly or otherwise, to that party, that the other party will not seek to
enforce this waiver by the such certifying party of the right to a jury trial.
12.6. GOVERNING LAW; CONSENT TO JURISDICTION
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York (but not including the choice of law
rules thereof). In the event of any litigation arising out of this Loan
Agreement, Borrower agrees that the substantive law of the State of New York
shall apply. Borrower hereby consents to jurisdiction within the State of New
York for purposes of such litigation and agrees that service of process may be
made, and personal jurisdiction over Borrower obtained, by serving a copy of the
summons and complaint upon Borrower, at the notice address set forth herein, in
accordance with the applicable laws of the State of New York. Nothing herein
contained, however, shall prevent any owner or holder of the Mortgage Note from
bringing any action or exercising any right against any security or against
Borrower, personally, or against any property of Borrower, within any other
jurisdiction or state. Initiating such proceeding or taking such action in any
other jurisdiction or state shall not, however, constitute a waiver of the
agreement contained herein that the laws of the State of New York shall govern
the rights and obligations of the parties hereunder.
12.7. PAYMENT OF EXPENSES
12.7.1.
Borrower shall pay all expenses incurred by Lender in connection
with this Agreement and in the preparation for, and consummation of, the
transactions provided for herein and in connection with the enforcement hereof,
and Borrower shall pay all costs of conveyances, initial Servicer fee and
Trustee fee, initial rating fees and ongoing activity of any special Servicer
incurred as a result of an Event of Default, bank charges relating to the
operation of the Operating Account, the Lockbox Account, the Cash Collateral
Account and any other Account, after the Securitization has occurred, its
proportionate share of initial and annual surveillance fees, if any, of the
Rating Agencies, any processing fees, reasonable attorney's fees and
disbursements, auditor's fees, costs of appraisals, environmental reports, and
engineering reports, all title insurance premiums, all notary fees, all filing
and application fees to any federal, state or local agencies, all sales, stamp,
documentary, transfer, and other taxes and fees applicable to the transactions
contemplated by this Agreement and the instruments and documents called for
hereunder and all other costs and charges incurred by the parties in connection
with such transactions. In addition, the Borrower shall reimburse Lender for any
expenses incurred by the Lender to the extent provided in SECTION 4.8 hereof.
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12.7.2.
Except as provided in SECTION 12.7.1, if the Securitization
occurs, the Servicer Fee (as defined in the Pooling and Servicing Agreement) and
the Trustee Fee (as defined in the Pooling and Servicing Agreement) and any
other amounts required to be paid to the Servicer or the Trustee under the
Pooling and Servicing Agreement in reimbursement of expenses of the Servicer or
the Trustee shall be paid by Lender or the Trust Fund (the "TRUST FUND") created
under the Pooling and Servicing Agreement.
12.8. SEVERABILITY
In the event that any term or provision of this Agreement or of
any other Loan Document or the application thereof to any Person or circumstance
shall, to any extent, be held to be invalid or unenforceable, the remainder of
such term or provision or the application thereof to Persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and shall be enforced to the fullest extent permitted by law.
12.9. GENDER, ETC.
Whenever used herein and where the context so requires, the
singular shall include the plural, the plural shall include the singular, and
the use of the masculine, feminine or neuter gender shall include all genders;
and the word "including" shall mean "including, without limitation."
12.10. HEADINGS
The Article, Section and Subsection headings of this Agreement
are for convenience of reference only, and shall not limit or otherwise affect
any of the terms hereof.
12.11. COUNTERPARTS; FACSIMILES
This Agreement may be executed in separate counterparts, none of
which need contain the signatures of all parties, each of which shall be deemed
to be an original, and all of which taken together shall constitute one and the
same instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto. In the
event the parties hereto exchange signature pages of this Agreement by
facsimile, they agree to send the original executed counterparts of this
Agreement to one another by overnight delivery service, but the facsimile
signatures shall in any event be binding.
12.12. NO THIRD PARTY BENEFICIARY
The parties do not intend the benefits of this Agreement to inure
to any third party other than the Trust (and the Servicer and Trustee on behalf
of the Trust), upon
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assignment hereof by Lender to the Trustee, on behalf of the Trust, as
contemplated by SECTION 9.1 hereof. Notwithstanding anything contained herein or
in the Mortgage Note or any other Loan Document to the contrary, or any conduct
or course of conduct by any or all of the parties hereto, before or after
signing this Agreement or any of the other Loan Documents, nothing herein shall
be construed as creating any right, claim or cause of action against Lender, or
any of Lender's officers, directors, agents or employees, in favor of any
materialman, supplier, contractor, subcontractor, purchaser or lessee of any
property owned by Borrower any other person or entity other than Borrower.
12.13. NO LIABILITY OF LENDER
The relationship between Borrower and Lender is, and shall at all
times remain, solely that of borrower and lender, and Lender will not undertake
or assume any responsibility or duty to Borrower to review, inspect, supervise,
pass judgment upon, or inform Borrower of any matter in connection with any
phase of Borrower's business, operations, or condition, financial or otherwise.
Borrower shall rely entirely upon its own judgment with respect to such matters,
and any review, inspection, supervision, exercise of judgment, or information
supplied to Borrower by Lender in connection with any such matter is for the
protection of Lender, and neither Borrower nor any third party is entitled to
rely thereon.
12.14. CONFIDENTIALITY
Lender agrees that it shall maintain confidentiality with regard
to nonpublic information concerning Borrower obtained from Borrower pursuant to
this Agreement that is identified by Borrower as nonpublic, provided that Lender
shall not be precluded from making disclosure regarding such information: (i) to
Lender's counsel, accountants and other professional advisors (who are, in each
case, subject to this confidentiality agreement), (ii) to officers, directors,
employees, agents and partners of Lender who typically would be provided with
such information (who are, in each case, subject to this confidentiality
agreement), (iii) in response to a subpoena or order of a court or governmental
agency, (iv) in connection with the Securitization, to the Rating Agencies, the
Trustee and the Servicer, provided, Lender shall require that any such entity be
subject to this SECTION 12.14, however, Lender shall have no duty to monitor any
such entity and shall have no liability in the event that any such entity
violates this SECTION 12.14, (v) as required by law, GAAP or applicable
regulation, or (vi) following the public disclosure of such information (other
than by Lender). In connection with enforcing its rights pursuant to this
SECTION 12.14, Borrower shall be entitled to the equitable remedies of specific
performance and injunctive relief against Lender or other entity subject to this
Section 12.14 which shall breach the confidentiality provisions of this Section
12.14.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Loan
Agreement or have caused this Loan Agreement to be executed on their behalf as
of the day and year first above written.
BORROWER:
ARDEN REALTY FINANCE III, L.L.C.
By:
Name:
Its:
LENDER:
XXXXXX BROTHERS REALTY CORPORATION
By:
Name:
Its:
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LIST OF SCHEDULES
-----------------
Schedule 1.1 Allocated Loan Amounts
Schedule 3.6 Lease Defaults
Schedule 3.22 Environmental Reports
Schedule 3.23A Engineering Surveys
Schedule 3.23B Equipment Leases
Schedule 4.3.2 Mortgaged Properties
Schedule 5.11 Cash Management Procedures
Schedule 5.14 Required Expenditures
87
LIST OF EXHIBITS
----------------
Exhibit A Description of Land
Exhibit B Form of Mortgage Note
Exhibit C Tenant Estoppel Certificate
Exhibit D Subordination, Non-Disturbance and Attornment
Agreement
