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EXHIBIT 10.1
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SUBORDINATED LOAN AGREEMENT
DATED AS OF NOVEMBER 13, 1998
BETWEEN
XXXXXXXX CAPITAL CORPORATION,
AS BORROWER
AND
LEND LEASE INVESTMENTS HOLDINGS, INC.
AS
SUBORDINATED LENDER
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND INTERPRETATION......................................................1
Section 1.1. Defined Terms............................................................1
Section 1.2. Certain Other Terms......................................................4
Section 1.3. Certain References.......................................................4
Section 1.4. Accounting Principles....................................................4
Section 1.5. Headings.................................................................4
ARTICLE II - THE LOANS..........................................................................5
Section 2.1. The Loan Commitment......................................................5
Section 2.2. Method of Disbursement of the Loans......................................5
Section 2.3. The Subordinated Note....................................................5
Section 2.4. Interest Rate and Payment of Interest....................................6
Section 2.5. Prepayment of the Loans..................................................6
Section 2.6. Repayment and Maturity...................................................6
Section 2.7. Use of Proceeds..........................................................7
Section 2.8. Subordination............................................................7
Section 2.9. Taxes...................................................................10
ARTICLE III - CONDITIONS PRECEDENT.............................................................11
Section 3.1. Documents Required for the Initial Loan.................................11
Section 3.2. Conditions Precedent to All Loans.......................................11
ARTICLE IV - REPRESENTATIONS AND WARRANTIES....................................................12
Section 4.1. Representations of Borrower.............................................12
Section 4.2. Representations of the Subordinated Lender..............................13
ARTICLE V - COVENANTS..........................................................................14
Section 5.1. Financial Statements....................................................14
Section 5.2. Existence, Etc..........................................................15
Section 5.3. Maintenance of Property; Insurance......................................15
Section 5.4. Notices.................................................................16
Section 5.5. Other Information.......................................................16
Section 5.6. Prohibition of Fundamental Changes......................................16
Section 5.7. Limitation on Distributions.............................................17
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ARTICLE VI - DEFAULT AND REMEDIES..............................................................18
Section 6.1. Events of Default.......................................................18
Section 6.2. Interest After Default; Interest on Interest............................19
Section 6.3. Remedies................................................................19
ARTICLE VII - MISCELLANEOUS....................................................................20
Section 7.1. Amendment and Waiver....................................................20
Section 7.2. Further Assurances......................................................20
Section 7.3. Enforcement and Waiver by the Subordinated Lender.......................20
Section 7.4. Costs and Expenses; Indemnification.....................................20
Section 7.5. Notices.................................................................23
Section 7.6. Binding Effect, Assignment and Entire Agreement.........................25
Section 7.7. Counterparts............................................................25
Section 7.8. Governing Law...........................................................25
Section 7.9. Waiver of Jury Trial; Submission to Jurisdiction........................25
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SUBORDINATED LOAN AGREEMENT
This Subordinated Loan Agreement, dated as of November 13, 1998,
between XXXXXXXX CAPITAL CORPORATION, a Georgia corporation (the "BORROWER"),
and LEND LEASE INVESTMENTS HOLDINGS, INC., a Delaware corporation (the
"SUBORDINATED LENDER")
W I T N E S S E T H:
WHEREAS, the Borrower has entered into the agreements identified on
Schedule I hereto (as amended, modified or supplemented from time to time,
together with, to the extent permitted hereunder, all replacements, renewals,
extensions, substitutions or refinancings thereof, whether in whole or in part,
all referred to herein as the "SENIOR LOAN AGREEMENTS") with the financial
institutions identified on such Schedule (together with their respective
successors and assigns, the "SENIOR LENDERS"); and
WHEREAS, the Borrower has requested that the Senior Lenders modify
certain terms of the Senior Loan Agreements; and
WHEREAS, as a condition precedent to the Senior Lenders' modification
of the Senior Loan Agreements, the Senior Lenders have required that the
Borrower obtain additional financial support in the form of subordinated
capital; and
WHEREAS, in order to satisfy the condition precedent described above,
the Borrower has requested that the Subordinated Lender lend to the Borrower
from time to time the sum of up to $40,000,000, to be used by the Borrower to
fund loan commitments of the Borrower in existence on the date hereof and for
general working capital purposes; and
WHEREAS, the Subordinated Lender has agreed to lend to the Borrower
from time to time the sum of up to $40,000,000, upon the terms and subject to
the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINED TERMS. For the purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
"AGREEMENT" means this Subordinated Loan Agreement, as
amended, modified or supplemented from time to time.
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"BANKRUPTCY CODE" means the United States Bankruptcy Code of
1978, as in effect from time to time.
"BUSINESS DAY" means any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City.
"CHANGE IN CONTROL" means the occurrence of any of the
following: (i) any entity, person (within the meaning of Section 14(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (other than the Borrower) that theretofore was
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
less than 51% of the Borrower's then outstanding common stock either
(A) acquires shares of common stock of the Borrower in a transaction or
series of transactions that results in such entity, person or group
directly or indirectly owning beneficially 51% or more of the
outstanding common stock of the Borrower, or (B) acquires, by proxy or
otherwise the right to vote for the election of directors, for any
merger, combination or consolidation of the Borrower or any of its
direct or indirect Subsidiaries, or for any other matter or question,
more than 51% of the then outstanding voting securities of the Borrower
(except where such acquisition is made by a person or persons appointed
by at least a majority of the board of directors of the Borrower to act
as proxy for any purpose); or (ii) Lend Lease Real Estate Investments,
Inc. ("LEND LEASE") or another Subsidiary of Lend Lease shall cease to
be the "Manager" under the Management Agreement, dated as of April 28,
1998 (the "MANAGEMENT AGREEMENT"), between the Borrower and [Lend
Lease] or the Management Agreement shall be terminated, unless the
"Manager" resigns voluntarily or terminates the Management Agreement.
"CLOSING DATE" means the date on which all of the conditions
set forth in Article III hereto have been satisfied in full by Borrower
or waived by the Subordinated Lender.
"COMMITMENT" has the meaning specified in Section 2.1.
"COMMITMENT TERMINATION DATE" means the earlier to occur of
(i) March 31, 1999 and (ii) the declaration by the Subordinated Lender,
pursuant to Section 6.3, of a Commitment Termination Event.
"COMMITMENT TERMINATION EVENT" means (i) any Event of Default
described in Section 6.1(f), (g), (h) or (j) or (ii) the declaration by
any Senior Lender, following a default under the Senior Loan Agreements
to which such Senior Lender is a party, that the Senior Debt owing to
such Senior Lender is due and payable before its stated maturity or
before its regularly scheduled dates of payment.
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"DEFAULT" means an event or condition the occurrence or
existence of that would, with the lapse of time or the giving of notice
or both, become an Event of Default.
"DEFAULT RATE" means the rate of interest in effect from time
to time applicable to Loans hereunder plus five percent (5%).
"DISTRIBUTION EVENT" has the meaning specified in Section
2.8(b).
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"GAAP" has the meaning specified in Section 1.4.
"INTEREST PERIOD" has the meaning specified in Section 2.4(b).
"LOAN" means each loan made hereunder by the Subordinated
Lender in accordance with Article II.
"PERSON" means any individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated organization, association, joint venture
or other entity, or a government or any political subdivision or agency
thereof.
"SENIOR DEBT" means all obligations of the Borrower to make
payments of the principal of (and premium, if any), and interest on,
amounts outstanding under the Senior Loan Agreements and all other
obligations of the Borrower to the Senior Lenders under the Senior Loan
Agreements.
"SENIOR DEFAULT" means a Senior Nonmonetary Default or a
Senior Payment Default.
"SENIOR NONMONETARY DEFAULT" has the meaning specified in
Section 2.8(c).
"SENIOR PAYMENT DEFAULT" has the meaning specified in Section
2.8(c).
"SENIOR LENDERS" has the meaning specified in the recitals to
this Agreement.
"SENIOR LOAN AGREEMENTS" has the meaning specified in the
recitals to this Agreement.
"SUBORDINATED DEBT" has the meaning specified in Section
2.8(a).
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"SUBORDINATED LOAN DOCUMENTS" means this Agreement and the
Subordinated Note.
"SUBORDINATED NOTE" means a duly authorized, executed and
appropriately completed promissory note in the form of Exhibit A
attached hereto and made a part hereof.
"SUBSIDIARY" means, with respect to any Person, any other
Person of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other
entity (irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person.
SECTION 1.2. CERTAIN OTHER TERMS. When used herein, words of any gender
shall include any other gender, and singular words shall include the plural and
vice versa, as the context may require.
SECTION 1.3. CERTAIN REFERENCES. Each reference in this Agreement to a
designated section, subsection, paragraph or subparagraph is a reference to the
designated section, subsection, paragraph or subparagraph, as the case may be,
of this Agreement. When used in this Agreement, the words "herein", "hereof" and
"hereunder", and other words of similar import, refer to this Agreement as a
whole and not to any particular provision of this Agreement.
SECTION 1.4. ACCOUNTING PRINCIPLES. When the character or amount of any
asset or liability or item of income or expense is required to be determined, or
any consolidation or other accounting computation is required to be made, for
the purposes of this Agreement, the same shall be determined or made, as the
case may be, in accordance with United States generally accepted accounting
principles ("GAAP") as in effect on the date of such determination.
SECTION 1.5. HEADINGS. All section and paragraph headings in this
Agreement, and any table of contents or index of documents or exhibits, are
included herein solely for convenience of reference and shall not constitute a
part of this Agreement for the purpose of the construction or interpretation
hereof.
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ARTICLE II
THE LOANS
SECTION 2.1. THE LOAN COMMITMENT. (a) AMOUNT. Subject to the terms and
conditions of this Agreement, the Subordinated Lender hereby agrees to lend to
the Borrower, in one or more disbursements made during the period from the date
hereof to the Commitment Termination Date, an aggregate principal amount not to
exceed the sum of $40,000,000 at any time outstanding (the "COMMITMENT"). Within
the foregoing limitations, and subject to the conditions set forth herein, the
Borrower may borrow, pay or prepay and reborrow hereunder.
(b) REDUCTION OF THE COMMITMENT. The Borrower may, at any time upon
written notice to the Subordinated Lender and written consent of the Senior
Lenders, reduce in part or terminate in whole the Commitment. Notwithstanding
any other provision of this Agreement, on the Commitment Termination Date, the
Commitment shall automatically and permanently terminate.
SECTION 2.2. METHOD OF DISBURSEMENT OF THE LOANS. Each disbursement of
a Loan shall be made by the Subordinated Lender pursuant to a notice of
borrowing delivered to the Subordinated Lender, with a copy to each Senior
Lender, not later than 11:00 AM (New York time) on the third Business Day before
the proposed date of the disbursement (the "DISBURSEMENT DATE"). Each notice of
borrowing shall be delivered by telecopier, or by telephone, confirmed
immediately by telecopier, specifying the requested Disbursement Date and the
amount of the Loan to be made on such date. The Subordinated Lender agrees that
on or before such Disbursement Date, the Subordinated Lender shall make
available to the Borrower, in same day funds such amounts requested by the
Borrower according to Section 2.1, which shall be delivered to the account
identified for such purpose in the notice of borrowing delivered to the
Subordinated Lender by the Borrower.
SECTION 2.3. THE SUBORDINATED NOTE. The indebtedness of the Borrower to
the Subordinated Lender resulting from Loans made from time to time pursuant to
this Agreement shall be evidenced by a Subordinated Note. The Subordinated
Lender will note on the grid attached to the Subordinated Note and in its
internal records, to the extent applicable, the date and amount of each Loan
made hereunder, and the amount of each payment in respect thereof, and prior to
any transfer of the Subordinated Note or any portion thereof, will endorse
thereon the outstanding principal amount evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of the
Loans. Absent manifest error, the Subordinated Lender's records or notations on
the Subordinated Note as to the outstanding principal amount of the Subordinated
Note shall be conclusive.
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SECTION 2.4. INTEREST RATE AND PAYMENT OF INTEREST. (a) The outstanding
principal amount of each Loan shall bear interest from the date of such Loan
until the principal amount thereof is paid in full, payable on the last day of
each Interest Period for such Loan and on the date of payment in full of such
principal amount, at a rate equal to 14% per annum at all times during the
period from the date hereof through (and including) January 31, 1999 and 16% per
annum at all times thereafter. Interest shall be calculated on the basis of a
year of 365 days for the actual number of days (including the first day but
excluding the last day) elapsed.
(b) The period between the date any Loan is made and the date of
payment in full of the principal amount thereof shall be divided into successive
periods of one calendar month (each, an "INTEREST PERIOD"), with each such
Interest Period ending on the last day of a calendar month, except that the
initial Interest Period for any Loan shall begin on the date it is made. Each
subsequent Interest Period shall begin on the last day of the preceding Interest
Period; provided, that (i) any Interest Period that would otherwise end on a day
that is not a Business Day shall, subject to clauses (ii) and (iii) below, be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day; (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (iii), end on the last Business Day of a calendar
month; and (iii) any Interest Period that would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination Date.
SECTION 2.5. PREPAYMENT OF THE LOANS. Subject to Section 2.8, the
Borrower shall have the right at any time, and from time to time, upon providing
notice to the Subordinated Lender at least one Business Day before the date of
prepayment, to prepay the Loans, in whole or in part, without premium or
penalty; provided that (a) both before and after giving effect to such
prepayment, no Senior Default shall have occurred and be continuing, (b) no
later than two Business Days prior to such prepayment, the Borrower shall have
provided to the Senior Lenders, a certificate establishing that, after giving
effect to such prepayment, the Borrower shall remain in compliance with all
financial covenants under the Senior Loan Agreements, and (c) prior to such
prepayment no Senior Lender shall have notified the Borrower that such Senior
Lender believes that such prepayment would result in a Senior Default. On and
after the Commitment Termination Date, if the Subordinated Note is paid in full,
it shall be surrendered to the Borrower and canceled and shall not be reissued.
SECTION 2.6. REPAYMENT AND MATURITY. (a) Subject to Section 2.8, the
Borrower shall repay the outstanding principal amount of the Subordinated Note
on the Commitment Termination Date. The Borrower shall make each payment under
this Agreement and under the Subordinated Note not later than 11:00 A.M. (New
York time) on the date when due in dollars of the United States of America to
the Subordinated Lender at the location set forth in the Subordinated Note
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(or such other location as the Subordinated Lender shall designate in writing to
the Borrower) in same day funds.
(b) Whenever any payment shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and interest shall be calculated up to that Business Day.
SECTION 2.7. USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loans for only the purposes set forth in the recitals to this Agreement.
SECTION 2.8. SUBORDINATION.
(a) SUBORDINATION OF LIABILITIES. The Borrower, for itself, its
successors and assigns, covenants and agrees, and the holder of the indebtedness
evidenced by this Agreement and the Subordinated Note (the "SUBORDINATED DEBT")
by its acceptance hereof and thereof likewise covenants and agrees that the
payment of the principal of, and interest on, and all other amounts owing in
respect of, the Subordinated Debt is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full of
the Senior Debt in cash. In furtherance of the foregoing, in each case to the
extent prohibited by this Section 2.8, the Subordinated Lender will not take,
demand or receive from the Borrower, and the Borrower will not make, give or
permit, directly or indirectly, by set-off, redemption, purchase or in any other
manner, any payment of or security for the whole or any part of the Subordinated
Debt. The subordination provisions set forth herein shall constitute a
continuing offer to the Senior Lenders and all persons who, in reliance upon
such provisions, become holders of, or continue to hold, Senior Debt, and such
provisions are made for the benefit of the Senior Lenders and such holders,
which are hereby made obligees hereunder to the same extent as if their names
were written herein as such, and they and/or each of them may proceed to enforce
such provisions.
(b) UPON LIQUIDATION, DISSOLUTION, ETC. Upon any payment or
distribution of assets of the Borrower to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedings of the Borrower, whether voluntary or involuntary (except in
connection with the consolidation or merger of the Borrower or its liquidation
or dissolution following the conveyance, transfer or lease of its properties and
assets substantially as an entirety) (each such event, a "DISTRIBUTION EVENT"),
the holders of Senior Debt will first be entitled to receive payment in full, in
cash or cash equivalents, of all amounts due or to become due on or in respect
of such Senior Debt (including interest accruing after the commencement of any
such proceeding at the rate specified in the applicable Senior Loan Agreement)
before the Subordinated Lender is entitled to receive any payment of principal
of or interest on the Subordinated Debt. In the event that, notwithstanding the
foregoing, the Subordinated Lender receives any payment or distribution of
assets of the Borrower of any kind or character after the occurrence of a
Distribution Event but
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before all the Senior Debt is paid in full, then such payment or distribution
will be held in trust for the holders of Senior Debt and will be required to be
paid over or delivered forthwith to the trustee in bankruptcy or other Person
making payment or distribution of assets of the Borrower for application to the
payment of all Senior Debt remaining unpaid, to the extent necessary to pay the
Senior Debt in full.
Upon the occurrence of any bankruptcy, insolvency or similar event or
proceeding commenced by or against the Borrower:
(i) the Subordinated Lender irrevocably authorizes and
empowers each Senior Lender (A) to demand, xxx for, collect and receive
every payment or distribution on account of the Subordinated Debt
payable or deliverable in connection with such event or proceeding and
give acquittance therefor, and (B) to file claims and proofs of claim
in any statutory or non-statutory proceeding and take such other
actions, in its own name, or in the name of the Subordinated Lender or
otherwise, as such Senior Lender may deem necessary or advisable for
the enforcement of the provisions of this Agreement; provided, however,
that the foregoing authorization and empowerment imposes no obligation
on any Senior Lender to take any such action;
(ii) the Subordinated Lender shall take such action, duly and
promptly, as any Senior Lender may request from time to time (A) to
collect the Subordinated Debt for the respective accounts of the Senior
Lenders (ratably in accordance with the obligations owed to them by the
Borrower) and (B) to file appropriate proofs of claim in respect of the
Subordinated Debt; and
(iii) the Subordinated Lender shall execute and deliver such
powers of attorney, assignments or proofs of claim or other instruments
as the Senior Lenders may request to enable the Senior Lenders to
enforce any and all claims in respect of the Subordinated Debt and to
collect and receive (ratably in accordance with the obligations owed to
them by the Borrower) any and all payments and distributions that may
be payable or deliverable at any time upon or in respect of the
Subordinated Debt.
(c) UPON CERTAIN DEFAULTS. The Borrower may not make (and the
Subordinated Lender may not ask, demand, xxx for, or otherwise take, accept or
receive) any payments on account of the Subordinated Debt if (i) a default in
the payment of principal of (or premium, if any) or interest on any Senior Debt
has occurred and is continuing or a default in the payment when due of any other
obligation under any Senior Debt has occurred and is continuing (a "SENIOR
PAYMENT DEFAULT") or (ii) any default (other than a Senior Payment Default) has
occurred and is continuing with respect to any Senior Debt permitting the
holders thereof (or a trustee or agent on behalf thereof) to accelerate the
maturity thereof (a "SENIOR NONMONETARY DEFAULT") until the date, if any, on
which the Senior Debt to which such Senior Default relates is paid in full or is
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waived or otherwise cured. In furtherance of the foregoing, unless and until the
earlier to occur of (i) the payment in full of the Senior Debt and (ii) April
10, 1999, the Subordinated Lender will not commence any proceeding against the
Borrower, or join with any creditor in any such proceeding, under any
bankruptcy, reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation or insolvency law or statute of the Federal or any
state government, unless any Senior Lender shall also join in bringing such
proceeding (it being understood that the mere filing of a proof of claim by the
Subordinated Lender shall not constitute a breach hereof).
(d) SUBROGATION. Subject to the prior payment in full of all Senior
Debt in cash, the Subordinated Lender shall be subrogated to the rights of the
Senior Lenders to receive payments or distributions of assets of the Borrower
applicable to the Senior Debt until all amounts owing in respect of the
Subordinated Debt shall be paid in full, and for the purpose of such subrogation
no payments or distributions to the holders of the Senior Debt by or on behalf
of the Borrower or by or on behalf of the Subordinated Lender by virtue of the
subordination provisions set forth herein that otherwise would have been made to
the Subordinated Lender, shall be deemed to be payment by the Borrower to or on
account of the Senior Debt, it being understood that the subordination
provisions set forth herein are and are intended solely for the purpose of
defining the relative rights of the Subordinated Lender, on the one hand, and
the Senior Lenders, on the other hand.
(e) OBLIGATION OF THE BORROWER UNCONDITIONAL. Nothing contained in the
subordination provisions set forth herein is intended to or shall impair, as
between the Borrower and the Subordinated Lender, the obligation of the
Borrower, which is absolute and unconditional, to pay to the Subordinated Lender
the principal of and interest on the Subordinated Debt as and when the same
shall become due and payable in accordance with its terms, or is intended to or
shall affect the relative rights of the Subordinated Lender and creditors of the
Borrower other than the Senior Lenders, nor shall anything herein or therein
prevent the Subordinated Lender from exercising all remedies otherwise permitted
by applicable law, subject to the rights, if any, under the subordination
provisions set forth herein of the Senior Lenders in respect of cash, property,
or securities of the Borrower received upon the exercise of any such remedy.
Upon any distribution of assets of the Borrower referred to herein, the
Subordinated Lender shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Subordinated Lender, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Borrower, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
hereto.
(f) SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF BORROWER
OR SENIOR LENDERS. No rights of the Senior Lenders to enforce subordination as
herein provided shall at any
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time in any way be prejudiced or impaired by an act or failure to act on the
part of the Borrower or by any act or failure to act by any such Senior Lender,
or by any noncompliance by the Borrower with the terms and provisions of the
Subordinated Debt, regardless of any knowledge thereof that any such Senior
Lender may have or be otherwise charged with. The Senior Lenders may, without in
any way affecting the obligations of the Subordinated Lender with respect
thereto, at any time or from time to time and in its absolute discretion, change
the manner, place or terms of payment of, change or extend the time of payment
of, or renew or alter, any Senior Debt, or amend, modify or supplement any
agreement or instrument governing or evidencing such Senior Debt or any other
document referred to therein, or exercise or refrain from exercising any other
of their rights under the Senior Debt including, without limitation, the waiver
of a default thereunder and the release of any collateral securing such Senior
Debt, all without notice to or assent from the Subordinated Lender.
SECTION 2.9. TAXES. (a) Any and all payments by the Borrower shall be
made, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on the Subordinated Lender's
income, and franchise taxes imposed on the Subordinated Lender, by any
jurisdiction (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable to the Subordinated Lender, (i) the sum payable shall be increased
as may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.9) the
Subordinated Lender receives an amount equal to the sum it would have received
had no such deductions been made; provided, however, that if the Borrower's
obligation to deduct or withhold Taxes is caused solely by the Subordinated
Lender's failure to provide appropriate withholding exemption certificates for
which the Subordinated Lender is eligible, no such increase shall be required;
(ii) the Borrower shall make such deductions; and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamps or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement or the
Subordinated Note (hereinafter referred to as "OTHER TAXES").
(c) The Borrower will pay when due all Taxes payable in respect of any
payment. Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Subordinated Lender, at its address set forth in the
Subordinated Note, the original or a certified copy of a receipt evidencing
payment of such Taxes.
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(d) In the event that any amount payable to the Subordinated Lender is
increased pursuant to Section 2.9(a) on account of Taxes or the Borrower pays on
behalf of the Subordinated Lender any Taxes or Other Taxes, and subsequently the
Subordinated Lender receives a refund with respect to such amount, such Taxes or
Other Taxes, the Subordinated Lender shall promptly turn over such refund to
Borrower; provided, however, that such refund shall be retained by the
Subordinated Lender and turned over to the Borrower only when the Subordinated
Lender's rights to receive such refund shall have become final and
non-appealable.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1. DOCUMENTS REQUIRED FOR THE INITIAL LOAN. The obligation of
the Subordinated Lender to make the initial Loan hereunder is subject to the
satisfaction of the condition precedent that the Borrower shall have delivered
the following documents to the Subordinated Lender, in such number of
counterparts or copies as the Subordinated Lender may reasonably request:
(a) a duly executed copy of this Agreement and the Subordinated Note;
(b) certified (as of the Closing Date) resolutions of the board of
directors of the Borrower, in form and substance reasonably satisfactory to the
Subordinated Lender, authorizing the execution, delivery and performance of the
Subordinated Loan Documents;
(c) a certificate of an authorized officer of the Borrower, dated the
Closing Date, to the effect that:
(i) the representations and warranties of the Borrower set
forth in Section 4.1 are true and correct in all material respects as
of the Closing Date; and
(ii) no Commitment Termination Event has occurred and is
continuing as of the Closing Date;
(d) evidence, satisfactory to the Subordinated Lender that the Senior
Loan Agreements are in full force and effect; and
(e) such other documents, certificates and legal opinions as the
Subordinated Lender may reasonably request.
SECTION 3.2. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the
Subordinated Lender to make each Loan (including the initial Loan) hereunder is
subject to the satisfaction of
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the condition precedent that on the applicable Disbursement Date, no Commitment
Termination Event shall have occurred and be continuing (and the Subordinated
Lender shall have received a certificate of an authorized officer of the
Borrower, dated such Disbursement Date, to such effect).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS OF BORROWER. The Borrower represents and
warrants to the Subordinated Lender as follows:
(a) CORPORATE EXISTENCE: COMPLIANCE WITH LAW. The Borrower (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, (ii) has the corporate power and authority,
and has all governmental licenses, authorizations, consents and approvals
necessary, to own and operate its property, to lease the property it operates as
lessee and to carry on its business as now being or as proposed to be conducted,
(iii) is duly qualified to do business and is in good standing under the laws of
each jurisdiction in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify should be reasonably
expected (either individually or in the aggregate) to have a material adverse
effect on the business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole, (iv) is in
compliance in all material respects with all applicable laws, and (v) is in
compliance in all material respects with its obligations under its articles of
incorporation and by-laws.
(b) CORPORATE POWER: AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
(i) The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform this Agreement and the Subordinated Note,
and has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement and the Subordinated Note, and the
execution, delivery and performance of this Agreement and the Subordinated Note.
(ii) No consent or authorization of, approval by, notice to, filing
with or other act by or in respect of, any governmental authority or any other
Person is required or necessary in connection with the borrowings hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement or the Subordinated Note, except as previously obtained and currently
in full force and effect.
(iii) This Agreement and the Subordinated Note have been duly and
validly executed and delivered by the Borrower, and each constitutes, a legal,
valid and binding obligation of the
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Borrower, enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the Subordinated Note, the borrowings hereunder and the use of the
proceeds thereof will not (i) violate any applicable law, any provision of the
Borrower's articles of incorporation or by-laws or contractual obligation of the
Borrower or (ii) result in, or require, the creation or imposition of any lien
on any of the Borrower properties or revenues pursuant to any applicable law,
any provision of any agreement, instrument or other undertaking to which the
Borrower is a party or by which any of its property is bound, or any provision
of any security issued by the Borrower.
(d) MARGIN REGULATIONS. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under, or for any other purpose which
violates or would be inconsistent with the provisions of, Regulation T, U or X
of the Board of Governors of the Federal Reserve System.
(e) INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or state statute or
regulation which limits its ability to incur indebtedness.
(f) BORROWER SOLVENT; FRAUDULENT CONVEYANCE. As of the date hereof and
immediately after giving effect to each Loan, (i) the fair value of the assets
of the Borrower is and shall be greater than the fair value of the liabilities
(including, without limitation, contingent liabilities if and to the extent
required to be recorded as a liability on the financial statements of the
Borrower in accordance with GAAP) of the Borrower, and (ii) the Borrower is and
will be solvent, is and will be able to pay its debts as they mature and does
not and will not have an unreasonably small capital to engage in the business in
which it is engaged and proposes to engage. Borrower does not intend to incur,
or believe that it has incurred, debts beyond its ability to pay such debts as
they mature. Borrower is not transferring any assets with any intent to hinder,
delay or defraud any of its creditors.
SECTION 4.2. REPRESENTATIONS OF THE SUBORDINATED LENDER.
(a) INFORMATION RECEIVED. The Subordinated Lender has had the
opportunity to ask questions of and receive answers from representatives of the
Borrower concerning the terms and conditions of this investment, and all
questions asked by the Subordinated Lender have been adequately answered to the
satisfaction of the Subordinated Lender. The Subordinated Lender has
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received or has had access to all additional information concerning the Borrower
and the transactions contemplated hereby that it has requested.
(b) NONDISTRIBUTIVE INTENT. The Subordinated Lender is acquiring the
Subordinated Note for its own account, for investment and with no view to the
distribution thereof.
(c) SUBORDINATED NOTE NOT REGISTERED. The Subordinated Lender
acknowledges that the Subordinated Note has not been registered under the
Securities Act of 1933 or the securities laws of any state of the United States
or any other jurisdiction and may not be offered or sold by the Subordinated
Lender unless subsequently registered under that Act and any other applicable
securities laws or unless exemptions from the registration or other requirements
thereof are available for the transaction, which exemptions shall be established
to the reasonable satisfaction of the Borrower, by opinion of counsel or
otherwise.
(d) ECONOMIC LOSS AND SOPHISTICATION. The Subordinated Lender is able
to bear the economic risk of losing its entire investment in the Subordinated
Note. The Subordinated Lender's overall commitment to investments that are not
readily marketable is not disproportionate to its net worth. The Subordinated
Lender's investment in the Subordinated Note will not cause such overall
commitment to become excessive. The Subordinated Lender has such knowledge and
experience in financial and business matters that it is capable of evaluating
the risks and merits of this investment.
(e) LEGENDS ON THE SUBORDINATED NOTE. The Subordinated Lender
acknowledges that the certificates representing the Subordinated Note will
contain legends reflecting the subordination provisions hereof and the
restrictions on transfer imposed by the United States securities laws and that
such restrictions will be noted on the Borrower's transfer records.
ARTICLE V
COVENANTS
The Borrower covenants and agrees with the Subordinated Lender that, so
long as the Subordinated Lender shall have any Commitment or any amount payable
by the Borrower under the Subordinated Loan Documents shall remain outstanding:
SECTION 5.1. FINANCIAL STATEMENTS. The Borrower shall deliver to the
Subordinated Lender:
(a) as soon as available and in any event within 50 days after the end
of each of the first three quarterly fiscal periods of each fiscal year of the
Borrower, the consolidated and consolidating balance sheets of the Borrower and
its consolidated Subsidiaries as at the end of
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such period and the related unaudited consolidated and consolidating statements
of income and of cash flows for the Borrower and its consolidated Subsidiaries
for such period and the portion of the fiscal year through the end of such
period, if applicable, setting forth in each case in comparative form the
figures for the previous year, accompanied by a certificate of an authorized
officer of the Borrower, which certificate shall state that said consolidated
financial statements fairly present the consolidated and consolidating financial
condition and results of operations of the Borrower and its Subsidiaries in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 100 days after the end
of the fiscal year of the Borrower, the audited consolidated and consolidating
balance sheets of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such year, if applicable, setting forth in each
case in comparative form the figures for the previous year, accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated and consolidating financial
statements fairly present the consolidated Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP; and
(c) promptly and in any event within five Business Days following
request therefor by the Subordinated Lender directed to the persons to whom
notice is to be given pursuant to Section 7.5, from time to time such other
information regarding the financial conditions, operations, or business of the
Borrower and its Subsidiaries as the Subordinated Lender may reasonably request.
SECTION 5.2. EXISTENCE, ETC. The Borrower will:
(i) preserve and maintain all of its material rights,
privileges, licenses and franchises;
(ii) comply with the requirements of all applicable laws
(including, without limitation, all environmental laws) if failure to
comply with such requirements should reasonably be expected (either
individually or in the aggregate) to have a material adverse effect on
the business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole; and
(iii) keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently
applied.
SECTION 5.3. MAINTENANCE OF PROPERTY; INSURANCE. The Borrower shall
keep all property useful and necessary in its business in good working order and
condition. The Borrower shall
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maintain errors and omissions insurance and/or mortgage impairment insurance and
blanket bond coverage in such amounts as are in effect on the date hereof (as
disclosed to Subordinated Lender in writing) and shall not reduce such coverage
without the written consent of the Subordinated Lender, and shall also maintain
such other insurance with financially sound and reputable insurance companies,
and with respect to property and risk of a character usually maintained by
entities engaged in the same or similar business similarly situated, against
loss, damage and liability of the kinds and in the amounts customarily
maintained by such entities.
SECTION 5.4. NOTICES. The Borrower shall give notice to the
Subordinated Lender promptly:
(i) upon the Borrower becoming aware of and in any event
within two Business Days after, the occurrence of any Default or Event
of Default or any default under any other material agreement of the
Borrower including, but not limited to, any Senior Loan Agreement;
(ii) upon, and in any event within three Business Days after,
service of process on the Borrower or any of its Subsidiaries, or any
agent thereof for service of process, in respect of any legal or
arbitrable proceedings affecting the Borrower or any of its
Subsidiaries (A) that questions or challenges the validity or
enforceability of any of this Agreement or the Subordinated Note or (B)
in which the amount in controversy exceeds $1,000,000; and
(iii) of entry of a judgment or decree affecting the Borrower
in an amount in excess of $1,000,000.
Each notice pursuant to this Section 5.4 shall be accompanied by a statement of
an authorized officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken or proposes
to take with respect thereto.
SECTION 5.5. OTHER INFORMATION. The Borrower shall furnish to the
Subordinated Lender, as soon as available, copies of any and all proxy
statements, financial statements and reports which the Borrower sends to its
stockholders, and copies of all regular, periodic and special reports, and all
registration statements filed with the Securities and Exchange Commission and/or
any governmental authority that supervises the issuance of securities by the
Borrower.
SECTION 5.6. PROHIBITION OF FUNDAMENTAL CHANGES. Neither the Borrower
nor any of its Subsidiaries shall enter into any transaction of merger or
consolidation or amalgamation, or dissolve itself (or suffer any dissolution).
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SECTION 5.7. LIMITATION ON DISTRIBUTIONS. The Borrower shall not make
any payment on account of, or set apart assets for, a sinking or other analogous
fund for the purchase, redemption, defeasance, retirement or other acquisition
of any equity or partnership interest of the Borrower, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower;
provided, however, that the foregoing shall not limit or prohibit the Borrower's
payment of dividends or distributions as required by the Internal Revenue Code
of 1986, as the same may be amended from time to time, in connection with the
Borrower's status as a real estate investment trust.
SECTION 5.8. LIMITATION ON ACQUISITIONS. Neither the Borrower nor any
of its Subsidiaries shall acquire any assets in excess of $1,000 individually
and $5,000 in the aggregate, other than pursuant to loan commitments in
existence on the date hereof.
SECTION 5.9. AMENDMENTS. The Borrower shall not agree to or enter into
any amendment to or other modification of any Senior Loan Agreement, other than
any amendments entered into on the date of this Agreement, that would have the
effect of increasing the principal amount of indebtedness, or rate of interest
or fees payable, under such Senior Loan Agreement.
SECTION 5.10. ADDITIONAL INDEBTEDNESS. Neither the Borrower nor any of
its Subsidiaries shall incur any indebtedness not outstanding on the date hereof
that shall rank senior to, or pari passu with, the Subordinated Debt except for:
(a) indebtedness under the Senior Loan Agreements; and
(b) indebtedness secured by assets of the Borrower upon which no lien,
security interest or encumbrance then exists, provided that such lien or
encumbrance, or recourse to the Borrower (subject to customary exceptions to
nonrecourse provisions), does not extend beyond the asset being financed. Such
assets shall include, but shall not be limited to, (i) a mortgage loan secured
by Lakeside Plaza and Bryarwood 85 Office Center and (ii) loans secured by
various mortgage-backed securities held by the Borrower on the date hereof and
upon which no lien or encumbrance currently exists.
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ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall exist if
any of the following conditions or events shall occur and be continuing:
(a) the Borrower shall default in the payment of any principal of the
Loans after the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or
(b) at any time the Borrower is not prohibited from making payments of
interest pursuant to Section 2.8, the Borrower shall default in the payment of
any interest on the Loan for more than three Business Days after the same
becomes due and payable; or
(c) the Borrower shall default in the performance or compliance with
any obligation to be performed or complied with by it hereunder (except the
obligations described in subsections (a) and (b) of this Section 6.1) and such
default shall not be remedied within twenty Business Days after the Borrower
shall receive notice of such failure from the Subordinated Lender; or
(d) the Borrower shall default in the payment of, or the Borrower shall
default in the performance of or compliance with any term under any agreement
creating, evidencing or securing, any Senior Debt in an aggregate outstanding
principal amount of at least $1,000,000, and, in each case as a consequence of
such default, such Senior Debt has become, or has been declared due and payable
before its stated maturity or before its regularly scheduled dates of payment;
or
(e) any representation, warranty or certificate made or furnished by
the Borrower in writing to the Subordinated Lender in connection with any
Subordinated Loan Document, or as inducement to the Subordinated Lender to enter
into any Subordinated Loan Document, or in any separate statement or document
delivered hereunder to the Subordinated Lender, shall have been materially false
or incorrect on the date as of which made; or
(f) the Borrower is generally not paying, or admits in writing its
inability to pay, its debts as they become due or shall have made an assignment
for the benefit of any of its creditors; or
(g) proceedings in bankruptcy, or for reorganization of the Borrower,
or for the readjustment of any of the debts thereof, or for the relief of
debtors, now or hereafter existing, shall have been commenced by the Borrower,
or shall have been commenced against the Borrower and shall not have been
discharged within 60 days of their commencement; or
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(h) a receiver, custodian or trustee shall have been appointed for the
Borrower or for any substantial part of its assets, or any proceedings shall
have been instituted for the dissolution or the full or partial liquidation of
the Borrower, and such receiver, custodian or trustee shall not have been
discharged within 60 days of its appointment, or such proceedings shall not have
been discharged within 60 days of their commencement, or the Borrower shall have
discontinued business or shall have materially changed the nature of its
business; or
(i) the Borrower shall have suffered final judgments for the payment of
money aggregating in excess of $1,000,000 that are not covered by insurance and
shall not have discharged or bonded the same within a period of 60 days unless,
pending further proceedings, execution shall not have been commenced or shall
have been effectively stayed; or
(j) a Change in Control shall occur.
SECTION 6.2. INTEREST AFTER DEFAULT; INTEREST ON INTEREST. Immediately
and without notice upon the occurrence of an Event of Default, and thereafter
until such Event of Default shall have been cured or waived by the Subordinated
Lender, the Loans shall accrue interest at the Default Rate, payable on demand
subject to Section 2.8. In addition to the foregoing, any interest payable
hereunder that is not paid when due, other than by operation of Section 2.8 at
any time prior to April 10, 1998, shall accrue interest at the Default Rate,
payable on demand, subject in all cases to Section 2.8.
SECTION 6.3. REMEDIES. If an Event of Default has occurred and is
continuing, the Subordinated Lender, by notice to the Borrower (i) may, if such
Event of Default constitutes a Commitment Termination Event, declare the
obligation of the Subordinated Lender to make Loans to be terminated, whereupon
the same shall forthwith terminate, and (ii) subject to Section 2.8, may declare
the Subordinated Note, all interest thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Subordinated Note,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of an Event of Default pursuant to subsection (g) of Section
6.1, (A) the obligation of the Subordinated Lender to make Loans shall
automatically be terminated and (B) the Subordinated Note, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. Subject to Section 2.8, after any acceleration
of a Loan, as provided for above, the Subordinated Lender shall have, in
addition to the rights and remedies given it by the Subordinated Loan Documents,
all others allowed by all applicable laws.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1. AMENDMENT AND WAIVER. This Agreement and the Subordinated
Note may not be amended except by an instrument in writing signed by the parties
hereto. The observance of any term hereof or of the Subordinated Note may be
waived (either retroactively or prospectively), with (and only with) the written
consent of the Borrower or the Subordinated Lender, as the case may be.
SECTION 7.2. FURTHER ASSURANCES. From time to time, the Borrower will
execute and deliver to the Subordinated Lender such additional documents and
will provide such additional information as the Subordinated Lender may
reasonably require to carry out the terms of this Agreement and to be informed
of the Borrower's status and affairs.
SECTION 7.3. ENFORCEMENT AND WAIVER BY THE SUBORDINATED LENDER. The
Subordinated Lender shall have the right at all times, subject to the provisions
of Section 2.8, to enforce the provisions of the Subordinated Loan Documents in
strict accordance with the terms hereof and thereof, notwithstanding any conduct
or custom on the part of the Subordinated Lender in refraining from so doing at
any time or times. The failure of a Subordinated Lender at any time or times to
enforce its rights under such provisions, strictly in accordance with the same,
shall not be construed as having created a custom in any way or manner contrary
to specific provisions of the Subordinated Loan Documents or as having in any
way or manner modified or waived the same. All rights and remedies of the
Subordinated Lender are cumulative and concurrent and the exercise of one right
or remedy shall not be deemed a waiver or release of any other right or remedy.
SECTION 7.4. COSTS AND EXPENSES; INDEMNIFICATION. (a) The Borrower
agrees to pay on demand (i) all reasonable costs and expenses of the
Subordinated Lender in connection with the execution, delivery, waiver,
amendment or enforcement of the Subordinated Loan Documents (including, without
limitation, the fees and expenses of counsel to the Subordinated Lender with
respect thereto, with respect to advising the Subordinated Lender as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Subordinated Loan Documents, with respect to
negotiations with the Borrower or with other creditors of the Borrower or any of
its Subsidiaries arising out of any Default or any events of circumstances that
may give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceedings involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of the Subordinated Lender in
connection with the enforcement of the Subordinated Loan Documents, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
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proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable fees and expenses of counsel for the
Subordinated Lender with respect thereto).
(b) (i) The Borrower agrees that it will indemnify and hold harmless
the Subordinated Lender to the fullest extent permitted by law, from
and against any and all losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and
disbursements (and any and all actions, suits, proceedings and
investigations in respect thereof and any and all legal or other costs,
expenses and disbursements in giving testimony or furnishing documents
in response to a subpoena or otherwise), including, without limitation,
the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, proceeding or
investigation (whether or not in connection with litigation in which
the Subordinated Lender is a party thereto), directly or indirectly,
caused by, relating to, based upon, arising out of or in connection
with (A) this Agreement and the other Subordinated Loan Documents, (B)
the Senior Loan Agreements or (C) any untrue statement or alleged
untrue statement of a material fact contained in, or omissions or
alleged omissions from any filing with any governmental agency or
similar statements or omissions in or from any information furnished by
the Borrower or any of its Subsidiaries or Affiliates to the
Subordinated Lender or any other person in connection with this
Agreement and the other Subordinated Loan Documents; provided, however,
that such indemnity agreement shall not apply to any such loss, claim,
damage, obligation, penalty, judgment, award, liability, cost, expense
or disbursement to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have
resulted primarily and directly from the gross negligence or willful
misconduct of the Subordinated Lender. The Borrower also agrees that
the Subordinated Lender shall have no liability (whether direct or
indirect, in contract or tort or otherwise) to the Borrower for or in
connection with this Agreement and the other Subordinated Loan
Documents or the transactions contemplated thereby including, without
limitation, the Senior Loan Agreements, except for any such losses,
claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements that are finally
judicially determined by a court of competent jurisdiction (not subject
to further appeal) to have resulted from the bad faith or gross
negligence of the Subordinated Lender.
(ii) The indemnification provisions in this Section shall be
in addition to any liability that the Borrower may have to the
Subordinated Lender or the Persons indemnified below in this sentence
and shall extend to the following: the Subordinated Lender and its
Affiliates, directors, officers, employees, legal counsel, agents and
controlling persons (within the meaning of the federal securities
laws), and none of such indemnified persons shall be liable for any act
or omission of the others. All references to "the Subordinated Lender"
in these indemnification provisions shall be understood to include any
and all of the foregoing.
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(iii) In case any action or proceeding shall be commenced
involving the Subordinated Lender in respect of which indemnity may be
sought pursuant to this Section, the Subordinated Lender shall promptly
notify the Borrower in writing and the Borrower shall have the right to
assume the defense of such action, including the employment of counsel
reasonably satisfactory to the Subordinated Lender and the payment of
all fees and expenses of such counsel, as incurred. The Subordinated
Lender shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Subordinated
Lender unless (A) the employment of such counsel shall have been
specifically authorized in writing by the Borrower, (B) the Borrower
shall have failed to assume the defense of such action or employ
counsel reasonably satisfactory to the Subordinated Lender or (C) the
named parties to any such action (including any impleaded parties)
include both the Subordinated Lender and the Borrower, and the
Subordinated Lender shall have been advised by such counsel that either
(A) there may be one or more legal defenses available to it that are
different from or additional to those available to the Borrower or (B)
a conflict may exist between the Borrower and the Subordinated Lender
(in which case the Borrower shall not have the right to assume the
defense of such action on behalf of the Subordinated Lender). The
Borrower shall indemnify and hold harmless the Subordinated Lender from
and against any and all losses, claims, damages, liabilities and
judgments by reason of any settlement of any action (A) effected with
the written consent of the Borrower or (B) effected without its written
consent if the settlement is entered into more than twenty Business
Days after the Borrower shall have received a request from the
Subordinated Lender for reimbursement for the reasonable fees and
expenses of counsel (in any case where such fees and expenses are at
the expense of the Borrower) and, prior to the date of such settlement,
the Borrower shall have failed to comply with such reimbursement
request. The Borrower shall not, without the prior written consent of
the Subordinated Lender, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the Subordinated Lender is or
could have been a party and indemnity or contribution may be or could
have been sought hereunder by the Subordinated Lender, unless such
settlement, compromise or judgment includes an unconditional release of
the Subordinated Lender from all liability on claims that are or could
have been the subject matter of such action.
(iv) Neither termination of the Commitment nor repayment of
the Loans shall affect the indemnification provisions contained in this
Section, which shall then remain operative and in full force and
effect.
(v) Notwithstanding anything to the contrary set forth herein,
no provision of Section 7.4 shall in any way effect or prejudice any
claim that the Borrower may have
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against Lend Lease or any Subsidiary thereof arising out of its
performance as "Manager" under the Management Agreement.
SECTION 7.5. NOTICES. Any notices or consents required or permitted by
this Agreement shall be in writing and shall be deemed delivered: (i) when
delivered in person: or (ii) if sent by certified mail, postage prepaid, return
receipt requested, or by a recognized overnight delivery service (with charges
prepaid) when received by the addressee thereof; or (iii) if sent by telecopy,
on the Business Day on which sent; in any such case to the following applicable
address, unless such address is changed by written notice hereunder:
If to the Borrower:
Xxxxxxxx Capital Corporation
Attn: Xxxxxx X. Xxxxxxxxxx
Monarch Tower
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx & Bird LLP
Attn: Xxxx X. Xxxxxx
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
If to the Subordinated Lender:
Lend Lease Investments Holdings, Inc.
Attn: Xxxxx Xxxxxx
Monarch Tower
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
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with a copy to:
King & Spalding
Attn: Xxxx X. Xxxxxx, III
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
If to Senior Lenders:
Xxxxxx Guaranty and Trust Company of New York
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10260
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Xxxxxxx Xxxxx Mortgage Capital Inc.
Xxxxxxx Xxxxx World Headquarters
World Financial Center
Xxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
00
00
Xxxxxxxx Xxxx XX, Xxx Xxxx Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Repo Desk, Third Floor
SECTION 7.6. BINDING EFFECT, ASSIGNMENT AND ENTIRE AGREEMENT. (a) This
Agreement shall inure to the benefit of, and shall be binding upon, the
respective successors and permitted assigns of the parties hereto. The Borrower
has no right to assign any of its rights or obligations hereunder without the
prior written consent of the Subordinated Lender. This Agreement, and the
documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties and may be amended only by a writing signed on
behalf of the Borrower and the Subordinated Lender.
(b) The Subordinated Lender may at any time, with the consent of the
Borrower, such consent not to be unreasonably withheld, and which consent shall
not be required if an Event of Default has occurred and is continuing, assign
the Subordinated Note (or any part thereof) to any other person, and the
assignee thereof will be deemed to be a "Subordinated Lender" hereunder.
Borrower agrees to promptly notify the Senior Lenders of any assignment of the
Subordinated Note.
SECTION 7.7. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute but one and the same instrument.
SECTION 7.8. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 7.9. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. (a) The
Borrower agrees for the exclusive benefit of the Subordinated Lender that the
courts of the Supreme Court of the State of New York, County of New York,
Borough of Manhattan, and the United States District Court for the Southern
District of New York will have jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement and that accordingly any suit,
action or proceeding arising out of or in connection with this Agreement may be
brought by the Subordinated Lender in any such court.
(b) The Borrower irrevocably waives and agrees not to raise any
objection that it may have now or hereafter to the laying of the venue of any
proceedings described in subsection (a) above in any such court as is referred
to in this Section 7.9 and any claim that any such proceedings have been brought
in an inconvenient forum and further irrevocably agrees that a
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judgment in any such proceedings brought in any such courts shall be conclusive
and binding upon the Borrower and may be enforced in the courts of any other
jurisdiction.
(c) The Borrower knowingly, voluntarily and intentionally waives any
right which it may have to a trial by jury in respect of any proceedings
described in subsection (a) above. The Borrower acknowledges and agrees that it
has received full and sufficient consideration for this provision.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives thereto duly authorized effective
as of the date first above written.
XXXXXXXX CAPITAL CORPORATION
By
-----------------------------
Name:
Title:
LEND LEASE INVESTMENTS
HOLDINGS, INC.
By
-----------------------------
Name:
Title:
