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Exhibit 10.5
EXECUTION COPY
LOAN AGREEMENT
Dated as of July 31, 1998
by and among
THE BORROWERS LISTED ON SCHEDULE 1 HERETO
as joint and several Borrowers,
MERIDIAN FUNDING COMPANY, LLC,
as the Lender
and
BANKERS TRUST COMPANY
as the Collateral Agent
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TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS........................................................ 2
Section 1.1. Definitions...................................................... 2
ARTICLE II GENERAL TERMS............................................................. 33
Section 2.1. Amount of the Loan; Amounts of Advances.......................... 33
Section 2.2. Use of Proceeds.................................................. 33
Section 2.3. Security for the Loan............................................ 33
Section 2.4. Borrower's Note.................................................. 33
Section 2.5. Principal, Interest and Fees..................................... 34
Section 2.6. Voluntary Prepayment............................................. 34
Section 2.7. Mandatory Prepayment............................................. 35
Section 2.8. Application of Payments.......................................... 37
Section 2.9. Method and Place of Payment...................................... 37
Section 2.10. Taxes............................................................ 37
Section 2.11. Release of Collateral............................................ 37
Section 2.12. Central Cash Management.......................................... 38
Section 2.13. Security Agreement............................................... 45
Section 2.14. Supplemental Mortgage Affidavits................................. 48
ARTICLE III CONDITIONS PRECEDENT..................................................... 48
Section 3.1. Conditions Precedent to Effectiveness............................ 48
Section 3.2. Execution and Delivery of Agreement.............................. 50
Section 3.3. Conditions Precedent to Disbursement of an Advance............... 50
Section 3.4. Acceptance of Borrowings......................................... 54
Section 3.5. Form of Loan Documents and Related Matters....................... 55
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................ 55
Section 4.1. Closing Date Borrower Representations............................ 55
Section 4.2. Advance Closing Date Borrower Representations.................... 59
Section 4.3. Survival of Representations...................................... 66
ARTICLE V AFFIRMATIVE COVENANTS...................................................... 66
Section 5.1. Borrower Covenants............................................... 66
ARTICLE VI NEGATIVE COVENANTS........................................................ 78
Section 6.1. Borrower Negative Covenants...................................... 78
ARTICLE VII DEFAULTS................................................................. 81
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Section 7.1. Event of Default................................................. 81
Section 7.2. Remedies......................................................... 84
Section 7.3. Remedies Cumulative.............................................. 85
ARTICLE VIII MISCELLANEOUS........................................................... 85
Section 8.1. Survival......................................................... 85
Section 8.2. Lender's Discretion.............................................. 86
Section 8.3. Governing Law.................................................... 86
Section 8.4. Modification, Waiver in Writing.................................. 87
Section 8.5. Delay Not a Waiver............................................... 87
Section 8.6. Notices.......................................................... 87
Section 8.7. TRIAL BY JURY.................................................... 88
Section 8.8. Headings......................................................... 88
Section 8.9. Assignment....................................................... 88
Section 8.10. Severability..................................................... 88
Section 8.11. Preferences...................................................... 88
Section 8.12. Waiver of Notice................................................. 88
Section 8.13. Remedies of Borrower............................................. 89
Section 8.14. Exhibits Incorporated............................................ 89
Section 8.15. Offsets, Counterclaims and Defenses.............................. 89
Section 8.16. No Joint Venture or Partnership.................................. 89
Section 8.17. Waiver of Marshaling of Assets Defense........................... 89
Section 8.18. Waiver of Counterclaim........................................... 90
Section 8.19. Conflict; Construction of Documents.............................. 90
Section 8.20. Brokers and Financial Advisors................................... 90
Section 8.21. Counterparts..................................................... 90
Section 8.22. Estoppel Certificates............................................ 90
Section 8.23. Payment of Expenses.............................................. 90
Section 8.24. Bankruptcy Waiver................................................ 91
Section 8.25. Limited Recourse................................................. 92
Section 8.26. Borrower's Agent................................................. 92
Section 8.27. Regarding the Collateral Agent................................... 92
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Schedules
1 - Borrowers
2 - Initial Advance Amounts, Appraised Values, Purchase Prices and
All-In Costs
3 - Capital Structure of Borrower
4 - Survey Requirements
5 - Title Insurance Requirements
Exhibits
A - Promissory Note (Form)
B - Contribution Agreement (Form)
C - Collateral Agency Agreement (Form)
D - Guarantee (Form)
E - Pledge and Security Agreement (Form)
F - Indemnity Agreement (Form)
G - Mortgage, Assignment of Rents, Security Agreement and Fixture
Filing (Form)
H - Present Assignment of Rents (Form)
I - Assignment of U.S. Government Contract (Form)
J - Notice of Assignment (Form)
K - Collateral Assignment of Interest Rate Protection Agreement (Form)
L - Property Manager's Consent and Subordination of Management
Agreement (Form)
M - Estoppel Certificate (Form)
N - Nonconsolidation Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP (Form)
O - Closing Date Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP (Form)
P - Advance Closing Date Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
(Form)
Q - Opinion of Local Counsel (Form)
R - Description of Hedging Policy
S - Required Debt Service Payment Certificate (Form)
T - Request for Borrowing (Form)
U - Partnership Pledge Agreement (Form)
V - Substantive Consolidation Certificate (Form)
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LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of July 31, 1998, is by and among MERIDIAN
FUNDING COMPANY, LLC, a Delaware limited liability company, having an address at
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Lender"), each of the
borrowers listed on Schedule 1 hereto, as such schedule may be amended from time
to time, having the respective addresses listed on such Schedule 1 (each, a
"Borrower" and collectively, the "Borrowers"), and BANKERS TRUST COMPANY, having
an address at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as collateral agent
for the equal and ratable benefit of the Secured Parties defined below (in such
capacity, the "Collateral Agent").
RECITALS
WHEREAS, the Borrowers desire to obtain, on a joint and several basis,
a series of loans (each, an "Advance"; collectively, the "Loan") from the Lender
in an aggregate amount of up to $234,155,624.00 (the "Loan Amount") to finance
or refinance the acquisition by the respective Borrowers of various commercial
real estate properties leased to the federal General Services Administration
and, subject to certain conditions, other properties;
WHEREAS, the Lender is unwilling to make the Loan unless the Borrowers
join in the execution and delivery of this Agreement which shall establish the
terms and conditions of the Loan and of each Advance;
WHEREAS, the Borrowers have agreed to establish certain accounts and
subaccounts and to grant to the Collateral Agent on behalf of the Secured
Parties defined below, including the Lender, a security interest therein upon
the terms and conditions of the security agreement set forth in Section 2.13;
and
WHEREAS, Bankers Trust Company, in its capacity as the Collateral
Agent, is willing to join in the security agreement set forth in Section 2.13 by
execution and delivery of this Agreement in that capacity;
NOW, THEREFORE, in consideration of the making of the Loan by the
Lender and the covenants, agreements, representations and warranties set forth
in this Agreement, the parties hereby covenant, agree, represent and warrant as
follows:
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. For all purposes of this Agreement:
(1) the capitalized terms defined in this Article I have the meanings
assigned to them in this Article I, and include the plural as well as the
singular;
(2) all accounting terms have the meanings assigned to them in
accordance with generally accepted accounting principles in effect in the United
States of America on the date hereof;
(3) the term "including" shall mean "including without limitation";
(4) all references to a contract, agreement or lease herein shall mean
such contract, agreement or lease and all exhibits, schedules and other
attachments thereto, as any such contract, agreement or lease may be amended,
supplemented or otherwise modified from time to time in a manner that does not
violate the provisions of this Agreement;
(5) the words "herein", "hereof", and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(6) the following terms have the following meanings:
"Account Collateral" has the meaning provided in Section 2.13(a).
"Accounts" means all accounts (as defined in the UCC), now owned or
hereafter acquired by any Borrower, and arising out of or in connection with,
the operation of the Facilities and shall also mean and include the Collection
Account, the Sub-Accounts and the Basic Carrying Costs Account, and all other
accounts described in the Property Management Agreements and all present and
future accounts receivable, inventory accounts, contract rights, chattel paper,
notes, acceptances, insurance policies, Instruments, Documents or other rights
to payment and all forms of obligations owing at any time to any Borrower
thereunder, whether now existing or hereafter created or otherwise acquired by
such Borrower, and all Proceeds thereof and all liens, security interests,
guaranties, remedies, privileges and other rights pertaining thereto, and all
rights and remedies of any kind forming the subject matter of any of the
foregoing. Without limiting the generality of the foregoing, the term "Accounts"
shall include (i) all income, rents, issues, profits, revenues, deposits and
other benefits from the Facilities, including, without limitation, all revenues
and credit card receipts collected from restaurants, bars, meeting rooms,
banquet rooms and recreational facilities, all receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising or created out of the sale, lease, sublease, license,
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concession or other grant of the right of the use and occupancy of property or
rendering of services by any Borrower or any operator or manager of the
Facilities or other commercial space located at the Facilities or acquired from
others including, without limiting the generality of the foregoing, from rental
of space, halls, stores, and offices, and deposits securing reservations of such
space, exhibit or sales space of every kind, license, lease, sublease and
concession fees and rentals, food and beverage wholesale and retail sales of
merchandise, service charges, vending machine sales and proceeds, if any, from
business interruption or other loss of income insurance; (ii) all sums of money,
and all instruments, documents and securities held in any accounts in connection
therewith, or any demand, time, savings or other account maintained with any
bank or certificate of deposit issued by any bank with the proceeds of such
account; and (iii) all of the records and books of account now or hereafter
maintained by or on behalf of any Borrower in connection with the operation of
the Facilities.
"Adjusted Cash Flow" means for any period (and calculated for either a
Facility or the Facilities) the Net Operating Income thereof for such period
reduced by (i) an annual allowance for Capital Improvement Costs equal to the
greater of (x) the product of (1) $0.15 and (2) the aggregate area of all
improvements in all Facilities, measured in square feet, and (y) the amount
identified in the Engineering Report(s) as the annual amount needed to be
reserved for ongoing capital expenditures; (ii) annual property or asset
management fees with respect thereto equal to the greater of (x) actual property
or asset management fees paid pursuant to the Property Management Agreements and
(y) 2.5% of Gross Revenue per annum, to the extent that such costs have not been
included in Operating Expenses; (iii) costs of environmental audits and
monitoring, environmental remediation work or any other expenses incurred with
respect to compliance with Environmental Laws for the Facilities (or any
Facility); and (iv) an amount equal to any actual leasing commissions and tenant
improvements with respect thereto or leasing commissions and tenant improvements
with respect thereto projected by the Borrowers (which projections shall be
approved by the Lender) on the basis of Lease maturities. For each Facility, the
initial calculation of Adjusted Cash Flow and all other calculations of Adjusted
Cash Flow made prior to the first anniversary of the Advance Closing Date with
respect to such Facility shall be made on an annualized basis using existing
Adjusted Cash Flow, and using the further assumptions, described on Schedule 1
attached hereto. All calculations of Adjusted Cash Flow for a Facility made
after such time shall be based on Net Operating Income for the prior three-month
and 12-month period.
"Advance" has the meaning provided in the Recitals hereto.
"Advance Closing Date" means each date on which an Advance is made
hereunder with respect to a Facility pursuant to Section 3.3.
"Advance Rate" means, with respect to any Advance or with respect to
all Advances, 75%, or such other amount as shall be determined by the Lender and
the Rating Agencies.
"Advisor" has the meaning provided in Section 8.20.
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"Affiliate" of any specified Person means any other Person Controlling
or Controlled by or under common Control with such specified Person.
"Affiliated Entities" means, collectively, the Borrowers, the
Borrower's Agent, the Guarantor, the Manager, the Operating Partnership and the
Indemnitors.
"Agreement" means this Loan Agreement, as the same may from time to
time hereafter be modified, supplemented or amended.
"All-In Costs" means, with respect to each Facility, the costs
associated with the acquisition of such Facility (including legal expenses,
brokerage fees, financing costs, third party due diligence and other transaction
costs), as set forth on Schedule 2, or with respect to the Facilities financed
after the initial Advance Closing Date, as certified by the Borrowers and
approved by the Lender.
"Allocated Loan Amount" means the portion of the Loan Amount allocated
to each Facility (which initially shall be the amount of the Advance with
respect to such Facility, as set forth on Schedule 2), as such amounts shall be
adjusted from time to time as set forth in this Agreement. Upon each adjustment
in the amount of Principal Indebtedness due to a prepayment of principal
pursuant to Section 2.6, Section 2.7(c), Section 2.7(d) or Section 2.7(e), each
Allocated Loan Amount shall be decreased by an amount equal to the product of
(i) the amount of such principal payment and (ii) a fraction, the numerator of
which is the applicable Allocated Loan Amount (prior to the adjustment in
question) and the denominator of which is the total of all Allocated Loan
Amounts prior to the adjustment to the Principal Indebtedness resulting in the
recalculation of the Allocated Loan Amount. When the Principal Indebtedness is
reduced as a result of (x) the Lender's receipt of Net Proceeds or Loss Proceeds
with respect to a Taking or casualty affecting 100% of a Facility or (y) the
Lender's receipt of the Release Price with respect to an Individual Property
pursuant to a Transfer of such Individual Property pursuant to Section 2.7(a),
the Allocated Loan Amount for the Individual Property with respect to which the
Net Proceeds, Loss Proceeds or Release Price was received shall be reduced to
zero (such Allocated Loan Amount prior to such reduction being referred to as
the "Withdrawn Allocated Amount"), and each other Allocated Loan Amount shall
(i) if the Withdrawn Allocated Amount exceeds such Net Proceeds, Loss Proceeds
or Release Price, as the case may be (such excess being referred to as the
"Proceeds Deficiency"), be increased by an amount equal to the product of (1)
the Proceeds Deficiency and (2) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts other
than the Withdrawn Allocated Amount or (ii) if such Net Proceeds, Loss Proceeds
or Release Price, as the case may be, are greater than or equal to the Withdrawn
Allocated Amount, remain unadjusted.
"Appraisals" means the appraisals with respect to each Facility
delivered to the Lender in connection with the Loan and any more recent
appraisal of any Facility delivered to the Lender (whether or not required to be
delivered pursuant to the terms and conditions of this
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Agreement, but provided, however, that nothing herein shall be deemed to require
any Individual Property to be appraised subsequent to the Appraisal relied upon
by the Lender in connection with the Advance made with respect to such
Individual Property), each made by an Appraiser at the request of any Borrower
or the Lender, as any of the same may be updated by recertification from time to
time by the Appraiser performing such Appraisal.
"Appraised Value" of any Facility means the fair market value of such
Facility as set forth in its Appraisal.
"Appraiser" means a duly qualified, appropriately licensed appraiser
meeting each of the relevant requirements set forth in the federal Financial
Institutions Reform, Recovery and Enforcement Act of 1989, and approved in
writing by the Lender.
"Assignment of Rents" means, with respect to a Facility, a first
priority Present Assignment of Rents, in the form attached hereto as Exhibit H,
dated as of the applicable Advance Closing Date, from a Borrower, as assignor,
to the Collateral Agent, as assignee, assigning to the Collateral Agent such
Borrower's interest in and to the Leases and the Rents with respect to such
Facility as collateral security for the Loan, as the same may thereafter from
time to time be supplemented, amended, modified or extended by one or more
agreements supplemental thereto, and "Assignments of Rents" means all such
instruments collectively.
"Assignment of Interest Rate Protection Agreement" means, a Collateral
Assignment of Rate Protection Agreement required pursuant to the terms of this
Agreement, in the form attached hereto as Exhibit K, from the Borrowers, as
assignors, to the Collateral Agent, as assignee, and consented to by the
counterparty to the applicable Interest Rate Protection Agreement.
"Assignment of U.S. Government Contract" means, with respect to each
GSA Lease, an Assignment of U.S. Government Contract required pursuant to the
terms of this Agreement, in the form attached hereto as Exhibit I, from the
applicable Borrower, as assignor, to the Collateral Agent, as assignee, and
"Assignments of U.S. Government Contract" means all such instruments
collectively.
"Basic Carrying Costs" means the following costs with respect to the
Mortgaged Property: (i) Impositions and (ii) insurance premiums for policies of
insurance required to be maintained by the Borrowers pursuant to this Agreement
or the other Loan Documents.
"Basic Carrying Costs Account" has the meaning provided in Section
2.12(a).
"Basic Carrying Costs Monthly Installment" means the Borrowers'
reasonable, good faith estimate of 1/12th of the annual amount of Basic Carrying
Costs. Should the Basic Carrying Costs for the current Fiscal Year or payment
period not be ascertainable at the time a monthly deposit is required to be
made, the Basic Carrying Costs Monthly Installment shall be the Borrowers'
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estimate based on 1/12th of the aggregate Basic Carrying Costs for the prior
Fiscal Year or payment period with reasonable adjustments for additional
Facilities. As soon as the Basic Carrying Costs are fixed for the current Fiscal
Year or period, the next ensuing Basic Carrying Costs Monthly Installment shall
be adjusted to reflect any deficiency or surplus in prior Basic Carrying Costs
Monthly Installments.
"Basic Carrying Costs Sub-Account" means the Sub-Account of the
Collection Account established and maintained pursuant to Section 2.12 relating
to the payment of Basic Carrying Costs.
"Borrower" has the meaning provided in the first paragraph of this
Agreement.
"Borrower's Agent" has the meaning provided in Section 8.26.
"Breakage Costs" means, collectively, each loss or expense which the
Lender may sustain or incur as a consequence of (a) a default by the Borrowers
in payment when due of the principal amount of the Loan; (b) default by the
Borrowers in making a borrowing of an Advance after the Borrowers have delivered
a Request for Borrowing in accordance with the provisions of this Agreement; (c)
default by the Borrowers in making any prepayment after the Borrowers have given
a notice thereof in accordance with the provisions of this Agreement; or (d) the
making of a payment or prepayment of the Loan on any date other than a Payment
Date or the Maturity Date; which losses and expenses shall include, without
limitation, in each case, any such loss (including, without limitation, loss of
margin) or expense arising from the employment of funds obtained by it from
issuance of MTNs or otherwise or from fees payable to prepay MTNs or to
terminate the deposits or other liabilities from which such funds were obtained.
"Business Day" means any day other than (i) a Saturday and a Sunday,
and (ii) a day on which federally insured depository institutions in (x) New
York State or (y) a state in which the Collateral Agent is located are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, "Business Day"
shall mean a day on which banks are open for dealing in foreign currency and
exchange in London and New York City.
"Capital Improvement Costs" means costs incurred by the Borrowers in
connection with replacements and capital repairs required to be made to the
Facilities, including without limitation, repairs to the Facilities' structural
components, roofs, building systems and parking lots.
"Capital Reserve Amount" means, at any time, the aggregate amount of
the annual replacement reserves for Capital Improvement Costs for each Facility
which may be increased by the Borrowers but may not be less than an amount equal
to the greater of (y) the product of (1) $0.15 and (2) the aggregate area of all
improvements in all Facilities, measured in square feet, and (z) the amount
identified in the Engineering Report for such Facility as the annual amount
needed to be reserved for on-going capital expenditures.
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"Capital Reserve Monthly Installment" means an amount equal to l/12th
of the Capital Reserve Amount.
"Capital Reserve Sub-Account" means the Sub-Account of the Collection
Account established and maintained pursuant to Section 2.12 relating to the
deposit of Capital Reserve Amounts and the payment of Capital Improvement Costs.
"Ceiling Cap Rate" means the then-applicable interest rate ceilings
under each of the Interest Rate Protection Agreements.
"Change of Control" means (a) a change in the direct or indirect
ownership of the Borrowers as set forth in Schedule 3 or (b) the failure of any
Key Person to be actively involved in the management of the Borrowers, either
directly or as an employee of an Affiliate of the Borrowers.
"Charter Document" means (a) with respect to a corporation, such
corporation's articles of incorporation or certificate of incorporation, as
applicable; (b) with respect to a limited liability company, such limited
liability company's articles or certificate of organization or formation, as
applicable; and (c) with respect to a limited partnership, such limited
partnership's certificate of limited partnership or other similar document.
"Closing Date" means the date on which this Agreement shall become
effective pursuant to Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Collateral" means, collectively, the Land, Improvements, Contracts,
Documents, Equipment, Rents, Accounts, General Intangibles, Instruments,
Inventory, Money (other than security deposits) and rights to payment from
guests and patrons arising from the operation of each Facility, and (to the full
extent assignable) Permits and all Proceeds, all whether now owned or hereafter
acquired and all other property which is or hereafter may become subject to a
Lien in favor of the Collateral Agent as security for the Loan.
"Collateral Agency Agreement" means the Collateral Agency Agreement
dated as of the Closing Date and entered into by the Collateral Agent, the
Lender, Insurer and the Borrowers, substantially in the form attached hereto as
Exhibit C.
"Collateral Agent" means Bankers Trust Company or such Person's
successor in interest.
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"Collateral Security Instrument" means any right, document or
instrument, other than a Mortgage, given as security for the Loan (including,
without limitation, the Collateral Agency Agreement, the Assignments of Rents,
the Pledge and Security Agreement, the Assignment of Interest Rate Protection
Agreement, the Assignments of U.S. Government Contract, the Notices of
Assignment and the Partnership Pledge Agreement), as same may be amended or
modified from time to time.
"Collection Account" has the meaning provided in Section 2.12(a).
"Condemnation Proceeds" has the meaning provided in Section 2.12(g).
"Contingent Obligation" means any obligation of any Borrower
guaranteeing any indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Borrower, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of such primary obligation against loss in
respect thereof. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made (taking into account the
nonrecourse or limited recourse nature of such Contingent Obligation, if
applicable) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Borrower is required to
perform thereunder) as determined by the Lender in good faith (taking into
account the nonrecourse or limited recourse nature of such Contingent
Obligation, if applicable).
"Contracts" means the Property Management Agreements, and all other
agreements to which any Borrower is a party executed in connection with the
operation and management of the Facilities, including, without limitation,
agreements for the sale, lease or exchange of goods or other property and/or the
performance of services by or for it, in each case whether now in existence or
hereafter arising or acquired, as any such agreements have been or may be from
time to time amended, supplemented or otherwise modified.
"Contribution Agreement" means the Contribution Agreement of even date
herewith entered into by the Borrowers, substantially in the form of Exhibit B.
"Control" means, with respect to any Person, the power to direct or
veto (other than with respect to the power to veto major decisions that
typically require the unanimous written consent of the owners) the management
and policies of such Person, directly or indirectly, whether
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through the ownership of voting securities or other beneficial interests, by
contract or otherwise; and the terms "Controlling" and "Controlled" have the
meanings correlative to the foregoing.
"Controlling Party" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Counterparty" means each party (other than the Borrowers) to an
Interest Rate Protection Agreement.
"Debt Service" means the principal and interest payments that would be
due and payable to the Lender or Insurer in accordance with the Note or the
Insurance and Indemnity Agreement, respectively, during an applicable period.
"Debt Service Coverage Ratio" means, as of any date, the Debt Service
Coverage Ratio (Actual) or the Debt Service Coverage Ratio (Imputed).
"Debt Service Coverage Ratio (Actual)" means, as of any date, the
lesser of (a) the quotient obtained by dividing the aggregate Adjusted Cash Flow
for all of the Facilities for the three-month period ending on such date by Debt
Service (calculated without regard to the effect of any Interest Rate Protection
Agreement) during such three-month period and (b) the quotient obtained by
dividing the aggregate Adjusted Cash Flow for all of the Facilities for the
12-month period ending on such date by Debt Service (calculated without regard
to the effect of any Interest Rate Protection Agreement) during such 12-month
period.
"Debt Service Coverage Ratio (Imputed)" means, as of any date, the
lesser of (a) the quotient obtained by dividing the aggregate Adjusted Cash Flow
for all of the Facilities for the three-month period ending on such date by
Imputed Debt Service during such three-month period and (b) the quotient
obtained by dividing the aggregate Adjusted Cash Flow for all of the Facilities
for the 12-month period ending on such date by Imputed Debt Service during such
12-month period.
"Debt Service Payment Sub-Account" means the Sub-Account of the
Collection Account established and maintained pursuant to Section 2.12 relating
to the payment of Debt Service.
"Deed of Trust Trustee" means each of the trustees, if any, under the
Mortgages.
"Default" means the occurrence of any event which, but for the giving
of notice or the passage of time, or both, would be an Event of Default.
"Default Rate" means the per annum interest rate equal to the lesser of
(i) the Maximum Amount or (ii) the greater of (A) the sum of LIBOR determined as
of the immediately
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preceding Interest Determination Date plus 5% and (B) 4% per annum in excess of
the rate otherwise applicable hereunder.
"Documents" means all "documents" as defined in the UCC or other
receipts covering, evidencing or representing goods now owned or hereafter
acquired by any Borrower.
"Eligible Account" means an account that is: (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 such holding company) are
rated by the Rating Agencies in one of the two highest rating categories at the
time of the deposit therein, or, if such depository institution or trust company
(or holding company) does not have a long-term unsecured debt rating, the
short-term unsecured debt obligations of such depository institution or trust
company (or holding company), as the case may be, are rated A-1 by Standard &
Poor's and P-1 by Xxxxx'x, (ii) an account the deposits in which are fully
insured by the FDIC, or (iii) a trust account maintained with the trust
department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity.
"Eligible Property" means a commercial real estate property located in
the United States of America (a) which is leased pursuant to a Lease which is in
form and substance reasonably satisfactory to the Lender and which does not
expire by its terms on or before the Maturity Date; and (b) which, if added as
an Individual Property, would not cause all of the Individual Properties, taken
as a whole, to violate any of the Pool Requirements.
"Engineer" means an Independent Engineer as shall be approved by the
Lender.
"Engineering Reports" means the structural engineering reports with
respect to each Facility prepared by an engineer for a Borrower and delivered by
such Borrower to the Lender in connection with an Advance and any amendments or
supplements thereto delivered to the Lender.
"Environmental Claim" means any notice, notification, request for
information, demand or other communication (whether written or oral) or
administrative or regulatory action by any Governmental Authority or any claim,
judicial action, suit or judgment by any Person or Governmental Authority
alleging or asserting liability with respect to any Borrower or any Facility,
whether for damages, contribution, indemnification, cost recovery, compensation,
injunctive relief, investigatory, response, remedial or cleanup costs, damages
to natural resources, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, Use or Release into the environment
of any Hazardous Substance at any location, whether or not owned, leased or
operated by such Borrower, (ii) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law or (iii) any alleged injury or threat of injury to health, safety or the
environment.
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"Environmental Laws" means any and all present and future federal,
state, regional, local and foreign laws, rules or regulations, any judicial or
administrative orders, decrees or judgments thereunder, and any permits,
approvals, licenses, registrations, filings and authorizations, in each case as
now or hereafter in effect, relating to the environment, human health or safety,
or the Release or threatened Release of Hazardous Substances or otherwise
relating to the Use of Hazardous Substances.
"Environmental Reports" means the environmental audit reports with
respect to each Facility delivered to the Lender, each prepared for a Borrower
by an environmental auditor in connection with an Advance and any amendments or
supplements thereto delivered to the Lender.
"Equipment" means all "equipment" as defined in the UCC, now or
hereafter owned by any Borrower or in which such Borrower has or shall acquire
an interest, now or hereafter located on, attached to or contained in or used or
usable in connection with the Mortgaged Properties, and shall also mean and
include all building materials, construction materials, personal property
constituting furniture, fittings, appliances, apparatus, leasehold improvements,
machinery, devices, interior improvements, appurtenances, equipment, plant,
furnishings, fixtures, computers, electronic data processing equipment,
telecommunications equipment and other fixed assets now owned or hereafter
acquired by such Borrower and also all items of the following types used in the
operation of the business conducted at the Facilities: advertising and promotion
literature, upholstery material, curtains, draperies, carpets and rugs, screens,
awnings, shades and blinds, furniture, furnishings, chairs, chests, desks,
bookcases, tables, hangings, pictures, divans, couches, ornaments, bars, bar
fixtures, safes, stoves, ranges, refrigerators, radios, televisions, electrical
equipment, lamps, mirrors, heating and lighting fixtures and equipment, steam
and hot water boilers, engines, generators, ice machines, cooling systems, air
conditioning machines, fire prevention and extinguishing apparatus, security
systems, elevators, escalators and fittings, printing presses, individual motor
drives for machines, pipes, radiators, plumbing fixtures, and all similar and
related articles located in the halls, closets, offices, lobbies, basements and
cellars, vaults and other portions of the Facilities, and paper goods,
brochures, office supplies and stationery in the Facilities, and all Proceeds
thereof and as well as all additions to, substitutions for, replacements of or
accessions to any of the items recited as aforesaid and all attachments,
components, parts (including spare parts) and accessories, whether installed
thereon or affixed thereto, and wherever located, now or hereafter owned by such
Borrower and used or intended to be used in connection with, or with the
operation of, the Facilities or the buildings, structures or other improvements
now or hereafter located at the Mortgaged Properties, or intended for the use or
convenience of tenants and other occupants thereof or in connection with any
construction being conducted or which may be conducted thereon, all regardless
of whether the same are located on the Mortgaged Properties or are located
elsewhere (including without limitation, in warehouses or other storage
facilities or in the possession of or on the premises of a bailee, vendor or
manufacturer) for purposes of manufacture, storage, fabrication or
transportation and all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to, and proceeds of, any of the
foregoing; provided, however, that, with respect to any items which are leased
and not owned by such Borrower, the Equipment shall include the leasehold
interest only of
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such Borrower, together with any options to purchase any of said items and any
additional or greater rights with respect to such items which such Borrower may
hereafter acquire.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement
and, as of the relevant date, any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which any Borrower is a
member.
"Estoppel Certificate" means an Estoppel Certificate, substantially in
the form of Exhibit M attached hereto or, in the case of the GSA, in the form
approved by the GSA, to be executed in favor of the Collateral Agent by each
lessee of a Facility.
"Event of Default" has the meaning provided in Section 7.1.
"Excess Cash Flow" means, on any Payment Date, all available cash from
the operation of the Facilities after payment of amounts required to be paid
pursuant to Section 2.12(e), Debt Service, Insurer Obligations, amounts payable
with respect to Interest Rate Protection Agreements, Basic Carrying Costs and
Capital Improvement Costs (to the extent not paid from the Sub-Accounts) and
payment of Operating Expenses.
"Excess Cash Flow Reserve Sub-Account" means the Sub-Account of the
Collection Account established and maintained pursuant to Section 2.12 relating
to the reserve of Preliminary Excess Cash Flow.
"Facility" means the Land, the Improvements and the Equipment (to the
extent same shall be deemed to be fixtures) encumbered by a Related Mortgage and
"Facilities" means all Land, Improvements and Equipment (to the extent same
shall be deemed to be fixtures) covered by the Mortgages.
"Final Operating Budget" has the meaning provided in Section 5.1(X).
"Financing Period" has the meaning provided in Section 2.1.
"Fiscal Year" means the 12-month period ending on December 31st of each
year or such other fiscal year of the Affiliated Entities as the Affiliated
Entities may select from time to time with the prior consent of the Lender
(which consent shall not be unreasonably withheld).
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"GAAP" means generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
"General Intangibles" means all "general intangibles" as defined in the
UCC, now owned or hereafter acquired by any Borrower, including, without
limitation, (i) all obligations or indebtedness owing to such Borrower from
whatever source arising (other than Accounts, Rents, Instruments, Inventory,
Money, Contracts, Documents and Permits), (ii) all unearned premiums accrued or
to accrue under all insurance policies for the Mortgaged Properties obtained by
such Borrower, all proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance, condemnation awards, and all rights of such Borrower to
refunds of real estate taxes and assessments, (iii) all royalties and license
fees, (iv) all trademark licenses, trademarks, rights in intellectual property,
goodwill, trade names, service marks, trade secrets, copyrights, permits and
licenses, together with the registrations therefor and the goodwill appurtenant
thereto, (v) all rights or claims in respect of refunds for taxes paid and (vi)
all rights in respect of any pension plan or similar arrangement maintained for
employees of such Borrower.
"Governmental Authority" means any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Gross Revenue" means with respect to a Facility, the total dollar
amount of all income and receipts whatsoever received by the Borrower that owns
such Facility in the ordinary course of its business with respect to such
Facility, including all Rents, Money and proceeds of any Accounts.
"GSA" means the General Services Administration, an agency of the
federal government of the United States of America.
"GSA Lease" means a Lease with the GSA as lessee.
"Guarantee" means the Guarantee of even date herewith executed by the
Guarantor in favor of the Collateral Agent, substantially in the form of Exhibit
D.
"Guarantor" means Fortress GSA Properties LLC, a Delaware limited
liability company, as guarantor under the Guarantee.
"Guarantor Side Letter" means the letter agreement dated as of the
Closing Date between the Guarantor and the Lender.
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"Hazardous Substance" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in
drinking water, and lead-based paint, (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definitions of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (iii) any other chemical or any
other material or substance, exposure to which is now or hereafter prohibited,
limited or regulated under any Environmental Law.
"Impositions" means all taxes (including, without limitation, all real
estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction privilege,
privilege or license or similar taxes), assessments (including, without
limitation, to the extent not discharged prior to the applicable Advance Closing
Date, all assessments for public improvements or benefits, whether or not
commenced or completed within the term of the Related Mortgage), ground rents,
water, sewer or other rents and charges, excises, levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
in respect of an Individual Property, including any Rents and Accounts
(including all interest and penalties thereon), which at any time prior to,
during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a lien upon (i) any Borrower (including, without limitation,
all income, franchise, single business or other taxes imposed on such Borrower
for the privilege of doing business in the jurisdiction in which such Individual
Property, or any other collateral delivered or pledged to the Collateral Agent
in connection with the Loan, is located) or any Secured Party, (ii) an
Individual Property, or any other collateral delivered or pledged to the
Collateral Agent in connection with the Loan, or any part thereof or any Rents
therefrom or any estate, right, title or interest therein, or (iii) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on, or in connection with such Individual Property or the leasing or use of such
Individual Property or any part thereof, or the acquisition or financing of the
acquisition of such Individual Property by any Borrower. Nothing contained in
this Agreement shall be construed to require any Borrower to pay any tax,
assessment, levy or charge imposed on any Secured Party in the nature of a
franchise, capital levy, estate, inheritance, succession, income or net revenue
tax.
"Improvements" means all buildings, structures and improvements of
every nature whatsoever situated on the Land on the applicable Advance Closing
Date or thereafter, including, but not limited to, all gas and electric
fixtures, radiators, heaters, engines and machinery, boilers, ranges, elevators
and motors, plumbing and heating fixtures, carpeting and other floor coverings,
water heaters, awnings and storm sashes, and cleaning apparatus which are or
shall be attached to the Land or said buildings, structures or improvements.
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"Imputed Debt Service" means, for any period, the amount of Debt
Service that would be payable during such period assuming that the Principal
Indebtedness outstanding as of the beginning of such period was to be amortized
in equal monthly installments over a 25-year period, payable on the first
Business Day of each month along with interest accruing at a rate per annum
equal to the Treasury Rate plus the Imputed Margin.
"Imputed Margin" means, with respect to the calculation of Imputed Debt
Service, (a) 1.50%, if such calculation is made during Year 1; (b) 2.00%, if
such calculation is made during Year 2; and (c) 2.50%, if such calculation is
made during Year 3.
"Indebtedness" means the Principal Indebtedness, together with all
other obligations and liabilities due or to become due to the Lender pursuant
hereto, under the Note or in accordance with any of the other Loan Documents,
and all other amounts, sums and expenses paid by or payable to the Lender
hereunder or pursuant to the Note or any of the other Loan Documents.
"Indemnitors" means, collectively, Fortress Investment Corp., a
Maryland corporation and Fortress GSA Properties LLC, a Delaware limited
liability company, as indemnitors under the Indemnity Agreement.
"Indemnitors Side Letter" means the letter agreement dated as of the
Closing Date between the Indemnitors and the Lender.
"Indemnity Agreement" means the Indemnity Agreement, in the form
attached hereto as Exhibit F, dated as of the Closing Date, from the Indemnitors
to the Collateral Agent.
"Independent" means, when used with respect to any Person, a Person who
(i) does not have any direct financial interest or any material indirect
financial interest in any Borrower or in any Affiliate of any Borrower, and (ii)
is not connected with any Borrower or any Affiliate of any Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Individual Property" means that portion of the Mortgaged Property
located at or otherwise pertaining to one of the Facilities. All of the
"Individual Properties" collectively comprise the Mortgaged Property.
"Initial Capital Requirement" means, with respect to each Facility,
120% of the amount specified in the Engineering Report for such Facility as
being necessary to complete the deferred capital improvements identified
therein.
"Instruments" means (i) all "instruments" as defined in the UCC,
"chattel paper" as defined in the UCC, or letters of credit, evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Collateral, including,
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without limitation, promissory notes, drafts, bills of exchange and trade
acceptances and (ii) notes or other obligations of indebtedness owing to any
Borrower from whatever source arising, in each case now owned or hereafter
acquired by such Borrower.
"Insurance and Indemnity Agreement" means the Insurance and Indemnity
Agreement entered into among the Borrowers, the Insurer, the Lender and the
Collateral Agent.
"Insurance Proceeds" has the meaning provided in Section 2.12(g).
"Insurance Requirements" means all material terms of any insurance
policy required pursuant to this Agreement or a Mortgage and all material
regulations and then current standards applicable to or affecting the applicable
Individual Property or any part thereof or any use or condition thereof, which
may, at any time, be recommended by the Board of Fire Underwriters, if any,
having jurisdiction over such Individual Property, or such other body exercising
similar functions.
"Insurer" means MBIA Insurance Corporation, or any successor thereto as
issuer of the Policy.
"Insurer Obligations" means, as of any date, all amounts owing to the
Insurer under the Insurance and Indemnity Agreement, under any Interest Rate
Protection Insurance and Indemnity Agreement or otherwise under the Loan
Documents.
"Insurer Sub-Account" means the Sub-Account of the Collection Account
established and maintained pursuant to Section 2.12 relating to Insurer
Obligations.
"Interest Accrual Period" means the three-month period (or, with
respect to the first Interest Accrual Period, a period beginning on the initial
Advance Closing Date and ending on November 23, 1998) that any particular
interest rate equal to LIBOR shall be in effect, subject to the following
provisions:
(i) in the case of immediately successive Interest Accrual
Periods, each successive Interest Accrual Period shall commence on the
day on which the next preceding Interest Accrual Period expires; and
(ii) each successive Interest Accrual Period shall end on the
twenty-third day of the third calendar month after the month in which
such Interest Accrual Period commenced; provided, however, that if any
Interest Accrual Period would otherwise expire on a day which is not a
Business Day, such Interest Accrual Period shall be extended to expire
on the next succeeding Business Day if the next succeeding Business Day
occurs in the same calendar month, and if there will be no
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succeeding Business Day in such calendar month, the Interest Accrual
Period shall expire on the immediately preceding Business Day.
"Interest Determination Date" means, in connection with the calculation
of LIBOR for any Interest Accrual Period, the second Business Day preceding the
first day of such Interest Accrual Period.
"Interest Rate Protection Agreement" means the interest rate agreement
or similar agreement between a counterparty and the Borrowers, as supplemented
by a related confirmation between such parties, more particularly described in
Section 5.1(T), and "Interest Rate Protection Agreements" means all such
instruments collectively.
"Interest Rate Protection Insurance and Indemnity Agreement" means any
agreement to which the Insurer may become a party from to time pursuant to which
the Insurer is or may become entitled to reimbursement for amounts paid by the
Insurer pursuant to a guaranty, surety, insurance policy or other accommodation
with respect to any Interest Rate Protection Agreement.
"Interest Rate Protection Sub-Account" means the Sub-Account of the
Collection Account established and maintained pursuant to Section 2.12 relating
to the reserve of funds for the purchase of an Interest Rate Protection
Agreement.
"Inventory" means all "inventory" as defined in the UCC, whether now or
hereafter existing or acquired, and which arises out of or is used in connection
with, directly or indirectly, the ownership and operation of the Facilities, all
Documents representing the same and all Proceeds and products of such Inventory.
The term "Inventory" shall include, without limitation, all goods, merchandise,
raw materials, work in process and other personal property, wherever located,
now or hereafter owned or held by any Borrower for manufacture, processing, the
providing of services or sale, use or consumption in the operation of the
Facilities, including without limitation, provisions in storerooms,
refrigerators, kitchens, pantries, beverages in wine cellars or bars, fuel,
supplies and similar items and all substances commingled therewith or added
thereto, and shall also include all rights and claims of such Borrower against
anyone who may store or acquire the Inventory for the account of such Borrower,
or from whom such Borrower may purchase the Inventory.
"Investment Grade Advance Rate" means, with respect to each Rating
Agency, the aggregate Advance Rate for all Advances required in order for such
Rating Agency to provide an investment grade rating for the Loan, as determined
by such Rating Agency upon completion of its final due diligence with respect to
the Transactions.
"Key Person" means Xxxxxx X. Xxxxx.
"Land" has the meaning provided in the Mortgages.
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"Lease Reserve Sub-Account" means the Sub-Account of the Collection
Account established and maintained pursuant to Section 2.12 relating to the
payment of certain Operating Expenses, tenant improvement costs and leasing
commissions.
"Leases" means all leases, lettings, occupancy agreements, tenancies
and licenses by any Borrower as landlord of a Facility or any part thereof now
or hereafter entered into, and all amendments, extensions, renewals and
guarantees thereof, and all security therefor.
"Legal Requirements" means all governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including without limitation Environmental Laws)
affecting either an applicable Individual Property or any part thereof or the
construction, use, alteration or operation thereof, or any part thereof, whether
now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, at any time in force
affecting such Individual Property or any part thereof, including, without
limitation, any which may (i) require repairs, modifications or alterations in
or to such Individual Property or any part thereof, or (ii) in any way limit the
use and enjoyment thereof.
"Lender" has the meaning provided in the first paragraph of this
Agreement.
"LIBOR" means the interest rate calculated as set forth below.
(a) For the first Interest Accrual Period, LIBOR shall be the
rate determined on the first Interest Determination Date through
straight-line interpolation of the rates for three- and four-month U.S.
dollar deposits which appear on Page 3750 of the Dow Xxxxx Telerate
Service, as of 11:00 a.m., London time, on such Interest Determination
Date; provided, however, that if such rate does not appear on Page 3750
of the Dow Xxxxx Telerate Service, LIBOR shall be the Reserve Interest
Rate.
(b) On the second Interest Determination Date and on each
Interest Determination Date thereafter, LIBOR for the next succeeding
Interest Accrual Period shall be the rate for three-month U.S. dollar
deposits which appears on Page 3750 of the Dow Xxxxx Telerate Service,
as of 11:00 a.m., London time, on such Interest Determination Date;
provided, however, that if such rate does not appear on Page 3750 of
the Dow Xxxxx Telerate Service, LIBOR shall be the Reserve Interest
Rate.
(c) The establishment of LIBOR or, if applicable, the Reserve
Interest Rate, by the Lender and the Lender's subsequent calculation of
the rates of interest applicable to the Loan for each related Interest
Accrual Period shall (in the absence of manifest error) be final and
binding.
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(d) In determining LIBOR, or, if applicable, the Reserve
Interest Rate, the Lender may (absent manifest error) conclusively rely
and shall be protected in relying upon the offered quotation (whether
electronic, written or oral) from the Reference Banks or, if
applicable, the New York City banks referred to in the definition of
the term "Reserve Interest Rate". The Lender shall have no liability or
responsibility to any Person for (i) its selection of Reference Banks
or, if applicable, such New York City banks or (ii) its inability,
following a good faith reasonable effort, to obtain such quotations
from the Reference Banks or, if applicable, such New York City banks,
all as provided in the definitions of the terms "LIBOR" and "Reserve
Interest Rate".
"Lien" means any mortgage, deed of trust, lien (statutory or other),
pledge, hypothecation, assignment, preference, priority, security interest, or
any other encumbrance or charge on or affecting an Individual Property or any
portion thereof or any Borrower, or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement or similar instrument under the
Uniform Commercial Code or comparable law of any other jurisdiction, domestic or
foreign, and mechanic's, materialmen's and other similar liens and encumbrances.
"Loan" has the meaning provided in the Recitals hereto.
"Loan Amount" has the meaning provided in the Recitals hereto.
"Loan Documents" means this Agreement, the Note, the Contribution
Agreement, the Mortgages, the Collateral Agency Agreement, the Assignments of
Rents, the Assignments of U.S. Government Contract, the Notices of Assignment,
the Guarantee, the Pledge and Security Agreement, the Indemnity Agreement, the
Interest Rate Protection Agreements, the Assignments of Interest Rate Protection
Agreement, the Insurance and Indemnity Agreement, each Interest Rate Protection
Insurance and Indemnity Agreement, the Policy, the Indemnitors Side Letter, each
Interest Rate Protection Insurance and Indemnity Agreement, Side Letter, the
Partnership Pledge Agreement and all other agreements, instruments, certificates
and documents delivered by or on behalf of any Borrower or an Affiliate to
evidence or secure the Loan or otherwise in satisfaction of the requirements of
this Agreement, the Mortgages or the other documents listed above as same may be
amended or modified from time to time.
"Loss Proceeds" has the meaning provided in Section 2.12(g).
"Manager" means Fortress Investment Group LLC.
"Material Adverse Effect" means a material adverse effect upon (i) the
business operations, properties, assets or condition (financial or otherwise) of
any Borrower, (ii) the ability of any Borrower to perform, or of any Secured
Party to enforce, any of the Loan Documents or (iii) the value of the
Collateral, taken as a whole.
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"Maturity Date" means the Payment Date occurring in February, 2008, or
such earlier date resulting from acceleration.
"Maximum Rate" means the maximum rate of interest designated by
applicable Legal Requirements.
"Money" means all moneys, cash, rights to deposit or savings accounts
or other items of legal tender obtained from, or for use in connection with, the
operation of the Facilities.
"Monthly Date" means, during any Interest Accrual Period, (a) the
Payment Date with respect to such Interest Accrual Period, (b) the date which is
one month prior to such Payment Date (or, if such date is not a Business Day,
the first Business Day thereafter) and (c) the date which is two months prior to
such Payment Date (or, if such date is not a Business Day, the first Business
Day thereafter).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means, with respect to a Facility, a first priority
Mortgage, Assignment of Rents, Security Agreement and Fixture Filing or Deed of
Trust, Assignment of Rents, Security Agreement and Fixture Filing or Deed to
Secure Debt, Assignment of Rents, Security Agreement and Fixture Filing, in the
form attached hereto as Exhibit G, dated as of the applicable Advance Closing
Date, granted by a Borrower to the Collateral Agent (or, in the case of a Deed
of Trust, to Deed of Trust Trustee for the benefit of the Collateral Agent) with
respect to such Individual Property as security for the Loan, as same may
thereafter from time to time be supplemented, amended, modified or extended by
one or more agreements supplemental thereto, but shall exclude any such
instrument released by the Collateral Agent pursuant to Section 2.11, and
"Mortgages" means all such instruments collectively.
"Mortgaged Property" means, at any time, all of the Individual
Properties encumbered by the Mortgages then outstanding.
"MSA" means "Metropolitan Statistical Area", as defined as of the date
hereof by the Director of the federal Office of Management and Budget.
"MTN" means a medium-term note "Series 1998B" issued by the Lender
pursuant to the MTN Facility Agreement for the purpose of funding Advances
pursuant to this Agreement.
"MTN Facility Agreement" means the Facility Agreement, dated as of
August 28, 1997, between the Lender and Capital Markets Assurance Corporation,
as amended by the Assignment, Amendment and Assumption Agreement, dated as of
May 27, 1998, among the Lender;
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Capital Markets Assurance Corporation; Bankers Trust Company; Bankers Trust
Company, London Branch; Bankers Trust Luxembourg S.A.; and MBIA Insurance
Corporation.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by any Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Operating Income" means for any period (and calculated either for
a Facility or for the Facilities) the excess, if any, of aggregate Operating
Income for all of the Facilities for such period over aggregate Operating
Expenses for all of the Facilities for such period.
"Net Proceeds" means, with respect to any Individual Property, (i)
either (x) unless clause (y) below applies, the purchase price actually received
by the Collateral Agent from a third party purchaser with respect to such
Individual Property as a result of the exercise by the Collateral Agent of its
rights, powers, privileges and other remedies after the occurrence of an Event
of Default or (y) in the event that the Collateral Agent is the purchaser at
foreclosure of such Individual Property, the amount of the Collateral Agent
credit bid, in either case less (ii) all reasonable costs and expenses,
including, without limitation, all attorneys' fees and disbursements and any
brokerage fees, if applicable, incurred by the Collateral Agent in connection
with the exercise of such remedies; provided, however, that such costs and
expenses shall not be deducted to the extent such amounts previously have been
added to the Indebtedness in accordance with the terms of the Mortgages or
applicable law.
"Non-Controlling Equity Interest" means, with respect to any Borrower,
an equity interest in such Borrower held by a Person that does not have Control
over such Borrower.
"Note" means, a promissory note substantially in the form of Exhibit A
hereto, made by the Borrowers on a joint and several basis to the Lender
pursuant to this Agreement, as such note may be modified, amended, supplemented,
extended or consolidated.
"Notice of Assignment" means, with respect to each GSA Lease, a Notice
of Assignment required pursuant to the terms of this Agreement, in the form
attached hereto as Exhibit J, executed by the appropriate contracting officer of
the GSA, and "Notices of Assignment" means all such instruments collectively.
"Notice For Payment" has the meaning given to such term in the Policy.
"Officer's Certificate" means a certificate delivered to the Lender by
an Affiliated Entity which is signed by an authorized officer of such Affiliated
Entity.
"Operating Budget" has the meaning provided in Section 5.1(X).
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"Operating Expenses" means, for any period, all expenditures by the
Borrowers reasonably required to be expended during such period in connection
with the ownership, operation, maintenance, repair or leasing of the Facilities
(or of any Facility), including, without limitation:
(i) expenses in connection with cleaning, repair and
maintenance of the Facilities (or of any Facility);
(ii) wages, benefits, payroll taxes, insurance costs and all
other related expenses for employees of any Borrower or any Affiliate
engaged in the repair, operation and maintenance of the Facilities (or
of any Facility);
(iii) any management fees, franchise fees and expenses
incurred with respect to the Facilities (or of a y Facility);
(iv) the cost of all electricity, oil, gas, water, steam,
heat, ventilation, air conditioning and any other energy, utility or
similar item and overtime services for the Facilities (or any
Facility);
(v) the cost of cleaning supplies for the Facilities (or any
Facility);
(vi) Impositions with respect to the Facilities (or any
Facility);
(vii) business interruption, liability, casualty and fidelity
insurance premiums (which, in the case of any policies covering more
than one Facility, shall be allocated among the Facilities pro rata in
proportion to the insured value of the Facilities covered by such
policies);
(viii) legal, accounting and other professional fees and
expenses incurred in connection with the ownership and operation of the
Facilities (or of any Facility) including, without limitation,
collection costs and expenses;
(ix) costs and expenses of security and security systems
provided to and/or installed and maintained with respect to the
Facilities (or any Facility);
(x) trash removal and exterminating costs and expenses for the
Facilities (or any Facility);
(xi) advertising and marketing costs for the Facilities (or
any Facility);and
(xii) all other ongoing expenses which in accordance with GAAP
should be included in any Borrower's annual financial statements as
operating expenses of the Facilities (or of any Facility).
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Notwithstanding the foregoing, Operating Expenses shall not include (w) any
Capital Improvement Costs, (x) depreciation, amortization and other non-cash
charges, (y) any extraordinary items or (z) Debt Service and other payments in
connection with the Secured Obligations. Operating Expenses shall be calculated
on the accrual basis of accounting and in accordance with GAAP.
"Operating Income" means, for any period, all regular ongoing income of
the Borrowers during such period from the Permitted Investments or the operation
of the Facilities (or of any Facility), including, without limitation, all
amounts payable to any Borrower by any Person as Rent and other income pursuant
to leases relating to the Facilities (or any Facility). Notwithstanding the
foregoing, Operating Income shall not include (a) any condemnation or insurance
proceeds, (b) any proceeds resulting from the sale, exchange, transfer,
financing or refinancing of all or any portion of one or more Individual
Properties, (c) any Rent attributable to a Lease prior to the date on which the
actual payment of Rent is required to be made thereunder, (d) any item of income
otherwise includable in Operating Income but paid directly to a Person other
than a Borrower, or (e) security deposits received from tenants until forfeited.
Operating Income shall be calculated on the accrual basis of accounting and in
accordance with GAAP.
"Operating Partnership" means Fortress Partners, L.P., a Delaware
limited partnership.
"Organizing Document" means, (a) in the case of a corporation, such
corporation's bylaws; (b) in the case of a limited liability company, such
limited liability company's operating agreement, limited liability company
agreement or other similar document; and (c) in the case of a limited
partnership, such limited partnership's partnership agreement or other similar
document.
"Other Borrowings" means, with respect to any Borrower, without
duplication (but not including the Secured Obligations or any deferred fees
payable in connection with any Transaction) (i) all indebtedness of such
Borrower for borrowed money or for the deferred purchase price of property or
services, (ii) all indebtedness of such Borrower evidenced by a note, bond,
debenture or similar instrument, (iii) the face amount of all letters of credit
issued for the account of such Borrower and, without duplication, all
unreimbursed amounts drawn thereunder, (iv) all indebtedness of such Borrower
secured by a Lien on any property owned by such Borrower whether or not such
indebtedness has been assumed, (v) all Contingent Obligations of such Borrower,
and (vi) all payment obligations of such Borrower under any interest rate
protection agreement (including, without limitation, any interest rate swaps,
caps, floors, collars or similar agreements) and similar agreements (except the
Interest Rate Protection Agreements).
"Payment Date" means, with respect to each Interest Accrual Period, the
date which is five Business Days prior to the last day of such Interest Accrual
Period.
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"Partnership Pledge Agreement" means the Pledge and Security Agreement,
dated as of the Closing Date between Fortress GSA Houston Properties, LP, a
Delaware limited partnership, and Fortress Houston GP Corp., a Delaware
corporation, as assignors, and the Collateral Agent, as assignee, substantially
in the form of Exhibit U.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA, or any successor thereto.
"Permits" means all licenses, permits, variances and certificates used
in connection with the ownership, operation, use or occupancy of the Mortgaged
Property, including, without limitation, business licenses, state health
department licenses, food service licenses, liquor licenses, licenses to conduct
business, certificates of need and all such other permits, licenses and rights,
obtained from any Governmental Authority or private Person concerning ownership,
operation, use or occupancy of the Mortgaged Property.
"Permitted Encumbrances" means, with respect to an Individual Property,
collectively, (i) the Lien created by the Related Mortgage or the other Loan
Documents of record, (ii) all Liens and other matters disclosed in the Title
Insurance Policy concerning such Individual Property or any part thereof, (iii)
Liens, if any, for Impositions imposed by any Governmental Authority not yet due
or delinquent or being contested in good faith and by appropriate proceedings in
accordance with any applicable requirements set forth in the Mortgages, (iv)
rights of existing and future tenants as tenants only pursuant to Leases, (v)
Liens securing indebtedness permitted pursuant to Section 6.1(C)(ii), provided
that the priority of such Lien is subordinate to the Lien in favor of the
Collateral Agent and that the beneficiary of such Lien shall not be entitled to
exercise any remedy with respect thereto until the Secured Obligations has been
indefeasibly repaid in full and the Financing Period has expired, (vi)
purchase-money Liens arising in the ordinary course of business; provided,
however, that the aggregate indebtedness secured by such Liens shall not at any
time exceed $1,000,000 and (vii) statutory Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; provided, however, that the aggregate indebtedness secured
by such Liens shall not at any time exceed $1,000,000.
"Permitted Investments" means any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by the Lender or any of its Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to payment of principal and interest by, (x) the United States or any
agency or instrumentality thereof provided such obligations are backed
by the full faith and credit of the United States of
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America, or (y) FHLMC, FNMA, the Federal Farm Credit System or the
Federal Home Xxx Xxxxx;
(ii) fully FDIC-insured demand and time deposits in or
certificates of deposit of, or bankers' acceptances issued by, any bank
or trust company, savings and loan association or savings bank;
provided, that the commercial paper is rated at the highest rating
level b the Rating Agencies and the long-term unsecured debt
obligations of such depository institution or trust company have one of
the two highest ratings available for such securities by the Rating
Agencies;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a depository
institution or trust company (acting as principal) described in clause
(ii) above; provided, that the commercial paper of such depository
institution or trust company is rated at the highest rating level by
the Rating Agencies and the long-term unsecured debt obligations of
such depository institution or trust company have one of the two
highest ratings available for such securities by the Rating Agencies;
(iv) general obligations of or obligations guaranteed by any
State of the United States or the District of Columbia receiving one of
the two highest long-term unsecured debt rating available for such
securities by the Rating Agencies;
(v) securities 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 or the District of Columbia and
rated by the Rating Agencies in one of their two highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided,
however, that securities issued by any such corporation will not be
Permitted Investments to the extent that investment therein will cause
the then outstanding principal amount of securities issued by such
corporation and held as part of the Collection Account to exceed 20% of
the aggregate principal amount of all Permitted Investments held in the
Collection Account;
(vi) 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
year after the date of issuance thereof) that is rated A-1 by Standard
& Poor's and P-1 by Moody's, and is issued by a corporation the
outstanding senior long-term debt obligations of which are then rated
by the Rating Agencies in one of their two highest ratings available in
their long-term unsecured debt ratings;
(vii) guaranteed reinvestment agreements acceptable to the
Rating Agencies issued by any bank, insurance company or other
corporation rated in one of the two highest long-term unsecured rating
levels available to such issuers by the Rating Agencies throughout the
duration of such agreements; and
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(viii) money market or mutual funds rated AAAm-G by Standard &
Poor's and P-1 by Moody's (including funds for which the Collateral
Agent or any of its Affiliates is investment manager or advisor);
provided, however, that no instrument or security shall be a Permitted
Investment if the right to receive principal and interest payments derived from
the underlying investment provide a yield to maturity in excess of 120% of the
yield to maturity at par of such underlying investment; provided further that
the downgrade or withdrawal of any rating required pursuant to this definition
shall not require the Borrowers to dispose of or sell any such investment in a
manner that would not be commercially practicable; provided further that each
Permitted Investment (a) shall not have an "r" highlighter affixed to its
rating; (b) shall have a predetermined fixed-dollar amount of principal due at
maturity that cannot vary or change; and (c) shall have interest tied to a
single interest rate index plus a single fixed-priced spread, if any, and move
proportionately with that index.
"Person" means any individual, corporation, partnership, joint venture,
estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
"Pledge and Security Agreement" means that certain first priority
Pledge and Security Agreement, in the form attached hereto as Exhibit E, dated
as of the initial Advance Closing Date, made by the Guarantor, as pledgor, in
favor of the Collateral Agent, as pledgee, with respect to collateral security
for the Loan.
"Plan" means an employee benefit or other plan established or
maintained by any Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Policy" means the Financial Guaranty Insurance Policy issued by the
Insurer with respect to principal and interest payable by the Borrowers under
this Agreement.
"Pool Requirements" means each of the following requirements:
(i) GSA Leases must account or not less than 90% of the net
present value of remaining scheduled payments under all existing Leases
(for the purposes of this definition, all net present values shall be
calculated on the basis of a discount rate of 9.5%);
(ii) GSA Leases must account for not less than 90% of the
aggregate Allocated Loan Amount (if a Facility is subject to more than
one Lease, the Allocated Loan Amount for such Facility shall, for the
purposes of this definition, be allocated among each such Lease pro
rata on the basis of the net present value of Lease payments scheduled
to be paid under each Lease);
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(iii) the average term to maturity of all GSA Leases, weighted
on the basis of the net present value of remaining scheduled payments
under each such Lease, shall be not less than nine years during Year 1,
not less than eight years during Year 2 and not less than seven years
during Year 3;
(iv) the average term to maturity of all GSA Leases, weighted
on the basis of the Allocated Loan Amount attributable to each such
Lease, shall be not less than nine years during Year 1, not less than
eight years during Year 2 and not less than seven years during Year 3;
(v) the average percentage by which the Rent under each GSA
Lease exceeds the market rent for similar properties in the same MSA
(as reasonably determined by the Lender), weighted on the basis of the
net present value of remaining scheduled payments under each Lease,
shall not exceed 5%;
(vi) the average percentage by which the Rent under each GSA
Lease exceeds the market rent for similar properties in the same MSA
(as reasonably determined by the Lender), weighted on the basis of the
Allocated Loan Amount attributable to each Lease, shall not exceed 5%;
(vii) GSA Leases with respect to Facilities located within a
single MSA (other than the MSA's that include Burlington, New Jersey
and Sacramento, California, respectively) shall account for not more
than 15% of the net present value of remaining scheduled payments under
all existing Leases;
(viii) GSA Leases with respect to Facilities located within a
single MSA (other than the MSA that includes Burlington, New Jersey)
shall account for not more than 15% of the aggregate Allocated Loan
Amount;
(ix) Leases with respect to a single Facility (other than the
Facilities located in Burlington, New Jersey Facility or Sacramento,
California, respectively) shall account for not more than 15% of the
net present value of remaining scheduled payments under all existing
Leases;
(x) Leases with respect to a single Facility (other than the
Facilities located in Burlington, New Jersey Facility or Sacramento,
California, respectively) shall account for not more than 15% of the
aggregate Allocated Loan Amount;
(xi) the amount obtained by dividing Net Operating Income for
the preceding 12-month period, measured as of any Advance Closing Date
or date on which any
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Individual Property is Transferred by any Borrower, by the Principal
Indebtedness shall not be less than 0.12;
(xii) Leases with lessees that do not have investment grade
long-term unsecured debt ratings from each of the Rating Agencies may
account for not more than 5% of the net present value of remaining
scheduled payments under all existing Leases; and
(xiii) Leases with lessees that do not have investment grade
long-term unsecured debt ratings from each of the Rating Agencies may
account for not more than 5% of the aggregate Allocated Loan Amount.
"Preliminary Excess Cash Flow" means all available cash from the
operation of the Facilities aft r the monthly funding of the Sub-Accounts
pursuant to Section 2.12(f)(i), (ii), (iii), (iv) and (v).
"Prepayment Fee" means (a) during Year 1, 1.0%; (b) during the first
six months of Year 2, 0.50%; (c) during the second six months of Year 2 and the
first six months of Year 3, 0.25%; and (d) thereafter, zero; multiplied in each
case by the principal amount of the Loan being prepaid.
"Pricing Spread" means with respect to each Advance, (a) prior to the
beginning of Year 4, 0.68% and (b) thereafter, 4.00%.
"Principal Indebtedness" means the principal amount of the Loan
outstanding as the same may be increased, by additional Advances or otherwise,
or decreased, as a result of prepayment or otherwise, from time to time.
"Proceeds" shall have the meaning given in the UCC and, in any event,
shall include, without limitation, all proceeds, product, rents, profits or
receipts, in whatever form, arising from the Collateral, including, without
limitation, (i) Money, Instruments and other property received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Collateral or the Mortgaged Properties, (ii) the collection, sale, lease,
sublease, concession, exchange, assignment, licensing or other disposition of,
or realization upon, any item or portion of the Collateral or the Mortgaged
Properties, including, without limitation, all claims of any Borrower against
third parties for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral or the Mortgaged Properties now existing or hereafter
arising, (iii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Borrower from time to time with respect to any of the
Collateral or the Mortgaged Properties, (iv) any and all payments (in any form
whatsoever) made or due and payable to any Borrower from time to time in
connection with the requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral or the Mortgaged Properties by
any governmental authority (or any person acting under color of governmental
authority) and (v) any and
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all other amounts from time to time paid or payable under or in connection with
any of the Collateral or the Mortgaged Properties.
"Proceeds Deficiency" has the meaning provided in the definition of
"Allocated Loan Amount".
"Property Management Agreement" means, with respect to a Facility, the
management agreement entered into between the applicable Property Manager and
the Borrower that owns such Facility pertaining to the management of such
Facility in a form approved by the Lender, and "Property Management Agreements"
means all such agreements collectively.
"Property Manager" means, with respect to a Facility, the party
responsible for managing such Facility pursuant to the Property Management
Agreement with respect to such Facility.
"Property Manager's Subordination" means, with respect to a Facility,
the Property Manager's Consent and Subordination of Management Agreement in the
form attached hereto as Exhibit L, dated as of the applicable Advance Closing
Date, executed by the applicable Property Manager, the Borrower that owns such
Facility and the Collateral Agent, and "Property Manager's Subordinations" means
all such agreements collectively.
"Proposed Operating Budget" has the meaning provided in Section 5.1(X).
"Rating Agencies" means Moody's and Standard & Poor's.
"Reference Banks" means four major banks, selected by the Lender, in
the London interbank market.
"Related Mortgage" means, with respect to a particular Individual
Property, the Mortgage encumbering such Individual Property.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Substances through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Release Price" means, with respect to the sale of any Individual
Property, an amount equal to the greatest of (a) the Allocated Loan Amount with
respect to such Individual Property; (b) the minimum sale price such that the
sale of such Individual Property will not result in the violation of any Pool
Requirement; (c) the minimum sale price such that the sale of such Individual
Property will not result in any Debt Service Coverage Ratio decreasing below the
applicable Required Debt Service Coverage Ratio; (d) in the event that, after
accounting for the sale of such Individual
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Property, (i) there will be five or fewer Individual Properties or (ii) the
Principal Indebtedness will be less than or equal to $100,000,000, 100% of the
proceeds of such sale.
"Remedial Work" has the meaning provided in Section 5.1(D)(i).
"Rents" means all income, rents, issues, profits, revenues (including
all oil and gas or other mineral royalties and bonuses), deposits and other
benefits from the Facilities, including, without limitation, all revenues and
credit card receipts collected from guest rooms, restaurants, bars, meeting
rooms, banquet rooms and recreational facilities, all receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by any Borrower or any operator or manager of the
Facilities, including, without limiting the generality of the foregoing, from
the rental of any office space, retail space (including, without limitation,
rights to payment earned under Leases for space in the Improvements for the
operation of ongoing retail businesses such as news stands, xxxxxx shops, beauty
shops, physicians' offices, pharmacies and specialty shops), halls, stores, and
offices, and deposits securing reservations of such space, exhibit or sales
space of every kind, license, lease, sublease and concession fees and rentals,
health club membership fees, food and beverage wholesale and retail sales,
service charges, vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance relating to the use, employment
and occupancy of the Facilities.
"Request for Borrowing" means a Request for Borrowing, substantially in
the form of Exhibit T.
"Required Debt Service Coverage Ratio" means, as of any date, the
Required Debt Service Coverage Ratio (Actual) or the Required Debt Service
Coverage Ratio (Imputed).
"Required Debt Service Coverage Ratio (Actual)" means (a) 1.35 during
Year 1 and (b) 1.50 thereafter.
"Required Debt Service Coverage Ratio (Imputed)" means (a) 1.15 during
Year 1 and Year 2 and (b) 1.20 thereafter.
"Required Debt Service Payment" has the meaning provided in Section
2.12(e).
"Required Lease Reserve Sub-Account Balance" means, as of any date, the
aggregate amount of Operating Expenses, tenant improvement costs and leasing
commissions that will, according to reasonable projections prepared by or on
behalf of the Borrowers and approved by the Lenders, be payable in the 12-month
period commencing on such date with respect to each Lease that, as of such date,
(a) will expire by its terms (without giving effect to any renewals of such
Lease)
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on or before the date which is 12 months after such date and (b) has not been
renewed for a period of three years after such date of expiration.
"Required Interest Rate Protection Sub-Account Balance" means, as of
any Monthly Date, if the Interest Rate Protection Agreements in form and
substance satisfactory to the Lender are not in place, the current market price
for the purchase of an Interest Rate Protection Agreement with (a) a notional
amount equal to the amount of the Principal Indebtedness, (b) a term expiring on
the Maturity Date and (c) a strike price that would enable each Required Debt
Service Coverage Ratio to be satisfied, if calculated with the maximum interest
rate under the Interest Rate Protection Agreement.
"Reserve Interest Rate" means a rate determined on the basis of the
rates at which U.S. Dollars are offered by the Reference Banks at approximately
11:00 a.m., London time, on the Interest Determination Date to prime banks in
the London interbank market for the period coinciding with the next succeeding
Interest Accrual Period in the amount of the Principal Indebtedness to be
outstanding as of the first day of such Interest Accrual Period, in accordance
with the following procedure: the Lender will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for the next succeeding
Interest Accrual Period will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for the next succeeding
Interest Accrual Period will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Lender, at approximately 11:00 a.m., New
York City time, on the Interest Determination Date for loans in U.S. Dollars to
leading European banks for the period coinciding with the next succeeding
Interest Accrual Period and in the amount of the Principal Indebtedness to be
outstanding as of the first day of the such Interest Accrual Period.
"Secured Obligations" has the meaning provided in the Collateral Agency
Agreement.
"Secured Parties" means, collectively, the Lender, Insurer, each
Counterparty and the Collateral Agent.
"Single-Purpose Entity" means a Person, other than an individual, which
(i) is formed or organized solely for the purpose of acquiring and directly (or,
in the case of the Guarantor, indirectly) holding an ownership interest in the
Mortgaged Property; (ii) does not engage in any business unrelated to the
Mortgaged Property; (iii) does not have any assets other than those related to
its interest in the Mortgaged Property or any indebtedness other than as
permitted by this Agreement, the Mortgages or the other Loan Documents; (iv) has
its own separate books and records and has its own accounts, in each case which
are separate and apart from the books and records and accounts of any other
Person; (v) at all times has two Independent directors (mutually acceptable to
the Borrowers and the Lender; the present Independent directors being acceptable
to the Borrowers and the Lender); provided, however, that the requirement set
forth in this clause (v) shall be deemed
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to be satisfied with respect to a Borrower if the sole member or manager of such
Borrower is a Single-Purpose Entity; and (vi) holds itself out as being a Person
separate and apart from any other Person.
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Sub-Account" has the meaning provided in Section 2.12(b).
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company or other entity (a) of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions are at the time
directly or indirectly owned by such Person or (b) that is directly or
indirectly controlled by such Person within the meaning of "control" under
Section 15 of the Securities Act of 1933, as amended, and any regulations
promulgated thereunder.
"Substantive Consolidation Certificate" means an Officer's Certificate
jointly executed by the Borrowers, the Guarantor and the Indemnitors, dated as
of the Closing Date, substantially in the form of Exhibit V.
"Survey" means a certified as-built title survey of an Individual
Property prepared by a registered Independent surveyor and in form and content
satisfactory to the Lender and the company issuing the Title Insurance Policy
for that Individual Property.
"Taking" means a taking or voluntary conveyance during the term hereof
of all or part of a Facility, or any interest therein or right accruing thereto
or use thereof, as the result of, or in settlement of, any condemnation or other
eminent domain proceeding by any Governmental Authority affecting a Facility or
any portion thereof whether or not the same shall have actually been commenced.
"Tangible Net Worth" means, as of the day of determination, all items
which in conformity with GAAP would be included under shareholders' equity on a
balance sheet of a Person on such day ("marked to market" in the case of
securities and other financial assets), less (i) all Contingent Obligations and,
without duplication, other contingent liabilities that would be required to be
noted under GAAP, and (ii) all goodwill, intellectual property and other
intangible assets.
"Title Insurance Policy" means the loan policy (or policies) of title
insurance on Form-B 1970 (revised 10-17-70 and 10-17-84), if available, or such
other form reasonably satisfactory to the Lender, issued by one or more title
companies reasonably satisfactory to the Lender with respect to each Individual
Property and insuring the first priority lien in favor of the Collateral Agent
created by the Related Mortgage in an amount satisfactory to the Lender, subject
only to such exceptions as are satisfactory to the Lender for that Individual
Property and containing
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such endorsements and affirmative assurances as the Lender shall reasonably
require, and "Title Insurance Policies" means all such policies collectively.
"Transaction Costs" means all costs and expenses paid or payable by the
Borrowers relating to the Transactions, including, without limitation, appraisal
fees, legal fees and accounting fees and the costs and expenses described in
Section 8.23.
"Transactions" means each of the transactions contemplated by the Loan
Documents, including each Advance.
"Transfer" means any transfer, sale, assignment or conveyance of a
Facility.
"Transfer Agreement" means the Transfer, Services, Distributions and
Termination Agreement, dated as of July 7, 1998, among Alpine Realty
Investments, LLC, Fortress GSA Properties LLC and certain other parties named
therein.
"Treasury Rate" means, as of the date of determination, the yield as
reported in the current Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading "U.S. Government Securities/Treasury Constant
Maturities", of U.S. Treasury constant maturities with maturity dates 10 years
from the date of issuance. (In the event Release H.15 is no longer published,
the Lender may select a comparable publication reasonably acceptable to the
Borrowers to determine the Treasury Rate.)
"UCC" means with respect to a Facility, the Uniform Commercial Code as
in effect on the date hereof in the state where such Facility is located, as
amended from time to time; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
security interest in any item or portion of the Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the state
where such Facility is located, "UCC" shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.
"UCC Searches" has the meaning specified in Section 3.3(G).
"Use" means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance or transportation of such Hazardous
Substance.
"Year" means, by number, (a) the period commencing on the Closing Date
and ending on the first anniversary thereof (Year 1) and (b) each consecutive
one-year period thereafter.
ARTICLE II
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GENERAL TERMS
Section 2.1. Amount of the Loan; Amounts of Advances.
(a) From and including the Closing Date to and including the date that
is 36 months after the date hereof (the "Financing Period"), subject to the
terms and conditions of this Agreement, the Lender may, or, if, in the Lender's
determination, required by applicable law, may cause an accommodation lender to,
lend to the Borrowers, on a joint and several basis, a total amount up to the
Loan Amount in one or more Advances. Notwithstanding any other provision of this
Agreement, the Lender shall have no obligation to fund any Advance, and the
conditions set forth in this Agreement for the Lender to make an Advance shall
be necessary but not sufficient conditions to the making of an Advance.
(b) The amount of each Advance to be made on the initial Advance
Closing Date is set forth on Schedule 2. The amount of any Advance to be made
after the initial Advance Closing Date shall not exceed the Advance Rate
multiplied by the lesser of (i) the purchase price of the Facility to be
acquired with the proceeds of such Advance or (ii) the Appraised Value of such
Facility, and the Borrowers shall provide the balance of such purchase price.
After any Principal Indebtedness is repaid, the Lender shall have no obligation
to re-advance the amount repaid.
Section 2.2. Use of Proceeds. Proceeds of each Advance shall be used
for the following purposes: (a) to pay the purchase price for an Eligible
Property being acquired by any Borrower and the reasonable costs and expenses
directly related to such acquisition, (b) to repay all existing indebtedness on
such Eligible Property and all related costs and expenses of such repayment, (c)
to pay to the Lender and the Advisor the financing fees and to pay or reimburse
all other Transaction Costs, (d) to purchase an Interest Rate Protection
Agreement, if applicable, and (e) to fund the Capital Reserve Sub-Account in the
amount of the Initial Capital Requirement for such Facility, if required.
Section 2.3. Security for the Loan. The Note and the Borrowers' joint
and several obligations hereunder and under the other Loan Documents shall be
secured by (a) the Mortgages, (b) the Collateral Security Instruments and (c)
the security interests and Liens granted in this Agreement and in the other Loan
Documents.
Section 2.4. Borrower's Note. The Borrowers' joint and several
obligation to pay the principal of and interest on the Loan and the Prepayment
Fee, if any, shall be evidenced on the date hereof by the Note, duly executed
and delivered by the Borrowers. The Lender is hereby authorized, at its option,
(i) to endorse on a schedule attached to the Note (or on a continuation of such
schedule attached to the Note and made a part thereof) an appropriate notation
evidencing the date and amount of each Advance and of each payment of principal,
interest and Prepayment Fee, if any, in respect thereof, and/or (ii) to record
such Advance and such payments in respect thereof in its books and records. Such
schedule and/or such books and records, as the case may be, shall,
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absent manifest error, constitute prima facie evidence of the accuracy of the
information contained therein. The failure of the Lender to make a notation on
the schedule to the Note or its books and records as aforesaid shall not affect
the obligations of the Borrowers hereunder, under the Note or any other Loan
Document in any respect. At no time shall the aggregate original principal
amounts of the Note exceed the Loan Amount. The Note shall be payable as to
principal, interest and Prepayment Fee, if any, as specified in this Agreement.
The final maturity of the Note shall occur on the Maturity Date.
Section 2.5. Principal, Interest and Fees. (a) The principal sum of the
Note shall, except as otherwise provided in this Agreement, be payable only on
the Maturity Date. Interest on the Loan through the end of each Interest Accrual
Period shall be payable in arrears on the Payment Date (other than the Maturity
Date) that precedes the end of such Interest Accrual Period, with the entire
outstanding principal balance of the Loan, together with all accrued but unpaid
interest thereon through the Maturity Date, due and payable to the Lender on the
Maturity Date. Interest shall be computed on the basis of the actual number of
days elapsed and a 360-day year.
(b) Interest on the Principal Indebtedness shall commence to accrue
upon the first Advance Closing Date. Each Advance will bear interest during each
Interest Accrual Period from and including its respective Advance Closing Date
at a rate per annum equal to the lesser of (i) LIBOR determined as of the
Interest Determination Date immediately preceding each such Interest Accrual
Period plus the Pricing Spread and (ii) the Maximum Rate.
(c) Promptly following the end of the calendar month during which such
investment earnings are received by the Lender, the Lender shall remit to the
Collateral Agent, for deposit into the Collection Account, an amount equal to
the amount of investment earnings received by the Lender on interest payments
made by the Borrowers on or after the immediately preceding Payment Date through
but excluding the last day of such Interest Period.
(d) Borrower shall pay lender a fee on the average daily unused amount
of the Loan Amount at a rate per annum equal to 0.175%, payable quarterly in
arrears on each Payment Date.
(e) If the Borrowers fail to make (i) the payment due on the Maturity
Date or (ii) any other payment of principal of or interest on the Loan when due,
the unpaid amount will bear interest at the lesser of the Default Rate and the
Maximum Rate from the date due until paid. The Borrowers will be deemed to have
made a quarterly payment of interest if the funds necessary to make such payment
are in the Debt Service Payment Sub-Account on the Payment Date.
Section 2.6. Voluntary Prepayment. (a) The Borrowers may voluntarily
prepay the Loan at any time in whole or, unless an Event of Default shall have
occurred and be continuing, in part; provided, however, that, any such
prepayment may be made only on a Payment Date and
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must be accompanied by an amount representing a prepayment premium equal to the
Prepayment Fee, together with all accrued interest and other amounts then due
under the Loan Documents.
(b) In the event of any such voluntary prepayment, the Borrowers shall
give the Lender written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay, which notice shall be given at least 30 days
prior to the date upon which prepayment is to be made and shall specify the
Payment Date on which such prepayment is to be made and the amount of such
prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein (unless such notice is
revoked by the Borrowers prior to the date specified therein in which event the
Borrowers shall immediately reimburse the Lender for any costs incurred in
connection with the giving of such notice and its revocation).
Section 2.7. Mandatory Prepayment. (a) A Borrower may Transfer any
Individual Property at any time; provided, however, that (i) such Borrower shall
have given the Lender at least 30 days' prior written notice of the Transfer,
(ii) no Default or Event of Default shall have occurred and be continuing or
shall result from such Transfer, (iii) the Lender shall have received from the
Borrowers financial statements, calculations and other backup information with
respect to the matters referred to in clause (ii) above, all in form and
substance reasonably satisfactory to the Lender and accompanied by an Officer's
Certificate stating that such statements, calculations and information are true,
correct and complete in all material respects, and (iv) upon the date of the
consummation of any such Transfer, the Borrowers shall pay to the Lender (unless
such notice is revoked by the Borrowers prior to the date specified therein in
which event the Borrowers shall immediately reimburse the Lender for any
reasonable costs incurred in connection with the giving of such notice and its
revocation):
(1) all interest accrued on the portion of the Loan being
prepaid through the date of prepayment;
(2) if such prepayment is made on a day other than a Payment
Date, any Breakage Costs incurred or to be incurred by the Lender;
(3) the payment of the Prepayment Fee with respect to the
prepayment of the Note; as of the date of such Transfer; provided,
however, that no Prepayment Fee shall be payable if the aggregate
Release Price required to be paid with respect to such Transfer and all
previous Transfers of Individual Properties does not exceed 20% of the
highest amount of Principal Indebtedness outstanding since the Closing
Date;
(4) an amount equal to the Release Price; and
(5) all other amounts due under the Related Mortgage.
(b) If the Borrowers are required by the Lender under the provisions of
a Mortgage to prepay the Loan or any portion thereof in the event of damage,
destruction or a Taking
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of a Facility, the Borrowers shall prepay a portion of the Loan (such prepayment
to be applied to the Allocated Loan Amount for such Facility to the extent of
such Allocated Loan Amount) such that the principal amount prepaid together with
accrued interest thereon to the date of prepayment exhausts the Insurance
Proceeds or the Condemnation Proceeds available for such prepayment by remitting
the Loss Proceeds from the Collection Account. In the event that the amount of
such Loss Proceeds exceeds the Allocated Loan Amount for such Facility, the
Borrowers shall be required to pay to the Lender an amount equal to the lesser
of (i) the amount of such Loss Proceeds and (ii) the aggregate amount that would
be payable under Section 2.7(a) in the event that the Facility were Transferred
(excluding any Prepayment Fee). No Prepayment Fee shall be applicable in the
event of any prepayment pursuant to this Section 2.7(b).
(c) If, as calculated on any date prior to the beginning of Year 4, (i)
either Debt Service Coverage Ratio is less than the applicable Required Debt
Service Coverage Ratio or (ii) subject to the next succeeding sentence, any Pool
Requirement (other than a Pool Requirement described in clause (v), clause (vi)
or clause (xi) of the definition thereof) has been violated, then the Borrowers
shall, if so directed by the Lender, on each Monthly Date thereafter until the
condition described in clause (i) or clause (ii), as the case may be, is no
longer continuing, (A) prepay the Loan in an aggregate amount equal to the
Preliminary Excess Cash Flow for the prior month, such Preliminary Excess Cash
Flow to be applied by the Lender to the payment of the Loan; or (B) deposit an
amount equal to the Preliminary Excess Cash Flow for the prior month into the
Excess Cash Flow Reserve Sub-Account. Notwithstanding any other provision of
this Agreement, the Lender's decision to fund the initial Advance hereunder
shall constitute a waiver of any noncompliance with Pool Requirements with
respect to the Individual Properties and Leases existing or in effect as of the
initial Advance Closing Date, but only (i) to the extent that any such
noncompliance exists as of such initial Advance Closing Date and (ii) so long as
there is no change in the overall composition of Individual Properties and
Leases subject to the provisions of this Agreement and the other Loan Documents.
No Prepayment Fee shall be applicable in the event of any prepayment pursuant to
this Section 2.7(c).
(d) If an Event of Default shall occur, the Borrowers shall, if so
directed by the Lender, on each Monthly Date thereafter until such Event of
Default has been cured, (i) prepay the Loan in an aggregate amount equal to the
Preliminary Excess Cash Flow for the prior month, such Preliminary Excess Cash
Flow to be applied by the Lender to the payment of the Loan; or (ii) deposit an
amount equal to the Preliminary Excess Cash Flow for the prior month into the
Excess Cash Flow Reserve Sub-Account. This clause shall not be construed as an
agreement or privilege to extend the date of the payment of the Loan, nor as a
waiver of any other right or remedy accruing to the Lender by reason of the
occurrence of any Event of Default.
(e) In the event that any Rating Agency's Investment Grade Advance Rate
shall be less than 75%, the Borrowers shall, within 30 Business Days of receipt
of notice from the Lender of such occurrence, prepay the Loan so that the amount
of Principal Indebtedness that remains outstanding is less than or equal to the
aggregate principal amount of the Loan that would have been
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made on the Mortgaged Property had the Advance Rate been equal to the Investment
Grade Advance Rate at the time of each Advance (and all payments made by the
Borrowers pursuant to this clause (e) shall be applied immediately to reduce the
Principal Indebtedness).
(f) The Borrower shall, if so directed by the Lender, on each Monthly
Date occurring after the end of Year 3, (i) prepay the Loan in an aggregate
amount equal to the Preliminary Excess Cash Flow for the prior month, such
Preliminary Excess Cash Flow to be applied by the Lender to the payment of the
Loan; or (ii) deposit an amount equal to the Preliminary Excess Cash Flow for
the prior month into the Excess Cash Flow Reserve Sub-Account.
(g) Upon prepayment of the Loan in full, the Borrowers shall pay to the
Lender, in addition to the amounts specified in Section 2.6 or this Section 2.7,
as applicable, any other amounts then due and payable to the Lender pursuant to
the Loan Documents. All prepayments made pursuant to Section 2.6 or this Section
2.7 shall be applied in accordance with the provisions of Section 2.8.
Section 2.8. Application of Payments. All proceeds (including any Net
Proceeds, other than those described in clause (i)(y) of the definition thereof)
of any repayment, including prepayments, of the Loan shall be applied to pay:
first, any reasonable out-of-pocket costs and expenses of the Lender arising as
a result of such repayment; second, any accrued and unpaid interest then payable
with respect to the Loan or the portion thereof being repaid; third, the
Prepayment Fee, if any, on the Loan or the portion thereof being repaid; fourth,
the outstanding principal amount of the Loan or the portion thereof being
repaid; and fifth, any other amounts owing by the Borrowers under this Agreement
or any other Loan Document.
Section 2.9. Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Note shall be made to the Lender not later than 10:00 a.m., New York
City time, on the date when due and shall be made in lawful money of the United
States of America in federal or other immediately available funds to an account
specified to the Borrowers by the Lender in writing, and any funds received by
the Lender after such time shall, for all purposes hereof, be deemed to have
been paid on the next succeeding Business Day.
(b) All payments made by the Borrowers hereunder, or by the Borrowers
under the other Loan Documents, shall be made irrespective of, and without any
deduction for, any set-offs or counterclaims.
Section 2.10. Taxes. All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (other than taxes imposed on the income of the Lender).
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Section 2.11. Release of Collateral. (a) Notwithstanding any other
provision of this Agreement or any other Loan Document, upon a prepayment with
respect to any Individual Property as described in Section 2.7(a) or Section
2.12(h) hereof, the Collateral Agent shall, simultaneously with its receipt of,
and pursuant to, written directions from the Lender and confirmation from the
Lender that it has received the full amount of such prepayment (which directions
and confirmation the Lender hereby agrees to deliver to the Collateral Agent
immediately), release the Lien of the Related Mortgage and the related
Assignment of Rents and UCC-1 financing statements, pursuant to documentation
provided to it, and any other Liens in favor of the Lender relating to such
Individual Property and shall release to the Borrowers any portion of the
Sub-Accounts relating to such Individual Property.
(b) If the Lender (i) receives Loss Proceeds with respect to any
Facility (x) in the event of a Taking or casualty affecting 100% of such
Facility or (y) in an amount equal to or exceeding the sum of the Allocated Loan
Amount for such Facility and accrued and unpaid interest thereon and (ii)
applies such Loss Proceeds to reduce the Indebtedness in accordance with Section
2.7(b), the Collateral Agent shall simultaneously with its receipt of, and
pursuant to, written directions from the Lender and confirmation from the Lender
that it has made such application (which directions and confirmation the Lender
hereby agrees to deliver to the Collateral Agent immediately), release the Lien
of the Related Mortgage and related Assignment of Rents and UCC-1 financing
statements, pursuant to documentation provided to it, and any other Liens in
favor of the Lender relating to such Individual Property.
(c) Upon (i) repayment of the Loan and all other amounts due hereunder
and under the Loan Documents (including all Secured Obligations owing to any
Secured Party) in full in accordance with the terms hereof and thereof and the
expiration of the Financing Period or (ii) if the initial Advance Closing Date
shall not occur as a result of a failure to issue the MTNs, the Collateral Agent
shall release its Liens with respect to all Collateral.
Section 2.12. Central Cash Management. (a) (i) shall jointly open and
maintain at the Collateral Agent a non-interest-bearing segregated trust account
(the "Collection Account"). The Collection Account shall each be opened and
maintained in the name of the Collateral Agent. The Borrowers shall direct each
lessee and each other account debtor of any Borrower to remit all payments due
to any Borrower directly to the Collection Account. The Borrowers shall deposit
all Moneys and checks received by the Borrowers in respect of Rent or otherwise
in respect of any Accounts within two Business Days after receipt thereof,
directly into the Collection Account. The Collection Account shall at all times
be an Eligible Account. The Borrowers shall have no right of withdrawal from the
Collection Account, and the Collection Account shall be under the sole dominion
and control of the Collateral Agent.
(ii) The Borrowers shall jointly open and maintain at the Collateral
Agent a demand deposit account (the "Basic Carrying Costs Account") in the name
of the Borrowers "as joint
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and several Debtors and Bankers Trust Company (as Collateral Agent) as Secured
Party pursuant to the Loan Agreement dated as of July 31, 1998". Upon the
occurrence and during the continuance of a Default or Event of Default, the
Collateral Agent shall, upon the receipt of and pursuant to the written
instructions of the Lender, transfer all funds on deposit in the Basic Carrying
Costs Account into the Basic Carrying Costs Sub-Account.
(b) Establishment of Sub-Accounts. The Collection Account shall contain
the Debt Service Payment Sub-Account, the Insurer Sub-Account, the Basic
Carrying Costs Sub-Account, the Capital Reserve Sub-Account, the Interest Rate
Protection Sub-Account, the Lease Reserve Sub-Account and the Excess Cash Flow
Reserve Sub-Account, each of which accounts (individually, a "Sub-Account" and
collectively, the "Sub-Accounts") shall be an Eligible Account to which certain
funds shall be allocated and from which disbursements shall be made pursuant to
the terms of this Agreement. The Collateral Agent shall be permitted to
establish such Sub-Accounts as non-interest bearing trust accounts for
administrative purposes.
(c) Permitted Investments. Upon the request of the Borrowers, the
Lender may direct the Collateral Agent in writing to invest and reinvest any
balance in the Collection Account from time to time in Permitted Investments as
instructed by the Borrowers; provided, however, that (i) if the Borrowers fail
to so instruct the Lender, or upon the occurrence of an Event of Default, the
Lender shall direct the Collateral Agent in writing to invest and reinvest such
balance in Permitted Investments as the Lender shall determine in its sole
discretion, (ii) the maturities of the Permitted Investments on deposit in the
Collection Account shall, to the extent such dates are ascertainable, be
selected and coordinated to become due not later than the day before any
disbursements from the applicable Sub-Accounts must be made, (iii) all such
Permitted Investments shall be held in the name and be under the sole dominion
and control of the Lender, and (iv) no Permitted Investment shall be made unless
the Lender shall retain a perfected first priority Lien in such Permitted
Investment securing the Secured Obligations and all filings and other actions
necessary to ensure the validity, perfection, and priority of such Lien have
been taken. It is the intention of the parties hereto that the entire amount
deposited in the Collection Account (or as much thereof as the Lender may
reasonably arrange to invest) shall at all times be invested in Permitted
Investments, and that the Collection Account shall be a so-called "zero balance"
account. All funds in the Collection Account that are invested in a Permitted
Investment are deemed to be held in the Collection Account for all purposes of
this Agreement and the other Loan Documents. The Lender shall have no liability
for any loss in investments of funds in the Collection Account that are invested
in Permitted Investments (unless invested contrary to Borrowers' request prior
to an Event of Default) and no such loss shall affect the Borrowers' obligation
to fund, or liability for funding, the Collection Account and each Sub-Account,
as the case may be. Each Borrower agrees that such Borrower shall include its
pro-rata share of all such earnings on the Collection Account as income of such
Borrower for federal and applicable state tax purposes. In no event shall the
Collateral Agent be liable for the selection of Permitted Investments or for
investment losses incurred thereon. The Collateral Agent shall have no liability
in respect of losses incurred as a result of the liquidation of any Permitted
Investment prior to its stated maturity or the failure of the Borrowers or the
Lender to provide timely written
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investment direction. The Collateral Agent shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction.
(d) Interest on Accounts. All interest paid or other earnings on the
Permitted Investments made hereunder shall be deposited into the Collection
Account and shall be subject to allocation and distribution like any other
monies deposited therein.
(e) Payments. Not later than three Business Days before each Payment
Date during the term of the Loan, the Lender shall deliver to the Borrowers and
the Collateral Agent a certificate in the form attached hereto as Exhibit S,
setting forth (i) the Debt Service that will be payable to the Lender on such
Payment Date, which amount shall include interest accruing through the end of
the then-current Interest Accrual Period (the "Required Debt Service Payment")
and (ii) whether sufficient funds exist in the Collection Account to fund the
Debt Service Payment Sub-Account, the Insurer Sub-Account, the Interest Rate
Protection Sub-Account, the Basic Carrying Costs Sub-Account, the Excess Cash
Flow Reserve Sub-Account and the Capital Reserve Sub-Account in the required
amounts. If any such certificate states that the funds then allocated to the
Sub-Accounts are less than the amount of funds which are required to be on
deposit therein on such Payment Date, the Borrowers shall be obligated to
deposit funds (in addition to Rents and Money received from Accounts) into the
Collection Account in the amount of such deficiency, and failure to make such
deposit at or before 10:00 a.m. on the Business Day that is two Business Days
after such Payment Date shall be an Event of Default hereunder.
(i) Payment of Basic Carrying Costs. If funds are the
allocated to the Basic Carrying Costs Account, the Borrowers shall
withdraw funds on deposit in such Account from time to time for purpose
of paying Basic Carrying Costs when due. If amounts are then allocated
to the Basic Carrying Costs Sub-Account, to the extent that there are
insufficient funds available in the Basic Carrying Costs Account, at
least five Business Days prior to the due date of any Basic Carrying
Cost, the Borrowers shall notify the Lender in writing and request that
the Lender request the Collateral Agent to release to the Borrowers
from the Basic Carrying Costs Sub-Account funds sufficient to pay such
Basic Carrying Cost prior to the due date thereof. Together with each
such request, the Borrowers shall furnish the Lender with copies of
bills and other documentation as may be reasonably required by the
Lender to establish that such Basic Carrying Cost is then due. Provided
no Event of Default has occurred and is continuing, the Lender will
direct the Collateral Agent in writing to release to the Borrowers from
the Basic Carrying Cost Sub-Account an amount sufficient to pay such
Basic Carrying Cost before same shall be delinquent to the extent that
there are funds available in the Basic Carrying Cost Sub-Account and
the Lender has received appropriate documentation to establish the
amount(s) due and the due date(s).
(ii) Payment of Debt Service. At or before 12:00 noon, New
York City time, on each Payment Date during the term of the Loan and on
the Maturity Date, the Collateral Agent shall transfer from the Debt
Service Payment Sub-Account to the Lender
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an amount equal to the Required Debt Service Payment. The Borrowers
shall be deemed to have timely made the Required Debt Service Payment
pursuant to Section 2.9 regardless of the time the Collateral Agent
makes such transfer to the Lender as long as sufficient funds are then
on deposit in the Debt Service Payment Sub-Account. In the event that
the amount of funds transferred to the Lender on any Payment Date
pursuant to the first sentence of this clause (ii) is less than the
Required Debt Service Payment, the Collateral Agent, at the written
direction of the Lender, shall promptly transfer to the Lender any
amounts received from the Borrowers or applied from any other Account
or Sub-Account specified by the Lender to cure such deficiency after
such transfer but prior to 10:00 a.m. on the Business Day that is two
Business Days after such Payment Date.
(iii) Payments to Insurer. At or before 12:00 noon, New York
City time, on each Payment Date during the term of the Loan and on the
Maturity Date, the Collateral Agent shall transfer from the Insurer
Sub-Account to the Insurer an amount equal to all Insurer Obligations
payable on such Payment Date, as set forth in written instructions
delivered by the Insurer to the Collateral Agent. The Borrowers shall
be deemed to have timely made the payment required under this clause
(iii) pursuant to Section 2.9 regardless of the time the Collateral
Agent makes such transfer to Insurer as long as sufficient funds are
then on deposit in the Insurer Sub-Account.
(iv) Payment for Interest Rate Protection Agreement. The
Collateral Agent shall transfer funds from the Interest Rate Protection
Sub-Account to the appropriate counterparty at any time, pursuant to
the written instructions of the Controlling Party.
(v) Excess Cash Flow Reserve. If, at any time prior to the
beginning of Year 4, (A) all Events of Default that shall have occurred
shall have been waived by the Lender; (B) each Debt Service Coverage
Ratio is greater than or equal to the Required Debt Service Coverage
Ratio, and (C) each Pool Requirement is satisfied, the Lender will
direct the Collateral Agent in writing to transfer all funds on deposit
in the Excess Cash Flow Reserve Sub-Account to the Collection Account.
(vi) Payment of Capital Improvement Costs. Not more frequently
than once each month and provided that no Event of Default has occurred
and is continuing, upon the Borrowers' written request the Lender will
direct the Collateral Agent in writing to transfer funds to the
Borrowers then allocated to the Capital Reserve Sub-Account for payment
of Capital Improvement Costs. Together with each such request, the
Borrowers shall furnish the Lender with copies of bills and other
documentation as may be reasonably required by the Lender to establish
that such Capital Improvement Costs are then due, together with lien
waivers and releases from all parties furnishing materials and/or
services in connection with the requested payment.
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(vii) Payment of Costs from Lease Reserve Sub-Account. Not
more frequently than once each month and provided that no Event of Default
has occurred and is continuing, upon the Borrowers' written request, the
Lender will direct the Collateral Agent in writing to transfer funds to
the Borrowers then allocated to the Lease Reserve Sub-Account for payment
of Operating Expenses, tenant improvement costs and leasing commissions.
Together with each such request, the Borrowers shall furnish the Lender
with copies of bills and other documentation as may be reasonably required
by the Lender to establish that such amounts are then due, together with
lien waivers and releases from all parties furnishing materials and/or
services in connection with the requested payment.
(f) Monthly Funding of Basic Carrying Costs Account and
Sub-Accounts. On each Monthly Date during the term of the Loan, the Collateral
Agent shall in accordance with the written direction of the Lender allocate all
funds then on deposit in the Collection Account as follows and in the following
priority:
(i) first, to the Basic Carrying Costs Account, until an
amount equal to the Basic Carrying Costs Monthly Installment for the
current month has been allocated to the Basic Carrying Costs Account;
provided, however, that following the Collateral Agent's receipt of
written notice from the Lender that a Default or Event of Default has
occurred and is continuing and directing the Collateral Agent to transfer
all funds on deposit in the Basic Carrying Costs Account to the Basic
Carrying Costs Sub-Account, and until the Collateral Agent shall receive
written notice from the Lender that such Default or Event of Default has
been cured, the Collateral Agent shall allocate to the Basic Carrying
Costs Sub-Account all funds that would otherwise be transferred to the
Basic Carrying Costs Account;
(ii) second, to the Debt Service Payment Sub-Account, (A) on
each Monthly Date other than a Payment Date, an amount certified by the
Lender to be equal to (or if such amount cannot be precisely determined,
the Lender's best estimate of) one-third of the Required Debt Service
Payment payable on the next Payment Date; and (B) on each Payment Date,
the amount required to increase the balance of the Debt Service Payment
Sub-Account to the amount certified by the Lender to be the Required Debt
Service Payment for such Payment Date;
(iii) third, to the Insurer Sub-Account, (A) on each Monthly
Date other than a Payment Date, an amount certified by Insurer to be equal
to (or if such amount cannot be precisely determined, Insurer's best
estimate of) one-third of the amount of Insurer Obligations that will be
payable on the next Payment Date; and (B) on each Payment Date, the amount
required to increase the balance of the Insurer Sub-Account to the amount
certified by Insurer to be the amount of Insurer Obligations payable on
such Payment Date;
(iv) fourth, if Interest Rate Protection Agreements in form
and substance satisfactory to the Lender are not in place and if required
by the Lender in its sole discretion,
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to the Interest Rate Protection Sub-Account, the amount certified by the
Lender to be the amount required to bring the balance of such Sub-Account
to the Required Interest Rate Protection Sub-Account Balance;
(v) fifth, to the Lease Reserve Sub-Account, the amount
certified by the Lender to be the amount required to bring the balance of
such Sub-Account to the Required Lease Reserve Sub-Account Balance;
(vi) sixth, to the Excess Cash Flow Reserve Sub-Account, any
amount of Preliminary Excess Cash Flow that the Lender may direct the
Collateral Agent to apply to such Sub-Account pursuant to Section 2.7(c);
and
(vii) seventh, to the Capital Reserve Sub-Account, until an
amount equal to the Capital Reserve Monthly Installment for the current
month has been allocated to the Capital Reserve Sub-Account.
Provided that (i) no Event of Default has occurred and is
continuing, (ii) the Lender has received all financial information described in
Section 5.1(R) for the most recent periods for which the same are due and (iii)
no prepayments of the Loan from Preliminary Excess Cash Flow are then required
pursuant to Section 2.7(c) or (d), the Lender agrees that on each Monthly Date
any amounts deposited into or remaining in the Collection Account after the
minimum amounts set forth in clauses (i), (ii), (iii), (iv), (v) and (vi) above
have been allocated with respect to the current month and any periods prior
thereto, the Lender shall instruct the Collateral Agent in writing to disburse
such amounts to the Borrowers by wire transfer. The Borrowers shall use any
funds distributed to the Borrowers pursuant to the foregoing to first pay all
Operating Expenses, and all Excess Cash Flow may be retained by the Borrowers
and used for, or applied to, any purpose, including, without limitation,
dividends or other distributions. If an Event of Default has occurred and so
long as it is continuing, any amounts deposited into or remaining in the
Collection Account after the Lender has allocated minimum amounts as hereinabove
provided shall be for the account of the Lender and may be withdrawn by the
Lender to be applied as provided in the Loan Documents.
If, on any Payment Date, the balance in the Debt Service Payment
Sub-Account is insufficient to make the payment of Required Debt Service Payment
or the Insurer Obligations then payable, then the Lender may (but shall not be
obligated to) withdraw funds from the Basic Carrying Costs Account, the Interest
Rate Protection Sub-Account, Basic Carrying Costs Sub-Account, the Excess Cash
Flow Reserve Sub-Account or the Capital Reserve Sub-Account to pay such
deficiency. In the event that the Lender elects to apply the proceeds of any
such Sub-Account to pay any Required Debt Service Payment, the Borrowers shall,
upon demand, repay to the Lender the amount of such withdrawn funds to replenish
such Sub-Account, and if the Borrowers shall fail to repay such amounts within
five days after such withdrawal, an Event of Default shall exist hereunder,
which Event of Default shall not be cured unless and until the Borrowers repay
such amount or all Sub-Accounts have again been fully funded from Rents or Money
received from Accounts. The Lender may, at its sole option, replenish such
Sub-Account out of available Rents or Money received
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from Accounts in subsequent months which the Borrowers would have otherwise been
entitled to receive.
(g) Loss Proceeds. In the event of a casualty or Taking with respect
to a Facility, unless pursuant to the Related Mortgage the proceeds received
under any insurance policy ("Insurance Proceeds") or the proceeds in respect of
any Taking ("Condemnation Proceeds") are to be made available to the Borrowers
for restoration, the Lender and the Borrowers shall cause all such Insurance
Proceeds or Condemnation Proceeds (collectively, "Loss Proceeds") to be paid
directly to the Collection Account, whereupon the Lender will apply same to
reduce the Indebtedness in accordance with Section 2.7(b). If the Lender agrees
or is required pursuant to the provisions hereof or of the Mortgage to make Loss
Proceeds available for restoration, then, to the extent permitted in the
applicable Lease(s) (i) all Insurance Proceeds received in respect of business
interruption coverage and (ii) any Condemnation Proceeds received in connection
with a temporary Taking shall be maintained in the Collection Account, to be
applied by the Lender in the same manner as Rent received with respect to the
operation of such Facility; provided, further, that in the event that the
Insurance Proceeds of any such business interruption insurance policy or
Condemnation Proceeds of such temporary Taking are paid in a lump sum in
advance, the Lender will hold such Insurance Proceeds or Condemnation Proceeds
in a segregated non-interest-bearing trust account at the Collateral Agent,
shall estimate, in the Lender's reasonable discretion, the number of months
required for the Borrowers to restore the damage caused by the casualty to such
Facility or that such Facility will be affected by such temporary Taking, as the
case may be, shall divide the aggregate business interruption Insurance Proceeds
or Condemnation Proceeds in connection with such temporary Taking by such number
of months, and shall disburse from such escrow account into the Collection
Account each month during the performance of such restoration or pendency of
such temporary Taking such monthly installment of said Insurance Proceeds or
Condemnation Proceeds. In the event that Insurance Proceeds or Condemnation
Proceeds are to be applied toward restoration, the Lender will hold such funds
in a segregated non-interest-bearing trust account at the Collateral Agent and
shall direct the Collateral Agent in writing to disburse same in accordance with
the provisions of the Related Mortgage. If any Loss Proceeds are received by any
Borrower, such Loss Proceeds shall be received in trust for the Lender, shall be
segregated from other funds of Borrower, and shall be forthwith paid to the
Collection Account, or paid to the Lender to hold in a segregated
interest-bearing trust account, in each case to be applied or disbursed in
accordance with the foregoing, except as provided to the contrary in the Related
Mortgage. Any Loss Proceeds made available to the Borrowers for restoration in
accordance herewith, to the extent not used by the Borrowers in connection with,
or to the extent they exceed the cost of, such restoration, shall be deposited
into the Collection Account, whereupon the Lender will apply the same to reduce
the Allocated Loan Amount applicable to the affected Individual Property in
accordance with Section 2.7(b).
(h) Payment of Basic Carrying Costs. The Borrowers shall pay all
Basic Carrying Costs with respect to the Borrowers and each Individual Property
in accordance with the provisions of the Related Mortgage, subject, however, to
the Borrowers' rights to contest payment of same in
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accordance with the Related Mortgage. The Borrowers' obligation to pay (or cause
the Lender to pay) Basic Carrying Costs pursuant to this Agreement shall
include, to the extent permitted by applicable law, Impositions resulting from
future changes in law which impose upon the Lender or any Deed of Trust Trustee
an obligation to pay any property taxes or other Impositions or which otherwise
adversely affect the Lender's or the Deed of Trust Trustee's interests. (In the
event such a change in law prohibits the Borrowers from assuming liability for
payment of any such Imposition, the Allocated Loan Amount and accrued and unpaid
interest thereon with respect to the affected Facility shall, at the option of
the Lender, become due and payable, without payment of the Prepayment Fee, on
the date that is 120 days after such change in law and failure to pay such
amounts on the date due shall be an Event of Default.) All funds deposited in
the Collection Account relating to the Basic Carrying Costs shall be held by the
Lender pursuant to the provisions of this Agreement and the Lender shall direct
the Collateral Agent in writing to apply such funds in payment of the foregoing
charges when and as payable, provided that no Event of Default shall have
occurred and be continuing. Should an Event of Default occur, the proceeds on
deposit in the Basic Carrying Costs Sub-Account may be applied by the Lender in
payment of any Basic Carrying Costs for all or any portion of the Mortgaged
Property as the Lender in its sole discretion may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by the Lender as herein provided.
(i) Collateral Agent's Reliance. The Collateral Agent may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Collateral Agent may rely on notice from the Lender
as to the occurrence of an Event of Default.
Section 2.13 Security Agreement. (a) Pledge of Accounts. To secure
the full and punctual payment and performance of all of the Secured Obligations,
the Borrowers hereby sell, assign, convey, pledge and transfer to the Collateral
Agent (for the equal and ratable benefit of the Secured Parties, in accordance
with their respective interests as set forth in the Collateral Agency
Agreement), and grant a first and continuing security interest in and to, the
following property, whether now owned or existing or hereafter acquired or
arising and regardless of where located (collectively, the "Account
Collateral"):
(i) all of the Borrowers' right, title and interest in the
Collection Account and the Basic Carrying Costs Account and all Money, if
any, from time to time deposited or held in the Collection Account and the
Basic Carrying Costs Account ;
(ii) all interest, dividends, Money, Instruments and other
property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any of the foregoing; and
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(iii) to the extent not covered by clause (i), (ii), or (iii)
above, all proceeds (as defined under the UCC of the applicable
jurisdiction) of any or all of the foregoing.
(b) Covenants. The Borrowers covenant that (i) all Rents and Money
(other than tenant security deposits) received from Accounts shall be deposited
into the Collection Account; (ii) so long as any portion of the Secured
Obligations is outstanding, the Borrowers shall not open (or permit any Property
Manager to open) any other account for the collection of Rents (other than
tenant security deposits) or Money received from Accounts; and (iii) the
Borrowers will instruct each counterparty to the Interest Rate Protection
Agreements (if applicable) to deposit any and all payments thereunder into the
Collection Account
(c) Rules Governing Collection Account. The Collection Account and
the Basic Carrying Costs Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other banking authority or Governmental Authority, as may now
or hereafter be in effect, and to the rules, regulations and procedures of the
Collateral Agent relating to trust accounts or demand deposit accounts, as
applicable, from time to time in effect.
(d) Financing Statements: Further Assurances. In connection with
each Advance Closing Date, the Borrowers will execute and deliver to the
Collateral Agent for filing a financing statement or statements in connection
with the Account Collateral in the form required to properly perfect the
Collateral Agent's security interest in the Account Collateral to the extent
that it may be perfected by such a filing. The Borrowers agree that at any time
and from time to time, at the expense of the Borrowers, the Borrowers shall
promptly execute and deliver all further instruments, and take all further
action, that is required or that the Collateral Agent may reasonably request, in
order to perfect and protect the pledge and security interest granted or
purported to be granted hereby, or to enable the Collateral Agent to exercise
and enforce the Collateral Agent's rights and remedies hereunder with respect
to, any Account Collateral.
(e) Transfers and Other Liens. Each Borrower agrees that it will not
sell or otherwise dispose of any of the Account Collateral other than pursuant
to the terms hereof, or create or permit to exist any Lien upon or with respect
to all or any of the Account Collateral, except for the Lien granted to the
Collateral Agent under this Agreement.
(f) Collateral Agent's Right to Perform. If the Borrowers or any
Borrower fails to perform any covenant or obligation contained herein and such
failure shall continue for a period of 10 Business Days after the Borrowers'
receipt of written notice thereof from the Collateral Agent, the Collateral
Agent may, but shall have no obligation to, itself perform, or cause performance
of, such covenant or obligation, and the reasonable expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Borrowers to the
Collateral Agent upon demand. Notwithstanding the foregoing, the Collateral
Agent shall have no obligation to send notice to the Borrowers of any such
failure unless directed to do so by the Controlling Party.
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(g) Collateral Agent's Reasonable Care. Beyond the exercise of
reasonable care in the custody thereof, the Collateral Agent shall not have any
duty as to any Account Collateral or any income thereon in its possession or
control or in the possession or control of any agents for, or of the Collateral
Agent, or the preservation of rights against any Person or otherwise with
respect thereto. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody of the Account Collateral in its possession if
the Account Collateral is accorded treatment substantially equal to that which
the Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not be liable or responsible for any loss, damage or
diminution in value by reason of the act or omission of the Collateral Agent, or
the Collateral Agent's agents, employees or bailees, except to the extent that
such loss or damage or diminution in value results from the Collateral Agent's
gross negligence or willful misconduct or the gross negligence or willful
misconduct of any such agent, employee or bailee of the Collateral Agent.
(h) Remedies. The rights and remedies provided in this Section 2.13
are cumulative and may be exercised independently or concurrently, and are not
exclusive of any other right or remedy provided at law or in equity. No failure
to exercise or delay by the Collateral Agent or any Secured Party in exercising
any right or remedy hereunder or under the Loan Documents shall impair or
prohibit the exercise of any such rights or remedies in the future or be deemed
to constitute a waiver or limitation of any such right or remedy or acquiescence
therein.
(i) No Waiver. Every right and remedy granted to the Collateral
Agent under this Agreement or by law may be exercised by the Collateral Agent at
any time and from time to time, and as often as the Collateral Agent may deem it
expedient. Any and all of the Collateral Agent's rights with respect to the
pledge and security interest granted hereunder shall continue unimpaired, and
each Borrower shall be and remain obligated in accordance with the terms hereof,
notwithstanding (i) any proceeding of any Borrower under the United States
Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes
of any state, (ii) the release or substitution of Account Collateral at any
time, or of any rights or interests therein or (iii) any delay, extension of
time, renewal, compromise or other indulgence granted by the Collateral Agent in
the event of any Default with respect to the Account Collateral or otherwise
hereunder. No delay or extension of time by the Collateral Agent in exercising
any power of sale, option or other right or remedy hereunder, and no notice or
demand which may be given to or made upon the Borrowers by the Collateral Agent,
shall constitute a waiver thereof, or limit, impair or prejudice the Collateral
Agent's right, without notice or demand, to take any action against the
Borrowers or to exercise any other power of sale, option or any other right or
remedy.
(j) Collateral Agent Appointed Attorney-In-Fact. Each Borrower
hereby irrevocably constitutes and appoints the Collateral Agent as such
Borrower's true and lawful attorney-in-fact, with full power of substitution, at
any time after the occurrence and during the continuation of an Event of
Default, to execute, acknowledge and deliver any instruments and to exercise and
enforce every right, power, remedy, option and privilege of such Borrower with
respect
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to the Account Collateral, and do in the name, place and stead of such Borrower,
all such acts, things and deeds for and on behalf of and in the name of such
Borrower with respect to the Account Collateral, which such Borrower could or
might do or which the Collateral Agent may deem necessary or desirable to more
fully vest in the Collateral Agent the rights and remedies provided for herein
with respect to the Account Collateral and to accomplish the purposes of this
Agreement. The foregoing powers of attorney are irrevocable and coupled with an
interest.
(k) Continuing Security Interest; Termination. This Section 2.13
shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until payment in full of
the Secured Obligations. Upon payment in full of the Secured Obligations, the
Borrowers shall be entitled to the return, upon its request and at its expense,
of such of the Account Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof, and the Collateral Agent shall execute
such instruments and documents as may be reasonably requested by the Borrowers
to evidence such termination and the release of the pledge and lien hereof;
provided, however, that the Borrowers shall pay on demand all of the Collateral
Agent's expenses in connection therewith.
(l) Collateral Agent's Reliance. The Collateral Agent may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Collateral Agent may rely on notice from the
Controlling Party as to the occurrence of an Event of Default.
Section 2.14 Supplemental Mortgage Affidavits. The Lien to be
created by each Mortgage is intended to encumber the Individual Property
described therein to the full extent of all the Secured Obligations and to cross
collateralize the other Individual Properties. As of each Advance Closing Date,
the Borrowers shall have paid all state, county and municipal recording and all
other taxes imposed upon the execution and recordation of the Related Mortgage
and all other Mortgages dated on or prior to such Advance Closing Date. If at
any time the Lender determines, based on applicable law, that the Lender is not
being afforded the maximum amount of security available from any Individual
Property as a direct, or indirect, result of applicable taxes not having been
paid with respect to the Related Mortgage, the Borrowers agree that the
Borrowers will execute, acknowledge and deliver to the Lender, immediately upon
the Lender's request, supplemental affidavits increasing the amount of Secured
Obligations for which all applicable taxes have been paid to an amount
determined by the Lender to be equal to the lesser of (a) the greater of the
fair market value of such Individual Property (i) as of the Advance Closing Date
for such Individual Property and (ii) as of the date such supplemental
affidavits are to be delivered to the Lender, and (b) the amount of the Secured
Obligations, and the Borrowers shall, on demand, pay any such additional taxes.
ARTICLE III
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CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Effectiveness. This Agreement
shall become effective on the date that all of the following conditions shall
have been satisfied (or waived in accordance with Section 8.4) (the "Closing
Date"):
(A) Loan Agreement. The Borrowers shall have executed and delivered
this Agreement to the Lender.
(B) Note. The Borrowers shall have executed and delivered to the
Lender the Note.
(C) Indemnity Agreement. The Indemnitors shall have executed and
delivered to the Collateral Agent the Indemnity Agreement.
(D) Collateral Agency Agreement. The Borrowers shall have executed
and delivered to the Collateral Agent the Collateral Agency Agreement.
(E) Guarantee. The Guarantor shall have executed and delivered to
the Collateral Agent the Guarantee.
(F) Pledge and Security Agreement. The Guarantor shall have executed
and delivered to the Collateral Agent the Pledge and Security Agreement.
(G) Contribution Agreement. Each Borrower shall have executed the
Contribution Agreement.
(H) Opinions of Counsel. The Lender shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the Affiliated Entities,
its legal opinions in substantially the form attached hereto as Exhibit N and
Exhibit O, respectively. Such legal opinions will be addressed to the Lender,
the Insurer and the Rating Agencies, dated the Closing Date, and in form and
substance satisfactory to the Lender and its counsel. Each Borrower hereby
instructs such counsel to deliver such opinions.
(I) The Indemnitors shall have executed and delivered to the Lender
the Indemnitors Side Letter.
(J) Fortress GSA Houston Properties, LP and Fortress Houston GP
Corp. shall have executed and delivered to the Lender the Partnership Pledge
Agreement.
(K) The Borrowers shall have executed and delivered to the Lender
the Substantive Consolidation Certificate.
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(L) The Guarantor shall have executed and delivered to the Lender
the Guarantor Side Letter.
(M) Corporate and LLC Documents. The Lender shall have received with
respect to each Affiliated Entity its Charter Document, as amended, modified or
supplemented to the Closing Date, certified to be true, correct and complete by
the appropriate Secretary of State as of a date not more than 10 days prior to
the Closing Date, together with a good standing certificate from such Secretary
of State dated a date not more than 10 days prior to the Closing Date.
(N) Certified Resolutions, etc. The Lender shall have received a
certificate of the secretary or assistant secretary or other appropriate officer
of each Affiliated Entity dated the Closing Date, certifying (i) the names and
true signatures of its incumbent officers authorized to sign each Loan Document
to which such Affiliated Entity is a party, (ii) its Organizing Document as in
effect on the Closing Date, (iii) the resolutions of its board of directors or
other analogous body approving and authorizing the execution, delivery and
performance of each Loan Document to which such Affiliated Entity is a party and
(iv) that there have been no changes in its Charter Document since the date of
the most recent certification thereof by the appropriate Secretary of State.
(O) Notification of Account Debtors. Each Borrower shall have
provided written notice to each lessee and other account debtor of such Borrower
directing each such Person to remit all payments due to such Borrower directly
to the Collection Account.
(P) Representations and Warranties. The representations and
warranties herein shall be true and correct in all material respects on such
date both before and after the execution and delivery of this Agreement.
(Q) No Default or Event of Defaults. No Default with respect to the
payment of money or Event of Default shall have occurred and be continuing on
such date either before or after the execution and delivery of this Agreement.
(R) No Injunction. No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been issued,
and no litigation shall be pending or threatened, which in the good faith
judgment of the Lender would enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transactions.
(S) Transaction Costs. The Borrowers shall have paid all Transaction
Costs for which bills have been submitted.
(T) Required Ratings. The Lender shall have received evidence
reasonably satisfactory to the Lender that each of Standard & Poor's and Xxxxx'x
rating the Indebtedness not
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lower than Investment Grade Advance Rate (provided, that this requirement shall
be deemed to be satisfied or waived upon the Lender's execution and delivery of
this Agreement).
(U) Policy. The Insurer shall have delivered the Policy to the
Collateral Agent.
(V) Transfer Agreement. A copy of the Transfer Agreement, certified
to be true, correct and complete by the Indemnitors, shall be delivered to the
Lender.
Section 3.2. Execution and Delivery of Agreement. The execution and
delivery by the Borrowers of this Agreement shall constitute a representation
and warranty by the Borrowers to the Lender that all of the conditions required
to be satisfied under Section 3.1 have been satisfied or waived in accordance
with Section 8.4.
Section 3.3. Conditions Precedent to Disbursement of an Advance. The
Borrowers shall jointly submit a Request for Borrowing with respect to each
Advance and shall submit with such Request for Borrowing the items described in
this Section 3.3. If the Lender approves such request, an Advance shall be made
on the date (each, an "Advance Closing Date") that is 10 Business Days (or such
lesser period of time as shall be agreed to by the parties) after all of the
following conditions shall have been satisfied (or waived in accordance with
Section 8.4). Notwithstanding the foregoing or any other provision of this
Agreement, the funding of any Advance by the Lender shall be subject to the
Lender's sole and absolute discretion.
(A) Loan Documents.
(i) Mortgage. The appropriate Borrower shall have executed and
delivered to the Lender a Mortgage with respect to the Facility being
acquired and such Mortgage shall have been recorded in the appropriate
filing office in the jurisdiction in which such Facility is located or
irrevocably delivered to a title agent for such recordation.
(ii) Estoppel Certificates. Each Lessee of the Facility, other
than the GSA, shall have executed and delivered to the Lender an Estoppel
Certificate with respect to such Person's Lease.
(iii) Assignment of Rents. The appropriate Borrower shall have
executed and delivered to the Lender an Assignment of Rents with respect
to the Facility being acquired and the Assignment of Rents shall have been
filed of record in the appropriate filing office in the jurisdiction in
which such Facility is located or irrevocably delivered to a title agent
for such recordation.
(iv) Financing Statements. The appropriate Borrower shall have
executed and delivered to the Lender all financing statements as shall be
required to perfect the Collateral Agent's security interest in the
Collateral, and such financing statements shall have
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been filed of record in the appropriate filing offices in each of the
appropriate jurisdictions or irrevocably delivered to a title agent for
such recordation.
(v) Assignment of U.S. Government Contract; Notice of
Assignment. In the event that Facility with respect to which the Advance
is to be made is subject to a Lease with the GSA, the appropriate Borrower
shall have (1) executed and delivered to the Lender an Assignment of U.S.
Government Contract and (2) submitted to the GSA a Notice of Assignment
for execution.
(B) The Borrowers shall have executed and delivered to the Lender,
not less than 10 Business Days (or such lesser period of time as shall be agreed
to by the parties) prior to the proposed Advance Closing Date, a Request for
Borrowing.
(C) Opinions of Counsel. The Lender shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx L.L.P., counsel to the Affiliated Entities,
a legal opinion in substantially the form attached hereto as Exhibit P; and from
each local counsel to the Borrowers, its legal opinion in substantially the form
attached hereto as Exhibit Q. Each of such legal opinions will be addressed to
the Lender, the Insurer and the Rating Agencies, dated the Advance Closing Date,
and in form and substance satisfactory to the Lender and its counsel. Each
Borrower hereby instructs such counsel to deliver such opinions.
(D) Corporate and LLC Documents. The Lender shall have received with
respect to each Affiliated Entity its Charter Document, as amended, modified or
supplemented to the Advance Closing Date, certified to be true, correct and
complete by the appropriate Secretary of State as of a date not more than 20
days prior to the Advance Closing Date, together with a good standing
certificate from such Secretary of State and a good standing certificate from
the Secretaries of State (or the equivalent thereof) of each other State in
which such Affiliated Entity is required to be qualified to transact business,
each to be dated a date not more than 20 days prior to the Advance Closing Date.
(E) Certified Resolutions, etc. The Lender shall have received a
certificate of the secretary or assistant secretary of each Affiliated Entity
dated the Advance Closing Date, certifying (i) the names and true signatures of
its incumbent officers authorized to sign the applicable Loan Documents, (ii)
its Organizing Document as in effect on the Advance Closing Date, (iii) the
resolutions of its board of directors or other analogous body approving and
authorizing the execution, delivery and performance of all Loan Documents
executed by it, and (iv) that there have been no changes in its Charter Document
since the date of the most recent certification thereof by the appropriate
Secretary of State.
(F) Insurance. The Lender shall have received certificates of
insurance demonstrating insurance coverage in respect of the Facility of types,
in amounts, with insurers and otherwise in compliance with the terms, provisions
and conditions set forth in the Related Mortgage. Such certificates shall
indicate that the Lender and the Collateral Agent are named additional insured
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as their interests may appear and shall contain a loss payee endorsement in
favor of the Lender and the Collateral Agent with respect to the property
policies required to be maintained under the Mortgage. All insurance policies
required to be maintained hereunder shall be maintained from the Advance Closing
Date throughout the term of this Agreement in the types and amounts required
under the Mortgages.
(G) Lien Search Reports. The Lender shall have received satisfactory
reports of UCC (collectively, the "UCC Searches"), tax lien, judgment and
litigation searches conducted by a search firm acceptable to the Lender with
respect to the Collateral relating to the Advance, each Borrower and the
Guarantor, such searches to be conducted in the state and county in which the
Individual Property to be acquired is located and to be dated not more than 25
days prior to the Advance Closing Date.
(H) Title Insurance Policy. The Lender shall have received a
commitment (in form and substance satisfactory to the Lender) to issue the Title
Insurance Policy which shall, without limitation, include the requirements set
forth on Schedule 5 attached hereto.
(I) Environmental Matters. The Lender shall have received an
Environmental Report with respect to the Facility (which, if prepared on or
after the date of this Agreement, shall be addressed to the Lender as well as
the Borrowers), which Environmental Report shall be acceptable to the Lender and
show no adverse environmental condition on the Facility, such Environmental
Report to be conducted by an Independent environmental engineer acceptable to
the Lender.
(J) Consents, Licenses, Approvals etc. The Lender shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by the Borrowers, and
the validity and enforceability, of the Loan Documents, and such consents,
licenses and approvals shall be in full force and effect.
(K) Due Diligence. The Lender shall have received the letter of
intent relating to the applicable Borrower's (or prospective Borrower's)
proposed purchase of the Facility, the Lease or Leases relating to such Facility
(or such other written evidence of the terms and conditions of such purchase as
shall be in form and substance satisfactory to the Lender), the Borrowers'
economic and underwriting analysis with respect to such Facility and such other
certificates (including a certificate of occupancy, if available, reflecting the
use of the Facility as of the Advance Closing Date), lease summaries or
abstracts prepared by the Borrowers or the Borrowers' counsel, opinions,
documents (including the purchase agreement pursuant to which the applicable
Borrower intends to acquire the Facility) and instruments (including, if
available, a letter from the appropriate Governmental Authority regarding the
zoning of the Facility) relating to the Advance as may have been reasonably
requested by the Lender, and all corporate and other proceedings, all other
documents (including, without limitation, all documents referred to herein and
not appearing as exhibits hereto) and all legal matters in connection with the
Loan shall be satisfactory in form and substance to the Lender.
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(L) Representations and Warranties. The representations and
warranties herein and in the other Loan Documents shall be true and correct in
all material respects on such date both before and after giving effect to the
making of the Advance.
(M) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date either before or after giving
effect to the making of the Advance.
(N) No Injunction. No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been issued,
and no litigation shall be pending or threatened, which in the good faith
judgment of the Lender would enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, the making or
repayment of the Advance or the Loan or the consummation of the Transactions.
(O) Survey. The Lender shall have received the Survey with respect
to the Facility which shall, without limitation, include the requirements set
forth on Schedule 4 attached hereto.
(P) Engineering Report. The Lender shall have received the
Engineering Report with respect to the Facility (which, if prepared on or after
the date of this Agreement, shall be addressed to the Lender as well as the
Borrowers) prepared by a firm acceptable to the Lender in its sole discretion
and showing no adverse structural condition.
(Q) Appraisal. The Lender shall have received the Appraisal by an
Appraiser with respect to the Facility (which, if prepared on or after the date
of this Agreement, shall be addressed to the Lender as well as the Borrowers).
(R) Transaction Costs. The Borrowers shall have paid (or agreed to
pay at closing from the proceeds of the Advance) all Transaction Costs for which
bills have been submitted and have not been previously paid.
(S) No Mandatory Prepayment. The Borrowers shall not be required
under Section 2.7(c), either before or after giving effect to the requested
Advance, to apply Preliminary Excess Cash Flow to repay the Loan.
(T) Site Inspection. The Lender shall have performed, or caused to
be performed on its behalf, an on-site due diligence review of the Facility to
be acquired with the Advance satisfactory to the Lender in its sole discretion.
(U) Effect on Mortgaged Property. The inclusion of the Facility to
be acquired with the Advance shall not result in a violation of any Pool
Requirement.
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(V) Financial Information. The Lender shall have received acceptable
financial information relating to the Facility to be acquired with the Advance,
including, but not limited to, operating statements, rent roll, the most recent
audited consolidated financial statements and unaudited quarterly consolidated
financial statements.
(W) Financial Statements. With respect to the first Advance Closing
Date, the Lender shall have received pro forma financial statements for the
first year of operation of the Borrowers reflecting the Borrowers' reasonable
and good faith projections.
(X) Property Management Agreement. The Lender shall have received
the Property Management Agreement with respect to the Facility, certified by the
Borrowers to be true and correct and in full force and effect.
(Y) Leases. The Lender shall have received each Lease with respect
to the Facility, certified by the Borrowers to be true and correct and in full
force and effect.
(Z) MTNs. The Lender shall have issued MTNs in an aggregate
principal amount equal to the amount sufficient for the Lender to realize net
cash proceeds in an amount not less than the amount of such Advance (provided,
that the Lender shall use reasonable efforts to issue MTN's in such amount if
all other conditions precedent set forth in Section 3.1 and this Section 3.3
have been satisfied).
Section 3.4. Acceptance of Borrowings. The acceptance by the
Borrowers or any Borrower of the proceeds of an Advance shall constitute a
representation and warranty by the Borrowers to the Lender that all of the
conditions to be satisfied under Section 3.3 in connection with the making of
the Advance have been satisfied or waived in accordance with Section 8.4.
Section 3.5. Form of Loan Documents and Related Matters. The Note
and all of the certificates, agreements, legal opinions and other documents and
papers referred to in this Article III, unless otherwise specified, shall be
delivered to the Lender, and shall be satisfactory in form and substance to the
Lender in its reasonable discretion (unless the form thereof is prescribed
herein).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Closing Date Borrower Representations. Each Borrower
represents and warrants that, as of the Closing Date:
(A) Organization. Each Borrower (i) is a duly organized and validly
existing limited liability company or limited partnership, as applicable, in
good standing under the laws of its state of formation, (ii) has the requisite
power and authority to carry on its business as now being
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conducted, and (iii) has the requisite power to execute and deliver, and perform
its obligations under, this Agreement and the other Loan Documents to which it
is a party.
(B) Authorization. The execution and delivery by each Borrower of
this Agreement and the other Loan Documents to which it is a party, such
Borrower's performance of its obligations hereunder and thereunder and the
creation of the security interests and liens provided for in this Agreement and
the other Loan Documents to which it is a party (i) have been duly authorized by
all requisite action on the part of such Borrower, (ii) will not violate any
provision of any Legal Requirements, any order of any court or other
Governmental Authority, the Charter Document of such Borrower or any indenture
or material agreement or other instrument to which such Borrower is a party or
by which such Borrower is bound, and (iii) will not be in conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default under, or result in the creation or imposition of any Lien of any nature
whatsoever upon any of the property or assets of such Borrower pursuant to, any
such indenture or material agreement or instrument. Other than those obtained or
filed on or prior to the Closing Date, no Borrower is required to obtain any
consent, approval or authorization from, or to file any declaration or statement
with, any Governmental Authority or other agency in connection with or as a
condition to the execution, delivery or performance of this Agreement.
(C) Litigation. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending
and served or, to the knowledge of such Borrower, threatened against any
Borrower.
(D) Agreements. No Borrower is a party to any agreement or
instrument or subject to any restriction which is reasonably likely to have a
Material Adverse Effect. No Borrower is in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or
by which any Borrower or any Individual Property is bound.
(E) No Bankruptcy Filing. No Borrower is contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of such Borrower's assets or
property, and such Borrower has no knowledge of any Person contemplating the
filing of any such petition against any Borrower.
(F) Full and Accurate Disclosure. No statement of fact made by any
Affiliated Entity in this Agreement or in any other Loan Document, or contained
in any document supplied by any Affiliated Entity pursuant hereto or thereto
(other than documents that are neither prepared nor executed by any Affiliated
Entity) contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to such Borrower which has not been
disclosed to the Lender which could reasonably be expected to have a Material
Adverse Effect.
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(G) Location of Chief Executive Offices. The location of each
Borrower's principal place of business and chief executive office is 1301 Avenue
of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(H) Compliance. Each Borrower complies in all material respects with
all applicable legal requirements. No Borrower is in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority, the
violation of which is reasonably likely to have a Material Adverse Effect.
(I) Other Debt. No Borrower has borrowed or received other debt
financing which is not fully repaid as of the date hereof or is not otherwise
permitted hereunder.
(J) ERISA. Each Plan, and, to the knowledge of such Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, its terms and the
applicable provisions of ERISA, the Code and any other federal or state law
applicable to it, and no event or condition has occurred and is continuing as to
which any Borrower would be under an obligation to furnish a report to the
Lender under Section 5.1(U)(i).
(K) Solvency. Giving effect to the Transactions contemplated hereby,
the fair saleable value of each Borrower's assets exceeds and will, immediately
following the execution and delivery of this Agreement, exceed Borrower's total
liabilities, including, without limitation, subordinated, unliquidated, disputed
or contingent liabilities. The fair saleable value of each Borrower's assets is
and will, immediately following the execution and delivery of this Agreement, be
greater than such Borrower's probable liabilities, including the maximum amount
of its contingent liabilities or its debts as such debts become absolute and
matured. No Borrower's assets constitute and, immediately following the
execution and delivery of this Agreement, no Borrower's assets will constitute,
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. No Borrower intends to, or believes that it will, incur debts
and liabilities (including, without limitation, 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
such Borrower).
(L) Not Foreign Person. No Borrower is a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
(M) Single-Purpose Entity.
(i) Each Borrower and the Guarantor at all times since its
formation has been, and will continue to be, a duly formed and existing
limited liability company or limited partnership, as applicable, in the
state of its formation and a Single-Purpose Entity.
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(ii) Each Borrower and the Guarantor at all times since its
formation has complied, and will continue to comply, with the provisions
of its Charter Document and Organizing Document and the laws of its state
of formation relating to limited liability companies or limited
partnerships, as applicable.
(iii) All customary formalities regarding the legal existence
of each Borrower and the Guarantor have been observed at all times since
its formation and will continue to be observed.
(iv) Each Borrower and the Guarantor has at all times since
its formation accurately maintained, and will continue to accurately
maintain, its financial statements, accounting records and other corporate
documents separate from those of its members or partners, Affiliates of
its members or partners and any other Person. Neither any Borrower nor the
Guarantor has at any time since its formation commingled, and neither the
Borrower nor the Guarantor will commingle, its assets with those of its
members or partners, any Affiliates of its members or partners, or any
other Person (other than, in the case of Borrowers only, other Borrowers,
as provided under the Loan Documents). Each Borrower and the Guarantor has
at all times since its formation accurately maintained, and will continue
to accurately maintain, its own bank accounts and separate books of
account (other than, in the case of Borrowers only, bank accounts
maintained jointly with the other Borrowers pursuant to the Loan
Documents).
(v) Each Borrower and the Guarantor has at all times since its
formation paid, and will continue to pay, its own liabilities (including,
in the case of the Borrowers, the joint and several liabilities arising
under the Loan Documents) from its own separate assets.
(vi) Each Borrower and the Guarantor has at all times since
its formation identified itself, and will continue to identify itself, in
all dealings with the public, under such Person's own name and as a
separate and distinct entity. Neither any Borrower nor the Guarantor has
at any time since its formation identified itself, and will not identify
itself, as being a division or a part of any other entity. Neither any
Borrower nor the Guarantor has at any time since its formation identified,
and will not identify its members or partners or any Affiliates of its
members or partners, as being a division or part of such Borrower or the
Guarantor, as the case may be.
(vii) Each Borrower and the Guarantor has been at all times
since its formation and will continue to be adequately capitalized in
light of the nature of its business.
(viii) Neither any Borrower nor the Guarantor has at any time
since its formation assumed or guaranteed, and neither any Borrower nor
the Guarantor will assume or guarantee, the liabilities of its members or
partners (or any predecessor company), any Affiliates of its members or
partners, or any other Persons, except as permitted by or
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pursuant to this Agreement and the other Loan Documents. Neither any
Borrower nor the Guarantor has at any time since its formation acquired,
and neither any Borrower nor the Guarantor will acquire, obligations or
securities of its members or partners (or any predecessor company), or any
Affiliates of its members or partners. Neither any Borrower nor the
Guarantor has at any time since its formation made, and neither any
Borrower nor the Guarantor will make, loans to its members or partners (or
any predecessor company), or any Affiliates of its members or partners.
(ix) Neither any Borrower nor the Guarantor has at any time
since its formation entered into or was a party to, and neither any
Borrower nor the Guarantor will enter into or be a party to, any
transaction with its members or partners (or any predecessor company) or
any Affiliates of its members or partners (other than pursuant to the Loan
Documents) except in the ordinary course of business of such Person on
terms which are no less favorable to such Person than would be obtained in
a comparable arm's length transaction with an unrelated third party.
(N) Enforceability. This Agreement is the legal, valid and binding
obligation of each Borrower, enforceable against each Borrower in accordance
with its terms, subject to bankruptcy, insolvency and other limitations on
creditors' rights generally and to equitable principles.
(O) Investment Company Act; Public Utility Holding Company Act. No
Borrower is (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
(P) Capitalization. Except as set forth on Schedule 3, no Borrower
has any Subsidiaries, is engaged in any joint venture or partnership with any
other Person, or is directly or indirectly owned, in whole or in part, by any
other Person. Set forth on Schedule 3 is a description of the Borrowers' capital
structure.
(Q) No Defaults. No Default or Event of Default exists under or with
respect to any Loan Document.
(R) Labor Matters. No Borrower is a party to any collective
bargaining agreements.
(S) Appraised Values, Purchase Prices and All-In Costs. Schedule 2
accurately sets forth the Appraised Value, purchase price and all-in cost
(including legal expenses, brokerage
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fees, financing costs, third party due diligence and other transaction costs) of
each Individual Property to be financed as of the initial Advance Closing Date.
Section 4.2. Advance Closing Date Borrower Representations. As of
each Advance Closing Date, each Borrower shall represent and warrant that:
(A) Organization. Each Borrower (i) is a duly organized and validly
existing limited liability company or limited partnership, as applicable, in
good standing under the laws of its state of formation, (ii) has the requisite
power and authority to own its properties (including, without limitation, the
Mortgaged Property) and to carry on its business as now being conducted and is
qualified to do business in every jurisdiction in which a Facility is located,
and (iii) has the requisite power to execute and deliver, and perform its
obligations under, the Note, the Mortgages and all of the other Loan Documents
to which it is a party.
(B) Authorization. The execution and delivery by each Borrower of
the Note, the Mortgages and each of the other Loan Documents, such Borrower's
performance of its obligations thereunder and the creation of the security
interests and liens provided for in this Agreement and the other Loan Documents
to which it is a party (i) have been duly authorized by all requisite action on
the part of such Borrower, (ii) will not violate any provision of any Legal
Requirements, any order of any court or other Governmental Authority, the
Charter Document or Organizing Document of such Borrower or any indenture or
material agreement or other instrument to which such Borrower is a party or by
which such Borrower is bound, and (iii) will not be in conflict with, result in
a breach of, or constitute (with due notice or lapse of time or both) a default
under, or result in the creation or imposition of any Lien of any nature
whatsoever upon any of the property or assets of such Borrower pursuant to, any
such indenture or material agreement or instrument. Other than those obtained or
filed on or prior to the Advance Closing Date, no Borrower is required to obtain
any consent, approval or authorization from, or to file any declaration or
statement with, any Governmental Authority or other agency in connection with or
as a condition to the execution, delivery or performance of the Note, the
Mortgages or the other Loan Documents executed and delivered by such Borrower on
or prior to the applicable Advance Closing Date.
(C) Litigation. Except for claims that are fully covered by valid
policies of insurance held by the appropriate Borrower, and except as disclosed
in writing to the Lender, there are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending
and served or, to the knowledge of such Borrower, threatened against any
Borrower or any Individual Property, which actions, suits or proceedings, if
determined against any Borrower or any Individual Property, might result in a
Material Adverse Effect.
(D) Title to the Mortgaged Property. Good, marketable and insurable
fee simple title to each Facility is owned by a Borrower, free and clear of all
Liens, other than the Permitted Encumbrances applicable to that Facility. There
are no outstanding options to purchase or rights of first refusal affecting any
Facility.
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(E) Full and Accurate Disclosure. No statement of fact made by any
Affiliated Entity in this Agreement or in any other Loan Document, or contained
in any document supplied by any Affiliated Entity pursuant hereto or thereto
(other than documents that are neither prepared nor executed by any Affiliated
Entity) contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to such Borrower which has not been
disclosed to the Lender which could reasonably be expected to have a Material
Adverse Effect.
(F) Compliance. Except for matters set forth in the Engineering
Reports and in the Environmental Reports and except for matters described in
Section 4.2(L) (as to which the provisions of Section 4.2(L) shall apply), each
Borrower, each Facility and the applicable Borrower's use thereof and operations
thereat comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes. No
Borrower is in default or violation of any order, writ, injunction, decree or
demand of any Governmental Authority, the violation of which is reasonably
likely to have a Material Adverse Effect.
(G) Use of Proceeds: Margin Regulations. Each Borrower will use the
proceeds of the Advance for the purposes described in Section 2.2. No part of
the proceeds of the Advance will be used for the purpose of purchasing or
acquiring any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or for any other purpose which would be
inconsistent with such Regulation U or any other Regulations of such Board of
Governors, or for any purposes prohibited by Legal Requirements.
(H) Financial Information. All financial data concerning the
Borrowers and the Facilities that has been delivered by the Borrowers to the
Lender is true, complete and correct in all material respects and are prepared
in accordance with GAAP. Since the delivery of such data, except as otherwise
disclosed in writing to the Lender, there has been no adverse change in the
financial position of any Borrower or the Facilities, or in the results of
operations of any Borrower. No Borrower has incurred any obligation or
liability, contingent or otherwise, not reflected in such financial data which
might adversely affect its business operations or any Facility.
(I) Condemnation. No Taking has been commenced or, to such
Borrower's knowledge, is contemplated with respect to all or any portion of any
Individual Property or for the relocation of roadways providing access to any
Facility.
(J) Other Debt. Except for the debt to be repaid from the proceeds
of the Advance, no Borrower has borrowed or received other debt financing
whether unsecured or secured by any Individual Property or any part thereof.
(K) Utilities and Public Access. Each Facility has adequate rights
of access to public ways and is served by adequate water, sewer, sanitary sewer
and storm drain facilities. Except
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as otherwise disclosed by the Surveys, all public utilities necessary to the
continued use and enjoyment of each Facility as presently used and enjoyed are
located in the public right-of-way abutting the premises, and all such utilities
are connected so as to serve such Facility without passing over other property.
All roads necessary for the full utilization of each Facility for its current
purpose have been completed and dedicated to public use and accepted by all
Governmental Authorities or are the subject of access easements for the benefit
of the Facility.
(L) Environmental Compliance. After due inquiry, except for matters
set forth in the Environmental Reports delivered to the Lender in connection
with the Advance or prior Advances (true, correct and complete copies of which
have been provided to the Lender by the Borrowers):
(i) Each Borrower is in full compliance with all applicable
Environmental Laws, which compliance includes, but is not limited to, the
possession by such Borrower of all environmental, health and safety
permits, licenses and other governmental authorizations required in
connection with the ownership and operation of the Individual Property
under all Environmental Laws, except where the failure to comply with such
laws is not reasonably likely to result in a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to such
Borrower's knowledge, threatened, and no penalties arising under
Environmental Laws have been assessed, against any Borrower or against any
Person whose liability for any Environmental Claim such Borrower has or
may have retained or assumed either contractually or by operation of law,
and no investigation or review is pending or, to the knowledge of such
Borrower, threatened by any Governmental Authority, citizens group,
employee or other Person with respect to any alleged failure by any
Borrower or any Individual Property to have any environmental, health or
safety permit, license or other authorization required under, or to
otherwise comply with, any Environmental Law or with respect to any
alleged liability of any Borrower for any Use or Release of any Hazardous
Substances.
(iii) There have been and are no past or present Releases of
any Hazardous Substance that are reasonably likely to form the basis of
any Environmental Claim against any Borrower or, to such Borrower's
knowledge, against any Person whose liability for any Environmental Claim
any Borrower has or may have retained or assumed either contractually or
by operation of law.
(iv) Without limiting the generality of the foregoing, there
is not present at, on, in or under the Individual Property, PCB-containing
equipment, asbestos or asbestos containing materials, underground storage
tanks or surface impoundments for Hazardous Substances, lead in drinking
water (except in concentrations that comply with all Environmental Laws),
or lead-based paint.
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(v) No liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Law with respect to the
Individual Property and, to such Borrower's knowledge, no Governmental
Authority has been taking or is in the process of taking any action that
could subject the Individual Property to Liens under any Environmental
Law.
(vi) There have been no environmental investigations, studies,
audits, reviews or other analyses conducted by or that are in the
possession of any Borrower in relation to an Individual Property which
have not been made available to the Lender.
(M) Solvency. Giving effect to the transactions contemplated hereby,
the fair saleable value of each Borrower's assets exceeds and will, immediately
following the making of the Advance, exceed such Borrower's total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities. The fair saleable value of each Borrower's assets is and
will, immediately following the making of the Advance, be greater than such
Borrower's probable liabilities, including the maximum amount of its contingent
liabilities on its debts as such debts become absolute and matured. No
Borrower's assets constitute and, immediately following the making of the
Advance no Borrower's assets will constitute, unreasonably small capital to
carry out its business as conducted or as proposed to be conducted. No Borrower
intends to, or believes that it will, incur debts and liabilities (including,
without limitation, Contingent Obligations 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 such Borrower).
(N) Single-Purpose Entity.
(i) Each Borrower and the Guarantor at all times since its
formation has been, and will continue to be, a duly formed and existing
limited liability company or limited partnership, as applicable, in the
state of its formation and a Single-Purpose Entity.
(ii) Each Borrower and the Guarantor at all times since its
formation has complied, and will continue to comply, with the provisions
of its Charter Document and Organizing Document and the laws of its state
of formation relating to limited liability companies or limited
partnerships, as applicable.
(iii) All customary formalities regarding the legal existence
of each Borrower and the Guarantor have been observed at all times since
its formation and will continue to be observed.
(iv) Each Borrower and the Guarantor has at all times since
its formation accurately maintained, and will continue to accurately
maintain, its financial statements, accounting records and other corporate
documents separate from those of its members or partners, Affiliates of
its members or partners and any other Person. Neither any Borrower
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nor the Guarantor has at any time since its formation commingled, and
neither the Borrower nor the Guarantor will commingle, its assets with
those of its members or partners, any Affiliates of its members or
partners, or any other Person (other than, in the case of Borrowers only,
other Borrowers, as provided under the Loan Documents). Each Borrower and
the Guarantor has at all times since its formation accurately maintained,
and will continue to accurately maintain, its own bank accounts and
separate books of account (other than, in the case of Borrowers only, bank
accounts maintained jointly with the other Borrowers pursuant to the Loan
Documents).
(v) Each Borrower and the Guarantor has at all times since its
formation paid, and will continue to pay, its own liabilities (including,
in the case of the Borrowers, the joint and several liabilities arising
under the Loan Documents) from its own separate assets.
(vi) Each Borrower and the Guarantor has at all times since
its formation identified itself, and will continue to identify itself, in
all dealings with the public, under such Person's own name and as a
separate and distinct entity. Neither any Borrower nor the Guarantor has
at any time since its formation identified itself, and will not identify
itself, as being a division or a part of any other entity. Neither any
Borrower nor the Guarantor has at any time since its formation identified,
and will not identify its members or partners or any Affiliates of its
members or partners, as being a division or part of such Borrower or the
Guarantor, as the case may be.
(vii) Each Borrower and the Guarantor has been at all times
since its formation and will continue to be adequately capitalized in
light of the nature of its business.
(viii) Neither any Borrower nor the Guarantor has at any time
since its formation assumed or guaranteed, and neither any Borrower nor
the Guarantor will assume or guarantee, the liabilities of its members or
partners (or any predecessor company), any Affiliates of its members or
partners, or any other Persons, except as permitted by or pursuant to this
Agreement and the other Loan Documents. Neither any Borrower nor the
Guarantor has at any time since its formation acquired, and neither any
Borrower nor the Guarantor will acquire, obligations or securities of its
members or partners (or any predecessor company), or any Affiliates of its
members or partners. Neither any Borrower nor the Guarantor has at any
time since its formation made, and neither any Borrower nor the Guarantor
will make, loans to its members or partners (or any predecessor company),
or any Affiliates of its members or partners.
(ix) Neither any Borrower nor the Guarantor has at any time
since its formation entered into or was a party to, and neither any
Borrower nor the Guarantor will enter into or be a party to, any
transaction with its members or partners (or any predecessor company) or
any Affiliates of its members or partners (other than pursuant to the Loan
Documents) except in the ordinary course of business of such Person on
terms which are no
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less favorable to such Person than would be obtained in a comparable arm's
length transaction with an unrelated third party.
(O) Separate Lots. Each Facility is comprised of one or more
parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot.
(P) Assessments. There are no pending or, to the knowledge of such
Borrower, proposed special or other assessments for public improvements or
otherwise affecting any Facility, nor, to the knowledge of such Borrower, are
there any contemplated improvements to any Facility that may result in such
special or other assessments.
(Q) Mortgage and Other Liens. Each Mortgage creates a valid and
enforceable first mortgage Lien on the Individual Property described therein, as
security for the repayment of the Secured Obligations, subject only to the
Permitted Encumbrances applicable to that Individual Property. Each Collateral
Security Instrument establishes and creates a valid, subsisting and enforceable
Lien on and a security interest in, or claim to, the rights and property
described therein. All property covered by any Collateral Security Instrument is
subject to a UCC financing statement filed and/or recorded, as appropriate (or
irrevocably delivered to an agent for such recordation or filing), in all places
necessary to perfect a valid first priority Lien with respect to the rights and
property that are the subject of such Collateral Security Instrument to the
extent governed by the UCC. All continuations and any assignments of any such
financing statements have been or will be timely filed or refiled, as
appropriate, in the appropriate recording offices.
(R) Enforceability. The Note, each Mortgage and each other Loan
Document executed by any Borrower in connection with the applicable Advance,
including, without limitation, any Collateral Security Instrument, is the legal,
valid and binding joint and several obligation of the Borrowers, enforceable
against such Borrower in accordance with its terms, subject to bankruptcy,
insolvency and other limitations on creditors' rights generally and to equitable
principles and the other matters described in the opinions delivered pursuant to
Section 3.3(B). The Note, each such Mortgage and such other Loan Documents are,
as of the Advance Closing Date, not subject to any right of rescission, set-off,
counterclaim or defense by any Borrower, including the defense of usury, nor
will the operation of any of the terms of the Note, each such Mortgage and such
other Loan Documents, or the exercise of any right thereunder, render any of the
Mortgages unenforceable against any Borrower, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense by any Borrower,
including the defense of usury, and no Borrower has asserted any right of
rescission, set-off, counterclaim or defense with respect thereto.
(S) Interest Rate Protection Agreements. The Assignments of Interest
Rate Protection Agreement establish and create valid, subsisting and enforceable
Liens on and security interests in, or claims to, the rights and property
described therein. All property covered by the Assignments of Interest Rate
Protection Agreement is subject to UCC financing statements filed and/or
recorded, as appropriate, in all places necessary to perfect a valid first
priority Lien with
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respect to the rights and property that are the subject of such document to the
extent governed by the UCC.
(T) No Prior Assignment. As of the Advance Closing Date, (i) the
Lender is the assignee of each Borrower's interest under the Leases; (ii) with
respect to each Lease which is not a GSA Lease, each Assignment of Rents creates
a valid and enforceable present assignment of the Rents payable under such
Lease, and with respect to each GSA Lease, each Assignment of U.S. Government
Contract will create, upon the execution and delivery by the contracting officer
with respect to such GSA Lease of a Notice of Assignment, a valid and
enforceable present assignment of the Rents payable under such GSA Lease; and
(iii) there are no Notices of Assignment in effect with respect to any GSA Lease
and no prior assignments of the Leases or any portion of the Rent due and
payable or to become due and payable which are presently outstanding.
(U) Property Management Agreements. Each Property Management
Agreement is in full force and effect and there is no default, breach or
violation existing thereunder by any party thereto and no event (other than
payments due but not yet delinquent) which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach or violation by any party thereunder.
(V) Permits; Certificate of Occupancy. Each Borrower has obtained
all Permits necessary to use and operate each Facility for its intended use. The
use being made of each Facility is in conformity in all material respects with
the certificate of occupancy and/or Permits for such Facility and any other
restrictions, covenants or conditions affecting such Facility.
(W) Flood Zone. Except as shown on the Surveys, none of the
Facilities is located in a flood hazard area as defined by the Federal Insurance
Administration.
(X) Physical Condition. Each Facility is free of structural defects
and all building systems contained therein are in good working order in all
material respects subject to ordinary wear and tear, except as disclosed in the
Engineering Reports.
(Y) Security Deposits. Each Borrower is in compliance with all Legal
Requirements relating to all security deposits with respect to the Facilities as
to which failure to comply is reasonably likely to have a Material Adverse
Effect.
(Z) No Defaults. No Default or Event of Default exists under or with
respect to any Loan Document.
(AA) No Encroachments. All of the Improvements which were included
in determining the appraised value of the Individual Property lie wholly within
the boundaries and building restriction lines of the Individual Property, and no
improvements on adjoining properties encroach upon the Individual Property, and
no easements or other encumbrances upon the Individual
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Property encroach upon any of the Improvements, so as to affect the value or
marketability of the Individual Property except those which are insured against
by title insurance. All of the Improvements comply with all material
requirements of any applicable zoning and subdivision laws and ordinances.
Section 4.3. Survival of Representations. Each Borrower agrees that
(i) all of the representations and warranties of the Borrowers set forth in
Section 4.1 and elsewhere in this Agreement (but not in Section 4.2) and in the
other Loan Documents delivered on the Closing Date are made as of the Closing
Date (except as expressly otherwise provided), (ii) all of the representations
and warranties of the Borrowers set forth in Section 4.2 and elsewhere in this
Agreement (including in Section 4.1) and in the other Loan Documents are made,
or reaffirmed, as of each Advance Closing Date, and (iii) all representations
and warranties made by the Borrowers shall survive the delivery of the Note and
making of the Advances and continue for so long as any amount remains owing to
the Lender under this Agreement, the Note or any of the other Loan Documents;
provided, however, that the representations set forth in Section 4.2(L) shall
survive in perpetuity. All representations, warranties, covenants and agreements
made in this Agreement or in the other Loan Documents shall be deemed to have
been relied upon by the Lender notwithstanding any investigation heretofore or
hereafter made by the Lender or on its behalf.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Borrower Covenants. Each Borrower covenants and agrees
that, from the date hereof (or, to the extent such covenants relate to a
Facility, from the Advance Closing Date with respect to such Facility) and until
payment in full of the Secured Obligations (or with respect to a particular
Individual Property, the earlier release of its Related Mortgage):
(A) Existence; Compliance with Legal Requirements; Insurance. Each
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence, rights, licenses, Permits
and franchises necessary for the conduct of its business and comply with all
Legal Requirements and Insurance Requirements applicable to it and each
Individual Property. Each Borrower shall at all times maintain, preserve and
protect all franchises and trade names and preserve all the remainder of its
property necessary for the continued conduct of its business and keep each
Facility in good repair, working order and condition, except for reasonable wear
and use, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as more fully provided in the Mortgages. Each Borrower shall keep each
Individual Property insured at all times, by financially sound and reputable
insurers, to such extent and against such risks, and maintain liability and such
other insurance, as is more fully provided in the Mortgages.
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(B) Impositions and Other Claims. Each Borrower shall pay and
discharge or cause to be paid and discharged all Impositions, as well as all
lawful claims for labor, materials and supplies or otherwise, which could become
a Lien, all as more fully provided in, and subject to any rights to contest
contained in, the Mortgages, including the right to contest Impositions for
which reserves have been maintained in compliance with GAAP.
(C) Litigation. Each Borrower shall give prompt written notice to
the Lender of any litigation or governmental proceedings pending or threatened
(in writing) against any Borrower which is reasonably likely to have a Material
Adverse Effect.
(D) Environmental Remediation.
(i) If any investigation, site monitoring, cleanup, removal,
restoration or other remedial work of any kind or nature is required
pursuant to an order or directive of any Governmental Authority or under
any applicable Environmental Law (collectively, the "Remedial Work"),
because of or in connection with the current or future presence, suspected
presence, Release or suspected Release of a Hazardous Substance on, under
or from a Facility or any portion thereof, the Borrowers shall promptly
commence and diligently prosecute to completion all such Remedial Work. In
all events, such Remedial Work shall be commenced within 30 days after any
demand therefor by the Lender or such shorter period as may be required
under any applicable Environmental Law; provided, however, that the
Borrowers shall not be required to commence such Remedial Work within the
above specified time periods: (x) if prevented from doing so by any
Governmental Authority, (y) if commencing such Remedial Work within such
time periods would result in any Borrower or such Remedial Work violating
any Environmental Law or (z) if the Borrowers, at their expense and after
prior notice to the Lender, are contesting by appropriate legal,
administrative or other proceedings conducted in good faith and with due
diligence the need to perform Remedial Work, as long as (1) the Borrowers
are permitted by the applicable Environmental Laws to delay performance of
the Remedial Work pending such proceedings, (2) neither the Facility nor
any part thereof or interest therein will be sold, forfeited or lost if
the Borrowers perform the Remedial Work being contested, and the Borrowers
would have the opportunity to do so, in the event of the Borrowers'
failure to prevail in the contest, (3) the Lender would not, by virtue of
such permitted contest, be exposed to any risk of any civil liability for
which the Borrowers have not furnished additional security as provided in
clause (4) below, or to any risk of criminal liability, and neither the
Facility nor any interest therein would be subject to the imposition of
any lien for which the Borrowers have not furnished additional security as
provided in clause (4) below, as a result of the failure to perform such
Remedial Work and (4) the Borrowers shall have furnished to the Lender
additional security in respect of the Remedial Work being contested and
the loss or damage that may result from the Borrowers' failure to prevail
in such contest in such amount as may be reasonably requested by the
Lender.
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(ii) If requested by the Lender, all Remedial Work under
clause (i) above in an aggregate amount greater than or equal to $500,000
shall be performed by contractors, and under the supervision of a
consulting Engineer, each approved in advance by the Lender which approval
will not be unreasonably withheld or delayed. All costs and expenses
reasonably incurred in connection with such Remedial Work shall be paid by
the Borrowers. If the Borrowers do not timely commence and diligently
prosecute to completion the Remedial Work, the Lender may (but shall not
be obligated to), upon 30 days prior written notice to the Borrowers of
its intention to do so, cause such Remedial Work to be performed. The
Borrowers shall pay or reimburse the Lender on demand for all Advances (as
defined in the Mortgages) and expenses (including reasonable attorneys'
fees and disbursements, but excluding internal overhead, administrative
and similar costs of the Lender) reasonably relating to or incurred by the
Lender in connection with monitoring, reviewing or performing any Remedial
Work in accordance herewith.
(iii) The Borrowers shall not commence any Remedial Work under
clause (i) above, nor enter into any settlement agreement, consent decree
or other compromise relating to any Hazardous Substances or Environmental
Laws which is reasonably likely to have a Material Adverse Effect.
Notwithstanding the foregoing, if the presence or threatened presence of
Hazardous Substances on, under or about any Individual Property poses an
immediate threat to the health, safety or welfare of any Person or the
environment, or is of such a nature that an immediate response is
necessary, the Borrowers may complete all necessary Remedial Work. In such
events, the Borrowers shall notify the Lender as soon as practicable and,
in any event, within three Business Days, of any action taken.
(E) Environmental Matters: Inspection.
(i) The Borrowers shall not permit a Hazardous Substance to be
present on, under or to emanate from a Facility, or migrate from adjoining
property controlled by any Borrower onto or into a Facility, except under
conditions permitted by applicable Environmental Laws and, in the event
that such Hazardous Substances are present on, under or emanate from a
Facility, or migrate onto or into a Facility, the Borrowers shall cause
the removal or remediation of such Hazardous Substances, in accordance
with this Agreement and Environmental Laws. The Borrowers shall use best
efforts to prevent, and to seek the remediation of, any migration of
Hazardous Substances onto or into any Facility from any adjoining
property.
(ii) Upon reasonable prior written notice, the Lender shall
have the right at all reasonable times to enter upon and inspect all or
any portion of any Facility, provided that such inspections shall not
unreasonably interfere with the operation or the tenants, residents or
occupants of such Facility. If the Lender suspects that Remedial Work may
be required, the Lender may select a consulting Engineer to conduct and
prepare reports of such inspections. The Borrowers shall be given a
reasonable opportunity to review any reports,
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data and other documents or materials reviewed or prepared by the
Engineer, and to submit comments and suggested revisions or rebuttals to
same. The inspection rights granted to the Lender in this Section 5.1(E)
shall be in addition to, and not in limitation of, any other inspection
rights granted to the Lender in this Agreement, and shall expressly
include the right (if the Lender suspects that Remedial Work may be
required) to conduct soil borings, establish ground water monitoring xxxxx
and conduct other customary environmental tests, assessments and audits.
(iii) Borrower agrees to bear and shall pay or reimburse the
Lender on demand for all sums advanced and expenses incurred (including
reasonable attorneys' fees and disbursements, but excluding internal
overhead, administrative and similar costs of the Lender) reasonably
relating to, or incurred by the Lender in connection with, the inspections
and reports described in this Section 5.1(E) (to the extent such
inspections and reports relate to any Facility) in the following
situations:
(x) If the Lender has reasonable grounds to believe, at the
time any such inspection is ordered, that there exists an occurrence
or condition that could lead to an Environmental Claim;
(y) If any such inspection reveals an occurrence or condition
that could lead to an Environmental Claim; or
(z) If an Event of Default with respect to any Facility exists
at the time any such inspection is ordered, and such Event of
Default relates to any representation, covenant or other obligation
pertaining to Hazardous Substances, Environmental Laws or any other
environmental matter.
(F) Environmental Notices. The Borrowers shall promptly provide
notice to the Lender of:
(i) any Environmental Claim asserted by any Governmental
Authority with respect to any Hazardous Substance on, in, under or
emanating from any Facility, which might impair the value of the Lender's
security interests hereunder or have a Material Adverse Effect;
(ii) any proceeding, investigation or inquiry commenced or
threatened in writing by any Governmental Authority, against any Borrower,
with respect to the presence, suspected presence, Release or threatened
Release of Hazardous Substances from or onto, in or under any property not
owned by any Borrower, including, without limitation, proceedings under
the Comprehensive Environmental Response, Compensation, and Liability Act,
as amended, 42 U.S.C. Section 9601, et seq., which might impair the value
of the Lender's security interests hereunder or have a Material Adverse
Effect;
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(iii) all Environmental Claims asserted or threatened against
any Borrower, against any other party occupying any Facility or any
portion thereof which become known to any Borrower or against such
Facility, which might impair the value of the Lender's security interests
hereunder or have a Material Adverse Effect;
(iv) the discovery by any Borrower of any occurrence or
condition on any Facility or on any real property adjoining or in the
vicinity of such Facility which could reasonably be expected to lead to an
Environmental Claim against any Borrower or the Lender; and
(v) the commencement or completion of any Remedial Work.
(G) Copies of Notices. The Borrowers shall transmit to the Lender
copies of any citations, orders, notices or other written communications
received from any Person and any notices, reports or other written
communications submitted to any Governmental Authority with respect to the
matters described in Section 5.1(F).
(H) Environmental Claims. The Lender and/or, to the extent
authorized by the Lender, Deed of Trust Trustee, may join and participate in, as
a party if the Lender so determines, any legal or administrative proceeding or
action concerning a Facility or any portion thereof under any Environmental Law,
if, in the Lender's reasonable judgment, the interests of the Lender or Deed of
Trust Trustee will not be adequately protected by the Borrowers. The Borrowers
agree on a joint and several basis to bear and shall pay or reimburse the Lender
or Deed of Trust Trustee on demand for all reasonable sums advanced and expenses
incurred (including reasonable attorneys' fees and disbursements, but excluding
internal overhead, administrative and similar costs of the Lender and Deed of
Trust Trustee) incurred by the Lender and/or Deed of Trust Trustee in connection
with any such action or proceeding.
(I) Indemnification. The Borrowers agree on a joint and several
basis to indemnify, reimburse, defend, and hold harmless the Lender, Deed of
Trust Trustee and the Collateral Agent (and its officers, directors, agents and
employees) for, from, and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties, reasonable attorneys' fees,
disbursements and expenses, and reasonable consultants' fees, disbursements and
expenses (but excluding internal overhead, administrative and similar costs of
the Lender and any Deed of Trust Trustee), imposed on, or incurred by the Lender
or such Deed of Trust Trustee or the Collateral Agent, directly or indirectly,
in connection with any of the following, except to the extent same are directly
and solely caused by the Lender's or such Deed of Trust Trustee's gross
negligence or willful misconduct:
(i) events, circumstances, or conditions which are alleged to,
or do, form the basis for an Environmental Claim;
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(ii) any pollution or threat to human health or the
environment that is related in any way to any Borrower's or any previous
owner's or operator's management, use control, ownership or operation of
any Facility, including, without limitation, all on-site and off-site
activities involving Hazardous Substances, and whether occurring, existing
or arising prior to or from and after the date hereof, and whether or not
the pollution or threat to human health or the environment is described in
the Environmental Reports;
(iii) any Environmental Claim against any Person whose
liability for such Environmental Claim any Borrower has or may have
assumed or retained either contractually or by operation of law; or
(iv) the breach of any representation, warranty or covenant
set forth in Section 4.2(L) and Sections 5.1(D) through 5.1(I), inclusive.
The indemnity provided in this Section 5.1(I) shall not be included
in any exculpation of any Borrower, the Indemnitors, the Borrower's Agent or the
Guarantor from personal liability provided in this Agreement or in any of the
other Loan Documents. Nothing in this Section 5.1(I) shall be deemed to deprive
the Lender of any rights or remedies provided to it elsewhere in this Agreement
or the other Loan Documents or otherwise available to it under law. The
indemnity provided in this Section 5.1(I) shall survive the termination of the
Loan Documents or the earlier resignation or removal of the Collateral Agent.
(J) Access to Facilities. Each Borrower shall permit agents,
representatives and employees of the Lender to inspect each Facility or any part
thereof at such reasonable times as may be requested by the Lender upon
reasonable advance notice of not less than two Business Days, subject, however,
to the rights of the tenants of the Facility.
(K) Notice of Default. The Borrowers shall promptly advise the
Lender of any material adverse change in Borrower's condition, financial or
otherwise, or of the occurrence of any Event of Default, or of the occurrence of
any Default.
(L) Cooperate in Legal Proceedings. Except with respect to any claim
by the Borrowers against the Lender, each Borrower shall cooperate fully with
the Lender with respect to any proceedings before any Governmental Authority
which may in any way affect the rights of the Lender hereunder or any rights
obtained by the Lender under any of the Loan Documents and, in connection
therewith, not prohibit the Lender, at its election, from participating in any
such proceedings.
(M) Perform Loan Documents. Each Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions required to be
observed, performed or satisfied
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by it, and shall pay when due all costs, fees and expenses required to be paid
by it, under the Loan Documents executed and delivered by such Borrower.
(N) Insurance Benefits. Each Borrower shall cooperate with the
Lender in obtaining for the Lender the benefits of any Insurance Proceeds
lawfully or equitably payable to the Lender in connection with each Individual
Property, and the Lender shall be reimbursed for any expenses reasonably
incurred in connection therewith (including reasonable attorneys' fees and
disbursements and the payment by the Lender of the reasonable expense of an
Appraisal on behalf of the Borrowers in case of a fire or other casualty
affecting such Individual Property or any part thereof, but excluding internal
overhead, administrative and similar costs of the Lender) out of such Insurance
Proceeds, all as more specifically provided in the Mortgages.
(O) Further Assurances. The Borrowers shall, at the Borrowers' sole
cost and expense:
(i) upon the Lender's request therefor given from time to time
(but, other than in connection with the Advance Closing Dates, in no event
more often than once every two years during the term of this Agreement),
pay for (a) reports of UCC, tax lien, judgment and litigation searches
with respect to any Borrower and (b) searches of title to each Facility,
each such search to be conducted by search firms designated by the Lender
in each of the locations designated by the Lender;
(ii) furnish to the Lender all instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans and
specifications, Appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement and
instrument required to be furnished pursuant to the terms of the Loan
Documents or reasonably requested by the Lender in connection therewith;
(iii) execute and deliver to the Lender such documents,
instruments, certificates, assignments and other writings, and do such
other acts necessary, to evidence, preserve and/or protect the Collateral
at any time securing or intended to secure the Note, as the Lender may
reasonably require; and
(iv) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective
carrying out of the intents and purposes of this Agreement and the other
Loan Documents, as the Lender shall reasonably require from time to time.
(P) Management of Mortgaged Property. Each of the Facilities will be
managed at all times by a Property Manager pursuant to a Property Management
Agreement until terminated as herein provided. Pursuant to each Property
Manager's Subordination, the applicable Property Manager will agree that the
applicable Property Management Agreement is subject and subordinate
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in all respects to the Lien of the Related Mortgage. Each Property Management
Agreement may be terminated by the Lender upon 30 days prior written notice to
the Borrowers and the applicable Property Manager (a) upon the occurrence of an
Event of Default of the type described in clause (i) through (iv) of Section
7.1, or (b) if the Property Manager commits any act which would permit
termination under the Property Management Agreement, or (c) there is a proposed
change in the majority control of any Borrower (or an Affiliate of any Borrower)
which will require notification of the Rating Agencies; provided, however, that
the Lender hereby waives compliance with the foregoing requirements with respect
to each Property Management Agreement in effect as of the Closing Date until
such Property Management Agreement is subject to renewal or expiration by its
terms or is otherwise terminated. The Borrowers may from time to time appoint a
successor manager to manage any of the Facilities with the Lender's prior
written consent. Notwithstanding the foregoing, any successor property manager
selected hereunder by the Lender or the Borrowers to serve as Property Manager
shall be a reputable management company having at least seven years' experience
in the management of commercial buildings of a similar type and quality in the
state in which the Facility is located. The Borrowers further covenant and agree
that each Property Manager (including any successor property manager serving as
a Property Manager) shall at all times during the term of the Loan after the
first Advance maintain worker's compensation insurance as required by
Governmental Authorities.
(Q) Further Agreements Regarding Property Management Agreements and
Leases. Each Borrower further covenants and agrees with the Lender as follows:
(a) Each Borrower shall cause each Facility to be operated pursuant
to the applicable Property Management Agreement and the applicable Lease.
(b) Each Borrower shall:
(i) promptly perform and/or observe all of the covenants and
agreements required to be performed and observed by it under the
applicable Property Management Agreement and Leases and do all
things necessary to preserve and to keep unimpaired its material
rights thereunder;
(ii) promptly notify the Lender of any default or any notice
of termination delivered under any Property Management Agreement or
Lease of which it is aware;
(iii) promptly deliver to the Lender a copy of each financial
statement, business plan, capital expenditures plan, notice, report
and estimate received by it under any Property Management Agreement
or Lease and
(iv) promptly enforce the performance and observance of all of
the covenants and agreements required to be performed and/or
observed by the Property
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Manager under any Property Management Agreement or the GSA or other
lessee under any Lease.
(R) Financial Reporting.
(i) The Borrowers shall keep and maintain or shall cause to be
kept and maintained on a Fiscal Year basis, in accordance with GAAP (or
such other accounting basis acceptable to the Lender) consistently
applied, books, records and accounts reflecting in reasonable detail all
of the financial affairs of the Borrowers and all items of income and
expense in connection with the operation of each Facility and in
connection with any services, equipment or furnishings provided in
connection with the operation of each Facility, whether such income or
expense may be realized by the Borrowers or by any other Person
whatsoever. The Lender shall have the right from time to time at all times
during normal business hours upon reasonable prior written notice to the
Borrowers to examine such books, records and accounts at the office of the
Borrowers or other Person maintaining such books, records and accounts and
to make such copies or extracts thereof as the Lender shall desire. After
the occurrence of an Event of Default with respect to the Borrowers or any
Facility, the Borrowers shall pay any costs and expenses incurred by the
Lender to examine the Borrowers' accounting records with respect to such
Facility, as the Lender shall reasonably determine to be necessary or
appropriate in the protection of the Lender's interest.
(ii) The Borrowers shall cause each Affiliated Entity to
furnish to the Lender annually, within 120 days following the end of each
Fiscal Year, a complete copy of such Affiliated Entity's financial
statements audited by an Independent certified public accountant
acceptable to the Lender (Lender hereby agreeing that any "Big Six"
certified public accounting firm, or any successor by merger thereto,
shall be acceptable to the Lender) in accordance with GAAP (or such other
accounting basis reasonably acceptable to the Lender) consistently applied
covering such Affiliated Entity's financial position and results of
operations, including consolidated and consolidating balance sheets for
each Facility, for such Fiscal Year and containing a statement of revenues
and expenses, a statement of cash flow, a statement of assets and
liabilities and a statement of such Affiliated Entity's equity.
Together with each Affiliated Entity's annual financial statements, the
Borrowers shall cause such Affiliated Entity to furnish to the Lender an
Officer's Certificate certifying as of the date thereof (x) that the
annual financial statements present fairly in all material respects the
results of operations and financial condition of such Affiliated Entity
all in accordance with GAAP consistently applied, and (y) in the case of
the Borrowers, whether there exists an Event of Default or Default, and if
such Event of Default or Default exists, the nature thereof, the period of
time it has existed and the action then being taken to remedy same.
(iii) The Borrowers shall cause each Affiliated Entity to
furnish to the Lender, within 45 days following the end of each Fiscal
Year quarter, a complete copy of
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such Affiliated Entity's unaudited financial statements prepared in
accordance with GAAP (or such other accounting basis reasonably acceptable
to the Lender) consistently applied covering such Affiliated Entity's
financial position and results of operations, including consolidated and
consolidating balance sheets for each Facility, for such quarter and
containing a statement of revenues and expenses, a statement of assets and
liabilities and a statement of such Affiliated Entity's equity.
(iv) The Borrowers shall furnish to the Lender, within 25 days
following the end of each month, in a form reasonably satisfactory to the
Lender, (x) a true, complete and correct cash flow statement with respect
to each Facility for that month, (y) information for each Facility as of
the end of that month in sufficient detail to show the average monthly
occupancy rates and (z) a calculation of each Debt Service Coverage Ratio
as of the last day of such month, together with an Officer's Certificate
in a form reasonably satisfactory to the Lender.
(v) The Borrowers shall furnish to the Lender copies of all
SEC filings by any Affiliated Entity.
(vi) The Borrowers shall furnish to the Lender, within 15
Business Days after request, such further information with respect to the
operation of any Facility and the financial affairs of the Borrowers as
may be reasonably requested by the Lender, including all business plans
prepared for the Borrowers.
(vii) The Borrowers shall furnish to the Lender, within 15
Business Days after request, such further information regarding any Plan
or Multiemployer Plan and any reports or other information required to be
filed under ERISA as may be reasonably requested by the Lender.
(S) Conduct of Business. The Borrowers shall cause the operation of
each Facility to be conducted at all times in a manner consistent with at least
the level of operation of such Facility as of the applicable Advance Closing
Date, including, without limitation, the following:
(i) to operate or cause to be operated each Facility with the
same degree of skill and diligence as would be demonstrated by a
nationally recognized, well qualified independent professional property
manager with extensive experience in the management, operation, leasing
and construction management of large, first class, mixed-use projects in
major metropolitan areas, and otherwise in a prudent manner in compliance
in all material respects with applicable Legal Requirements and Insurance
Requirements relating thereto and cause all licenses, Permits and any
other agreements necessary for the continued use and operation of each
Facility; and
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(ii) to maintain or cause to be maintained sufficient
Inventory and Equipment of types and quantities at each Facility to enable
the Borrowers to operate such Facility.
(T) Interest Rate Protection Agreements. If the Debt Service
Coverage Ratio (Actual) as of any date falls below the Required Debt Service
Coverage Ratio (Actual), the Borrowers shall promptly enter into, or shall cause
an Affiliate of the Borrowers approved by the Lender to enter into, an Interest
Rate Protection Agreement and shall collaterally assign the Interest Rate
Protection Agreement, or cause it to be collaterally assigned, to the Lender
pursuant to an Assignment of Interest Rate Protection Agreement. The Interest
Rate Protection Agreement shall (a) extend until a date not earlier than the
Maturity Date, (b) be in an amount not less than the amount of the Principal
Indebtedness outstanding at the time, (c) cause the Debt Service Coverage Ratio
(Actual), had it been calculated accounting for the effect of such Interest Rate
Protection Agreement, to equal or exceed the Required Debt Service Coverage
Ratio (Actual), (d) be with a financial institution having a credit rating of at
least "AA" by the Rating Agencies, (e) be otherwise in form and substance
reasonably satisfactory to the Lender and (f) have been paid in full through its
maturity by the Borrowers or, if applicable, the Borrowers' Affiliate (or will
be so paid from proceeds of the Advance).
(U) ERISA. The Borrowers shall deliver to the Lender as soon as
possible, and in any event within 10 days after any Borrower knows or has reason
to believe that any of the events or conditions specified below with respect to
any Plan or Multiemployer Plan has occurred or exists, a statement signed by a
senior financial officer of each Borrower setting forth details respecting such
event or condition and the action, if any, that the Borrowers or their ERISA
Affiliate propose to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by any Borrower or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan, as to
which PBGC has not by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Borrowers or an
ERISA Affiliate to terminate any Plan;
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(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by any Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been
taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by any Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the receipt by
any Borrower or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against any Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part if
any Borrower or an ERISA Affiliate fails to timely provide security to the
Plan in accordance with the provisions of said Sections; and
(vii) the imposition of a lien or a security interest in
connection with a Plan.
(V) Tangible Net Worth. The Borrowers shall at all times maintain
aggregate Tangible Net Worth in an amount equal to or greater than the greater
of (i) 15% of the aggregate All-In Costs of all Facilities owned by the
Borrowers or any Borrower and (ii) $20,000,000.
(W) Letters of Intent. Each Borrower shall give the Lender prompt
written notice of each letter of intent or other similar document executed by
such Borrower and the seller of a Facility with respect to such Borrower's
acquisition of a Facility.
(X) Operating Budget. The Borrowers shall, prior to the Closing
Date, adopt a budget of Operating Income, Operating Expenses, Basic Carrying
Costs, Debt Service, tenant improvements, leasing commissions and Capital
Improvement Costs (an "Operating Budget") for the period commencing on the
Closing Date and ending on December 31 of the calendar year during which the
Closing Date occurs. By September 1 of each calendar year, the Borrowers shall
provide to the Lender a time schedule for establishing a Operating Budget for
the calendar year immediately following such date. Such schedule shall specify
the date (not later than December 1 of such year) by which the Borrowers will
deliver to the Lender a proposed Operating Budget (a "Proposed Operating
Budget") and a final Operating Budget (a "Final Operating Budget") for such
calendar
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year, and the Borrowers shall deliver such Proposed Operating Budget to the
Lender on or prior to such date. Any objection to a Proposed Operating Budget by
the Lender shall be delivered to the Borrowers within 10 Business Days after
delivery of such Proposed Operating Budget by the Lender. Any such objections
shall be resolved in writing to the satisfaction of the Lender and the Borrowers
prior to the adoption of the Final Operating Budget. Each Operating Budget shall
present information on a monthly basis, including Operating Income, Operating
Expenses, Basic Carrying Costs, Debt Service, tenant improvements, leasing
commissions and Capital Improvement Costs. Promptly upon adoption thereof, the
Final Operating Budget shall be delivered to the Lender. If for any reason the
Borrowers shall not have adopted a Final Operating Budget before the beginning
of any calendar year, the Final Operating Budget for the preceding calendar year
(with each item of Operating Costs therein being deemed increased by 3% from the
corresponding item in the preceding year's Final Operating Budget, provided that
such increases shall not be allowed in the event that the Borrowers fail to
adopt a Final Operating Budget for more than one consecutive calendar year)
shall, until the adoption of a new Final Operating Budget, be deemed to be in
force and effective as the Final Operating Budget for such calendar year.
(Y) Estoppel Certificates; Notices of Assignment. Within 90 days
after the funding of each Advance, the Borrowers shall deliver to the Lender (i)
an Estoppel Certificate executed by each lessee with respect to each Lease
(other than a GSA Lease) to which the Individual Property to which such Advance
relates is subject; and (ii) a Notice of Assignment and estoppel certificate
executed by the GSA with respect to each GSA Lease to which such Individual
Property is subject.
(Z) Property Manager's Subordination. Each Borrower shall use its
best efforts to cause each Property Manager to execute and deliver to the Lender
a Property Manager's Subordination.
(AA) Initial Capital Requirement. On the Advance Closing Date for
any Advance, other than the initial Advance Closing Date, the Borrowers shall,
upon the Lender's request, deposit or cause to be deposited into the Capital
Reserve Sub-Account an amount not greater than the Initial Capital Requirement
with respect to the Facility to be financed by such Advance.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. Borrower Negative Covenants. Each Borrower covenants
and agrees that, until payment in full of the Secured Obligations (or, with
respect to any particular Individual Property, the earlier release of the
Related Mortgage), it will not do, directly or indirectly, any of the following
unless the Lender consents thereto in writing:
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(A) Liens on the Mortgaged Property. Incur, create, assume, become
or be liable in any manner with respect to, or permit to exist, any Lien with
respect to any Individual Property, except: (i) Liens in favor of the Lender and
(ii) the Permitted Encumbrances.
(B) Transfer. Except as expressly permitted by or pursuant to this
Agreement or the Mortgages, allow any Transfer to occur.
(C) Other Borrowings. Incur, create, assume, become or be liable in
any manner with respect to Other Borrowings, except that (i) the Borrowers may
incur indebtedness or other obligations to Alpine Realty Investments, LLC
pursuant to the Transfer Agreement in connection with the purchase of Eligible
Properties provided that such indebtedness is unsecured, subordinate to the full
repayment of the Secured Obligations and in amounts and on terms satisfactory to
the Lender; and (ii) the Borrowers may obtain financing subordinate to the
Secured Obligations in an aggregate principal amount not to exceed an amount
equal to 10% of the aggregate All-In Costs of the Mortgaged Property, provided
that, prior to the indefeasible repayment in full of the Secured Obligations and
the expiration of the Financing Period, no amount shall be payable or paid in
respect of such financing other than with (1) funds that may be released to the
Borrowers from time to time pursuant to Section 2.12(f) or (2) capital
contributions that are received by the Borrowers from time to time. For the
avoidance of doubt, the obligations owing to Alpine Realty Investments, LLC are
not prohibited by this Agreement.)
(D) Dissolution. Dissolve, terminate, liquidate, merge with or
consolidate into another Person.
(E) Change In Business. Cease to be a Single-Purpose Entity, or make
any material change in the scope or nature of its business objectives, purposes
or operations, or undertake or participate in activities other than the
continuance of its present business.
(F) Debt Cancellation. Cancel or otherwise forgive or release any
material claim or debt owed to any Borrower by any Person, except for adequate
consideration or in the ordinary course of such Borrower's business.
(G) Affiliate Transactions. Enter into, or be a party to, any
transaction with an Affiliate of any Borrower, except in the ordinary course of
business and on terms which are fully disclosed to the Lender in advance and are
no less favorable to such Borrower or such Affiliate than would be obtained in a
comparable arm's length transaction with an unrelated third party.
(H) Creation of Easements. Create, or permit any Facility or any
part thereof to become subject to, any easement, license or restrictive
covenant, other than a Permitted Encumbrance.
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(I) Misapplication of Funds. Distribute any Rents or Moneys received
from Accounts in violation of the provisions of Section 2.12.
(J) Certain Restrictions. Enter into any agreement which expressly
restricts the ability of any Borrower to enter into amendments, modifications or
waivers of any of the Loan Documents.
(K) Issuance of Equity Interests. Issue any equity interests of any
Borrower other than the equity interests which are outstanding on the Closing
Date, or issue any security or other instrument which by its terms is
convertible into or exercisable or exchangeable for any equity interests of any
Borrower; provided, however, that the Borrowers may, with the prior written
consent of the Lender (which consent shall not be unreasonably withheld or
delayed), issue or permit the Transfer of Non-Controlling Equity Interests.
(L) Assignment of Licenses and Permits. Assign or transfer any of
its interest in any Permits pertaining to any Facility, or assign, transfer or
remove, or permit any other Person to assign, transfer or remove any records
pertaining to any Facility without the Lender's prior written consent, which
consent may be granted or refused in the Lender's sole discretion.
(M) Place of Business. Change its chief executive office or its
principal place of business without giving the Lender at least 30 days' prior
written notice thereof and promptly providing the Lender such information as the
Lender may reasonably request in connection therewith.
(N) Leases. Without the Lender's prior consent, (i) surrender,
terminate, assign (other than to the Collateral Agent) or cancel any Lease, (ii)
reduce, or consent to the reduction of, the term of any Lease, (iii) increase,
or consent to the increase of, the amount of any charges under any Lease, (iv)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under, any Lease in any material respect or (v) permit
any Lease to be assigned by the lessee thereof; provided, however, that a
Borrower may, without the Lender's consent, extend the term of any Lease to
which it is a party; provided further, that a Borrower may, in connection with
the extension of the term of a Lease, allow a lessee to not pay Rent for a
reasonable, limited period of time, provided that no such arrangement shall,
without the Lender's prior written consent, (A) reduce the net present value of
Rent payments to be received by such Borrower with respect to the applicable
Facility, (B) cause any Debt Service Coverage Ratio to be reduced below the
applicable Required Debt Service Coverage Ratio or (C) cause a violation of any
Pool Requirement.
(O) Bankruptcy. Prior to the date that is one year and one day after
all of indebtedness that may from time to time be owing by the Lender has been
paid in full, take any action or institute any proceeding, or permit any
Affiliate of any Borrower to take any action or institute any proceeding,
against the Lender under any bankruptcy or insolvency law applicable to
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the Lender or which would be reasonably likely to cause the Lender to be subject
to, or seek the protection of, any such bankruptcy or insolvency law.
(P) No Joint Assessment. Suffer, permit or initiate the joint
assessment of any Facility (i) with any other real property constituting a
separate tax lot, and (ii) with any portion of the Facility which may be deemed
to constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Facility as a single lien.
(Q) Substantive Consolidation Certificate. Perform any act or omit
to perform any act, in either case if the effect of such act or omission, as the
case may be, is to cause any statement of fact set forth in the Substantive
Consolidation Certificate to not be true and correct.
ARTICLE VII
DEFAULTS
Section 7.1.Event of Default. The occurrence of one or more of the
following events shall be an "Event of Default" hereunder:
(i) if on any Payment Date the funds in the Debt Service
Payment Sub-Account are insufficient to pay the Required Debt Service
Payment due on such Payment Date, and such insufficiency continues until
10:00 a.m., New York City time, on the second Business Day following such
Payment Date;
(ii) if the Borrowers fail to pay the outstanding Indebtedness
on the date which is five Business Days prior to the Maturity Date, and
such failure continues until 10:00 a.m., New York City Time, on the date
which is three Business Days prior to the Maturity Date;
(iii) if on the date any payment of a Basic Carrying Cost
would become delinquent, the funds in the Basic Carrying Costs Sub-Account
required to be reserved pursuant to Section 2.12(f), if any, together with
any funds in the Collection Account not allocated to another Sub-Account
(excluding all funds which are utilized in the calculation in clause (i)
above to prevent the determination of an Event of Default thereunder) are
insufficient to make such payment;
(iv) the occurrence of the event identified in Sections
2.12(e) or 2.12(f) as constituting an "Event of Default" or the Borrowers
shall be in default under its obligations identified in Section 2.12(h)
(except, in each case, to the extent caused by the act or omission of the
Collateral Agent);
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(v) if the Borrowers fails to pay any other amount payable
pursuant to this Agreement or any other Loan Document when due and payable
in accordance with the provisions hereof or thereof, as the case may be,
and such failure continues for ten days after the Lender delivers written
notice thereof to the Borrowers;
(vi) if any representation or warranty made herein or in any
other Loan Document, or in any report, certificate, financial statement or
other Instrument, agreement or document furnished by any Borrower in
connection with this Agreement, the Note or any other Loan Document
executed and delivered by such Borrower, shall be false in any material
respect as of the date such representation or warranty was made, and such
Borrower fails, within 30 days after being notified of such falsity by the
Lender, in the event that the condition that made such representation or
warranty false is capable of being corrected within 30 days such that the
Lender's rights and ability to enforce such rights under this Agreement
and the other Loan Documents are and will be in no way impaired as a
result of the failure of such representation or warranty to be true when
made, to correct such condition such that no such impairment exists or
will exist;
(vii) if any Affiliated Entity makes an assignment for the
benefit of creditors;
(viii) if a receiver, liquidator or trustee shall be appointed
for any Affiliated Entity shall be adjudicated a bankrupt or insolvent, or
if any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to, or acquiesced in by, any Affiliated
Entity or if any proceeding for the dissolution or liquidation of any
Affiliated Entity shall be instituted; provided, however, that if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by such Affiliated Entity, upon the same not being
discharged, stayed or dismissed within 60 days, or if such Affiliated
Entity shall generally not be paying its debts as they become due;
(ix) if any Borrower delegates or purports to delegate its
obligations or assign its rights under this Agreement, any of the other
Loan Documents or any interest herein or therein, or if any Transfer
occurs other than in accordance with this Agreement, the Mortgages or any
other Loan Document;
(x) if any provision of the Charter Document or the Organizing
Document of any Borrower affecting the purpose for which such Borrower is
formed is amended or modified in any material respect which may adversely
affect the Lender or the Collateral Agent, or if such Borrower or its
owner fails to perform or enforce the provisions of such Charter Document
or Organizing Document or attempts to dissolve such Borrower, or if any
Borrower breaches any of its representations, warranties or covenants set
forth in Sections 4.1(M), 4.2(N) or 6.1(E);
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(xi) if an Event of Default as defined or described in the
Note, the Mortgages or any other Loan Document occurs, whether as to the
Borrowers or any Borrower or any Individual Property or all or any portion
of the Mortgaged Property;
(xii) if any Borrower shall fail to observe any term,
condition, requirement or obligation set forth in Section 6.1 and, in the
case of a violation of Section 6.1(I) that is not material and that does
not constitute gross negligence or wilful misconduct, such failure shall
continue for one Business Day;
(xiii) if an event or condition specified in Section 5.1(U)
shall occur or exist with respect to any Plan or Multiemployer Plan and,
as a result of such event or condition, together with all other such
events or conditions, any Borrower or any ERISA Affiliate shall incur or
in the opinion of the Lender shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any combination of
the foregoing) which would constitute, in the determination of the Lender,
a Material Adverse Effect;
(xiv) if any Borrower shall fail to observe any term,
covenant, covenant, condition or other requirement under any Loan
Document, Lease or Contract (other than as set forth in clauses (i)
through (xiii) above), and such failure shall continue for 10 days after
notice to the Borrowers from the Lender or its successors or assigns, in
the case of any such failure which can be cured by the payment of a sum of
money, or for 30 days after notice from the Lender or its successors or
assigns, in the case of any other such failure (unless otherwise provided
herein or in such other Loan Document); provided, however, that if such
non-monetary failure is susceptible of cure but cannot reasonably be cured
within such 30-day period and provided further that the Borrowers shall
have commenced to cure such failure within such 30-day period and
thereafter diligently and expeditiously proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary
for the Borrowers in the exercise of due diligence to cure such failure,
but in no event shall such period exceed 60 days after the original notice
from the Lender; or
(xv) if the Borrowers shall fail to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) with respect to any Other Borrowings aggregating $1,000,000
or more; or any breach, default or event of default shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Other Borrowings, if the effect thereof is to cause
an acceleration, mandatory redemption or other required repurchase of such
Other Borrowings, or permit the holder(s) of such Other Borrowings to
accelerate the maturity of any such Other Borrowings or require a
redemption or other repurchase of such Other Borrowings; or any such Other
Borrowings shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Borrowers or any Borrower (other than by a
regularly scheduled required prepayment) prior to the stated maturity
thereof;
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(xvi) if a Change of Control shall occur;
(xvii) if the Collateral Agent shall fail for any reason to
have a perfected, first-priority Lien on all of the Collateral, subject
only to Permitted Encumbrances (other than Permitted Encumbrances that are
required by the terms of this Agreement to be subordinate to the
Collateral Agent's Lien on the Collateral;
(xviii) if, at any time after Year 3, any Debt Service
Coverage Ratio shall be less than the applicable Required Debt Service
Coverage Ratio; or
(xix) if, at any time after Year 3, any Pool Requirement shall
not be satisfied;
then, upon the occurrence of any such Event of Default and at any time
thereafter, the Lender or its successors or assigns, may, in addition to any
other rights or remedies available to it pursuant to this Agreement, the Note,
the Mortgages and the other Loan Documents, or at law or in equity, take such
action, without notice or demand, as the Lender or its successors or assigns,
deems advisable to protect and enforce its rights against the Borrowers and in
and to all or any portion of the Mortgaged Property, including, without
limitation, declaring the entire Indebtedness to be immediately due and payable
and may enforce or avail itself of any or all rights or remedies provided in the
Loan Documents against the Borrowers and/or the Mortgaged Property, including,
without limitation, all rights or remedies available at law or in equity.
Notwithstanding any other provision of this Section 7.1, an Event of Default
that relates to only to an Individual Property shall be deemed cured upon the
consummation of a Transfer of such Individual Property by the applicable
Borrower and the satisfaction of the requirements of Section 2.7(a) on or before
the expiration of the applicable cure period, if any, provided for in this
Section 7.1.
Section 7.2. Remedies. (a) Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers, other remedies available
to the Lender or the Collateral Agent against the Borrowers under this
Agreement, the Note, the Mortgages or any of the other Loan Documents executed
by or with respect to the Borrowers, or at law or in equity may be exercised by
the Lender or the Collateral Agent at any time and from time to time, whether or
not all or any portion of the Indebtedness shall be declared due and payable,
and whether or not the Lender or the Collateral Agent shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to any Individual Property
or all or any portion of the Mortgaged Property. Any such actions taken by the
Lender or the Collateral Agent shall be cumulative and concurrent and may be
pursued independently, singly, successively, together or otherwise, at such time
and in such order as the Lender or the Collateral Agent may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of the Lender or the
Collateral Agent permitted by law, equity or contract or as set forth herein or
in the other Loan
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Documents. Without limiting the generality of the foregoing, upon the occurrence
and during the continuance of an Event of Default, the Lender shall have the
right to pay for the cost of curing such Event of Default by (i) expending its
own funds, in which case the amount so expended shall be added to the principal
balance of the Loan or (ii) withdrawing funds on deposit in the Collection
Account or any Sub-Account.
(b) In the event of the foreclosure or other action by the Lender or
the Collateral Agent to enforce its remedies in connection with one or more of
the Individual Properties or all or any portion of the Mortgaged Property,
whether such foreclosure sale (or other remedy) yields Net Proceeds in an amount
less than, equal to or more than the Allocated Loan Amount of such Individual
Property or Mortgaged Property, the Lender will apply all Net Proceeds received
to repay the Indebtedness in accordance with Section 2.8, Allocated Loan Amounts
shall be adjusted (or not adjusted) in accordance with the definition of
"Allocated Loan Amount", the Indebtedness shall be reduced to the extent of such
Net Proceeds and the remaining portion of the Indebtedness shall remain
outstanding and secured by the Mortgages and the other Loan Documents, it being
understood and agreed by the Borrowers that the Borrowers are jointly and
severally liable for the repayment of all the Indebtedness and that any "excess"
foreclosure proceeds are part of the cross-collateralized and cross-defaulted
security granted to the Collateral Agent pursuant to the Mortgages; provided,
however, that the Note shall be deemed to have been accelerated only to the
extent of the Net Proceeds actually received by the Lender or the Collateral
Agent with respect to any Individual Property and applied in reduction of the
Indebtedness evidenced by the Note in accordance with the provisions of the
Note, after payment by the Borrowers of all transaction costs and expenses and
costs of enforcement.
Section 7.3. Remedies Cumulative. The rights, powers and remedies of
the Lender and the Collateral Agent under this Agreement shall be cumulative and
not exclusive of any other right, power or remedy which the Lender or the
Collateral Agent may have against the Borrowers pursuant to this Agreement or
the other Loan Documents executed by or with respect to the Borrowers, or
existing at law or in equity or otherwise. The Lender's or the Collateral
Agent's rights, powers and remedies may be pursued singly, concurrently or
otherwise, at such time and in such order as the Lender or the Collateral Agent
may determine in such Person's sole discretion. No delay or omission to exercise
any remedy, right or power accruing upon an Event of Default shall impair any
such remedy, right or power or shall be construed as a waiver thereof, but any
such remedy, right or power may be exercised from time to time and as often as
may be deemed expedient. A waiver of any Default or Event of Default shall not
be construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon. Notwithstanding any other
provision of this Agreement, the Lender and the Collateral Agent each reserves
the right to seek a deficiency judgment or preserve a deficiency claim, in
connection with the foreclosure of a Mortgage on an Individual Property, to the
extent necessary to foreclose on other parts of the Mortgaged Property.
ARTICLE VIII
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MISCELLANEOUS
Section 8.1. Survival. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, the making by the Lender of each Advance hereunder and the execution
and delivery by the Borrowers to the Lender of the Note, and shall continue in
full force and effect so long as any portion of the Secured Obligations is
outstanding and unpaid; provided, however, that upon a prepayment with respect
to a particular Individual Property as described in Section 2.7(a) and upon
satisfaction of the other conditions set forth in Section 2.11, the Borrower
owning such Individual Property shall be released of all liability under this
Agreement (other than any liability with respect to environmental matters
arising under Section 4.2(L) or Section 5.1(D) - (I), inclusive, hereof), the
Note, the Related Mortgage, the applicable Assignment of Lease, and the other
Loan Documents insofar as they concern such Individual Property, and such
Borrower's member or partner shall be released of all liability under the Pledge
and Security Agreement with respect to such Individual Property. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All covenants,
promises and agreements in this Agreement contained, by or on behalf of the
Borrowers or any Borrower shall inure to the benefit of the respective
successors and assigns of the Lender. Nothing in this Agreement or in any other
Loan Document, express or implied, shall give to any Person other than the
parties and the holder of the Note, the Mortgages and the other Loan Documents,
and their legal representatives, successors and assigns, any benefit or any
legal or equitable right, remedy or claim hereunder.
Section 8.2. Lender's Discretion. Whenever pursuant to this
Agreement, the Lender exercises any right given to it to approve or disapprove,
or any arrangement or term is to be satisfactory to the Lender, the decision of
the Lender to approve or disapprove or to decide whether arrangements or terms
are satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of the Lender and shall be final and
conclusive.
Section 8.3. Governing Law. (a) This Agreement was negotiated
in New York, and made by the Lender and accepted by the Borrowers in the State
of New York, and the proceeds of the Note delivered pursuant hereto were
disbursed from New York, which State the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby,
and in all respects, including, without limitation, matters of construction,
validity and performance, this Agreement and the obligations arising hereunder
shall be governed by, and construed in accordance with, the laws of the State of
New York applicable to contracts made and performed in such State and any
applicable law of the United States of America, except that at all times the
provisions for the creation, perfection and enforcement of the liens and
security interests created pursuant to the Mortgages and the other Loan
Documents shall be governed by and construed according to the law of the State
in which the applicable Facility is located, it being understood that, to the
fullest extent permitted by law of such States, the law of the State of New York
shall govern the validity and the
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enforceability of all Loan Documents, and the Indebtedness or obligations
arising hereunder or thereunder. To the fullest extent permitted by law, each
Borrower hereby unconditionally and irrevocably waives any claim to assert that
the law of any other jurisdiction governs this Agreement and the Note, and this
Agreement and the Note shall be governed by and construed in accordance with the
laws of the State of New York pursuant to Section 5-1401 of the New York General
Obligations Law.
(b) Any legal suit, action or proceeding against the Lender or any
Borrower arising out of or relating to this Agreement shall be instituted in any
federal or state court in New York, New York, pursuant to Section 5-1402 of the
New York General Obligations Law, and each Borrower waives any objection which
it may now or hereafter have to the laying of venue of any such suit, action or
proceeding, and each Borrower hereby irrevocably submits to the jurisdiction of
any such court in any suit, action or proceeding. Each Borrower does hereby
designate and appoint CT Corporation System, presently located at 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent to accept and acknowledge on
its behalf service of any and all process which may be served in any such suit,
action or proceeding in any federal or state court in New York, New York, and
agrees that service of process upon said agent at said address (or at such other
office in New York, New York as may be designated by such Borrower from time to
time in accordance with the terms hereof) with a copy to such Borrower at its
principal executive offices, Attention: Xx. Xxxxxxx Xxxxxxx, and written notice
of said service of such Borrower mailed or delivered to such Borrower in the
manner provided herein shall be deemed in every respect effective service of
process upon such Borrower, in any such suit, action or proceeding in the State
of New York. Each Borrower (i) shall give prompt notice to the Lender of any
changed address of its authorized agent hereunder, (ii) may at any time and from
time to time designate a substitute authorized agent with an office in New York,
New York (which office shall be designated as the address for service of
process), and (iii) shall promptly designate such a substitute if its authorized
agent ceases to have an office in New York, New York or is dissolved without
leaving a successor.
Section 8.4. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, the Note or any other Loan Document, or consent to any departure by
any Borrower therefrom, shall in any event be effective unless the same shall be
in a writing signed by the party against whom enforcement is sought, and then
such waiver or consent shall be effective only in the specific instance, and for
the purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on any Borrower shall entitle any Borrower to any other or
future notice or demand in the same, similar or other circumstances.
Section 8.5. Delay Not a Waiver. Neither any failure nor any delay on
the part of the Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under the Note, or of any other Loan Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the
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exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, the Note or any other Loan Document, the Lender
shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due under this Agreement, the Note or the other
Loan Documents, or to declare a default for failure to effect prompt payment of
any such other amount.
Section 8.6. Notices. All notices, consents, approvals and
requests required or permitted hereunder or under any other Loan Document shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) certified or registered United States mail, postage prepaid, or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed if to the Lender at its address set forth on the first
page hereof, if to the Collateral Agent at its address set forth on the first
page hereof, and if to any Borrower at its address set forth on the first page
hereof, or at such other address and Person as shall be designated from time to
time by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Section 8.6. A copy of all
notices, consents, approvals and requests directed to the Lender shall be
delivered to Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xx. Xxxxxx X. Xxxxxxxx. A notice shall be deemed to have been given:
in the case of hand delivery, at the time of delivery; in the case of registered
or certified mail, when delivered or the first attempted delivery on a Business
Day; or in the case of expedited prepaid delivery and telecopy, upon the first
attempted delivery on a Business Day. A party receiving a notice which does not
comply with the technical requirements for notice under this Section 8.6 may
elect to waive any deficiencies and treat the notice as having been properly
given.
Section 8.7. TRIAL BY JURY. BORROWER AND LENDER, TO THE
FULLEST EXTENT THAT EACH SUCH PERSON MAY LAWFULLY DO SO, EACH WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT
ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTES OR
THE OTHER LOAN DOCUMENTS.
Section 8.8. Headings. The Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 8.9. Assignment. The Lender shall have the right to
assign this Agreement and/or any of the other Loan Documents and the obligations
hereunder to any Person. This Agreement may not be assigned by any Borrower.
Section 8.10. Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such
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provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
Section 8.11. Preferences. The Lender shall have no obligation
to marshal any assets in favor of any Borrower or any other party or against or
in payment of any or all of the obligations of such Borrower or the Borrowers
pursuant to this Agreement, the Note or any other Loan Document. The Lender
shall have the continuing and exclusive right to apply or reverse and reapply
any and all payments by any Borrower to any portion of the obligations of any
Borrower hereunder. To the extent the Borrowers make a payment or payments to
the Lender for the Borrowers' benefit, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by the Lender.
Section 8.12. Waiver of Notice. No Borrower shall be entitled
to any notices of any nature whatsoever from the Lender except with respect to
matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by the Lender to the Borrowers and
except with respect to matters for which the Borrowers are not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Each
Borrower hereby expressly waives the right to receive any notice from the Lender
with respect to any matter for which this Agreement or the other Loan Documents
does not specifically and expressly provide for the giving of notice by the
Lender to such Borrower.
Section 8.13. Remedies of Borrower. In the event that a claim
or adjudication is made that the Lender or its agents has acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement,
the Note, the Mortgages or the other Loan Documents, the Lender or such agent,
as the case may be, has an obligation to act reasonably or promptly, the
Borrowers agree that neither the Lender nor its agents shall be liable for any
monetary damages, and Borrowers' sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether the Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Section 8.14. Exhibits Incorporated. The Exhibits attached
hereto are hereby incorporated herein as a part of this Agreement with the same
effect as if set forth in the body hereof.
Section 8.15. Offsets, Counterclaims and Defenses. Any
assignee of the Lender's interest in and to this Agreement, the Note, the
Mortgages and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to this
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Agreement, the Note, the Mortgages and the other Loan Documents which any
Borrower may otherwise have against any assignor or this Agreement, the Notes,
the Mortgages and the other Loan Documents, and no such unrelated counterclaim
or defense shall be interposed or asserted by any Borrower in any action or
proceeding brought by any such assignee upon this Agreement, the Note, the
Mortgages and other Loan Documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by each Borrower.
Section 8.16. No Joint Venture or Partnership. The Borrowers
and the Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between any
Borrower and the Lender nor to grant the Lender any interest in the Mortgaged
Property other than that of mortgagee or lender.
Section 8.17. Waiver of Marshaling of Assets Defense. To the
fullest extent that each Borrower may legally do so, each Borrower waives all
rights to a marshaling of the assets of the Borrowers, the other Affiliated
Entities and others with interests in such Borrower, and of the Mortgaged
Property, or to a sale in inverse order of alienation in the event of
foreclosure of the interests hereby created, and agrees not to assert any right
under any laws pertaining to the marshaling of assets, the sale in inverse order
of alienation, homestead exemption, the administration of estates of decedents,
or any other matters whatsoever to defeat, reduce or affect the right of the
Lender under the Loan Documents to a sale of the Individual Property for the
collection of the Secured Obligations without any prior or different resort for
collection, or the right of the Lender or Deed of Trust Trustee to the payment
of the Secured Obligations out of the Net Proceeds of the Individual Property in
preference to every other claimant whatsoever.
Section 8.18. Waiver of Counterclaim. Each Borrower hereby
waives the right to assert a counterclaim, other than compulsory counterclaim,
in any action or proceeding brought against it by the Lender or its agents.
Section 8.19. Conflict; Construction of Documents. In the
event of any conflict between the provisions of this Agreement and the
provisions of the Note, the Mortgages or any of the other Loan Documents, the
provisions of this Agreement shall prevail. The parties hereto acknowledge that
they were represented by counsel in connection with the negotiation and drafting
of the Loan Documents and that the Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Section 8.20. Brokers and Financial Advisors. Each Borrower
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement except for MBIA Insurance
Corporation (the "Advisor"). Borrower agrees to pay all amounts required to be
paid to the Advisor pursuant to that certain engagement letter dated April 28,
1998, from the Advisor to Fortress Investment Holdings LLC. The Borrowers hereby
agree on a joint and several basis to
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indemnify and hold the Lender and the Collateral Agent harmless from and against
any and all claims, liabilities, costs and expenses of any kind in any way
relating to or arising from a claim by any Person (other than the Advisor) that
such Person acted on behalf of any Borrower in connection with the transactions
contemplated herein. The provisions of this Section 8.20 shall survive the
expiration and termination of this Agreement and the repayment of the Secured
Obligations.
Section 8.21. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the same
instrument.
Section 8.22. Estoppel Certificates. The Borrowers and the
Lender each hereby agree at any time and from time to time upon not less than 15
days prior written notice by the Borrowers or the Lender to execute, acknowledge
and deliver to the party specified in such notice, a statement, in writing,
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
knowledge of such certifying party, any Default or Event of Default has occurred
and is then continuing, and, if so, specifying each such Default or Event of
Default; provided, however, that it shall be a condition precedent to the
Lender's obligation to deliver the statement pursuant to this Section 8.22, that
the Lender shall have received, together with the Borrowers' request for such
statement, an Officer's Certificate stating that no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or Event
of Default).
Section 8.23. Payment of Expenses. The Borrowers shall,
whether or not the Transactions are consummated, pay, on a joint and several
basis, all Transaction Costs, which shall include, without limitation, (a)
reasonable out-of-pocket costs and expenses of the Lender and the Collateral
Agent in connection with (i) the negotiation, preparation, execution and
delivery of the Loan Documents and the documents and instruments referred to
therein, (ii) the creation, perfection or protection of the Lender's Liens in
the Collateral (including, without limitation, fees and expenses for title and
lien searches and filing and recording fees, third party due diligence expenses
for each Facility plus travel expenses, accounting firm fees, costs of the
Appraisals, Environmental Reports (and an environmental consultant), and the
Engineering Reports), (iii) the negotiation, preparation, execution and delivery
of any amendment, waiver or consent relating to any of the Loan Documents, (iv)
the ongoing administration of, preservation of rights under and enforcement of
the Loan Documents and the documents and instruments referred to therein,
including any restructuring or rescheduling of the Indebtedness and (v) the
issuance of the MTNs, (b) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Collateral Agent in connection with all of the
foregoing, (c) all fees and expenses of the Collateral Agent and (d) all fees
imposed by any Rating Agency at any time. Prior to retention of third parties,
the Lender will consult with the Borrowers regarding the services required and
the third parties selected to assure that costs will be reasonable in scope and
amount. In the event that the Transactions are not consummated, the Borrowers
shall pay, on a joint and several basis, all reasonable out-of-pocket costs and
expenses of the Lender in
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connection with the negotiation, preparation, execution and issuance of its
medium-term notes or such other securities issued by the Lender in order to
finance the Transactions, including the reasonable fees, expenses and
disbursements of counsel, underwriters, financial advisors and other advisors,
and shall indemnify the Lender for any and all Breakage Costs and other losses
resulting from the issuance of such securities. Notwithstanding the foregoing,
the Borrowers shall not be required to pay the fees of counsel to the Lender in
the event that the Transactions are not consummated as a result of the failure
to issue MTNs due to the Lender's gross negligence or wilful misconduct.
Section 8.24. Bankruptcy Waiver. Each Borrower hereby agrees
that, in consideration of the recitals and mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, in the event such Borrower shall (i) file with
any bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended, (ii) be the subject of any order
for relief issued under Title 11 of the U.S. Code, as amended, (iii) file or be
the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or law relating to bankruptcy, insolvency or other relief of debtors,
(iv) have sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator or liquidator or (v) be the subject of any order,
judgment or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal or state act or law relating to bankruptcy, insolvency
or other relief for debtors, the automatic stay provided by the Federal
Bankruptcy Code shall be modified and annulled as to the Lender, so as to permit
the Lender to exercise any and all of its remedies, upon request of the Lender
made on notice to such Borrower and any other party in interest but without the
need of further proof or hearing. No Borrower or any Affiliate of any Borrower
shall contest the enforceability of this Section 8.24.
Section 8.25. Limited Recourse. The obligations of the
Borrowers under this Agreement and the other Loan Documents are solely the
corporate joint and several obligations of the Borrowers. No recourse shall be
had for the payment of any amount owing in respect of the Loan or for the
payment of any fee hereunder or any other obligation or claim arising out of or
based upon this Agreement or any other Loan Document against any stockholder,
employee, officer, director, agent or incorporator of any Borrower, except as
expressly provided in any such Loan Document.
Section 8.26. Borrower's Agent. Fortress Investment Group LLC
shall act as agent for the Borrowers (in such capacity, the "Borrower's Agent")
for all purposes under this Agreement and the other Loan Documents. Any
decision, approval, request or consent that the Borrowers or any Borrower are
entitled to make or give under this Agreement or the other Loan Documents shall
be made or given by the Borrower's Agent on behalf of such Borrower or the
Borrowers, as the case may be. Any action taken by the Borrower's Agent on
behalf of any
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Borrower or the Borrowers under this Agreement or the other Loan Documents shall
be binding upon such Borrower or the Borrowers, as the case may be, and the
Lender, the Collateral Agent and each other Secured Party shall be entitled to
rely conclusively upon any action so taken. Any notice, request or document to
be delivered by the Lender, the Collateral Agent or any other Secured Party to
any Borrower or the Borrowers under this Agreement or the other Loan Documents
may be delivered to the Borrower's Agent, and shall be deemed delivered to each
Borrower upon such delivery to the Borrower's Agent. All documents and other
materials to be delivered by any Borrower or the Borrowers shall be delivered by
the Borrower's Agent on behalf of such Borrower, and none of the Lender, the
Collateral Agent, or any other Secured Party shall be required to deal directly
with any Borrower with respect to any matter under this Agreement or any other
Loan Document.
Section 8.27. Regarding the Collateral Agent. The Collateral
Agent shall be afforded all of the rights, powers, protections, immunities and
indemnities afforded to it under the Collateral Agency Agreement as if such
rights, powers, protections, immunities and indemnities are set forth herein.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
LENDER:
MERIDIAN FUNDING COMPANY, LLC, a
Delaware limited liability company
By: MBIA Insurance Corporation,
its attorney-in-fact
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
COLLATERAL AGENT:
BANKERS TRUST COMPANY,
as Collateral Agent only
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
BORROWER:
FORTRESS GSA BURLINGTON L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP: Asst. Secretary
101
FORTRESS GSA SACRAMENTO L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA SUFFOLK L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA PROVIDENCE L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA CONCORD L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA CALLOWHILL L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
102
FORTRESS GSA AURORA L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA HUNTSVILLE L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA PARFET L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA NORFOLK L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
103
FORTRESS GSA HOUSTON, LP,
a Delaware limited partnership
By: Fortress Houston GP Corp.,
a Delaware corporation,
its general partner
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
FORTRESS GSA E STREET L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx Edinburg
Name: Xxxxx Edinburg
Title: VP & Asst. Secretary
104
Schedule 1
Borrowers
Borrowers: Addresses:
Fortress GSA Burlington L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Sacramento L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000 Fortress
GSA Suffolk L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Providence L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Concord L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Callowhill L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Aurora L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Huntsville L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Parfet L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Borrowers: Addresses:
Fortress GSA Norfolk L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fortress GSA Houston, LP 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
000
Xxxxxxxx XXX X Xxxxxx L.L.C. 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
(Attached)
106
Schedule 2
Initial Advance Amounts, Appraised Values, Purchase Prices and All-In Costs
(Attached)
107
Schedule 3
Capital Structure of Borrower
(Attached)
108
Schedule 4
Survey Requirements
(Attached)
109
Schedule 5
Title Insurance Requirements
(Attached)
110
Schedule 6
Permitted Transferees
(Attached)
111
Exhibit A
Promissory Note (Form)
(Attached)
112
Exhibit B
Contribution Agreement (Form)
(Attached)
113
Exhibit C
Collateral Agency Agreement (Form)
(Attached)
114
Exhibit D
Guarantee (Form)
(Attached)
115
Exhibit E
Pledge and Security Agreement (Form)
(Attached)
116
Exhibit F
Indemnity Agreement (Form)
(Attached)
117
Exhibit G
Mortgage, Assignment of Rents, Security Agreement and Fixture Filing (Form)
(Attached)
118
Exhibit H
Present Assignment of Rents (Form)
(Attached)
119
Exhibit I
Assignment of U.S. Government Contract (Form)
(Attached)
120
Exhibit J
Notice of Assignment (Form)
(Attached)
121
Exhibit K
Collateral Assignment of Interest Rate Protection Agreement (Form)
(Attached)
122
Exhibit L
Property Manager's Consent and Subordination of Management Agreement (Form)
(Attached)
123
Exhibit M
Estoppel Certificate (Form)
(Attached)
124
Exhibit N
Nonconsolidation Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP (Form)
(Attached)
125
Exhibit O
Closing Date Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP (Form)
(Attached)
126
Exhibit P
Advance Closing Date Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP (Form)
(Attached)
127
Exhibit Q
Opinion of Local Counsel (Form)
(Attached)
128
Exhibit R
Description of Hedging Policy
(Attached)
129
Exhibit S
Required Debt Service Payment Certificate (Form)
(Attached)
130
Exhibit T
Request for Borrowing (Form)
(Attached)
131
Exhibit U
Partnership Pledge Agreement (Form)
(Attached)
132
Exhibit V
Substantive Consolidation Certificate (Form)
(Attached)
