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EXHIBIT 10.10
MEZZANINE LOAN AGREEMENT
Dated as of June 27, 2003
Among
XXXXXXX PROPERTIES - 555 W. FIFTH MEZZANINE, LLC
AND
XXXXXXX PROPERTIES - 808 S. OLIVE MEZZANINE, LLC
collectively,
as Borrower
and
BANK OF AMERICA, N.A.,
as Lender
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TABLE OF CONTENTS
(To be finalized upon completion of document)
ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION.................................. 2
SECTION 1.1. DEFINITIONS.......................................................... 2
SECTION 1.2. PRINCIPLES OF CONSTRUCTION........................................... 15
ARTICLE II GENERAL TERMS............................................................ 16
SECTION 2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER............................ 16
SECTION 2.2. INTEREST RATE PROTECTION AGREEMENT................................... 16
SECTION 2.3. LOAN PAYMENTS........................................................ 18
SECTION 2.4. LATE PAYMENT CHARGE.................................................. 19
SECTION 2.5. PREPAYMENT........................................................... 19
SECTION 2.6. PAYMENTS AFTER DEFAULT............................................... 21
SECTION 2.7. INTENTIONALLY DELETED................................................ 21
SECTION 2.8. USURY SAVINGS........................................................ 21
SECTION 2.9. UNAVAILABILITY OF RATE; FOREIGN TAXES; INCREASED COSTS............... 22
SECTION 2.10. EXTENSION............................................................ 25
SECTION 2.11. ADDITIONAL PAYMENT PROVISIONS........................................ 25
ARTICLE III CONDITIONS PRECEDENT..................................................... 26
SECTION 3.1. REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS........... 26
SECTION 3.2. DELIVERY OF LOAN DOCUMENTS; TITLE POLICIES........................... 27
SECTION 3.3. RELATED DOCUMENTS.................................................... 28
SECTION 3.4. ORGANIZATIONAL DOCUMENTS............................................. 28
SECTION 3.5. OPINIONS OF BORROWER'S COUNSEL....................................... 28
SECTION 3.6. ANNUAL BUDGET........................................................ 29
SECTION 3.7. TAXES AND OTHER CHARGES.............................................. 29
SECTION 3.8. COMPLETION OF PROCEEDINGS............................................ 29
SECTION 3.9. PAYMENTS............................................................. 29
SECTION 3.10. TRANSACTION COSTS.................................................... 29
SECTION 3.11. No MATERIAL ADVERSE CHANGE........................................... 29
SECTION 3.12. LEASES AND RENT ROLL................................................. 29
SECTION 3.13. TENANT ESTOPPELS..................................................... 30
SECTION 3.14. [INTENTIONALLY OMITTED].............................................. 30
SECTION 3.15. SUBORDINATION AND ATTORNMENT......................................... 30
SECTION 3.16. TAX LOT.............................................................. 30
SECTION 3.17. PHYSICAL CONDITIONS REPORT........................................... 30
SECTION 3.18. MANAGEMENT AGREEMENT................................................. 30
SECTION 3.19. APPRAISAL............................................................ 30
SECTION 3.20. FINANCIAL STATEMENTS................................................. 30
SECTION 3.21. [INTENTIONALLY DELETED].............................................. 30
SECTION 3.22. FURTHER DOCUMENTS.................................................... 30
SECTION 3.23. MORTGAGE LOAN........................................................ 30
SECTION 3.24. OPINION LETTER....................................................... 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................... 31
SECTION 4.1. ORGANIZATION......................................................... 31
SECTION 4.2. STATUS OF BORROWER................................................... 31
SECTION 4.3. VALIDITY OF DOCUMENTS................................................ 31
SECTION 4.4. No CONFLICTS......................................................... 32
SECTION 4.5. LITIGATION........................................................... 32
SECTION 4.6. AGREEMENTS........................................................... 32
SECTION 4.7. SOLVENCY............................................................. 33
SECTION 4.8. FULL AND ACCURATE DISCLOSURE......................................... 33
SECTION 4.9. No PLAN ASSETS....................................................... 33
SECTION 4.10. NOT A FOREIGN PERSON................................................. 33
SECTION 4.11. ENFORCEABILITY....................................................... 33
SECTION 4.12. BUSINESS PURPOSES.................................................... 34
SECTION 4.13. COMPLIANCE........................................................... 34
SECTION 4.14. FINANCIAL INFORMATION................................................ 34
SECTION 4.15. ILLEGAL ACTIVITY..................................................... 34
SECTION 4.16. PERMITTED ENCUMBRANCES............................................... 34
SECTION 4.17. FEDERAL RESERVE REGULATIONS.......................................... 35
SECTION 4.18. INVESTMENT COMPANY ACT............................................... 35
SECTION 4.19. No CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE...................... 35
SECTION 4.20. SPECIAL PURPOSE ENTITY............................................... 35
SECTION 4.21. ASSUMPTIONS.......................................................... 35
SECTION 4.22. INTELLECTUAL PROPERTY................................................ 35
SECTION 4.23. EMBARGOED PERSON..................................................... 36
SECTION 4.24. PATRIOT ACT.......................................................... 36
SECTION 4.25. MORTGAGE LOAN REPRESENTATIONS........................................ 37
SECTION 4.26. No CONTRACTUAL OBLIGATIONS........................................... 37
SECTION 4.27. SUBSIDIARIES......................................................... 37
SECTION 4.28. PLEDGED COMPANY INTERESTS............................................ 37
SECTION 4.29. SURVIVAL............................................................. 37
ARTICLE V BORROWER COVENANTS................................................................ 38
SECTION 5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS........................ 38
SECTION 5.2. MAINTENANCE AND USE OF PROPERTY...................................... 38
SECTION 5.3. WASTE................................................................ 39
SECTION 5.4. TAXES AND OTHER CHARGES.............................................. 39
SECTION 5.5. LITIGATION........................................................... 39
SECTION 5.6. ACCESS TO THE PROPERTY............................................... 40
SECTION 5.7. NOTICE OF DEFAULT.................................................... 40
SECTION 5.8. COOPERATE IN LEGAL PROCEEDINGS....................................... 40
SECTION 5.9. PERFORMANCE BY BORROWER.............................................. 40
SECTION 5.10. AWARDS; INSURANCE PROCEEDS........................................... 40
SECTION 5.11. FINANCIAL REPORTING.................................................. 40
SECTION 5.12. ESTOPPEL STATEMENT................................................... 43
ii
SECTION 5.13. LEASING MATTERS...................................................... 43
SECTION 5.14. PROPERTY MANAGEMENT.................................................. 45
SECTION 5.15. LIENS................................................................ 46
SECTION 5.16. DEBT CANCELLATION.................................................... 46
SECTION 5.17. ZONING............................................................... 46
SECTION 5.18. ERISA................................................................ 46
SECTION 5.19. No JOINT ASSESSMENT.................................................. 47
SECTION 5.20. ALTERATIONS.......................................................... 47
SECTION 5.21. [INTENTIONALLY DELETED.]............................................. 47
SECTION 5.22. RECIPROCAL EASEMENT AGREEMENT........................................ 47
SECTION 5.23. [INTENTIONALLY DELETED.]............................................. 48
SECTION 5.24. [INTENTIONALLY DELETED.]............................................. 48
SECTION 5.25. SPECIAL DISTRIBUTIONS................................................ 48
SECTION 5.26. CURING............................................................... 48
SECTION 5.27. LIENS................................................................ 48
SECTION 5.28. LIMITATION ON SECURITIES ISSUANCES................................... 48
SECTION 5.29. LIMITATIONS ON DISTRIBUTIONS......................................... 48
SECTION 5.30. OTHER LIMITATIONS.................................................... 48
SECTION 5.31. [INTENTIONALLY DELETED.]............................................. 49
SECTION 5.32. REFINANCING.......................................................... 49
ARTICLE VI ENTITY COVENANTS................................................................. 50
SECTION 6.1. SINGLE PURPOSE ENTITY/SEPARATENESS................................... 50
SECTION 6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE................................ 54
SECTION 6.3. BUSINESS AND OPERATIONS.............................................. 54
SECTION 6.4. INDEPENDENT MANAGERS................................................. 55
ARTICLE VII NO SALE OR ENCUMBRANCE.......................................................... 55
SECTION 7.1. TRANSFER DEFINITIONS................................................. 55
SECTION 7.2. No SALE/ENCUMBRANCE.................................................. 56
SECTION 7.3. PERMITTED TRANSFERS.................................................. 56
SECTION 7.4. LENDER'S RIGHTS...................................................... 57
SECTION 7.5. ASSUMPTION........................................................... 58
ARTICLE VIII INSURANCE; CASUALTY; CONDEMNATION; RESTORATION........................... 60
SECTION 8.1. INSURANCE............................................................ 60
SECTION 8.2. CASUALTY............................................................. 64
SECTION 8.3. CONDEMNATION......................................................... 65
SECTION 8.4. RESTORATION.......................................................... 65
ARTICLE IX RESERVE FUNDS............................................................ 69
ARTICLE X CASH MANAGEMENT.......................................................... 70
ARTICLE XI EVENTS OF DEFAULT; REMEDIES.............................................. 70
SECTION 11.1. EVENT OF DEFAULT..................................................... 70
SECTION 11.2. REMEDIES............................................................. 73
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ARTICLE XII ENVIRONMENTAL PROVISIONS........................................................ 73
SECTION 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES......................... 73
SECTION 12.2. ENVIRONMENTAL COVENANTS.............................................. 74
SECTION 12.3. LENDER'S RIGHTS...................................................... 75
SECTION 12.4. OPERATIONS AND MAINTENANCE PROGRAMS.................................. 75
SECTION 12.5. ENVIRONMENTAL DEFINITIONS............................................ 75
ARTICLE XIII SECONDARY MARKET............................................................... 76
SECTION 13.1. TRANSFER OF LOAN..................................................... 76
SECTION 13.2. DELEGATION OF SERVICING.............................................. 76
SECTION 13.3. DISSEMINATION OF INFORMATION......................................... 76
SECTION 13.4. COOPERATION.......................................................... 77
SECTION 13.5. SECURITIZATION INDEMNIFICATION....................................... 78
SECTION 13.6. [INTENTIONALLY OMITTED].............................................. 81
SECTION 13.7. INTENTIONALLY OMITTED]............................................... 81
SECTION 13.8. MORTGAGE LOAN SECURITIZATION......................................... 81
ARTICLE XIV INDEMNIFICATIONS................................................................ 81
SECTION 14.1. GENERAL INDEMNIFICATION.............................................. 81
SECTION 14.2. INTANGIBLE TAX INDEMNIFICATION....................................... 82
SECTION 14.3. ERISA INDEMNIFICATION................................................ 82
SECTION 14.4. SURVIVAL............................................................. 82
ARTICLE XV EXCULPATION...................................................................... 82
SECTION 15.1. EXCULPATION.............................................................. 82
ARTICLE XVI NOTICES......................................................................... 85
SECTION 16.1. NOTICES.................................................................. 85
ARTICLE XVII FURTHER ASSURANCES............................................................. 86
SECTION 17.1. REPLACEMENT DOCUMENTS................................................ 86
SECTION 17.2. [INTENTIONALLY OMITTED.]............................................. 87
SECTION 17.3. FURTHER ACTS, ETC.................................................... 87
SECTION 17.4. CHANGES IN TAX, DEBT, CREDIT AND
DOCUMENTARY STAMP LAWS............................................... 87
SECTION 17.5. EXPENSES............................................................. 88
ARTICLE XVIII WAIVERS....................................................................... 88
SECTION 18.1. REMEDIES CUMULATIVE; WAIVERS......................................... 88
SECTION 18.2. MODIFICATION, WAIVER IN WRITING...................................... 89
SECTION 18.3. DELAY NOT A WAIVER................................................... 89
SECTION 18.4. TRIAL BY JURY........................................................ 89
SECTION 18.5. WAIVER OF NOTICE..................................................... 90
SECTION 18.6. REMEDIES OF BORROWER................................................. 90
SECTION 18.7. WAIVER OF MARSHALLING OF ASSETS...................................... 90
SECTION 18.8. WAIVER OF STATUTE OF LIMITATIONS..................................... 90
SECTION 18.9. WAIVER OF COUNTERCLAIM............................................... 91
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SECTION 18.10. GRADSKY WAIVERS...................................................... 91
ARTICLE XIX GOVERNING LAW................................................................... 92
SECTION 19.1. CHOICE OF LAW........................................................ 92
SECTION 19.2. SEVERABILITY......................................................... 92
SECTION 19.3. PREFERENCES.......................................................... 92
ARTICLE XX MISCELLANEOUS.................................................................... 92
SECTION 20.1. SURVIVAL............................................................. 92
SECTION 20.2. LENDER'S DISCRETION.................................................. 93
SECTION 20.3. HEADINGS............................................................. 93
SECTION 20.4. COST OF ENFORCEMENT.................................................. 93
SECTION 20.5. SCHEDULES INCORPORATED............................................... 93
SECTION 20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES.................................. 93
SECTION 20.7. NO JOINT VENTURE OR PARTNERSHIP; No THIRD PARTY
BENEFICIARIES........................................................ 93
SECTION 20.8. PUBLICITY............................................................ 95
SECTION 20.9. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE........................ 95
SECTION 20.10. ENTIRE AGREEMENT..................................................... 95
SECTION 20.ll. CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC)........................... 95
SECTION 20.12. LIABILITY............................................................ 96
SECTION 20.13. CONTRIBUTION......................................................... 96
EXHIBITS
Exhibit A - Annual Budget
Exhibit B - Borrower Organizational Structure
Exhibit C - Form of Lease
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MEZZANINE LOAN AGREEMENT
THIS MEZZANINE LOAN AGREEMENT, dated as of June 27, 2003 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "AGREEMENT"), between BANK OF AMERICA, N.A., a national banking
association, having an address at Bank of America Corporate Center, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (together with its successors
and/or assigns, "LENDER") and XXXXXXX PROPERTIES - 555 W. FIFTH MEZZANINE, LLC,
a Delaware limited liability company, having an address at c/x Xxxxxxx
Properties, Inc., 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("West
FIFTH") and XXXXXXX PROPERTIES - 808 S. OLIVE MEZZANINE, LLC, a Delaware limited
liability company, having an address at c/x Xxxxxxx Properties, Inc., 000 Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("SOUTH OLIVE", and collectively
with West Fifth, together with their respective successors and/or assigns,
"BORROWER").
RECITALS:
Bank of America, N.A., a national banking association, as
mortgage lender ("MORTGAGE LENDER"), has made a loan in the original principal
amount of TWO HUNDRED FIFTY MILLION and No/100 Dollars ($250,000,000.00)
("MORTGAGE LOAN") to Xxxxxxx Properties - 555 W. Fifth, LLC and Xxxxxxx
Properties - 808 S. Olive, LLC (collectively, "MORTGAGE BORROWER") pursuant to a
certain Loan Agreement, dated of even date herewith, between Mortgage Borrower
and Mortgage Lender (as amended, restated, replaced, supplemented or otherwise
modified from time to time, the "MORTGAGE LOAN AGREEMENT"), which Mortgage Loan
is evidenced by a Promissory Note, dated of even date herewith, made by Mortgage
Borrower to Mortgage Lender (as amended, restated, replaced, consolidated or
otherwise modified from time to time, the "MORTGAGE NOTE") and secured by, among
other things, that certain Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated of even date herewith granted by
Mortgage Borrower in favor of Mortgage Lender (as amended, restated, replaced,
supplemented or otherwise modified from time to time, the "MORTGAGE"), pursuant
to which Mortgage Borrower has granted to Mortgage Lender a first priority
mortgage on, among other things, the real property and other collateral as more
fully described in the Mortgage (collectively, the "PROPERTY");
Borrower is the legal and beneficial owner of all of the
membership interests in Mortgage Borrower, consisting of a one hundred percent
(100%) membership interest therein (the "PLEDGED COMPANY INTERESTS");
Borrower has requested Lender to make a loan to it in the
aggregate principal amount of THIRTY MILLION and No/100 Dollars ($30,000,000.00)
("LOAN"); and
As a condition precedent to the obligation of Lender to make
the Loan to Borrower, Borrower has entered into that certain Pledge and Security
Agreement, dated of even date herewith, in favor of Lender (as amended,
restated, replaced, supplemented or otherwise modified from time to time,
"PLEDGE AGREEMENT"), pursuant to which Borrower has granted to Lender a first
priority security interest in the Collateral (as defined in the Pledge
Agreement) as collateral security for the Debt (as defined below);
In consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
"ACCEPTABLE ACCOUNTANT" shall mean a "Big Four" accounting
firm or other independent certified public accountant acceptable to Lender.
"ACCEPTABLE COUNTERPARTY'" shall mean any counterparty to the
Interest Rate Protection Agreement that has, as of the date hereof, and shall
maintain until the expiration of the applicable Interest Rate Protection
Agreement a credit rating of not less than "AA-" from S&P and not less than Aa3
from Moddy's.
"ACT" shall have the meaning set forth in Section 6.1(c)
hereof.
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or of
an Affiliate of such Person.
"AFFILIATED LOANS" shall mean a loan made by Lender to a
parent, subsidiary or such other entity affiliated with Borrower or Borrower
Principal.
"AFFILIATED MANAGER" shall have the meaning set forth in
Section 7.1 hereof.
"ALTERATION THRESHOLD" shall mean $1,000,000.00.
"ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for the Property approved by Lender in accordance
with Section 5.11(a)(iv) hereof for the applicable calendar year or other
period.
"ASSIGNMENTS OF MANAGEMENT AGREEMENT" shall mean,
collectively, that certain Assignment and Subordination of Management Agreement
dated the date hereof among Lender, West Fifth and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, with respect to the Tower Parcel and that certain Assignment and
Subordination of Management Agreement dated the date hereof among Lender, South
Olive and Manager, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time, with respect to the Garage Parcel.
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of the
Property.
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"BASE MANAGEMENT Fee" shall mean a monthly amount equal to
$83,333.
"BORROWER OPERATING AGREEMENT" shall mean, collectively, the
Limited Liability Company Operating Agreement for West Fifth and the Limited
Liability Company Operating Agreement for South Olive.
"BORROWER PRINCIPAL" shall mean Xxxxxxx Properties, L.P., a
Maryland limited partnership.
"BORROWER PRINCIPAL OBLIGATIONS" shall have the meaning set
forth in Section 18.10(c).
"BREAKAGE COSTS" shall have the meaning set forth in Section
2.9(e) hereof.
"BUSINESS DAY shall mean a day on which Lender is open for the
conduct of substantially all of its banking business at its office in the city
in which the Note is payable (excluding Saturdays and Sundays), except that when
used with respect to the determination of LIBOR, "Business Day" shall mean a day
on which commercial banks are open for international business (including
dealings in U.S. Dollar deposits) in London, England.
"CASUALTY" shall have the meaning set forth in Section 8.2
hereof.
"CLOSING DATE" shall mean the date of the funding of the Loan.
"COLLATERAL" shall have the meaning set forth in the Pledge
Agreement.
"COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT"
shall mean that certain Collateral Assignment of Interest Rate Protection
Agreement, dated as of the date hereof, executed by Borrower in connection with
the Loan for the benefit of Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"CONDEMNATION" shall mean a temporary or permanent taking by
any Governmental Authority as the result, in lieu or in anticipation, of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
"CONSEQUENTIAL LOSS" shall have the meaning set forth in
Section 2.1l(d) hereof.
"CONTRACTUAL OBLIGATION" shall mean as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of the foregoing.
"CONTROL" shall have the meaning set forth in Section 7.1
hereof.
"CREDITORS RIGHTS LAWS" shall mean with respect to any Person
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency,
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reorganization, conservatorship, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to its debts
or debtors.
"DEBT" shall mean the outstanding principal amount set forth
in, and evidenced by, this Agreement and the Note together with all interest
accrued and unpaid thereon and all other sums due to Lender in respect of the
Loan under the Note, this Agreement, the Pledge Agreement or any other Loan
Document.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and/or interest payments under the Note.
"DEFAULT" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (a) the maximum rate permitted by applicable
law, or (b) four percent (4%) above the Note Rate.
"DETERMINATION DATE" shall mean (a) with respect to any
Interest Period prior to the Interest Period that commences in the month during
which the Securitization Closing Date occurs, two (2) Business Days prior to the
start of the applicable Interest Period; (b) with respect to the Interest Period
that commences in the month during which the Securitization Closing Date occurs,
the date that is two (2) Business Days prior to the Securitization Closing Date
and (c) with respect to each Interest Period thereafter, the date that is two
(2) Business Days prior to the beginning of such Interest Period.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 13.5 hereof.
"ELIGIBILITY REQUIREMENTS" means, with respect to any Person,
that such Person (i) has total assets (in name or under management) in excess of
$600,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder's equity of $250,000,000 and
(ii) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties.
"EMBARGOED PERSON" shall have the meaning set forth in Section
4.23 hereof.
"ENVIRONMENTAL INDEMNITY" shall mean that certain Mezzanine
Environmental Indemnity Agreement, dated as of the date hereof, executed by
Borrower and Borrower Principal in connection with the Loan for the benefit of
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"ENVIRONMENTAL LAW" shall have the meaning set forth in
Section 12.5 hereof.
"ENVIRONMENTAL LIENS" shall have the meaning set forth in
Section 12.5 hereof.
"ENVIRONMENTAL REPORT" shall have the meaning set forth in
Section 12.5 hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statutes thereto and
applicable regulations issued pursuant thereto in temporary or final form.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
11.1 hereof.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of
1934, as amended.
"FACTORY MUTUAL" shall have the meaning set forth in Section
8.1(b) hereof.
"FITCH" shall mean Fitch, Inc.
"FOREIGN TAXES" shall have the meaning set forth in Section
2.9(b)(i).
"FOURTH ANNIVERSARY" shall mean the Payment Date occurring in
July, 2007.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as of the date of the applicable financial report.
"GARAGE PARCEL" shall mean the parking garage and other
improvements located at 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more
particularly described in the Mortgage.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
department, commission, office or other authority of any nature whatsoever for
any governmental unit (federal, state, county, municipal, city, town, special
district or otherwise) in the United States whether now or hereafter in
existence.
"HAZARDOUS MATERIALS" shall have the meaning set forth in
Section 12.5 hereof.
"IMPROVEMENTS" shall have the meaning set forth in the
granting clause of the Mortgage.
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in
Section 14.1 hereof.
"INDEMNIFIED PARTIES" shall mean (a) Lender, (b) any prior
owner or holder of the Loan or Participations in the Loan, (c) any Investor or
prior Investor of the Loan, (d) any Investor or prior Investor in any
Securities, (e) any trustees, custodians or other fiduciaries who hold or who
have held a full or partial interest in the Loan for the benefit of any Investor
or other third party, (f) any receiver or other fiduciary appointed in a
foreclosure or other Creditors Rights Laws proceeding, (g) any officers,
directors, shareholders, partners, members, employees, agents, representatives,
affiliates or subsidiaries of any and all of the foregoing, and (h) the heirs,
legal representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the Indemnified Parties' assets
and business), in all cases whether during the term of the Loan or as part of or
following a foreclosure of the Mortgage.
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"INDEPENDENT MANAGER" shall have the meaning set forth in
Section 6.4(a) hereof.
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section 8.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in
Section 8.4(b) hereof.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor
Agreement, dated of even date herewith, between Lender and Mortgage Lender.
"INTEREST PERIOD" shall mean (a) with respect to the initial
period for the accrual of interest due under this Agreement, the period from and
including the Closing Date through but excluding the Selected Day first
occurring after the Closing Date, and (b) with respect to the Payment Date
occurring in August, 2003 and each Payment Date thereafter, the period from and
including the Selected Day immediately preceding the applicable Payment Date
through but excluding the Selected Day next occurring after the applicable
Payment Date. Notwithstanding the foregoing clause (b), if Lender so elects at
any time, the "Interest Period" shall be the calendar month preceding each
Payment Date.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, as applicable
(A) an interest rate cap with a maturity date of the Maturity Date entered into
with an Acceptable Counterparty with a notional amount equal to the Loan Amount
for the term of the Loan and a LIBOR strike price not greater than three and one
half percent (3.50%); provided, however, that in the event the rating assigned
by any Rating Agency to the counterparty to any Interest Rate Protection
Agreement is downgraded, such Interest Rate Protection Agreement will be
replaced by an Interest Rate Protection Agreement in the same form and substance
as the Interest Rate Protection Agreement delivered by the Borrower in
connection with the closing of the Loan or in a form otherwise approved by
Lender in its reasonable discretion and shall be obtained from a counterparty
with a credit rating meeting the requirements of an Acceptable Counterparty; and
provided, that, each Interest Rate Protection Agreement shall provide for (i)
the calculation of interest, (ii) the determination of the interest rate, (iii)
the modification of the Interest Period and (iv) the distribution of payments
thereunder to be identical to the definition of Interest Period set forth
herein, and (B) a Replacement Interest Rate Protection Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, as it may be further amended from time to time, and any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.
"INVESTOR" shall have the meaning set forth in Section 13.3
hereof.
"ISSUER GROUP" shall have the meaning set forth in Section
13.5(b) hereof.
"ISSUER PERSON" shall have the meaning set forth in Section
13.5(b) hereof.
"JUNIOR SUBORDINATED MANAGEMENT FEE" shall mean a monthly
amount equal to (a) 3.0% of all Project Income (as defined in the Management
Agreement) for such month, minus (b) the Base Management Fee.
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"LEASE" shall have the meaning set forth in the Mortgage.
"LEGAL REQUIREMENTS" shall mean all statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting Borrower, Borrower Principal, Mortgage
Borrower (or any of their respective Affiliates), the Collateral or the Property
or any part thereof, or the construction, use, alteration or operation thereof,
whether now or hereafter enacted and in force, and all permits, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Borrower or Mortgage Borrower, at any time in force affecting Borrower,
Borrower Principal, Mortgage Borrower (or any of their respective Affiliates),
the Collateral or the Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to the Property or any part thereof, or (b) in any way limit the use and
enjoyment thereof.
"LETTER OF CREDIT" shall mean a clean, irrevocable and
unconditional letter of credit in form and substance acceptable to Lender (a)
that is issued by a commercial bank, the long term unsecured obligations of
which are rated no less than AA- (or the equivalent) by the Rating Agencies, (b)
that is payable upon presentation of sight draft only in New York, New York or
Los Angeles, California to the order of Lender, (c) that has an initial
expiration date of not less than one (1) year from the date of issuance and is
automatically renewable, at least thirty (30) days prior to expiration, for
successive one (1) year periods, (d) that is transferable by Lender without the
consent of the issuing bank and (e) for which neither Borrower nor Mortgage
Borrower have any reimbursement or payment obligations.
"LIBOR" shall mean, with respect to each Interest Period, the
greater of (i) two percent (2%) and (ii) a rate of interest per annum obtained
by dividing
(a) shall mean, with respect to each Interest Period, the
rate for deposits in U.S. Dollars, for a period equal to one month, which
appears on the Telerate Page 3750 as of 11:00 a.m., London time, on the related
Determination Date; provided, however, if more than one rate is specified on
Reuters Screen LIBOR Page, the LIBOR Rate shall be the arithmetic mean of all
rates. Lender shall determine the LIBOR Rate for each Interest Period and the
determination of the LIBOR Rate by Lender shall be binding upon Borrower absent
manifest error, by
(b) a percentage equal to 100% minus the applicable
Reserve Percentage then in effect.
LIBOR may or may not be the lowest rate based upon the market
for U.S. Dollar deposits in the London Interbank Eurodollar Market at which
Lender prices loans on the date which LIBOR is determined by Lender as set forth
above.
"LIBOR LOAN" shall mean the Loan at such time as interest
thereon accrues at the LIBOR Rate.
"LIBOR MARGIN" shall mean 5.50%.
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"LIBOR RATE" shall mean, for any applicable Interest Period, a
rate per annum equal to the sum of (i) LIBOR plus (ii) the LIBOR Margin.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting, Borrower, Mortgage Borrower, the Collateral,
the Property, any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIQUIDATION EVENT" shall have the meaning set forth in
Section 2.5(g)(i).
"LLC AGREEMENT" shall have the meaning set forth in Section
6.1(c).
"LOAN" shall have the meaning set forth in the Recitals.
"LOAN AMOUNT" shall mean the outstanding principal balance of
the Loan.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the Pledge Agreement, the Collateral Assignment of Interest Rate
Protection Agreement, the Intercreditor Agreement, the Subordination of
Management Agreement and any and all other documents, agreements and
certificates executed and/or delivered in connection with the Loan, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
"LOCKOUT PERIOD" shall mean the period commencing on the date
hereof and ending on the date immediately preceding the 37th Payment Date.
"LOCKOUT PREPAYMENT PREMIUM" shall mean an amount equal to
five percent (5%) of the then outstanding principal amount of the Loan.
"LOSSES" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to legal fees and other costs of defense).
"MAJOR DECISIONS" shall mean (i) the sale of all or a
substantial portion of the Property, (ii) the approval of the Annual Budget,
(iii) the execution of any Lease which does not substantially comply with
leasing guidelines then in effect with respect to the Property; (iv) any
material modification of the leasing guidelines then in effect; (v) any material
modification of any Loan Documents requested by Borrower; (vi) any material
modification or refinancing of the Permitted Mezzanine Financing; (vii) any
merger or consolidation of Borrower with any other entity, or the liquidation or
dissolution of Borrower other than in accordance with the terms of the
Borrower's operating agreement; (viii) any proposed settlement or compromise of
any claim, litigation or other legal proceeding by or against Borrower for more
than $1,000,000 (net of insurance coverage); (ix) any petition in bankruptcy or
reorganization or instituting any other type of bankruptcy, reorganization or
insolvency proceeding with respect to Borrower, the
- 8 -
admission in writing by Borrower of its inability to pay its debts generally as
they become due or the making by Borrower of a general assignment for the
benefit of its creditors; (x) except for the Management Agreement, any material
agreement between Borrower and any Affiliate of Borrower and (xi) such other
items similar in scope to the foregoing which (A) are consistent with veto
rights typically held by institutional investors holding majority but
non-managing, non-controlling interests in an entity, but (B) would not
reasonably be deemed to constitute a change in Control with respect to such
entity.
"MAJOR LEASE" shall mean as to the Property (i) any Lease
which, individually or when aggregated with all other leases at the Property
with the same Tenant or its Affiliate, either (A) demises in the aggregate more
than one (1) full occupied floor of the Property, or (B) covers seventy-five
(75) or more parking spaces, (ii) any Lease which contains any option, offer,
right of first refusal or other similar entitlement to acquire all or any
portion of the Property, or (iii) any instrument guaranteeing or providing
credit support for any Lease meeting the requirements of (i) or (ii) above.
"MANAGEMENT AGREEMENT" shall mean the management agreement
entered into by and between West Fifth and Manager with respect to the Tower
Parcel, and the management agreement entered into between South Olive and
Manager with respect to the Garage Parcel, pursuant to which Manager is to
provide management and other services with respect to the Property, together
with the sub-contract entered into between Manager and Xxxxxxx Properties
Services, Inc., as the foregoing documents may be amended, restated, replaced,
supplemented or otherwise modified in accordance with the terms of this
Agreement.
"MANAGER" shall mean Xxxxxxx Properties L.P., a Maryland
limited partnership or such other entity selected as the manager of the Property
in accordance with the terms of this Agreement.
"MATERIAL ADVERSE CHANGE" shall mean any event that is
reasonably likely to cause a material and adverse impact on a party's financial
condition, or the business of the Property, or the Collateral or could be
anticipated to prevent any person from complying with its material obligations
under the Loan Documents to which it is a party.
"MATURITY DATE" shall mean the Payment Date occurring in July,
2008.
"MAXIMUM LEGAL RATE" shall mean the maximum non-usurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws of
such state or states whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.
"MEMBER" shall have the meaning set forth in Section 6.1(c)
hereof.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE BORROWER COMPANY AGREEMENT" shall mean,
collectively, each Limited Liability Company Operating Agreement of the Mortgage
Borrower.
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"MORTGAGE LOAN DEFAULT" shall mean a "Default" under and as
defined in the Mortgage Loan Agreement.
"MORTGAGE LOAN DOCUMENTS" shall mean, collectively, the
Mortgage Loan Agreement, the Mortgage Note, the Mortgage, and any and all other
documents defined as the "Loan Documents" in the Mortgage Loan Agreement, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"MORTGAGE LOAN EVENT OF DEFAULT" shall mean an "Event of
Default" under and as defined in the Mortgage Loan Agreement.
"MORTGAGE RESERVE ACCOUNTS" shall mean the "Reserve Accounts"
as defined in the Mortgage Loan Agreement.
"NET LIQUIDATION PROCEEDS AFTER DEBT SERVICE" with respect to
any Liquidation Event, all amounts paid or payable to or received by or on
behalf of Mortgage Borrower in connection with such Liquidation Event, less
amounts required or permitted to be deducted therefrom pursuant to the Mortgage
Loan Documents and amounts paid pursuant to the Mortgage Loan Documents to
Mortgage Lender, including, without limitation, proceeds of any sale,
refinancing or other disposition or liquidation, the amount of any award or
payment incurred in connection with any condemnation or taking by eminent
domain, and the amount of any insurance proceeds paid in connection with any
casualty loss, as applicable, other than, in the case of a casualty loss or
condemnation award, amounts required or permitted by the terms of the Mortgage
Loan Documents to be applied to the restoration or repair of the Mortgaged
Property, less (i) in the case of a foreclosure sale or transfer of the Property
in connection with realization thereon following an Event of Default under the
Mortgage Loan or other disposition, such reasonable and customary costs and
expenses of sale or other disposition (including attorneys' fees and brokerage
commissions), (ii) in the case of a foreclosure sale, such costs and expenses
incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender
shall be entitled to receive reimbursement for under the terms of the Mortgage
Loan Documents, (iii) in the case of a casualty loss or condemnation, such costs
and expenses of collection (including attorneys' fees) of the related insurance
proceeds or condemnation award as shall be approved by Mortgage Lender pursuant
to the terms of the Mortgage Loan Documents, or if the Mortgage Loan has been
paid in full, by Lender, and (iv) in the case of a refinancing of the Mortgage
Loan or the Property, such costs and expenses (including attorneys' fees) of
such refinancing as shall be reasonably approved by Lender.
"NET PROCEEDS" shall have the meaning set forth in Section
8.4(b) hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 8.4(b)(vi) hereof.
"NOTE" shall mean that certain promissory note of even date
herewith in the original principal amount of $30,000,000.00, made by Borrower in
favor of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"NOTE RATE" shall mean (a) with respect to the initial
Interest Period, an interest rate per annum equal to 7.50%; and (b) with respect
to each Interest Period thereafter, an interest
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rate per annum equal to (i) the LIBOR Rate (in all cases where clause (ii) below
does not apply), or (ii) the Static LIBOR Rate, to the extent provided in
accordance with the provisions of Section 2.9.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized senior officer of Borrower
or an entity authorized to act on behalf of Borrower.
"OTHER CHARGES" shall mean all ground rents, maintenance
charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"OWNER'S TITLE INSURANCE POLICY" shall mean that certain ALTA
owner's title insurance policy issued to Borrower with respect to the Property.
"PARTICIPATIONS" shall have the meaning set forth in Section
13.1 hereof.
"PAYMENT DATE" shall mean the day that is six (6) Business
Days prior to the Selected Day.
"PERMITTED ENCUMBRANCES" shall mean, with respect to the
Property, collectively, (a) the Liens and security interests created by the
Mortgage Loan Documents, (b) all Liens, encumbrances and other matters disclosed
in the Title Insurance Policy (as defined in the Mortgage Loan Agreement), (c)
Liens, if any, for Taxes imposed by any Governmental Authority not yet
delinquent, and (d) such other title and survey exceptions as Lender has
approved or may approve in writing in Lender's sole discretion.
"PERSON" shall mean any individual, corporation, partnership,
joint venture, limited liability company, 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.
"PERSONAL PROPERTY" shall have the meaning set forth in the
granting clause of the Mortgage.
"PHYSICAL CONDITIONS REPORT" shall mean a report regarding the
physical condition of the Property prepared by Certified Environments, Inc. or a
company otherwise satisfactory to Lender, in form and substance satisfactory to
Lender in its sole discretion.
"PLEDGE AGREEMENT" shall have the meaning set forth in the
Recitals.
"PLEDGED COMPANY INTERESTS" shall have the meaning set forth
in the Recitals.
"POLICIES" shall have the meaning set forth in Section 8.1(b)
hereof.
"POLICY" shall have the meaning set forth in Section 8.1(b)
hereof.
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"PROHIBITED TRANSFER" shall have the meaning set forth in
Section 7.2(a) hereof.
"PROVIDED INFORMATION" shall have the meaning set forth in
Section 13.4(a) hereof.
"QUALIFIED INVESTOR" shall mean one or more of the following:
(A) a real estate investment trust, bank, saving and loan
association, investment bank, insurance company, trust company,
commercial credit corporation, pension plan, pension fund or pension
advisory firm, mutual fund, government entity or plan, provided that
any such Person referred to in this clause (A) satisfies the
Eligibility Requirements;
(B) an investment company, money management firm or
"qualified institutional buyer" within the meaning of Rule 144A under
the Securities Act of 1933, as amended, or an institutional "accredited
investor" within the meaning of Regulation D under the Securities Act
of 1933, as amended, provided that any such Person referred to in this
clause (B) satisfies the Eligibility Requirements;
(C) an institution substantially similar to any of the
foregoing entities described in clauses (ii)(A) or (ii)(B) that
satisfies the Eligibility Requirements;
(D) any entity Controlled by any of the entities
described in clause (i) or clauses (ii)(A) or (ii)(C) above.
For purposes of this definition of Qualified Investor,
"Control" means the ownership, directly or indirectly, in the aggregate of more
than fifty percent (50%) of the beneficial ownership interests of an entity and
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise. "Controlled by,"
"controlling" and "under common control with" shall have the respective
correlative meaning thereto.
"QUALIFIED MANAGER" shall mean Manager or a reputable and
experienced professional management organization (a) which manages, together
with its affiliates, at least five (5) first class office buildings totaling at
least 2,500,000 square feet of gross leasable area, exclusive of the Property
and (b) approved by Lender, which approval shall not have been unreasonably
withheld and for which Mortgage Lender and Lender shall have received a Rating
Confirmation.
"RATING AGENCY" shall mean each of S&P, Xxxxx'x and Fitch, or
any other nationally-recognized statistical rating agency which has been
approved by Lender.
"RATING CONFIRMATION" with respect to the transaction or
matter in question, shall mean: (i) if all or any portion of the Mortgage Loan
or the Loan, by itself or together with other loans, has been the subject of a
Securitization, then each applicable Rating Agency shall have confirmed in
writing that such transaction or matter shall not result in a downgrade,
qualification, or withdrawal of any rating then in effect for any class of
certificates or other securities issued in connection with such Securitization;
and (ii) if the Mortgage Loan and the
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Loan or any portion thereof has not been the subject of a Securitization, (a)
the applicable Rating Agency shall have confirmed in writing that such
transaction or matter shall not result in a downgrade, qualification, or
withdrawal of any shadow rating or other rating provided to the Loan or any
portion thereof not the subject of a Securitization, and (b) Lender shall have
determined in its reasonable discretion (taking into consideration such factors
as Lender may determine, including the attributes of the loan pool in which the
Loan might reasonably be expected to be securitized) that no rating for any
certificate or other securities that would be issued in connection with
Securitization of such portion of the Mortgage Loan or the Loan would be
downgraded, qualified, or withheld by reason of such transaction or matter.
"REA" shall mean that certain Reciprocal Easement Agreement
dated as of June 1, 1989, recorded April 5, 1990 as Instrument No. 90-655583
Official Records executed by Pacific Xxxx, American Telephone and Telegraph and
Xxxxxxx Xxxxxx Partners-Fifth & Grand, Ltd. (predecessor to Borrower) and that
certain Parking Easement Agreement dated December 13, 2000, a memorandum of
which was recorded December 27, 2000 as Instrument No. 00-2009212 Official
Records executed by Xxxxxxx Xxxxxx Partners-Xxxxxxx Development Company and
Xxxxxxx Xxxxxx Partners-Fifth & Grand, Ltd.
"RELEASE" shall have the meaning set forth in Section 12.5
hereof.
"RENEWAL LEASE" shall have the meaning set forth in Section
5.13 hereof.
"RENT ROLL" shall have the meaning set forth in the Mortgage
Loan Documents.
"RENTS" shall have the meaning set forth in the Mortgage.
"REP & WARRANTY BREACH" shall have the meaning set forth in
Section 1l.l(e).
"REPLACEMENT INTEREST RATE PROTECTION AGREEMENT" shall mean an
interest rate cap from an Acceptable Counterparty with terms identical to the
Interest Rate Protection Agreement.
"RESERVE PERCENTAGE" shall mean, with respect to any day of
any Interest Period, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor), for determining the maximum reserve requirement
(including basic, supplemental, emergency, special and marginal reserves)
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Lender in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on the Loan is determined),
whether or not Lender has any Eurocurrency liabilities or such requirement
otherwise in fact applies to Lender. The LIBOR Rate shall be adjusted
automatically as of the effective date of each change in the Reserve Percentage.
As of the date hereof, the Reserve Percentage is zero, however, there can be no
assurance as to what such amount may be in the future.
"RESTORATION" shall mean, following the occurrence of a
Casualty or a Condemnation which is of a type necessitating the repair of the
Property, the completion of the repair and restoration of the Property as nearly
as possible to the condition the Property was in
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immediately prior to such Casualty or Condemnation, with such alterations as may
be reasonably approved by Lender.
"RESTORATION CONSULTANT" shall have the meaning set forth in
Section 8.4(b)(iii) hereof.
"RESTORATION RETAINAGE" shall have the meaning set forth in
Section 8.4(b)(iv) hereof.
"RESTRICTED PARTY" shall have the meaning set forth in Section
7.1 hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies, Inc.
"SALE OR PLEDGE" shall have the meaning set forth in Section
7.1 hereof.
"SECURITIES" shall have the meaning set forth in Section 13.1
hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITIES LIABILITIES" shall have the meaning set forth in
Section 13.5(b) hereof.
"SECURITIZATION" shall have the meaning set forth in Section
13.1 hereof.
"SECURITIZATION CLOSING DATE" shall mean a date selected by
Lender in its sole discretion by providing not less than twenty-four (24) hours
prior notice to Borrower.
"SELECTED DAY" means the fifteenth (15th) day of each calendar
month or if such day is not a Business Day, the immediately succeeding Business
Day, or such other date as determined by Lender pursuant to Section 2.3(g)
hereof.
"SERVICER" shall have the meaning set forth in Section 13.2
hereof.
"SPECIAL MEMBER" shall have the meaning set forth in Section
6.1(c) hereof.
"SPONSOR" shall mean Xxxxxxx Properties, Inc.
"STATE" shall mean, with respect to the Property, the State or
Commonwealth in which the Property or any part thereof is located.
"STATIC LIBQR RATE" shall have the meaning set forth in
Section 2.9 hereof.
"STATIC LIBOR RATE LOAN" shall have the meaning set forth in
Section 2.9(c) hereof.
"SUBORDINATION OF MANAGEMENT AGREEMENT" shall mean that
certain Subordination of Management Agreement dated the date hereof among
Lender, Borrower and
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Manager, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"SUBSIDIARY" shall mean any corporation, partnership, limited
liability company or other entity in which a Person holds an equity interest
which is more than ten (10%) of the equity classes issued by such entity.
"SYNDICATION" shall have the meaning set forth in Section 13.1
hereof.
"TAXES" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents, now or hereafter levied or
assessed or imposed against the Property (or any part thereof) or the Collateral
(or any part thereof).
"TENANT" shall mean any Person leasing, subleasing or
otherwise occupying any portion of the Property under a Lease or other occupancy
agreement with Mortgage Borrower (including, without limitation, any Major
Lease).
"TOWER PARCEL" shall mean Gas Company Tower, located at 000
Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly described in
the Mortgage.
"TRIBUNAL" shall mean any state, commonwealth, federal,
foreign, territorial or other court or governmental department, commission,
board, bureau, district, authority, agency, central bank, or instrumentality or
any arbitration authority.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect in the State of Delaware.
"UCC-9 TITLE POLICY" shall mean that certain UCC-9 title
policy issued with respect to the Collateral and insuring the lien of the Pledge
Agreement encumbering such Collateral.
"UNDERWRITER GROUP" shall have the meaning set forth in
Section 13.5(b) hereof.
Section 1.2. PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. All uses of the
word "including" shall mean "including, without limitation" unless the context
shall indicate otherwise. Unless otherwise specified, the words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
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ARTICLE II
GENERAL TERMS
Section 2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
(a) Subject to and upon the terms and conditions set
forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept
the Loan on the Closing Date.
(b) Borrower may request and receive only one borrowing
in respect of the Loan and any amount borrowed and repaid in respect of the Loan
may not be re-borrowed.
(c) The Loan shall be evidenced by the Note and secured
by the Pledge Agreement and the other Loan Documents.
(d) Borrower shall use the proceeds of the Loan to (i)
make an equity contribution to the Mortgage Borrower in order to cause the
Mortgage Borrower to use such amounts for any use permitted pursuant to Section
2.1(d) of the Mortgage Loan Agreement, (ii) pay costs and expenses incurred in
connection with the closing of the Loan, as approved by Lender and (iii)
distribute the balance, if any, to its members.
Section 2.2. INTEREST RATE PROTECTION AGREEMENT.
(a) Prior to or contemporaneously with the Closing Date,
Borrower shall have obtained the Interest Rate Protection Agreement, which shall
be coterminous with, or extend beyond, the initial term of the Loan and have a
notional amount which shall not at any time be less than the outstanding
principal balance of the Loan. The Interest Rate Protection Agreement shall be
maintained throughout the term of the Loan with an Acceptable Counterparty. If
the provider of the Interest Rate Protection Agreement ceases to be an
Acceptable Counterparty, Borrower shall obtain a Replacement Interest Rate
Protection Agreement from an Acceptable Counterparty within ten (10) Business
Days of receipt of notice from Lender or Borrower's obtaining knowledge that the
then-current counterparty under the Interest Rate Protection Agreement is no
longer an Acceptable Counterparty; provided, however, in the event that the
Interest Rate Protection Agreement counterparty is Bank of America, N.A., the
provisions of this sentence shall not apply.
(b) Borrower shall collaterally assign to Lender pursuant
to the Collateral Assignment of Interest Rate Protection Agreement all of its
right, title and interest to receive any and all payments under the Interest
Rate Protection Agreement (and any related guarantee, if any) and shall deliver
to Lender counterparts of such Collateral Assignment of Interest Rate Protection
Agreement executed by the Borrower and by the Acceptable Counterparty and notify
the Acceptable Counterparty of such collateral assignment (either in such
Interest Rate Protection Agreement or by separate instrument). At such time as
the Loan is repaid in full, all of Lender's right, title and interest in the
Interest Rate Protection Agreement shall terminate and Lender shall execute and
deliver at Borrower's sole cost and expense, such documents as may be required
to evidence Lender's release of the Interest Rate Protection Agreement and to
notify the Acceptable Counterparty of such release.
- 16 -
(c) Borrower shall comply with all of its obligations
under the terms and provisions of the Interest Rate Protection Agreement. All
amounts paid by the Acceptable Counterparty under the Interest Rate Protection
Agreement to Borrower or Lender shall be deposited immediately with Lender.
Borrower shall take all actions reasonably requested by Lender to enforce
Lender's rights under the Interest Rate Protection Agreement in the event of a
default by the Acceptable Counterparty and shall not waive, amend or otherwise
modify any of its rights thereunder.
(d) In the event that Borrower fails to purchase,
maintain and / or deliver to Lender the Interest Rate Protection Agreement in
accordance with the terms and provisions of this Agreement, Lender may purchase
the Interest Rate Protection Agreement and the cost incurred by Lender in
purchasing the Interest Rate Protection Agreement shall be paid by Borrower to
Lender with interest thereon at the Default Rate from the date such cost was
incurred by Lender until such cost is reimbursed by Borrower to Lender.
(e) In connection with the Interest Rate Protection
Agreement and any Replacement Interest Rate Protection Agreement, Borrower shall
obtain and deliver to Lender an opinion from counsel (which counsel may be
in-house counsel for the Acceptable Counterparty) for the Acceptable
Counterparty (upon which Lender and its successors and assigns may rely) which
shall provide, in relevant part, that:
(i) the Acceptable Counterparty is duly organized,
validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has the organizational power and
authority to execute and deliver, and to perform its obligations under,
the Interest Rate Protection Agreement;
(ii) the execution and delivery of the Interest Rate
Protection Agreement by the Acceptable Counterparty, and any other
agreement which the Acceptable Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder
have been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws
(or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required
for the execution and delivery by the Acceptable Counterparty of the
Interest Rate Protection Agreement, and any other agreement which the
Acceptable Counterparty has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained
and remain in full force and effect, all conditions thereof have been
duly complied with, and no other action by, and no notice to or filing
with any governmental authority or regulatory body is required for such
execution, delivery or performance; and
(iv) the Interest Rate Protection Agreement, and any other
agreement which the Acceptable Counterparty has executed and delivered
pursuant thereto, has been duly executed and delivered by the
Acceptable Counterparty and constitutes the legal, valid and binding
obligation of the Acceptable Counterparty, enforceable against the
Acceptable Counterparty in accordance with its terms, subject to
applicable bankruptcy,
- 17 -
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
Section 2.3. LOAN PAYMENTS
(a) The Loan shall bear interest at a rate per annum
equal to the LIBOR Rate or the Static LIBOR Rate, as applicable (the "NOTE
RATE"). Interest shall be computed based on the daily rate produced assuming a
three hundred sixty (360) day year, multiplied by the actual number of days
elapsed. Except as otherwise set forth in this Agreement, interest shall be paid
in arrears.
(b) Borrower hereby agrees to pay sums due under the Note
as follows: An initial payment of $125,000.00 is due on July 9, 2003 for
interest from the date on which the Loan is funded by Lender into escrow through
and including July 14, 2003. Thereafter, except as may be adjusted in accordance
with Section 2.3(c), consecutive monthly installments of interest calculated at
the applicable Note Rate for the applicable Interest Period shall be payable
pursuant to the terms of Section 2.3(d) (the "MONTHLY PAYMENT AMOUNT") on each
Payment Date. Borrower shall pay to Lender on the Maturity Date the outstanding
principal balance, all accrued and unpaid interest and all other amounts due
hereunder and under the Note, the Mortgage and other Loan Documents. The accrued
and unpaid interest due on the Maturity Date shall be calculated for the full
final Interest Period, notwithstanding that such Interest Period may extend
beyond the Maturity Date.
(c) All interest shall be computed on the basis of a
three hundred sixty (360) day year and paid for the actual number of days
elapsed in an Interest Period (including the first day but excluding the last
day of an Interest Period). Lender shall determine the Note Rate applicable to
the Debt in accordance with this Agreement and its determination thereof shall
be conclusive in the absence of manifest error. The books and records of Lender
shall be prima facie evidence of all sums owing to Lender from time to time
under this Agreement, but the failure to record any such information shall not
limit or affect the obligations of Borrower under the Loan Documents.
(d) Each payment by Borrower hereunder or under the Note
shall be payable at X.X. Xxx 000000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, Attn:
Commercial Mortgage Loan Servicing #1777, or at such other place as the Lender
may designate from time to time in writing, on the date such payment is due, to
Lender by deposit to such account as Lender may designate by written notice to
Borrower. Each payment by Borrower hereunder or under the Note shall be made in
funds settled through the New York Clearing House Interbank Payments System or
other funds immediately available to Lender by 2:00 p.m., New York City time, on
the date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any payment hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the first Business Day preceding such scheduled due
date.
(e) Prior to the occurrence of an Event of Default, all
monthly payments made as scheduled under this Agreement and the Note shall be
applied to the payment of interest
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computed at the Note Rate. All voluntary and involuntary prepayments on the Note
shall be applied, to the extent thereof, to accrued but unpaid interest on the
amount prepaid, to the remaining principal amount, and any other sums due and
unpaid to Lender in connection with the Loan, in such manner and order as Lender
may elect in its sole and absolute discretion. Following the occurrence of an
Event of Default, any payment made on the Note shall be applied to accrued but
unpaid interest, late charges, accrued fees, the unpaid principal amount of the
Note, and any other sums due and unpaid to Lender in connection with the Loan,
in such manner and order as Lender may elect in its sole and absolute
discretion.
(f) All payments made by Borrower hereunder or under the
Note or the other Loan Documents shall be made irrespective of, and without any
deduction for, any setoff, defense or counterclaims.
(g) Borrower acknowledges that in connection with a
Securitization of the Loan and/or the Mortgage Loan, Lender may in its sole
discretion change the day of the month that constitutes the Selected Day.
Section 2.4. LATE PAYMENT CHARGE
Except for the payment due on the Maturity Date, if any
principal or interest payment is not paid by Borrower on or before the date on
which same is due, Borrower shall pay to Lender upon demand an amount equal to
the lesser of four percent (4%) of such unpaid sum or the maximum amount
permitted by applicable law in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment. Any such amount shall be secured by
the Mortgage and the other Loan Documents to the extent permitted by applicable
law.
Section 2.5. PREPAYMENT
Except as otherwise expressly permitted by this Section 2.5 no
voluntary prepayments, whether in whole or in part, of the Loan or any other
amount at any time due and owing under the Note can be made by Borrower or any
other Person without the express written consent of Lender.
(a) Lockout Period. Borrower has no right to make, and
Lender shall have no obligation to accept, any voluntary prepayment, whether in
whole or in part, of the Loan during the Lockout Period. Notwithstanding the
foregoing, if either (i) Lender, in its sole and absolute discretion, accepts a
full or partial voluntary prepayment during the Lockout Period or (ii) there is
an involuntary prepayment during the Lockout Period, then, in either case,
Borrower shall, in addition to any portion of the Loan prepaid (together with
all interest accrued and unpaid thereon), pay to Lender a prepayment premium in
an amount calculated in accordance with Section 2.5(c) hereof.
(b) Intentionally omitted.
(c) Involuntary Prepayment During the Lockout Period. If,
during the Lockout Period, payment of all or any part of the Debt is tendered by
Borrower or otherwise recovered by Lender in the exercise of its remedies under
the Loan Documents, such tender or
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recovery shall be (i) made on the next occurring Payment Date together with the
Monthly Payment Amount and (ii) deemed a voluntary prepayment by Borrower in
violation of the prohibition against prepayment set forth in this Section 2.5
and Borrower shall pay, in addition to the Debt, (x) an amount equal to the
Lockout Yield Maintenance Premium and (y) the accrued and unpaid interest
calculated for the full Interest Period in which such voluntary prepayment
occurs.
(d) Insurance and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay any prepayment
premium in connection with any prepayment occurring solely as a result of (i)
the application of Insurance Proceeds or Condemnation Proceeds pursuant to the
terms of the Loan Documents, or (ii) the application of any interest in excess
of the maximum rate permitted by applicable law to the reduction of the Loan.
(e) After the Lockout Period. Commencing on the day after
the expiration of the Lockout Period, and upon giving Lender at least sixty (60)
days (but not more than ninety (90) days) prior written notice, Borrower may
voluntarily prepay (without premium) the Note in whole (but not in part) on a
Payment Date. Lender shall accept a prepayment pursuant to this Section 2.5(e)
on a day other than a Payment Date provided that, in addition to payment of the
full outstanding principal balance of the Note, Borrower pays to Lender a sum
equal to the amount of interest which would have accrued on the Note if such
prepayment occurred on the next Payment Date.
(f) Limitation on Partial Prepayments. In no event shall
Lender have any obligation to accept a partial prepayment.
(g) Liquidation Events.
(i) In the event of (A) any Casualty to the Property or
any material portion thereof, (B) any Condemnation of the Property or
any material portion thereof, (C) any transfer of the Property in
connection with a realization thereon following a Mortgage Event of
Default, including, without limitation, a foreclosure sale, or (D) any
refinancing of the Property or the Mortgage Loan (each, a "LIQUIDATION
EVENT"), Borrower shall cause the related Net Liquidation Proceeds
After Debt Service to be deposited directly into the Mezzanine Debt
Service Account. On each date on which Lender actually receives a
distribution of Net Liquidation Proceeds After Debt Service, Borrower
shall prepay the outstanding principal balance of the Note in an amount
equal to one hundred percent (100%) of such Net Liquidation Proceeds
After Debt Service, together with interest which would have accrued on
such amount through the next Payment Date. Any amounts of Net
Liquidation Proceeds After Debt Service in excess of the Debt shall be
paid to Borrower. Any prepayment received by Lender pursuant to this
Section 2.5(g)(i) on a date other than a Payment Date shall be held by
Lender as collateral security for the Loan in an interest bearing
account, with such interest accruing to the benefit of Borrower, and
shall be applied by Lender on the next Payment Date.
(ii) Borrower shall notify Lender of any Liquidation Event
no later than one (1) Business Day following the first date on which Borrower
has knowledge of such
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event. Borrower shall be deemed to have knowledge of (i) a sale (other than a
foreclosure sale) of the Property on the date on which a contract of sale for
such sale is entered into, and a foreclosure sale, on the date notice of such
foreclosure sale is given, and (ii) a refinancing of the Property, on the date
on which a commitment for such refinancing has been entered into. The provisions
of this Section 2.5(g)(ii) shall not be construed to contravene in any manner
the restrictions and other provisions regarding refinancing of the Mortgage Loan
or the Sale or Pledge of the Property set forth in this Agreement and the other
Loan Documents.
(h) Prepayment of Mortgage Loan/Mortgage Borrower's
Failure to Extend Mortgage Loan. Except as provided in Section 5.32 hereof, in
the event that (i) the Mortgage Loan is paid in full at any time prior to the
then Maturity Date of the Loan or (ii) the Mortgage Borrower does not exercise
its right to extend the Mortgage Loan pursuant to Section 2.10 of the Mortgage
Loan Agreement, the Debt shall then be immediately due and payable regardless of
the Maturity Date of the Loan.
Section 2.6. PAYMENTS AFTER DEFAULT
Upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding principal balance of the Loan and, to the
extent permitted by law, overdue interest and other amounts due in respect of
the Loan, (a) shall accrue at the Default Rate, and (b) Lender shall be entitled
to receive and Borrower shall pay or cause to be paid to Lender all cash flow
from the Property in accordance with the terms of Article 10 of the Mortgage
Loan Agreement, such amount to be applied by Lender to the payment of the Debt
in such order as Lender shall determine in its sole discretion, including,
without limitation, alternating applications thereof between interest and
principal. Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the earlier of (i) the actual receipt and collection
of the Debt (or that portion thereof that is then due) and (ii) the cure of such
Event of Default. To the extent permitted by applicable law, interest at the
Default Rate shall be added to the Debt, shall itself accrue interest at the
same rate as the Loan and shall be secured by the Pledge Agreement. This
paragraph shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default; the
acceptance of any payment from Borrower shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Agreement to accelerate and to continue to demand payment of the Debt upon
the happening of and during the continuance any Event of Default, despite any
payment by Borrower to Lender.
Section 2.7. INTENTIONALLY DELETED
Section 2.8. USURY SAVINGS
This Agreement and the Note are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the Note Rate or the Default Rate, as
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the case may be, shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the
Loan for so long as the Loan is outstanding.
Section 2.9. UNAVAILABILITY OF RATE; FOREIGN TAXES; INCREASED
COSTS. In the event that Lender shall have determined in its reasonable
discretion that none of the methods set forth in the definition of "LIBOR"
herein are available, then Lender shall forthwith give notice by telephone of
such determination, confirmed in writing, to Borrower at least one (1) day prior
to the last day of the related Interest Period. If such notice is given, the
Note Rate, commencing with such related Interest Period shall be the LIBOR Rate
in effect for the most recent Interest Period (the "STATIC LIBOR RATE").
(a) If, pursuant to the terms of this Agreement, the Loan
has been converted to the Static LIBOR Rate and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
the Loan will be converted from the Static LIBOR Rate to the LIBOR Rate
effective on the first day of the next succeeding Interest Period.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to elect to convert from the LIBOR Rate to the
Static LIBOR Rate.
(b) (i) All payments made by Borrower hereunder shall be
made free and clear of, and without reduction for or on account of, income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions,
reserves or withholdings imposed, levied, collected, withheld or assessed by any
Governmental Authorities, which are imposed, enacted or become effective on or
after the Closing Date (such non-excluded taxes being referred to collectively
as "FOREIGN TAXES"), excluding income and franchise taxes of the United States
of America or any political subdivision or taxing authority thereof or therein.
If any Foreign Taxes are required to be withheld from any amounts payable to
Lender hereunder and such Foreign Taxes are not a result of activities of Lender
unrelated to the Loan or Borrower, the amounts so payable to Lender shall be
increased to the extent necessary to yield to Lender (after payment of all
Foreign Taxes) interest or any such other amounts payable hereunder at the rate
or in the amounts specified hereunder. Whenever any Foreign Taxes are payable
pursuant to applicable law by Borrower, as promptly as possible thereafter,
Borrower shall send to Lender an original official receipt, if available, or
certified copy thereof showing payment of such Foreign Taxes. Borrower hereby
indemnifies Lender for any incremental taxes, interest or penalties that may
become payable by Lender which may result from any failure by Borrower to pay
any such Foreign Taxes when due to the appropriate taxing authority of which
Lender shall have provided Borrower with prior written notice, if possible, or
any failure by Borrower to remit to Lender the required receipts or other
required documentary evidence. Lender's inability to notify Borrower of any such
Foreign Taxes in accordance with the immediately preceding sentence shall in no
way relieve Borrower of its obligations under this Section 2.9(b). (ii) A Lender
that is entitled to
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an exemption from or reduction of any Foreign Taxes, with respect to payments
under this Agreement shall deliver to the Borrower, at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
In addition, at Borrower's request, Lender shall provide to Borrower its
understanding as to whether any Foreign Taxes will be applicable to any
forthcoming payments due under the Loan Documents. Lender shall not be entitled
to claim compensation pursuant to this Section 2.9(b) for any Foreign Taxes to
the extent that such Foreign Taxes result from a failure to comply with the
requirements of this paragraph. (iii) If Lender determines in good faith that a
reasonable basis exists for contesting any Foreign Taxes for which
indemnification has been demanded hereunder, Lender shall cooperate with
Borrower in challenging such Taxes at Borrower's expense if so requested by
Borrower. If Lender receives a refund of Foreign Taxes for which a payment has
been made by Borrower pursuant to this Agreement, which refund in the good faith
judgment of Lender is attributable to such payment made by Borrower, then Lender
shall reimburse Borrower for such amount (together with any interest received
thereon) as Lender determines to be the proportion of the refund as will leave
it, after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. (iv) If the Borrower is required
to pay additional amounts to or for the account of any Lender pursuant to this
Section 2.9(b) as a result of a change in law or treaty occurring after such
Lender first became a party to this Agreement, then such Lender will, at the
request of the Borrower, change the jurisdiction of its applicable lending
office if such change (x) will eliminate or reduce any such additional payment
which may thereafter accrue and (y) is, in such Lender's sole, reasonable
discretion, determined not to be materially disadvantageous or cause
unreasonable hardship to such Lender, provided that fees, charges, costs or
expenses that are related to such change shall be borne by the Borrower on
behalf of a Lender, and the mere existence of such expenses, fees or costs shall
not be deemed to be materially disadvantageous or cause undue hardship to the
Lender. Lender agrees that it will (A) take all reasonable actions reasonably
requested by the Borrower in writing that are without material risk and cost to
Lender and consistent with the internal policies of such Lender and applicable
legal and regulatory restrictions (as the case may be) to maintain all
exemptions, if any, available to it from withholding taxes (whether available by
treaty or existing administrative waiver) and (B) to the extent reasonable and
without material risk and cost to it, otherwise cooperate with the Borrower to
minimize any amounts payable by the Borrower under this Section 2.9(b);
provided, however, that in each case, any cost relating to such action or
cooperation requested by the Borrower shall be borne by the Borrower.
(c) If any requirement of law or any change therein or in
the interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a Loan with the Note Rate being based on LIBOR as
contemplated hereunder, (i) the obligation of Lender hereunder to make or
continue the Loan based on LIBOR or to convert the Loan from the Static LIBOR
Rate to the LIBOR Rate shall be canceled forthwith and (ii) any outstanding
LIBOR Loan shall be converted automatically to a loan bearing interest at the
Static LIBOR Rate (the "STATIC LIBOR RATE LOAN") on the next succeeding Payment
Date or within such earlier period as required by law. Borrower hereby agrees
promptly to pay Lender, upon demand, any additional amounts necessary to
compensate Lender for any costs incurred by Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Lender to lenders of funds obtained by it in order to make or
maintain the
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LIBOR Loan hereunder. If Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.9(c), Lender shall provide Borrower with not less
than ninety (90) days written notice specifying in reasonable detail the event
by reason of which it has become so entitled and the additional amount required
to fully compensate Lender for such additional costs. Lender's notice of such
costs, as certified to Borrower, shall be conclusive absent manifest error.
(d) In the event that any change in any requirement of
law or in the interpretation or application thereof, or compliance by Lender
with any request or directive (whether or not having the force of law) hereafter
issued from any central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder;
(ii) shall hereafter have the effect of reducing the rate
of return on Lender's capital as a consequence of its obligations
hereunder to a level below that which Lender could have achieved but
for such adoption, change or compliance (taking into consideration
Lender's policies with respect to capital adequacy) by any amount
deemed by Lender to be material; or
(iii) shall hereafter impose on Lender any other condition
and the result of any of the foregoing is to increase the cost to
Lender of making, renewing or maintaining loans or extensions of credit
or to reduce any amount receivable hereunder other than with respect to
taxes; then, in any such case, Borrower shall promptly pay Lender, upon
demand, any additional amounts necessary to compensate Lender for such
additional cost or reduced amount receivable which Lender deems to be
material as determined by Lender. If Lender becomes entitled to claim
any additional amounts pursuant to this Section 2.9(d), Lender shall
provide Borrower with not less than ninety (90) days written notice
specifying in reasonable detail the event by reason of which it has
become so entitled and the additional amount required to fully
compensate Lender for such additional cost or reduced amount. A
certificate (together with such supporting documentation as Lender
shall provide) as to any additional costs or amounts payable pursuant
to the foregoing sentence submitted by Lender to Borrower shall be
conclusive in the absence of error. This provision shall survive
payment of the Note and the satisfaction of all other obligations of
Borrower under this Agreement and the Loan Documents.
(e) Borrower agrees to indemnify Lender and to hold
Lender harmless from any loss or expense which Lender sustains or incurs as a
consequence of (i) any default by Borrower in payment of the principal of or
interest on a LIBOR Loan, including, without limitation, any such loss or
expense arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain a LIBOR Loan hereunder, (ii) any prepayment
(whether voluntary or mandatory) of the LIBOR Loan that did not include all
interest which had accrued (or would have accrued) at the Note Rate through the
end of the related Interest Period,
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including, without limitation, such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the LIBOR Loan hereunder, and (iii) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of the Note Rate from the LIBOR Rate to the
Static LIBOR Rate with respect to any portion of the outstanding principal
amount of the Loan then bearing interest at the LIBOR Rate on a date other than
the Payment Date immediately following the last day of an Interest Period,
including, without limitation, such loss or expenses arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder (the amounts referred to in clauses (i), (ii) and (iii) are
herein referred to collectively as the "BREAKAGE COSTS"); provided, however,
Borrower shall not indemnify Lender from any loss or expense arising from
Lender's gross negligence or willful misconduct. This provision shall survive
payment of the Note in full and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.
Lender shall not be entitled to claim compensation pursuant to
this Section 2.9(e) for any Foreign Taxes, increased cost or reduction in
amounts received or receivable hereunder, or any reduced rate of return, which
was incurred or which accrued more than ninety (90) days before the date Lender
notified Borrower of the change in law or other circumstance on which such claim
of compensation is based and delivered to Borrower a written statement setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section 2.9(e), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
Section 2.10. EXTENSION.
In the event that Mortgage Borrower for any reason does not
extend the Maturity Date of the Mortgage Loan pursuant to Section 2.10 of the
Mortgage Loan Agreement, Borrower shall prepay the Loan (without payment of any
prepayment fee or penalty) on the Fourth Anniversary, as if such date were the
Maturity Date.
Section 2.11. ADDITIONAL PAYMENT PROVISIONS.
(a) Within fifteen (15) days after request by Lender (or
at the time of any prepayment), Borrower shall pay to Lender such amount or
amounts as will compensate Lender for any loss, cost, expense, penalty, claim or
liability, including any loss incurred in obtaining, prepaying, liquidating or
employing deposits or other funds from third parties and any loss of yield, as
determined by Lender in its judgment reasonably exercised incurred by it with
respect to the Loan as a result of the payment or prepayment of any amount on a
date other than the date such amount is required or permitted to be paid or
prepaid; provided that Lender delivers to Borrower a certificate as to the
amounts of such costs described herein, which certificate shall be conclusive in
the absence of manifest error. Lender shall have no obligation to purchase, sell
and/or match funds in connection with the funding or maintaining of the Loan or
any portion thereof. The obligations of Borrower under this Section shall
survive any termination of the Loan Documents and payment of the Note and shall
not be waived by any delay by Lender in seeking such compensation.
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(b) All payments made by Borrower hereunder or under the
other Loan Documents shall be made irrespective of, and without any deduction
for, any setoff, defense or counterclaims.
(c) Remittances in payment of any part of the Loan in
less than the required amount in immediately available U.S. funds shall not,
regardless of any receipt or credit issued therefor, constitute payment until
the required amount is actually received by the holder hereof in immediately
available U.S. funds and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practices of the collecting bank or banks.
(d) If at any time after the date hereof, Lender (which
shall include, for purposes of this Section, any corporation controlling Lender)
reasonably determines that due to the adoption or modification of any Legal
Requirement regarding taxation, Lender's required levels of reserves, deposits,
Federal Deposit Insurance Corporation insurance or capital (including any
allocation of capital requirements or conditions), or similar requirements, or
any interpretation or administration thereof by any Tribunal or compliance of
Lender with any of such requirements, has or would have the effect of (a)
increasing Lender's costs relating to the Loan, or (b) reducing the yield or
rate of return of Lender on the Loan, to a level below that which Lender could
have achieved but for the adoption or modification of any such Legal
Requirements, Borrower shall, within fifteen (15) days of any request by Lender,
pay to Lender such additional amounts as (in Lender's sole judgment, after good
faith and reasonable computation) will compensate Lender for such increase in
costs or reduction in yield or rate of return of Lender (a "CONSEQUENTIAL
LOSS"). No failure by Lender to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of Lender's right to demand
payment of such amounts at any subsequent time. Nothing herein contained shall
be construed or so operate as to require Borrower to pay any interest, fees,
costs or charges greater than is permitted by applicable Law. If a change in the
applicable lending office of Lender would eliminate any Consequential Loss,
Lender shall use its best efforts to change such office, so long as such change
would not be materially disadvantageous or cause unreasonable hardship to
Lender.
(e) Any demand for payment pursuant to this Section 2.11
shall be accompanied by an acknowledgement from Lender that it is applying these
provisions generally with respect to similar loan transactions and borrowers.
ARTICLE III
CONDITIONS PRECEDENT
The obligation of Lender to make the Loan hereunder is subject
to the fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date
Section 3.1. REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
CONDITIONS. The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with
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the same effect as if made on and as of such date, and Lender shall have
determined that no Default or an Event of Default shall have occurred and be
continuing nor will any Default or Event of Default occur immediately following
the Closing Date and Borrower shall be in compliance in all material respects
with all terms and conditions set forth in this Agreement and in each other Loan
Document on its part to be observed or performed.
Section 3.2. DELIVERY OF LOAN DOCUMENTS: TITLE POLICIES.
(a) Pledge Agreement. Loan Agreement and Note. Lender
shall have received from Borrower fully executed and acknowledged counterparts
of the Pledge Agreement and evidence that the Uniform Commercial Code financing
statements have been delivered to the title company for recording and/or filing,
in the reasonable judgment of Lender, so as to effectively create upon such
recording and/or filing valid and enforceable Liens upon the Collateral, of
first priority, in favor of Lender (or such other trustee as may be required or
desired under local law). Lender shall have also received from Borrower fully
executed counterparts of this Agreement, the Note, the Collateral Assignment of
Interest Rate Protection Agreement and all other Loan Documents.
(b) Owner's Title Policy; UCC-9 Title Policy.
(i) Lender shall have received an Owner's Title
Insurance Policy issued by a title company acceptable to Lender and dated as of
the Closing Date. Such Title Insurance Policy shall (i) provide such coverage as
may be reasonably acceptable to Lender, free and clear of all exceptions from
coverage other than Permitted Encumbrances and standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements), (ii)
contain such endorsements and affirmative coverages as Lender may reasonably
request (including, without limitation, the mezzanine financing endorsement),
and (iii) name Mortgage Borrower as the insured. The Owner's Title Insurance
Policy shall be assignable. Lender also shall have received evidence that all
premiums in respect of such Owner's Title Insurance Policy have been paid.
(ii) Lender shall have received a UCC-9 Title
Policy with respect to the Collateral issued by a title company acceptable to
Lender and dated as of the Closing Date. Such UCC-9 Title Policy shall (i)
provide coverage in the Loan Amount or such other amount as required by Lender,
(ii) insure Lender that the Pledge Agreement insured by such UCC-9 Title Policy
creates a valid, perfected lien on the Collateral of the requisite priority and
that Borrower is the sole owner of the Collateral, free and clear of all
exceptions from coverage other than the standard exceptions and exclusions from
coverage, (iii) contain such endorsements and affirmative coverages as Lender
may reasonably request, and (iv) name Lender as the insured. The UCC-9 Title
Policy shall be assignable. Lender also shall have received evidence that all
premiums in respect of such UCC-9 Title Policy have been paid.
(c) Survey. Lender shall have received a current title
survey for the Property, certified to the title company and Lender and their
successors and assigns, in form and content satisfactory to Lender and prepared
by a professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The survey shall meet the classification of an "Urban
- 27 -
Survey" and the following additional items from the list of "Optional Survey
Responsibilities and Specifications" (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10, 11 and 13. Such survey shall reflect the same legal
description contained in the Title Insurance Policy referred to in subsection
(b) above and shall include, among other things, a metes and bounds description
of the real property comprising part of the Property reasonably satisfactory to
Lender. The surveyor's seal shall be affixed to the survey and the surveyor
shall provide a certification for the survey in form and substance acceptable to
Lender.
(d) Insurance. Lender shall have received copies of the
Policies required hereunder, satisfactory to Lender in its sole discretion, and
evidence of the payment of all Insurance Premiums payable for the existing
policy period.
(e) Environmental Reports. Lender shall have received an
Environmental Report in respect of the Property satisfactory to Lender.
(f) Zoning/Building Code. Lender shall have received
evidence of compliance with zoning and building ordinances and codes with
respect to the Property, including, without limitation, required certificates of
occupancy, reasonably acceptable to Lender.
(g) Encumbrances. Borrower shall have taken or caused to
be taken such actions in such a manner so that Lender has a valid and perfected
first Lien as of the Closing Date on the Collateral, subject only to applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents, and Lender shall have received satisfactory evidence thereof.
(h) Lien Searches. Borrower shall have delivered to
Lender certified search results pertaining to Borrower, Borrower Principal and
such other Persons as reasonably required by Lender for state and federal tax
liens, bankruptcy, judgment, litigation and state and local UCC filings.
Section 3.3. RELATED DOCUMENTS. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and at Lender's written request, Lender shall have received and approved
certified copies thereof.
Section 3.4. ORGANIZATIONAL DOCUMENTS. On or before the
Closing Date, Borrower shall deliver or cause to be delivered to Lender (a)
copies certified by Borrower of all organizational documentation related to
Borrower and Borrower Principal which must be acceptable to Lender in its sole
discretion, and (b) such other evidence of the formation, structure, existence,
good standing and/or qualification to do business of the Borrower and Borrower
Principal, as Lender may request in its sole discretion, including, without
limitation, good standing or existence certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender.
Section 3.5. OPINIONS OF BORROWER'S COUNSEL. Lender shall have
received opinions of Borrower's counsel (a) with respect to non-consolidation
issues, and (b) with respect
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to due execution, authority, enforceability of the Loan Documents and such other
matters as Lender may require, and (c) with respect to the perfection of
Lender's security interest in the Collateral, all such opinions in form, scope
and substance satisfactory to Lender and Lender's counsel in their sole
discretion.
Section 3.6. ANNUAL BUDGET. Borrower shall have delivered, and
Lender shall have approved, the Annual Budget for the current fiscal year, a
copy of which is attached as Exhibit A hereto.
Section 3.7. TAXES AND OTHER CHARGES. Mortgage Borrower shall
have paid all Taxes and Other Charges (including any in arrears) relating to the
Property, which amounts shall be funded with proceeds of the Mortgage Loan and
Loan.
Section 3.8. COMPLETION OF PROCEEDINGS. All corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.
Section 3.9. PAYMENTS. All payments, deposits or escrows
required to be made or established by Borrower under this Agreement, the Note
and the other Loan Documents on or before the Closing Date shall have been paid.
Section 3.10. TRANSACTION COSTS. Except as otherwise expressly
provided herein, Borrower shall have paid or reimbursed Lender for all out of
pocket expenses in connection with the underwriting, negotiation, and closing of
the Loan, including title insurance premiums and other title company charges;
registration, filing and similar fees, taxes and charges; transfer, deed, stamp
or documentary taxes or similar fees or charges; costs of third-party reports,
including without limitation, environmental studies, credit reports, seismic
reports, engineer's reports, appraisals and surveys; underwriting and
origination expenses; and all actual, reasonable legal fees and expenses charged
by counsel to Lender.
Section 3.11. NO MATERIAL ADVERSE CHANGE. There shall have
been no Material Adverse Change in the financial condition or business condition
of the Property, Mortgage Borrower, Borrower, Borrower Principal, Manager or any
other person or party contributing to the operating income and operations of the
Property since the date of the most recent financial statements and/or other
information delivered to Lender. The income and expenses of the Property, the
occupancy and leases thereof, and all other features of the transaction shall be
as represented to Lender without material adverse change. None of Borrower,
Mortgage Borrower, Borrower Principal, or Affiliated Manager shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.
Section 3.12. LEASES AND RENT ROLL. Lender shall have received
copies of all Leases affecting the Property, which shall be satisfactory in form
and substance to Lender. Lender shall have received a current certified rent
roll of the Property, reasonably satisfactory in form and substance to Lender.
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Section 3.13. TENANT ESTOPPELS. Borrower shall have delivered
to Lender copies of the executed tenant estoppel letters delivered to Mortgage
Lender, which shall be in form and substance satisfactory to Lender, from (a)
each Tenant under a Major Lease and (b) disregarding the area leased by those
Tenants described in clause (a) herein, Tenants leasing, in the aggregate, not
less than seventy-five percent (75%) of the remaining gross leasable area of the
Property.
Section 3.14. [INTENTIONALLY OMITTED]
Section 3.15. SUBORDINATION AND ATTORNMENT. Borrower shall
deliver to Lender copies of the executed instruments delivered to Mortgage
Lender subordinating to the Mortgage all of the Leases previously designated by
Mortgage Lender.
Section 3.16. TAX LOT. Lender shall have received evidence
that the Property constitutes one (1) or more separate tax lots, which evidence
shall be reasonably satisfactory in form and substance to Lender.
Section 3.17. PHYSICAL CONDITIONS REPORT. Lender shall have
received a Physical Conditions Report with respect to the Property, which report
shall be reasonably satisfactory in form and substance to Lender.
Section 3.18. MANAGEMENT AGREEMENT. Lender shall have received
a certified copy of the Management Agreement, which shall be satisfactory in
form and substance to Lender.
Section 3.19. APPRAISAL. Lender shall have received an
appraisal for the Property, which shall be satisfactory in form and substance to
Lender.
Section 3.20. FINANCIAL STATEMENTS. Lender shall have received
financial statements and related information in form and substance satisfactory
to Lender and in compliance with any Legal Requirements promulgated by the
Securities and Exchange Commission, including, without limitation, a balance
sheet, income and expense statement and statement of cash flows with respect to
Borrower and an operating statement with respect to the Property for the
year-to-date 2003, 2002, 2001, and 2000, audited (except with respect to the
year-to-date 2003) by an Acceptable Accountant and together with an unqualified
opinion of such Acceptable Accountant that such statements have been prepared in
accordance with GAAP applied on a consistent basis.
Section 3.21. [INTENTIONALLY DELETED].
Section 3.22. FURTHER DOCUMENTS. Lender or its counsel shall
have received such other and further approvals, opinions, documents and
information as Lender or its counsel may have reasonably requested including the
Loan Documents in form and substance satisfactory to Lender and its counsel.
Section 3.23. MORTGAGE LOAN. The Mortgage Loan shall have
closed and Lender shall have approved all terms and conditions thereof.
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Section 3.24. OPINION LETTER. Borrower shall deliver to Lender
on the Closing Date an opinion letter from counsel relating to Lender's security
interest being perfected by the delivery of certificates evidencing equity
interests or by the filing of the UCC-1 Financing Statement with the Delaware
Secretary of State.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of Borrower and, where specifically indicated, Borrower
Principal represents and warrants to Lender as of the Closing Date that:
Section 4.1. ORGANIZATION. Borrower, Mortgage Borrower and
Borrower Principal (when not an individual) (a) has been duly organized and is
validly existing and in good standing with requisite power and authority to own
its properties and to transact the businesses in which it is now engaged, (b) is
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in connection with its properties, businesses
and operations, (c) possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership and management of Mortgage Borrower, and (d) in the
case of Borrower, has full power, authority and legal right to grant, bargain,
sell, pledge, assign, warrant, transfer and convey the Collateral pursuant to
the terms of the Loan Documents, and in the case of Borrower, Mortgage Borrower
and Borrower Principal, has full power, authority and legal right to keep and
observe all of the terms of the Loan Documents or Mortgage Loan Documents (as
applicable) to which it is a party. Borrower and Borrower Principal represent
and warrant that the chart attached hereto as Exhibit B sets forth an accurate
listing of the direct and indirect owners of the equity interests in Borrower
and Borrower Principal (when not an individual), to the extent such entity is
not publicly traded.
Section 4.2. STATUS OF BORROWER. Borrower's exact legal name
is correctly set forth on the first page of this Agreement, on the Pledge
Agreement, and on any UCC-1 Financing Statements filed in connection with the
Loan. Borrower is an organization of the type specified on the first page of
this Agreement. Borrower is incorporated in or organized under the laws of the
state of Delaware. Borrower's principal place of business and chief executive
office, and the place where Borrower keeps its books and records, including
recorded data of any kind or nature, regardless of the medium of recording,
including software, writings, plans, specifications and schematics, has been for
the preceding four months (or, if less, the entire period of the existence of
Borrower) the address of Borrower set forth on the first page of this Agreement.
West Fifth's organizational identification number assigned by the state of
incorporation or organization is 3658034, and South Olive's organizational
identification number assigned by the state of incorporation or organization is
3658032.
Section 4.3. VALIDITY OF DOCUMENTS. Borrower, Mortgage
Borrower and Borrower Principal have taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents and Mortgage Loan Documents to which they are parties. This Agreement,
the other Loan Documents and the Mortgage Loan
- 31 -
Documents have been duly executed and delivered by or on behalf of Borrower,
Mortgage Borrower and Borrower Principal (as applicable) and constitute the
legal, valid and binding obligations of Borrower, Mortgage Borrower and Borrower
Principal (as applicable) enforceable against Borrower, Mortgage Borrower and
Borrower Principal (as applicable) in accordance with their respective terms,
subject only to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section 4.4. NO CONFLICTS. The execution, delivery and
performance of this Agreement and the other Loan Documents and the Mortgage Loan
Documents by Borrower, Mortgage Borrower and Borrower Principal, to the extent
such Person is a party thereto, will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance (other than
pursuant to the Loan Documents or Mortgage Loan Documents) upon any of the
property or assets of Borrower, Mortgage Borrower or Borrower Principal pursuant
to the terms of any agreement or instrument to which Borrower, Mortgage Borrower
or Borrower Principal is a party or by which any of Borrower's, Mortgage
Borrower's or Borrower Principal's property or assets is subject, nor will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority having jurisdiction over
Borrower, Mortgage Borrower or Borrower Principal or any of Borrower's, Mortgage
Borrower's or Borrower Principal's properties or assets, and any consent,
approval, authorization, order, registration or qualification of or with any
Governmental Authority required for the execution, delivery and performance by
Borrower, Mortgage Borrower or Borrower Principal of this Agreement or any of
the other Loan Documents or any of the Mortgage Loan Documents has been obtained
and is in full force and effect.
Section 4.5. LITIGATION. Except as disclosed on Schedule 4.5
attached hereto, there are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending for which
Borrower or an Affiliate of Borrower has been served or, to Borrower's or
Borrower Principal's knowledge, threatened in writing against or affecting
Borrower, Mortgage Borrower or Borrower Principal, which actions, suits or
proceedings, if determined against Borrower, Mortgage Borrower or Borrower
Principal, would materially adversely affect the condition (financial or
otherwise) or business of Borrower, Mortgage Borrower or Borrower Principal or
the condition or ownership of the Collateral or the Property (as applicable).
Section 4.6. AGREEMENTS. Neither Borrower nor Mortgage
Borrower is a party to any agreement or instrument or subject to any restriction
which would materially and adversely affect Borrower, Mortgage Borrower, the
Property or the Collateral, or Borrower's or Mortgage Borrower's business,
properties or assets, operations or condition, financial or otherwise. Neither
Borrower nor Mortgage 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 Borrower, Mortgage Borrower, the Property or the Collateral is bound.
Neither Borrower nor Mortgage Borrower has any material financial obligation
under any agreement or instrument to which Borrower or Mortgage Borrower is a
party or by which Borrower, Mortgage Borrower, the Property or the Collateral is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the
- 32 -
ownership of the Collateral or the Property (as applicable) and (b) obligations
under the Loan Documents or Mortgage Loan Documents (as applicable).
Section 4.7. SOLVENCY. Except as disclosed on Schedule 4.7
attached hereto, Borrower and Borrower Principal have (a) not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for their obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of the assets of
Borrower and Borrower Principal exceeds and will, immediately following the
making of the Loan, exceed the total liabilities of Borrower and Borrower
Principal, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. No petition in bankruptcy has been filed against
Borrower, Borrower Principal, or Affiliated Manager in the last ten (10) years,
and neither Borrower nor Borrower Principal, or Affiliated Manager in the last
ten (10) years has made an assignment for the benefit of creditors or taken
advantage of any Creditors Rights Laws. Neither Borrower nor Borrower Principal,
or Affiliated Manager is contemplating either the filing of a petition by it
under any Creditors Rights Laws or the liquidation of all or a major portion of
Borrower's assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against Borrower or Borrower
Principal, or Affiliated Manager.
Section 4.8. FULL AND ACCURATE DISCLOSURE. No statement of
fact made by or on behalf of Borrower, Mortgage Borrower or Borrower Principal
in this Agreement or in any of the other Loan Documents or in any other document
or certificate delivered by Borrower, Mortgage Borrower or Borrower Principal or
any Affiliate thereof or, to Borrower's knowledge, in any third party reports
delivered on behalf of Borrower, Mortgage Borrower or Borrower Principal
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 material fact presently known to Borrower or Borrower Principal
which has not been disclosed to Lender which adversely affects, nor as far as
Borrower or Borrower Principal can reasonably foresee, might adversely affect,
the Collateral or the Property or the business, operations or condition
(financial or otherwise) of Borrower, Mortgage Borrower or Borrower Principal.
Section 4.9. NO PLAN ASSETS. Borrower is not an "employee
benefit plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA,
and none of the assets of Borrower constitutes or will constitute "plan assets"
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code currently in effect, which prohibit
or otherwise restrict the transactions contemplated by this Agreement.
Section 4.10. NOT A FOREIGN PERSON. Neither Borrower nor
Borrower Principal is a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code.
Section 4.11. ENFORCEABILITY. The Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense by
Borrower, including the defense of usury, nor
- 33 -
would the operation of any of the terms of the Loan Documents, or the exercise
of any right thereunder, render the Loan Documents unenforceable as a whole, and
Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto. No Default or Event of Default exists under or
with respect to any Loan Document.
Section 4.12. BUSINESS PURPOSES. The Loan is solely for the
business purpose of Borrower (including distributions to Borrower's constituent
entity and all subsequent upstream distributions), and is not for personal,
family, household, or agricultural purposes.
Section 4.13. COMPLIANCE. Borrower, Mortgage Borrower and the
Property, and the use and operation of the Property, comply in all material
respects with all Legal Requirements, including, without limitation, building
and zoning ordinances and codes and the Americans with Disabilities Act. To
Borrower's knowledge, neither Borrower nor Mortgage Borrower is in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority and Borrower has received no written notice of any such default or
violation. There has not been committed by Borrower, Mortgage Borrower or, to
Borrower's knowledge, any other Person in occupancy of or involved with the
operation or use of the Property any act or omission affording any Governmental
Authority the right of forfeiture as against the Property or any part thereof or
any monies paid in performance of Borrower's obligations under any of the Loan
Documents.
Section 4.14. FINANCIAL INFORMATION. All financial data,
including, without limitation, the balance sheets, statements of cash flow,
statements of income and operating expense and rent rolls, that have been
delivered to Lender in respect of Borrower, Mortgage Borrower, Borrower
Principal and/or the Property (a) are true, complete and correct in all material
respects, (b) accurately represent in all material respects the financial
condition of Borrower, Mortgage Borrower, Borrower Principal or the Property, as
applicable, as of the date of such reports, and (c) to the extent prepared or
audited by an independent certified public accounting firm, have been prepared
in accordance with GAAP throughout the periods covered, except as disclosed
therein. Neither Borrower nor Mortgage Borrower has any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
or Mortgage Borrower and reasonably likely to have a material adverse effect on
the Property or the current and/or intended operation thereof, except as
referred to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower, Mortgage Borrower or
Borrower Principal from that set forth in said financial statements.
Section 4.15. ILLEGAL ACTIVITY. No portion of the Collateral
or the Property has been or will be purchased with proceeds of any illegal
activity, and no part of the proceeds of the Loan will be used in connection
with any illegal activity.
Section 4.16. PERMITTED ENCUMBRANCES. None of the Permitted
Encumbrances, individually or in the aggregate, materially interferes with the
benefits of the security intended to be provided by the Mortgage Loan Documents,
materially and adversely affects the value of the Property, impairs the use or
the operation of the Property or impairs Mortgage Borrower's or Borrower's
ability to pay its obligations in a timely manner.
- 34 -
Section 4.17. FEDERAL RESERVE REGULATIONS. Borrower will use
the proceeds of the Loan for the purposes set forth in Section 2.1(d) hereof and
not for any illegal activity. No part of the proceeds of the Loan 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 or prohibited by the terms and conditions of this Agreement
or the other Loan Documents.
Section 4.18. INVESTMENT COMPANY ACT. Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) 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 (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section 4.19. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE.
ALL information submitted by Borrower, Mortgage Borrower or their respective
agents to Lender and in all financial statements, rent rolls, reports,
certificates and other documents submitted in connection with the Loan or in
satisfaction of the terms thereof and all statements of fact made by Borrower,
Borrower Principal and Mortgage Borrower in this Agreement, in any other Loan
Document or in the Mortgage Loan Documents, as may be updated by Borrower prior
to the closing of the Loan, are accurate and correct in all material respects
and sufficiently complete as to not be misleading in any material respect. To
the best of Borrower's knowledge, there has been no material adverse change in
any condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects or might materially and adversely
affect the Collateral, the Property or the business operations or the financial
condition of Borrower, Borrower Principal or Mortgage Borrower. Borrower and
Mortgage Borrower have each disclosed to Lender all material facts and have not
failed to disclose any material fact that could cause any representation or
warranty made herein or in any other documents delivered to Lender by Borrower,
Mortgage Borrower or any of their respective Affiliates or agents to be
materially misleading.
Section 4.20. SPECIAL PURPOSE ENTITY. Borrower meets all of
the requirements of Article VI hereof as of the Closing Date.
Section 4.21. ASSUMPTIONS. Each of the assumptions contained
in the opinion related to issues of substantive consolidation delivered by
Borrower to Lender on the date hereof are true and accurate.
Section 4.22. INTELLECTUAL PROPERTY. All trademarks, trade
names and service marks necessary to the business of Borrower as presently
conducted or as Borrower contemplates conducting its business are in good
standing and, to the extent of Borrower's actual knowledge, uncontested.
Borrower has not infringed, is not infringing, and has not received notice of
infringement with respect to asserted trademarks, trade names and service marks
of
- 35 -
others. To Borrower's knowledge, there is no infringement by others of
trademarks, trade names and service marks of Borrower.
Section 4.23. EMBARGOED PERSON. To the best of Borrower's
knowledge, as of the date hereof and at all times throughout the term of the
Loan, including after giving effect to any transfers of interests permitted
pursuant to the Loan Documents, (a) none of the funds or other assets of
Borrower and Borrower Principal constitute property of, or are beneficially
owned, directly or indirectly, by any person, entity or government subject to
trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive
Orders or regulations promulgated thereunder with the result that the investment
in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by Lender is in violation of
law ("EMBARGOED PERSON"); (b) no Embargoed Person has any interest of any nature
whatsoever in Borrower or Borrower Principal, as applicable, with the result
that the investment in Borrower or Borrower Principal, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law; and (c) none of the funds of Borrower or Borrower Principal, as applicable,
have been derived from any unlawful activity with the result that the investment
in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law.
Section 4.24. PATRIOT ACT. All capitalized words and phrases
and all defined terms used in the USA Patriot Act of 2001, 107 Public Law 56
(October 26, 2001) and in other statutes and all orders, rules and regulations
of the United States government and its various executive departments, agencies
and offices related to the subject matter of the Patriot Act, including
Executive Order 13224 effective September 24, 2001 (collectively referred to in
this Section only as the "PATRIOT ACT") and are incorporated into this Section.
Each of Borrower and Borrower Principal hereby represents and warrants that
Borrower and Borrower Principal and each and every Person affiliated with
Borrower or Borrower Principal or that to Borrower's knowledge has an economic
interest in Borrower, or, to Borrower's knowledge, that has or will have an
interest in the transaction contemplated by this Agreement or in the Property or
will participate, in any manner whatsoever, in the Loan, is: (i) not a "blocked"
person listed in the Annex to Executive Order Nos. 12947, 13099 and 13224 and
all modifications thereto or thereof (as used in this Section only, the
"ANNEX"); (ii) in full compliance with the requirements of the Patriot Act and
all other requirements contained in the rules and regulations of the Office of
Foreign Assets Control, Department of the Treasury (as used in this Section
only, "OFAC"); (iii) operated under policies, procedures and practices, if any,
that are in compliance with the Patriot Act and available to Lender for Lender's
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation of the Patriot
Act; (v) not listed as a Specially Designated Terrorist or as a "blocked" person
on any lists maintained by the OFAC pursuant to the Patriot Act or any other
list of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of the OFAC issued pursuant to the Patriot Act or on any
other list of terrorists or terrorist organizations maintained pursuant to the
Patriot Act; (vi) not a person who has been determined by competent authority to
be subject to any of the prohibitions contained in the Patriot Act; and (vii)
not owned or controlled by or now acting and or will in the future act
- 36 -
for or on behalf of any person named in the Annex or any other list promulgated
under the Patriot Act or any other person who has been determined to be subject
to the prohibitions contained in the Patriot Act. Borrower covenants and agrees
that in the event Borrower receives any notice that Borrower Principal or
Borrower (or any of its beneficial owners or affiliates or participants) become
listed on the Annex or any other list promulgated under the Patriot Act or is
indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Borrower shall immediately
notify Lender. It shall be an Event of Default hereunder if Borrower, Borrower
Principal or any other party to any Loan Document becomes listed on any list
promulgated under the Patriot Act or is indicted, arraigned or custodially
detained on charges involving money laundering or predicate crimes to money
laundering.
Section 4.25. MORTGAGE LOAN REPRESENTATIONS. All of the
representations and warranties contained in the Mortgage Loan Documents are
hereby incorporated into this Agreement and deemed made by Borrower hereunder
and are true and correct as of the Closing Date and shall remain incorporated
without regard to any waiver, amendment or other modification thereof by the
Mortgage Lender or to whether the related Mortgage Loan Document has been
repaid, defeased or otherwise terminated, unless otherwise consented to in
writing by Lender.
Section 4.26. NO CONTRACTUAL OBLIGATIONS. Except in connection
with its activities as the sole member of Mortgage Borrower and other than the
Loan Documents, the Borrower Operating Agreement and the Mortgage Borrower
Operating Agreement, as of the date of this Agreement, Borrower is not subject
to any Contractual Obligations and has not entered into any agreement,
instrument or undertaking by which it or its assets are bound, or has incurred
any indebtedness (other than the Loan), and prior to the date of this Agreement,
neither Borrower nor any of its Subsidiaries has entered into any Contractual
Obligation, or any agreement, instrument or undertaking by which it or its
assets are bound or incurred any indebtedness (other than the Loan or the
Mortgage Loan (as applicable)).
Section 4.27. SUBSIDIARIES. Effective as of the consummation
of the transactions contemplated by this Agreement, one hundred percent (100%)
of the membership interests in Borrower is owned by Borrower Principal free and
clear of all Liens (other than the Liens created by the Loan Documents).
Borrower does not have any Subsidiaries except the Mortgage Borrower. Borrower
does not own any equity interests other than the Pledged Company Interests.
Section 4.28. PLEDGED COMPANY INTERESTS. There are no Liens on
the Pledged Company Interests (other than the Liens created by the Loan
Documents).
Section 4.29. SURVIVAL. Borrower agrees that, unless expressly
provided otherwise, all of the representations and warranties of Borrower set
forth in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt remains owing to Lender. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
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ARTICLE V
BORROWER COVENANTS
From the date hereof and until repayment of the Debt in full
and performance in full of all obligations of Borrower under the Loan Documents
or the earlier release of the Lien of the Pledge Agreement (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
Section 5.l. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS,
(a) Borrower and Mortgage Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, licenses, permits and franchises and comply in all material respects
with all Legal Requirements applicable to it, Mortgage Borrower and the
Property. Borrower hereby covenants and agrees not to commit, permit or suffer
to exist any act or omission affording any Governmental Authority the right of
forfeiture as against the Collateral, the Property or any part thereof or any
monies paid in performance of Borrower's obligations under any of the Loan
Documents. Borrower shall at all times maintain, preserve and protect all
franchises and trade names used in connection with the operation of the
Property.
(b) After prior written notice to Lender, Borrower, at
its own expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the Legal Requirements affecting the Property, provided that (i) no
Default or Event of Default has occurred and is continuing; (ii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower, Mortgage Borrower or the Property is
subject and shall not constitute a default thereunder; (iii) neither the
Property, any part thereof or interest therein, any of the tenants or
occupants thereof, nor Mortgage Borrower, nor Borrower shall be affected in any
material adverse way as a result of such proceeding; (iv) non-compliance with
the Legal Requirements shall not impose civil or criminal liability on Borrower,
Mortgage Borrower or Lender; (v) Borrower shall have furnished, or shall have
caused Mortgage Borrower to furnish, the security as may be required in the
proceeding or by Lender to ensure compliance by Borrower and Mortgage Borrower
with the Legal Requirements; and (vi) Borrower shall have furnished, or shall
caused Mortgage Borrower to furnish, to Lender all other items reasonably
requested by Lender.
Section 5.2. MAINTENANCE AND USE OF PROPERTY. Borrower shall
cause Mortgage Borrower to maintain the Property in a good and safe condition
and repair. The Improvements and the Personal Property shall not be removed,
demolished or, other than in accordance with the provisions of Section 5.20,
materially altered (except for normal replacement or disposal of the Personal
Property in the ordinary course of Borrower's or Mortgage Borrower's business)
without the prior written consent of Lender, not to be unreasonably withheld,
conditioned or delayed. If under applicable zoning provisions the use of all or
any portion of the Property is or shall become a nonconforming use, Borrower
will not cause or permit the nonconforming use to be discontinued or the
nonconforming Improvement to be abandoned without the express written consent of
Lender.
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Section 5.3. WASTE. Borrower shall not commit or suffer, and
shall not cause Mortgage Borrower to commit or suffer, any physical or actual
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security
for the Loan. Borrower will not, without the prior written consent of Lender,
permit any drilling or exploration for or extraction, removal, or production of
any minerals from the surface or the subsurface of the Property, regardless of
the depth thereof or the method of mining or extraction thereof.
Section 5.4. TAXES AND OTHER CHARGES, (a) Borrower shall cause
Mortgage Borrower to pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Property or any part thereof prior to
delinquency; provided, however, Borrower's obligation to cause Mortgage Borrower
to directly pay Taxes shall be suspended for so long as Mortgage Borrower
complies with the terms and provisions of Section 9.6 of the Mortgage Loan
Agreement. Borrower shall cause Mortgage Borrower to furnish to Lender receipts
for the payment of the Taxes and the Other Charges prior to the date the same
shall become delinquent (provided, however, that Borrower is not required to
cause Mortgage Borrower to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Mortgage Lender pursuant to Section 9.6
of the Mortgage Loan Agreement). Subject to Section 5.4(b), Borrower shall cause
Mortgage Borrower to not suffer and shall promptly cause Mortgage Borrower to
pay and discharge any Lien or charge whatsoever which may be or become a Lien or
charge against the Property, and shall cause Mortgage Borrower to promptly pay
for all utility services provided to the Property.
(b) After prior written notice to Lender, Borrower, at
its own expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes, Other Charges or any Liens, provided that (i) no Default or Event of
Default has occurred and remains uncured; (ii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable Legal Requirements; (iii) neither the Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall cause Mortgage Borrower to promptly upon
final determination thereof pay the amount of any such Taxes, Other Charges or
any Liens, together with all costs, interest and penalties which may be payable
in connection therewith; (v) such proceeding shall suspend the collection of
such contested Taxes, Other Charges or any Liens from the Property; and (vi)
Borrower shall deliver evidence to Lender that Mortgage Borrower shall have
furnished Mortgage Lender with such security as may be required in the
proceeding, or shall have delivered to Mortgage Lender such reserve deposits as
may be requested by Mortgage Lender, to insure the payment of any such Taxes,
Other Charges or any Liens, together with all interest and penalties thereon
(unless Mortgage Borrower has paid all of the Taxes, Other Charges or any Liens
under protest).
Section 5.5. LITIGATION. Borrower shall give prompt written
notice to Lender of any litigation or governmental proceedings pending or
threatened in writing against Borrower,
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Borrower Principal or Mortgage Borrower which might materially adversely affect
Borrower's, Borrower Principal's or Mortgage Borrower's condition (financial or
otherwise) or business or the Property.
Section 5.6. ACCESS TO THE PROPERTY. Borrower shall cause
Mortgage Borrower to permit agents, representatives and employees of Lender to
inspect the Property or any part thereof at reasonable hours upon reasonable
advance notice, provided Lender shall use reasonable efforts to minimize
interference with the business of any tenants.
Section 5.7. NOTICE OF DEFAULT. Borrower shall promptly advise
Lender of any Material Adverse Change in the condition (financial or otherwise)
of Borrower, Mortgage Borrower, Borrower Principal, the Property or of the
occurrence of any Default or Event of Default hereunder or any Mortgage Loan
Event of Default (or any event which, but for the giving of notice or passage of
time, or both, would be a Mortgage Loan Event of Default) of which Borrower has
knowledge.
Section 5.8. COOPERATE IN LEGAL PROCEEDINGS. Borrower shall at
Borrower's expense cooperate fully with Lender with respect to any proceedings
before any court, board or other Governmental Authority which may in any way
affect the rights of Lender hereunder or any rights obtained by Lender under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
Section 5.9. PERFORMANCE BY BORROWER. Borrower shall in a
timely manner observe, perform and fulfill each and every covenant, term and
provision to be observed and performed by Borrower under this Agreement and the
other Loan Documents and any other material agreement or instrument affecting or
pertaining to the Collateral and any amendments, modifications or changes
thereto.
Section 5.10. AWARDS; INSURANCE PROCEEDS. Borrower shall, and
shall cause Mortgage Borrower to, cooperate with Lender in obtaining for Lender
the benefits of any Awards or Insurance Proceeds lawfully or equitably payable
in connection with the Property, and Lender shall be reimbursed for any expenses
incurred in connection therewith (including reasonable, actual attorneys' fees
and disbursements and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of a Casualty or Condemnation affecting the Property or
any part thereof) out of such Awards or Insurance Proceeds.
Section 5.11. FINANCIAL REPORTING.
(a) Borrower and Borrower Principal shall, and shall
cause Mortgage Borrower to, keep adequate books and records of account in
accordance with GAAP, consistently applied and shall furnish or cause to be
furnished to Lender:
(i) monthly (if required by Lender), quarterly, and
annual certified rent rolls signed and dated by Borrower and Mortgage
Borrower, detailing the names of all Tenants of the Improvements, the
portion of Improvements (in terms of square footage) occupied by each
Tenant, the base rent, additional rent and any other charges payable
under each Lease (including annual store sales required to be reported
by Tenant under any Lease), and the term of each Lease, including the
commencement and expiration dates and any
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tenant extension, expansion or renewal options, the extent to which any
Tenant is in default under any Lease, and any other information as is
reasonably required by Lender, within thirty (30) days after the end of
each calendar month, forty-five (45) days after the end of each fiscal
quarter or ninety (90) days after the close of each fiscal year of
Borrower and Mortgage Borrower, as applicable;
(ii) monthly (if required by Lender), quarterly, and
annual operating statements of the Property, prepared and certified by
the chief financial officer of Borrower and Mortgage Borrower in form
acceptable to Lender in its reasonable discretion (with the annual
operating statement prepared and audited by an Acceptable Accountant),
detailing the revenues received, the expenses incurred and the net
operating income before and after debt service (principal and interest)
and major capital improvements for the period of calculation and
containing appropriate year-to-date information, within thirty (30)
days after the end of each calendar month, forty-five (45) days after
the end of each fiscal quarter or ninety (90) days after the close of
each fiscal year of Borrower and Mortgage Borrower, as applicable;
(iii) quarterly and annual balance sheets, profit and loss
statements, statements of cash flows, and statements of change in
financial position of Borrower, Mortgage Borrower and Borrower
Principal in form reasonably acceptable to Lender (with the annual
financial statements prepared and audited by an Acceptable Accountant),
within forty-five (45) days after the end of each fiscal quarter or
ninety (90) days after the close of each fiscal year of Borrower,
Mortgage Borrower and Borrower Principal, as applicable, as the case
may be; and
(iv) an Annual Budget not later than thirty (30) days
prior to the commencement of each fiscal year of Borrower and Mortgage
Borrower in form reasonably satisfactory to Lender. In the event that
Lender objects to a proposed Annual Budget submitted by or on behalf of
Borrower, Lender shall advise Borrower of such objections within
fifteen (15) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall
promptly revise such Annual Budget and resubmit the same to Lender.
Lender shall advise Borrower in writing of any objections to such
revised Annual Budget within ten (10) days after receipt thereof (and
deliver to Borrower a reasonably detailed description of such
objections) and Borrower shall promptly revise the same in accordance
with the process described in this subsection until Lender approves the
Annual Budget. Lender shall have a period of thirty (30) days from
receipt of such Annual Budget, together with any other related
documentation reasonably requested by Lender, in which to approve or
reject such Annual Budget, provided that such Annual Budget is
accompanied by a written request from Borrower marked in bold lettering
with the following language: "LENDER'S RESPONSE IS REQUIRED WITHIN
THIRTY (30) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A
LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER" and the envelope
containing the request must be marked "PRIORITY - LENDER'S RESPONSE
REQUIRED IN THIRTY (30) DAYS." In the event that Lender fails to
approve or reject such Annual Budget in such period of time, Lender's
consent to such Annual Budget shall be deemed given. Until such time
that Lender approves a proposed Annual Budget, which approval shall not
be
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unreasonably withheld, conditioned or delayed, the most recent Annual
Budget shall apply; provided that, such approved Annual Budget shall be
adjusted to reflect actual increases in Taxes, Insurance Premiums,
utilities expenses and expenses under the Management Agreement. Without
the prior written consent of Lender, Borrower shall not approve or
consent to Mortgage Borrower entering into any contracts or other
agreements or expending any funds not provided for in the approved
Annual Budget, other than expenditures required to be made by reason of
the occurrence of any emergency (i.e., an unexpected event which
threatens imminent harm to persons or property at the Property) and
with respect to which it would be impracticable, under the
circumstances, to obtain Lender's prior consent thereto. Borrower shall
notify Lender as promptly as practicable with respect to any such
emergency expenditures made with respect to the Property. At the
request of Lender, Borrower agrees to cause Mortgage Borrower to
deliver evidence in a form satisfactory to Lender that amounts
allocated to budgeted expenses have been paid in accordance with the
approved Annual Budget.
(b) Upon request from Lender, Borrower shall promptly
furnish or cause to be furnished to Lender:
(i) a property management report for the Property,
containing a list of prospective tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower and
Mortgage Borrower under penalty of perjury to be true and complete, but
no more frequently than quarterly;
(ii) an accounting of all security deposits held in
connection with any Lease of any part of the Property, including the
name and identification number of the accounts in which such security
deposits are held, the name and address of the financial institutions
in which such security deposits are held and the name of the Person to
contact at such financial institution, along with any authority or
release necessary for Lender to obtain information regarding such
accounts directly from such financial institutions; and
(iii) a report of all letters of credit provided by any
Tenant in connection with any Lease of any part of the Property,
including the account numbers of such letters of credit, the names and
addresses of the financial institutions that issued such letters of
credit and the names of the Persons to contact at such financial
institutions, along with any authority or release necessary for Lender
to obtain information regarding such letters of credit directly from
such financial institutions.
(c) Borrower and Borrower Principal shall furnish Lender
(or cause Mortgage Borrower to furnish to Lender) with such other additional
financial or management information (including state and federal tax returns) as
may, from time to time, be reasonably required by Lender in form and substance
satisfactory to Lender (including, without limitation, any financial reports
required to be delivered by any Tenant or any guarantor of any Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its agents convenient
facilities for the examination and audit of any such books and records.
(d) All items requiring the certification of Borrower or
Mortgage Borrower shall, except where Borrower or Mortgage Borrower is an
individual, require a certificate
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executed by the general partner, managing member or chief executive officer of
Borrower or Mortgage Borrower, as applicable (and the same rules shall apply to
any sole shareholder, general partner or managing member which is not an
individual).
Section 5.12. ESTOPPEL STATEMENT, (a) After request by Lender,
Borrower shall within ten (10) Business Days furnish Lender with a statement,
duly acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the rate of interest on the Note, (iii) the
unpaid principal amount of the Note, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the payment of
the Debt, if any, and (vi) that the Note, this Agreement, the Pledge Agreement
and the other Loan Documents are valid, legal and binding obligations and have
not been modified or if modified, giving particulars of such modification.
(b) After request by Borrower, Lender shall promptly
deliver to Borrower a beneficiary's statement on Lender's (or its servicer's)
then current form of such document, which shall include the balance of the Loan
and the then applicable interest rate. In a separate writing, Lender shall
provide to Borrower, to the extent true, a statement that Lender has not
delivered any notices of default to Borrower.
(a) Borrower shall use its best efforts to deliver (or
cause Mortgage Borrower to deliver) to Lender, promptly upon request, duly
executed estoppel certificates from any one or more Tenants as required by
Lender attesting to such facts regarding the related Lease as Lender may
require, including, but not limited to attestations that each Lease covered
thereby is in full force and effect with no defaults thereunder on the part of
any party, that none of the Rents have been paid more than one month in advance,
except as security, and that the Tenant claims no defense or offset against the
full and timely performance of its obligations under the Lease. Other than in
connection with a Securitization, Borrower shall not be required to use its best
efforts to deliver such estoppel certificates more than once per year so long as
no Event of Default exists.
Section 5.13. LEASING MATTERS, (a) Borrower may permit
Mortgage Borrower to enter into a proposed Lease (including the renewal or
extension of an existing Lease (a "RENEWAL LEASE")) without the prior written
consent of Lender, provided such proposed Lease or Renewal Lease (i) provides
for rental rates and terms comparable to existing local market rates and terms
(taking into account the type and quality of the tenant) as of the date such
Lease is executed by Mortgage Borrower (unless, in the case of a Renewal Lease,
the rent payable during such renewal, or a formula or other method to compute
such rent, is provided for in the original Lease), (ii) is an arm's-length
transaction with a bona fide, independent third party tenant, (iii) does not
have a materially adverse effect on the value of the Property taken as a whole,
(iv) is subject and subordinate to the Mortgage and the Tenant thereunder agrees
to attorn to Lender, either by the terms of such Renewal Lease or pursuant to a
subordination, non-disturbance and attornment agreement on Lender's then current
form (v) does not contain any option, offer, right of first refusal, or other
similar right to acquire all or any portion of the Property, (vi) has a base
term of less than fifteen (15) years including options to renew, (vii) has no
rent, credits, free rents or concessions granted thereunder, other than as
consistent with then market standards for prudent institutional owners of Class
A office buildings in the sub-market where the Property is located, and (viii)
is written on the standard form of lease approved by
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Lender and attached hereto as Exhibit C, subject to tenant specific negotiated
changes which do not, individually or in the aggregate, cause a Material Adverse
Change with respect to the Property or the financial condition of Borrower. All
proposed Leases which do not satisfy the requirements set forth in this
subsection shall be at Borrower's expense and subject to the prior approval of
Lender and its counsel, not to be unreasonably withheld or delayed. Borrower
shall cause Mortgage Borrower to promptly deliver to Lender copies of all Leases
which are entered into pursuant to this subsection together with Borrower's
certification that it has satisfied all of the conditions of this Section.
(b) Borrower (i) shall cause Mortgage Borrower to observe
and perform all the obligations imposed upon the landlord under the Leases (or
refrain from such observance or performance to the extent the same is in
accordance with prudent institutional ownership practices for properties similar
to and in the same sub-market as Property) and shall not do or permit to be done
anything to impair the value of any of the Leases as security for the Debt; (ii)
shall cause Mortgage Borrower to promptly send copies to Lender of all notices
of default which Mortgage Borrower shall send or receive thereunder; (iii) shall
cause Mortgage Borrower to enforce all of the material terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed unless Borrower, in accordance with prudent institutional
ownership practices for properties similar and in the same sub-market as the
Property, elects not to enforce any such term, covenant or condition; (iv) shall
not permit Mortgage Borrower to collect any of the Rents more than one (1) month
in advance (except security deposits shall not be deemed Rents collected in
advance); (v) shall not permit Mortgage Borrower to execute any other assignment
of the landlord's interest in any of the Leases or the Rents; and (vi) shall not
permit Mortgage Borrower to consent to any assignment of or subletting under any
Leases not in accordance with their terms, without the prior written consent of
Lender, such consent not to be unreasonably withheld, conditioned or delayed.
(a) Borrower may, without the prior written consent of
Lender, permit Mortgage Borrower to amend, modify or waive the provisions of any
Lease or terminate, reduce Rents under, accept a surrender of space under, or
shorten the term of, any Lease (including any guaranty, letter of credit or
other credit support with respect thereto) provided that such action (taking
into account, in the case of a termination, reduction in rent, surrender of
space or shortening of term, the planned alternative use of the affected space)
does not have a materially adverse effect on the value of the Property taken as
a whole, and provided that such Lease, as amended, modified or waived, is
otherwise in compliance with the requirements of this Agreement and any
subordination agreement binding upon Lender with respect to such Lease. A
termination of a Lease with a tenant who is in default beyond applicable notice
and grace periods shall not be considered an action which has a materially
adverse effect on the value of the Property taken as a whole. Any amendment,
modification, waiver, termination, rent reduction, space surrender or term
shortening which does not satisfy the requirements set forth in this subsection
shall be subject to the prior approval of Lender and its counsel, at Borrower's
expense. Borrower shall cause Mortgage Borrower to promptly deliver to Lender
copies of amendments, modifications and waivers which are entered into pursuant
to this subsection together with Borrower's certification that it has satisfied
all of the conditions of this subsection.
(b) Notwithstanding anything contained herein to the
contrary, Borrower shall not permit Mortgage Borrower, without the prior written
consent of Lender, to enter into, renew,
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extend, amend, modify, waive any material provisions of, terminate, reduce Rents
under, accept a surrender of space under, or shorten the term of any Major
Lease.
(c) Notwithstanding anything to the contrary contained
herein, to the extent Lender's prior approval is required for any leasing
matters set forth in this Section 5.13, Lender shall have ten (10) Business Days
from receipt of written request and all required information and documentation
relating thereto in which to approve or disapprove such matter, provided that
such request to Lender is marked in capitalized bold lettering with the
following language: "LENDER'S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS
OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE
UNDERSIGNED AND LENDER" and the envelope containing the request must be marked
"PRIORITY - LENDER'S RESPONSE REQUIRED IN TEN (10) BUSINESS DAYS." In the event
that Lender fails to respond to the leasing matter in question within such time,
Lender's approval shall be deemed given for all purposes. Borrower shall provide
Lender with such information and documentation as may be reasonably required by
Lender, including, without limitation, lease comparables and other market
information as required by Lender.
Section 5.14. PROPERTY MANAGEMENT.
(a) Borrower shall cause Mortgage Borrower to (i)
promptly perform and observe all of the covenants required to be performed and
observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any default under the Management Agreement of which it is
aware; (iii) promptly deliver to Lender a copy of any notice of default or other
material notice received by Mortgage Borrower under the Management Agreement;
(iv) promptly give notice to Lender of any notice or information that Borrower
receives which indicates that Manager is terminating the Management Agreement or
that Manager is otherwise discontinuing its management of the Property; and (v)
promptly enforce the performance and observance of all of the covenants required
to be performed and observed by Manager under the Management Agreement.
(b) If at any time, (i) Manager shall become insolvent or
a debtor in a bankruptcy proceeding, (ii) an Event of Default has occurred and
is continuing, or (iii) a default has occurred and is continuing beyond
applicable cure periods under the Management Agreement, Borrower shall, at the
request of Lender, cause Mortgage Borrower to terminate the Management Agreement
upon sixty (60) days prior notice to Manager and replace Manager with a
Qualified Manager reasonably approved by Lender in accordance with the terms and
conditions satisfactory to Lender, it being understood and agreed that the
management fee for such replacement manager shall not exceed then prevailing
market rates.
(c) In addition to the foregoing, in the event that
Lender, in Lender's reasonable discretion, at any time prior to the termination
of the Subordination of Management Agreement, determines that the Property is
not being managed in accordance with generally accepted management practices for
projects similarly situated, Lender may deliver written notice thereof to
Borrower, Mortgage Borrower and Manager, which notice shall specify with
particularity the grounds for Lender's determination. If Lender reasonably
determines that the conditions specified in Lender's notice are not remedied to
Lender's reasonable satisfaction by
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Borrower, Mortgage Borrower or Manager within sixty (60) days from the date of
such notice or that Borrower or Manager have failed to diligently undertake
correcting such conditions within such sixty (60) day period, Lender may direct
Borrower to terminate the Management Agreement, provided Borrower has the right
to do so pursuant to the terms of the Management Agreement, and to replace
Manager with a Qualified Manager approved by Lender on terms and conditions
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market rates.
(d) Borrower shall not permit Mortgage Borrower, without
the prior written consent of Lender (which consent shall not be unreasonably
withheld, conditioned or delayed) to (i) surrender, terminate or cancel the
Management Agreement or otherwise replace Manager or enter into any other
management agreement with respect to the Property; (ii) reduce or consent to the
reduction of the term of the Management Agreement; (iii) increase or consent to
the increase of the amount of any charges under the Management Agreement; or
(iv) otherwise modify, change, supplement, alter or amend, or waive or release
any of its rights and remedies under, the Management Agreement in any material
respect. In the event that Borrower replaces Manager at any time during the term
of Loan pursuant to this subsection, such Manager shall be a Qualified Manager.
Section 5.15. LIENS. Borrower shall not permit Mortgage
Borrower, without the prior written consent of Lender, to create, incur, assume
or suffer to exist any Lien on any portion of the Property or permit any such
action to be taken, except Permitted Encumbrances. Borrower shall not create,
incur, assume or suffer to exist any Lien on any portion of the Collateral or
permit any such action to be taken.
Section 5.16. DEBT CANCELLATION. Borrower shall not cancel or
otherwise forgive or release any claim or debt owed to Borrower by any Person,
except for adequate consideration and in the ordinary course of Borrower's
business. Borrower shall not permit Mortgage Borrower to cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Mortgage Borrower by any Person, except for
adequate consideration and in the ordinary course of Mortgage Borrower's
business
Section 5.17. ZONING. Borrower shall not permit Mortgage
Borrower to, initiate or consent to any zoning reclassification of any portion
of the Property or seek any variance under any existing zoning ordinance or use
or permit the use of any portion of the Property in any manner that could result
in such use becoming a non-conforming use under any zoning ordinance or any
other applicable land use law, rule or regulation, without the prior consent of
Lender.
Section 5.18. ERISA.
(a) Borrower shall not engage in any transaction which
would cause any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under the Note, this Agreement or the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.
- 46 -
(b) Borrower further covenants and agrees to deliver to
Lender such certifications or other evidence from time to time throughout the
term of the Loan, as requested by Lender in its sole discretion, that (i)
Borrower is not and does not maintain an "employee benefit plan" as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, or a "governmental
plan" within the meaning of Section 3(3) of ERISA; (ii) Borrower is not subject
to state statutes regulating investments and fiduciary obligations with respect
to governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity interests in Borrower are publicly
offered securities, within the meaning of 29 C.F.R.
Section 2510.3-101(b)(2);
(B) Less than twenty-five percent (25%) of each
outstanding class of equity interests in Borrower are held by
"benefit plan investors" within the meaning of 29
C.F.R. Section 2510.3-101(f)(2); or
(c) Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c) or (e).
Section 5.19. No JOINT ASSESSMENT. Borrower shall not permit
Mortgage Borrower to suffer, permit or initiate the joint assessment of the
Property with (a) any other real property constituting a tax lot separate from
the Property, or (b) any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the Lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.
Section 5.20. ALTERATIONS. Lender's prior approval (not to be
unreasonably withheld) shall be required in connection with any alterations to
any Improvements, exclusive of alterations to tenant spaces required under any
Lease, (a) that may have a material adverse effect on the Property, (b) that
affect the structure of the applicable building or (c) that, together with any
other alterations undertaken at the same time (including any related
alterations, improvements or replacements), are reasonably anticipated to have a
cost in excess of the Alteration Threshold. If the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements shall at
any time exceed the Alteration Threshold, Borrower shall promptly deliver to
Lender as security for the payment of such amounts and as additional security
for Borrower's obligations under the Loan Documents any of the following: (i)
cash, (ii) direct non-callable obligations of the United States of America or
other obligations which are "government securities" within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, to the extent
acceptable to Lender, (iii) other securities acceptable to Lender, or (iv) a
completion bond, provided that such completion bond is acceptable to Lender.
Such security shall be in an amount equal to the excess of the total unpaid
amounts incurred and to be incurred with respect to such alterations to the
Improvements over the Alteration Threshold.
Section 5.21. [INTENTIONALLY DELETED.]
Section 5.22. RECIPROCAL EASEMENT AGREEMENT. Borrower shall
not permit Mortgage Borrower to enter into, terminate or modify any REA without
Lender's prior written
- 47 -
consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Borrower shall cause Mortgage Borrower to enforce, comply with, and
cause each of the parties to an REA to comply with all of the material economic
terms and conditions contained in such REA.
Section 5.23. [INTENTIONALLY DELETED.]
Section 5.24. [INTENTIONALLY DELETED.]
Section 5.25. SPECIAL DISTRIBUTIONS. On each date on which
amounts are required to be disbursed to Lender pursuant to the terms of Section
10.2 of the Mortgage Loan Agreement or are required to be paid to Lender under
any of the Loan Documents, Borrower shall exercise its rights under the Mortgage
Borrower Company Agreement to cause Mortgage Borrower to make to Borrower a
distribution in an aggregate amount such that Lender shall receive the amount
required to be disbursed or otherwise paid to Lender on such date.
Section 5.26. CURING. Lender shall have the right, but shall
not have the obligation, to exercise Borrower's rights under the Mortgage
Borrower Company Agreement (a) to cure a Mortgage Loan Default or Mortgage Loan
Event of Default and (b) to satisfy any Liens, claims or judgments against the
Property (except for Liens permitted by the Mortgage Loan Documents), in the
case of either (a) or (b), unless Borrower or Mortgage Borrower shall be
diligently pursuing remedies to cure to Lender's sole satisfaction. Borrower
shall reimburse Lender on demand for any and all costs incurred by Lender in
connection with curing any such Mortgage Loan Default or Mortgage Loan Event of
Default or satisfying any Liens, claims or judgments against the Property.
Section 5.27. LIENS. Neither Borrower nor any of its
Subsidiaries shall take any action that would impair the Lien created under this
Agreement, the Pledge Agreement or any other Loan Document.
Section 5.28. LIMITATION ON SECURITIES ISSUANCES. None of
Borrower or any of its Subsidiaries shall issue any membership interests or
other securities, other than those that have been issued as of the Closing Date.
Section 5.29. LIMITATIONS ON DISTRIBUTIONS. Following the
occurrence and during the continuance of an Event of Default, Borrower shall not
make any distributions to its members.
Section 5.30. OTHER LIMITATIONS. Prior to the payment in full
of the Debt, Borrower shall not, without the prior written consent of Lender
(which may be furnished or withheld at its sole and absolute discretion), give
its consent or approval to any of the following actions or items:
(a) except as permitted by the Mortgage Loan Documents
and the Loan Documents (i) any refinance of the Mortgage Loan, (ii) any
prepayment in full of the Mortgage Loan, (iii) any Sale or Pledge of the
Property or any portion thereof, or (iv) any action in connection with or in
furtherance of the foregoing;
(b) intentionally deleted;
- 48 -
(c) any material modification, amendment, consolidation,
spread, restatement, waiver or termination of any of the Mortgage Loan
Documents;
(d) the distribution to the partners, members or
shareholders of Mortgage Borrower of property other than cash, except in
accordance with the provisions of Mortgage Borrower's organizational documents;
(e) except as set forth in an approved Annual Budget or
as permitted under the Mortgage Loan Documents, any (i) material improvement,
renovation or refurbishment of all or any part of the Property to a materially
higher standard or level than that of comparable properties in the same market
segment and in the same geographical area as the Property, except in connection
with Tenant Improvements undertaken in accordance with the terms of the Mortgage
Loan Agreement (ii) except in connection with Tenant Improvements undertaken in
accordance with the terms of the Mortgage Loan Agreement, removal, demolition or
material alteration of the improvements or equipment on the Property or (iii)
material increase in the square footage or gross leasable area of the
improvements on the Property if a material portion of any of the expenses in
connection therewith are paid or incurred by Mortgage Borrower;
(f) any material change in the method of conduct of the
business of Borrower or any of its Subsidiaries, such consent to be given in the
sole discretion of Lender;
(g) except as required by the Mortgage Loan Documents,
any determination to restore the Property after a Casualty or Condemnation.
Section 5.31. [INTENTIONALLY DELETED.]
Section 5.32. REFINANCING. Borrower shall not consent to or
permit a refinancing of the Mortgage Loan unless it obtains the prior consent of
Lender, provided that Lender shall consent to a refinancing in full of the
Mortgage Loan if, after considering the following factors, Lender determines in
its reasonable discretion that such factors have been satisfied:
(a) no Event of Default or event which with the giving of
notice and/or lapse of time would constitute an Event of Default under this
Agreement shall have occurred and be continuing;
(b) the new mortgage loan ("New MORTGAGE LOAN") shall
have (i) an interest rate that is no higher than the then current interest rate
for the Mortgage Loan, as determined by Lender in its sole discretion (and shall
provide for an interest rate cap substantially identical to the Interest Rate
Protection Agreement), (ii) a principal balance that is no more than the balance
of the Mortgage Loan on the date of the refinancing, (iii) if the New Mortgage
Loan provides for amortization, an amortization schedule that provides for
repayment in monthly installments each of which is no greater than the monthly
payments due under the Mortgage Note, and (iv) a maturity date that is no
earlier than that provided for under the Mortgage Loan at the time of the
closing thereof;
(c) the terms of the New Mortgage Loan shall permit the
Loan, shall provide the same express rights to Lender as the Mortgage Loan and
shall not conflict with the terms of
- 49 -
the Loan and the new mortgage lender shall enter into an intercreditor agreement
with Lender no less favorable to Lender than the Intercreditor Agreement;
(d) no portion of the Property may not be transferred in
connection with such refinancing except pursuant to a Sale or Pledge made in
accordance with Article VII of this Agreement;
(e) Borrower shall pay all costs and expenses of Lender
incurred in connection with any such refinancing, including, without limitation,
reasonable fees and expenses of Lender's counsel;
(f) Borrower shall execute and deliver such amendments to
this Agreement and the other Loan Documents as Lender may request in connection
with such New Mortgage Loan; and
(g) Lender shall have received such settlement
statements, pay-off letters, opinions and other documentation as it shall
reasonably request in connection with such refinancing.
Upon the satisfaction of the foregoing, Borrower may permit or
consent to a refinancing of the Mortgage Loan, whereupon such New Mortgage Loan
shall be deemed to be the Mortgage Loan as defined herein.
ARTICLE VI
ENTITY COVENANTS
Section 6.1. SINGLE PURPOSE ENTITY/SEPARATENESS. Until the
Debt has been paid in full, Borrower represents, warrants and covenants as
follows:
(a) Borrower has not and will not, and will not permit
Mortgage Borrower to:
(i) (x) with respect to Borrower, engage in any business
or activity other than the ownership of the Pledged Company Interests
and the Collateral and any activities incidental thereto or (y) with
respect to the Mortgage Borrower, engage in any business or activity
other than the than the ownership, operation and maintenance of the
Property, and any activities incidental thereto;
(ii) (x) with respect to Borrower, acquire or own any
assets other than (A) the Pledged Company Interests or the Collateral,
and (B) such incidental Personal Property as may be necessary for the
ownership of the Pledged Company Interests and the Collateral or (y)
with respect to the Mortgage Borrower, acquire or own any assets other
than (A) the Property, and (B) such incidental Personal Property as may
be necessary for the operation of the Property;
(iii) merge into or consolidate with any Person, or
dissolve, terminate, liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change
its legal structure;
- 50 -
(iv) fail to observe all organizational formalities or
fail to preserve its existence as an entity duly organized, validly
existing and in good standing (if applicable) under the applicable
Legal Requirements of the jurisdiction of its organization or
formation, or amend, modify, terminate or fail to comply with the
provisions of its organizational documents;
(v) own any Subsidiary, or make any investment in, any
Person;
(vi) commingle its assets with the assets of any other
Person;
(vii) (x) with respect to Borrower, incur any debt, secured
or unsecured, direct or contingent (including guaranteeing any
obligation) or (y) with respect to Mortgage Borrower, incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (A) the Debt (as defined in the Mortgage Loan
Agreement), (B) trade and operational indebtedness incurred in the
ordinary course of business with trade creditors, provided such
indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on
commercially reasonable terms and conditions, and (4) due not more than
sixty (60) days past the date incurred and paid on or prior to such
date, and/or (C) financing leases and purchase money indebtedness
incurred in the ordinary course of business relating to Personal
Property on commercially reasonable terms and conditions; provided
however, the aggregate amount of the indebtedness described in (B) and
(C) shall not exceed at any time three percent (3%) of the outstanding
principal amount of the Mortgage Note;
(viii) fail to maintain its records, books of account, bank
accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other Person; except
that Borrower's and Mortgage Borrower's financial position, assets,
liabilities, net worth and operating results may be included in the
consolidated financial statements of an Affiliate, provided that such
consolidated financial statements contain a footnote indicating that
Borrower and Mortgage Borrower are separate legal entities and that
they maintain separate books and records;
(ix) enter into any contract or agreement with any general
partner, member, shareholder, principal, guarantor of the obligations
of Borrower or of Mortgage Borrower, or any Affiliate of the foregoing,
except upon terms and conditions that are intrinsically fair,
commercially reasonable and substantially similar to those that would
be available on an arm's-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual
assets from those of any other Person;
(xi) (A) assume or guaranty the debts of any other Person,
hold itself out to be responsible for the debts of any other Person, or
otherwise pledge its assets for the benefit of any other Person or hold
out its credit as being available to satisfy the obligations of any
other Person or (B) other than with respect to (I) the obligations of
Borrower or Mortgage Borrower guaranteed by Borrower Principal pursuant
to the terms of the Loan Documents, (II) reimbursement obligations, if
any, of Borrower Principal or its Affiliates
- 51 -
(other than Mortgage Borrower or Borrower) to the Issuing Bank with
respect to the Reserve Letters of Credit (as such terms are defined in
the Mortgage Loan Agreement) or (III) the Principals Guaranty, permit
any of its partners, members, shareholders or other Affiliates to
guarantee, become obligated for or hold its credit out to be
responsible for any of the debts or obligations of Borrower or Mortgage
Borrower;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns or file a
consolidated federal income tax return with any Person (unless
prohibited or required, as the case may be, by applicable Legal
Requirements);
(xiv) identify itself as a division of an Affiliate or fail
either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its
own name or fail to correct any known misunderstanding regarding its
separate identity;
(xv) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(xvi) without the unanimous written consent of all of its
members, and the written consent of 100% of the managers of Borrower or
Mortgage Borrower, as applicable, including, without limitation, each
Independent Manager, (a) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any Creditors
Rights Laws, (b) seek or consent to the appointment of a receiver,
liquidator or any similar official, (c) take any action that might
cause such entity to become insolvent, or (d) make an assignment for
the benefit of creditors;
(xvii) fail to allocate, fairly and reasonably, shared
expenses (including, without limitation, shared office space and
services performed by an employee of an Affiliate) among the Persons
sharing such expenses and to use separate stationery, invoices and
checks;
(xviii) fail to remain solvent or pay its own liabilities
(including, without limitation, salaries of its own employees) only
from its own funds;
(xix) acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made
with respect to Borrower, Mortgage Borrower and their principals in any
opinion letter pertaining to substantive consolidation delivered to
Lender in connection with the Loan;
(xxi) fail to maintain a sufficient number of employees in
light of its contemplated business operations;
(xxii) form, acquire, or hold any Subsidiary (other than
Mortgage Borrower);
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(xxiii) permit any Affiliate independent access to its bank
accounts other than with respect to the Manager in its capacity as
manager of the Property pursuant to the Management Agreement;
(xxiv) fail to maintain the resolutions, agreements and
other instruments regarding the transactions contemplated by the Loan
as official records; or
(xxv) fail to make all oral and written communication,
including, without limitation, letters, invoices, purchase orders,
contracts, statements, and applications solely in the name of Borrower.
(b) Borrower shall have as its sole member the Borrower
Principal. Borrower shall maintain its status as a single member Delaware
limited liability company.
(c) The limited liability company agreement of Borrower
(the "LLC AGREEMENT") shall provide that (i) upon the occurrence of any event
that causes the sole member of Borrower ("MEMBER") to cease to be the member of
Borrower (other than (A) upon an assignment by Member of all of its limited
liability company interest in Borrower and the admission of the transferee in
accordance with the Loan Documents and the LLC Agreement, or (B) the resignation
of Member and the admission of an additional member of Borrower in accordance
with the terms of the Loan Documents and the LLC Agreement), any person acting
as Independent Manager of Borrower shall, without any action of any other Person
and simultaneously with the Member ceasing to be the member of Borrower,
automatically be admitted to Borrower ("SPECIAL MEMBER") and shall continue
Borrower without dissolution and (ii) Special Member may not resign from
Borrower or transfer its rights as Special Member unless (A) a successor Special
Member has been admitted to Borrower as Special Member in accordance with
requirements of Delaware law and (B) such successor Special Member has also
accepted its appointment as an Independent Manager. The LLC Agreement shall
further provide that (i) Special Member shall automatically cease to be a member
of Borrower upon the admission to Borrower of a substitute Member, (ii) Special
Member shall be a member of Borrower that has no interest in the profits, losses
and capital of Borrower and has no right to receive any distributions of
Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the "ACT"), Special Member shall not be required to make
any capital contributions to Borrower and shall not receive a limited liability
company interest in Borrower, (iv) Special Member, in its capacity as Special
Member, may not bind Borrower and (v) except as required by any mandatory
provision of the Act, Special Member, in its capacity as Special Member, shall
have no right to vote on, approve or otherwise consent to any action by, or
matter relating to, Borrower, including, without limitation, the merger,
consolidation or conversion of Borrower; provided, however, such prohibition
shall not limit the obligations of Special Member, in its capacity as
Independent Manager, to vote on such matters required by the Loan Documents or
the LLC Agreement. In order to implement the admission to Borrower of Special
Member, Special Member shall execute a counterpart to the LLC Agreement. Prior
to its admission to Borrower as Special Member, Special Member shall not be a
member of Borrower.
Upon the occurrence of any event that causes the Member to
cease to be a member of Borrower, to the fullest extent permitted by law, the
personal representative of Member shall, within ninety (90) days after the
occurrence of the event that terminated the
- 53 -
continued membership of Member in Borrower, agree in writing (i) to continue
Borrower and (ii) to the admission of the personal representative or its nominee
or designee, as the case may be, as a substitute member of Borrower, effective
as of the occurrence of the event that terminated the continued membership of
Member of Borrower in Borrower. Any action initiated by or brought against
Member or Special Member under any Creditors Rights Laws shall not cause Member
or Special Member to cease to be a member of Borrower and upon the occurrence of
such an event, the business of Borrower shall continue without dissolution. The
LLC Agreement shall provide that each of Member and Special Member waives any
right it might have to agree in writing to dissolve Borrower upon the occurrence
of any action initiated by or brought against Member or Special Member under any
Creditors Rights Laws, or the occurrence of an event that causes Member or
Special Member to cease to be a member of Borrower.
Section 6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower
shall not change or permit to be changed (a) Borrower's name, (b) Borrower's
identity (including its trade name or names), (c) Borrower's principal place of
business set forth on the first page of this Agreement, (d) the corporate,
partnership or other organizational structure of Borrower, (e) Borrower's state
of organization, or (f) Borrower's organizational identification number, without
in each case notifying Lender of such change in writing at least thirty (30)
days prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender. In addition, Borrower shall not change or permit to be changed any
organizational documents of Borrower if such change would adversely impact the
covenants set forth in Sections 6.1 and 6.4 hereof. Borrower authorizes Lender
to file any financing statement or financing statement amendment required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate under, and representing and warranting
that Borrower does business under no other trade name with respect to the
Property. If Borrower does not now have an organizational identification number
and later obtains one, or if the organizational identification number assigned
to Borrower subsequently changes, Borrower shall promptly notify Lender of such
organizational identification number or change.
Section 6. 3. BUSINESS AND OPERATIONS.
(a) Borrower will qualify to do business and will remain in good
standing under the laws of the State as and to the extent the same are required
for the ownership, maintenance, management and operation of the Pledged Company
Interests and the Collateral. Borrower shall not enter into any line of business
other than the ownership of the Pledged Company Interests and the Collateral, 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.
(b) Borrower will cause Mortgage Borrower to qualify to do
business and to remain in good standing under the laws of each State as and to
the extent the same are required for the ownership, maintenance, management and
operation of the Property. Borrower shall not permit Mortgage Borrower to enter
into any line of business other than the ownership of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
- 54 -
operations, or undertake or participate in activities other than the continuance
of its present business.
Section 6.4. INDEPENDENT MANAGERS.
(a) The organizational documents of Borrower shall
provide that at all times there shall be, and Borrower shall cause there to be,
at least two duly appointed Independent Managers of Borrower reasonably
satisfactory to Lender each of whom are not at the time of such individual's
initial appointment, and shall not have been at any time during the preceding
five (5) years, and shall not be at any time while serving as a director of
Borrower, either (i) a shareholder (or other equity owner) of, or an officer,
director, partner, manager, member (other than as a Special Member in the case
of single member Delaware limited liability companies), employee, attorney or
counsel of, Borrower, or any of their respective shareholders, partners,
members, subsidiaries or affiliates; (ii) a customer or creditor of, or supplier
to, Borrower or any of its respective shareholders, partners, members,
subsidiaries or affiliates who derives any of its purchases or revenue from its
activities with Borrower or any Affiliate of any of them; (iii) a Person who
Controls or is under common Control with any such shareholder, officer,
director, partner, manager, member, employee, supplier, creditor or customer; or
(iv) a member of the immediate family of any such shareholder, officer,
director, partner, manager, member, employee, supplier, creditor or customer.
(b) The organizational documents of Borrower shall
provide that the board of managers of Borrower shall not take any action which,
under the terms of any certificate of incorporation, by-laws, articles of
organization, operating agreement or any voting trust agreement with respect to
any common stock or membership interest (as applicable), requires a unanimous
vote of the board of managers of Borrower unless at the time of such action
there shall be at least two members of the board of managers who are Independent
Managers. Borrower will not, without the unanimous written consent of its board
of managers including each Independent Manager, on behalf of itself or Mortgage
Borrower (as applicable) (i) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable Creditors
Rights Laws; (ii) seek or consent to the appointment of a receiver, liquidator
or any similar official; (iii) take any action that might cause such entity to
become insolvent; or (iv) make an assignment for the benefit of creditors.
ARTICLE VII
NO SALE OR ENCUMBRANCE
Section 7.1. TRANSFER DEFINITIONS. For purposes of this
Article 7, an "AFFILIATED MANAGER" shall mean any managing agent of the
Property, other than Borrower Principal, in which Mortgage Borrower, Borrower,
Borrower Principal or any affiliate of such entities has, directly or
indirectly, any Controlling legal, beneficial or economic interest; "CONTROL"
shall mean the power to direct the management and policies of a Restricted
Party, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise; "RESTRICTED
PARTY" shall mean Mortgage Borrower, Borrower, Borrower Principal, any
Affiliated Manager, or any shareholder, partner, member or
- 55 -
non-member manager, or any direct or indirect legal or beneficial owner of
Mortgage Borrower, Borrower, Borrower Principal, any Affiliated Manager or any
non-member manager, provided, however, that no direct or indirect owners of
Borrower Principal, other than Sponsor, shall be included within the definition
of a Restricted Party; and a "SALE OR PLEDGE" shall mean a voluntary or
involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, grant of any options with respect to, or any other transfer or
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) of a legal or beneficial interest, except for Permitted Encumbrances.
Section 7.2. NO SALE/ENCUMBRANCE.
(a) Except as provided in Section 7.3 below, Borrower
shall not cause or permit a Sale or Pledge of the Collateral or the Property or
any part thereof or any legal or beneficial interest therein nor permit a Sale
or Pledge of an interest in any Restricted Party (in each case, a "PROHIBITED
TRANSFER"), other than pursuant to Leases of space in the Improvements to
Tenants in accordance with the provisions of Section 5.13, without the prior
written consent of Lender
(b) A Prohibited Transfer shall include, but not be
limited to, (i) an installment sales agreement wherein Mortgage Borrower agrees
to sell the Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Mortgage Borrower leasing all or a substantial part of the
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgage Borrower's right, title and interest in and to any Leases or any Rents;
(iii) if a Restricted Party is a corporation, any merger, consolidation or Sale
or Pledge of such corporation's stock or the creation or issuance of new stock
in one or a series of transactions; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; (vii) the removal or
the resignation of a Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Section 5.14.
Section 7.3. PERMITTED TRANSFERS. Notwithstanding the
provisions of Section 7.2, the following transfers shall not be deemed to be a
Prohibited Transfer: (a) a transfer by devise or descent or by operation of law
upon the death of a member, partner or shareholder of a Restricted Party; (b)
the Sale or Pledge, in one or a series of transactions, of not more than
forty-nine percent (49%) of the stock, partnership interests or membership
interests (as the case may be) in a Restricted Party other than Mortgage
Borrower; provided, however, no such transfers shall result in a change in
Control in Borrower, Mortgage Borrower or Borrower Principal or a
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change in the Manager, and as a condition to each transfer of direct interests
in Borrower (to the extent otherwise permitted hereunder), Lender shall receive
not less than thirty (30) days prior written notice of such proposed transfer,
(c) the transfer of interests held by Sponsor and its Affiliates in any
Restricted Party other than Borrower or Mortgage Borrower in connection with the
purchase, sale and/or financing of the ownership interests in other properties
owned by Sponsor, provided that (i) no such transfers shall result in a change
in Control in Borrower or Mortgage Borrower or a change in Control of the
Manager (ii) Sponsor remains at all times the general partner of Borrower
Principal, and (iii) Sponsor continues to own no less than twenty-five percent
(25%) of the direct or indirect interests in Borrower, (d) transfers of direct
or indirect interests in Borrower Principal, provided that (i) no such transfers
shall result in a change in Control in Borrower, Mortgage Borrower or Manager,
(ii) Sponsor remains at all times the general partner of Borrower Principal, and
(iii) Sponsor continues to own no less than twenty-five (25%) of the direct or
indirect interests in Borrower, (e) so long as Sponsor is a publicly traded
company, the pledge of Sponsor's interests in any Restricted Party other than
Borrower or Mortgage Borrower to secure an operating debt facility of Sponsor,
provided that (i) such operating debt facility is secured by a pledge of
interests in entities having a direct or indirect interest in substantially all
of the properties directly or indirectly owned by Sponsor and (ii) the
beneficiary of such pledge shall be a major financial institution with
significant real estate experience involving properties similar to the Property,
(f) Sponsor and its Affiliates may sell (but not pledge) to a Qualified Investor
up to 75% of the direct or indirect, non-managing membership interests in
Borrower, provided that (i) Sponsor at all times maintains Control of the
Borrower and Mortgage Borrower (subject to the veto rights, if any, of such
Qualified Investor with respect to Major Decisions, provided that no such veto
right shall be construed to affect any rights or remedies of Lender under the
Loan Documents) and Borrower (ii) Sponsor shall at all times own, directly or
indirectly, at least 25% of the ownership interests in Borrower and Mortgage
Borrower and (iii) the Property shall at all times be managed by a Qualified
Manager, (g) transfers of ownership interests in Sponsor so long as Sponsor is a
publicly traded entity, (h) the merger of Sponsor with or into another entity,
provided that (x) the surviving entity is publicly traded and (y) such merger
does not result in a change of Control in Borrower, Mortgage Borrower or
Borrower Principal, (i) encumbrances of the Tower Parcel portion of the Property
with 365 parking covenants for the benefit of the property located at 000 Xxxxx
Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx pursuant to the terms of the Mortgage
Loan Agreement, or (j) with respect to the Garage Parcel, the execution of a
parking covenant agreement pursuant to the terms of the Mortgage Loan Agreement.
Notwithstanding anything to the contrary contained in this Section 7.3, if any
Sale or Pledge permitted under this Section 7.3 results in any Person and its
Affiliates owning in excess of forty-nine percent (49%) of the ownership
interests in Borrower, Mortgage Borrower or Borrower Principal, Borrower shall,
prior to such transfer, and in addition to any other requirement for Lender
consent contained herein, deliver a revised substantive non-consolidation
opinion to Lender reflecting such transfer, which opinion shall be in form,
scope and substance acceptable in all respects to Lender and the Rating
Agencies.
Section 7.4. LENDER'S RIGHTS. Lender reserves the right to
condition the consent to a Prohibited Transfer requested hereunder upon (a) a
modification of the terms hereof and an assumption of the Note and the other
Loan Documents as so modified by the proposed Prohibited Transfer, (b) receipt
of payment of a transfer fee equal to one half of one percent (0.5%) of the
outstanding principal balance of the Loan and all of Lender's expenses incurred
in connection with such Prohibited Transfer, (c) the proposed transferee's
continued compliance
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with the covenants set forth in this Agreement (including, without limitation,
the covenants in Article 6) and the other Loan Documents, (d) to the extent that
a Prohibited Transfer would result in a change of Control of Borrower or
Mortgage Borrower, a new manager for the Property and a new management agreement
satisfactory to Lender, (e) the satisfaction of all conditions set forth in
Section 7.4 of the Mortgage Loan Agreement, and (f) the satisfaction of such
other conditions and/or legal opinions as Lender shall determine in its
reasonable discretion to be in the interest of Lender. All expenses incurred by
Lender shall be payable by Borrower whether or not Lender consents to the
Prohibited Transfer. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon a Prohibited Transfer made
without Lender's consent. This provision shall apply to each and every
Prohibited Transfer, whether or not Lender has consented to any previous
Prohibited Transfer. Notwithstanding anything to the contrary contained in this
Section 7.4, if any Sale or Pledge results in any Person and its Affiliates
owning in excess of forty-nine percent (49%) of the ownership interests in a
Restricted Party, Borrower shall, prior to such transfer, and in addition to any
other requirement for Lender consent contained herein, deliver a revised
substantive non-consolidation opinion to Lender reflecting such Prohibited
Transfer, which opinion shall be in form, scope and substance acceptable in all
respects to Lender.
Section 7.5. ASSUMPTION.
(a) In the event Mortgage Borrower obtains the consent of
Mortgage Lender to a Transfer of the Property subject to, and assuming, the
Mortgage Loan Documents to another Person (a "TRANSFEREE MORTGAGE BORROWER"),
such Transfer shall nevertheless not be permitted hereunder unless (1) the sole
holder of 100% of the equity interests in the Transferee Mortgage Borrower (the
"TRANSFEREE MEZZANINE BORROWER") pledges its entire equity interest in the
Transferee Mortgage Borrower to Lender pursuant to a pledge agreement in the
form of the Pledge Agreement or otherwise acceptable to Lender in its sole
discretion, (2) the Transferee Mezzanine Borrower is substituted for and assumes
all of Borrower's obligations under the Loan Documents, and replacement
guarantors and indemnitors assume all of the obligations of Borrower Principal
under the Loan Documents (collectively, a "TRANSFER AND ASSUMPTION"), and (3)
Lender approves such Transfer and Assumption (including without limitation the
creditworthiness of the proposed "Transferee Mezzanine Borrower") in Lender's
reasonable discretion. Borrower may make a written application to Lender for
Lender's consent to the Transfer and Assumption, subject to the conditions set
forth in paragraphs (i) and (ii) of this Section below. Together with such
written application, Borrower will pay to Lender the reasonable review fee, not
to exceed $25,000, then required by Lender. Borrower also shall pay on demand
all of the costs and expenses incurred by Lender, including reasonable
attorneys' fees and expenses, and including the fees and expenses of Rating
Agencies, if applicable, and other outside entities, in connection with
considering any proposed Transfer and Assumption, whether or not the same is
permitted or occurs.
(b) Lender may grant or withhold its consent to a
Transfer and Assumption in its reasonable discretion, subject, however, to
satisfaction of the following conditions:
(i) No Default or Event of Default shall have occurred
and be continuing;
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(ii) Borrower shall have submitted to Lender true, correct
and complete copies of any and all information and documents of any
kind reasonably requested by Lender concerning the Property, Transferee
Mezzanine Borrower, replacement guarantors and indemnitors;
(iii) Evidence satisfactory to Lender shall have been
provided showing that the Transferee Mezzanine Borrower and such of its
Affiliates as shall be designated by Lender comply and will comply with
Article 6, as those provisions may be modified by Lender taking into
account the ownership structure of Transferee Mezzanine Borrower and
its Affiliates;
(iv) Borrower shall have obtained (and delivered to
Lender) a Rating Confirmation with respect to the Transfer and
Assumption and all related transactions;
(v) Borrower shall have paid all of Lender's costs and
expenses in connection with considering the Transfer and Assumption,
and shall have paid the amount requested by Lender as a deposit against
Lender's costs and expenses in connection with effecting the Transfer
and Assumption;
(vi) Borrower, the Transferee Mezzanine Borrower, and the
replacement guarantors and indemnitors shall have indicated in writing
in form and substance reasonably satisfactory to Lender their readiness
and ability to satisfy the conditions set forth in Subsection (c)
below; and
(vii) The identity, experience, and financial condition of
the Transferee Mezzanine Borrower and the replacement guarantors and
indemnitors shall be satisfactory to Lender in its sole and absolute
discretion, exercised in good faith.
(c) If Lender consents to the Transfer and Assumption,
the Transferee Mezzanine Borrower and/or Borrower, as the case may be, shall
deliver the following to Lender:
(i) Borrower (or Transferee Mezzanine Borrower) shall
deliver to Lender an assumption fee in the amount of 1.0% of the then
unpaid principal balance of the Loan at the closing of the Transfer and
Assumption;
(ii) Borrower, Transferee Mezzanine Borrower, the original
and replacement guarantors and indemnitors shall execute and deliver
any and all documents reasonably required by Lender, in form and
substance reasonably required by Lender, to evidence the Transfer and
Assumption, including Loan Document modifications reasonably
appropriate in light of such Transfer and Assumption (modifying
documentation if Lender requires to address variations in the ownership
structure of the Transferee Mezzanine Borrower from that of the
Borrower, for example, so long as such modifications do not alter the
economics of the Loan or materially increase the Borrower's obligations
thereunder);
(iii) Counsel to the Transferee Mezzanine Borrower and
replacement guarantors and indemnitors shall deliver to Lender opinions
in form and substance satisfactory to Lender as to such matters as
Lender and the Rating Agencies, if
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applicable, shall require, which may include opinions as to
substantially the same matters as were required in connection with the
origination of the Loan including, without limitation, a bankruptcy
non-consolidation opinion and a perfection opinion;
(iv) Borrower shall cause to be delivered to Lender, (A)
an endorsement (relating to the change in the identity of the vestee
and execution and delivery of the Transfer and Assumption documents) to
the Owner's Policy of Title Insurance, and (B) a new UCC Title Policy,
each in form and substance acceptable to Lender, in Lender's reasonable
discretion;
(v) Borrower shall deliver to Lender a payment in the
amount of all remaining unpaid costs incurred by Lender in connection
with the Transfer and Assumption, including but not limited to,
Lender's reasonable attorneys fees and expenses, all recording fees,
and all fees payable to the title company in connection with the
Transfer and Assumption; and
(vi) If required by Lender, the Loan shall either be
repaid in full or shall be assumed by the new member of the Transferee
Mezzanine Borrower pursuant to an assumption permitted and approved by
the Lender under the Loan Documents.
Upon completion of a Transfer and Assumption approved in
writing by Lender and permitted hereunder and execution of replacement
guaranties by replacement guarantors as provided in (c) above, and provided that
Lender has approved the replacement guarantors as substitutes for the original
Borrower Principal as provided in (b) above, Borrower and any original Borrower
Principal shall, as part of the documentation executed at the closing of the
Transfer and Assumption, be released from liability under the Loan Documents
accruing from and after the completion of the Transfer and Assumption, but not
from any liabilities for acts and occurrences taking place prior to such
Transfer and Assumption or under the Environmental Indemnity Agreement.
ARTICLE VIII
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
Section 8.1. INSURANCE.
(a) Borrower shall cause Mortgage Borrower to obtain and
maintain, at all times insurance for Mortgage Borrower and for the Property
providing at least the following coverages:
(i) comprehensive "all risk" insurance on the
Improvements and the Personal Property, in each case (A) in an amount
equal to one hundred percent (100%) of the "Full Replacement Cost,"
which for purposes of this Agreement shall mean actual replacement
value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation; (B) containing
an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing
for no deductible in excess of $100,000 for all such insurance
coverage; and (D) if any of the Improvements or the use of the Property
shall at any time constitute
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legal non-conforming structures or uses, providing coverage for
contingent liability from Operation of Building Laws, Demolition Costs
and Increased Cost of Construction Endorsements and containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement. In addition,
Borrower shall obtain: (y) if any portion of the Improvements is
currently or at any time in the future located in a "special flood
hazard area" designated by the Federal Emergency Management Agency,
flood hazard insurance in an amount equal to the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the
Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended; and (z) earthquake
insurance in amounts and in form and substance reasonably satisfactory
to Lender in the event the Property is located in an area with a high
degree of seismic risk, provided that the insurance pursuant to clauses
(y) and (z) hereof shall be on terms consistent with the comprehensive
all risk insurance policy required under this subsection (i), provided,
further, that the insurance pursuant to clause (z) hereof shall provide
for no deductible in excess of 5% of the total insurable value (which
includes annual rental value) of the properties insured under the
applicable policy;
(ii) Commercial General Liability insurance against claims
for personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, with such insurance (A) to be on the
so-called "occurrence" form with a general aggregate limit of not less
than $2,000,000 and a per occurrence limit of not less than $1,000,000;
(B) to continue at not less than the aforesaid limit until required to
be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least
the following hazards: (1) premises and operations; (2) products and
completed operations; (3) independent contractors; (4) blanket
contractual liability; and (5) contractual liability covering the
indemnities contained in Article 12 and Article 14 hereof to the extent
the same is available;
(iii) loss of rents insurance or business income insurance,
as applicable, (A) with loss payable to Lender, subject to the terms of
the Mortgage Loan Agreement; (B) covering all risks required to be
covered by the insurance provided for in subsection (i) above; and (C)
which provides that after the physical loss to the Improvements and
Personal Property occurs, the loss of rents or income, as applicable,
will be insured until such rents or income, as applicable, either
return to the same level that existed prior to the loss, or the
expiration of twenty-four (24) months, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period; and (D) which contains an extended period of indemnity
endorsement which provides that after the physical loss to the
Improvements and Personal Property has been repaired, the continued
loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of twelve
(12) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period. The amount
of such loss of rents or business income insurance, as applicable,
shall be determined prior to the date hereof and at least once each
year thereafter based on Borrower's reasonable estimate of the gross
income from the Property for the succeeding period of coverage required
above. All proceeds payable to Lender pursuant to this subsection shall
be held by Lender and shall be applied to the obligations secured by
the Loan
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Documents from time to time due and payable hereunder and under the
Note; provided, however, that nothing herein contained shall be deemed
to relieve Borrower of its obligations to pay the obligations secured
by the Loan Documents on the respective dates of payment provided for
in the Note, this Agreement and the other Loan Documents except to the
extent such amounts are actually paid out of the proceeds of such loss
of rents or business income insurance, as applicable;
(iv) at all times during which material structural
construction, repairs or alterations are being made with respect to the
Improvements, and only if the Property coverage form does not otherwise
apply, (A) owner's contingent or protective liability insurance
covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability insurance policy; and (B)
the insurance provided for in subsection (i) above written in a
so-called Builder's Risk Completed Value form (1) on a non-reporting
basis, (2) against "all risks" insured against pursuant to subsection
(i) above, (3) including permission to occupy the Property, and (4)
with an agreed amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory
limits of the State, and employer's liability insurance in respect of
any work or operations on or about the Property, or in connection with
the Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on
terms consistent with the commercial property insurance policy required
under subsection (i) above;
(vii) excess liability insurance in an amount not less than
$50,000,000 per occurrence on terms consistent with the commercial
general liability insurance required under subsection (ii) above; and
(viii) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time
to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is
located.
The Policies required to be maintained pursuant to clauses (i)
through (viii) above shall contain no exclusion for Losses resulting from acts
of terrorism as certified under the Terrorism Risk Insurance Act of 2002, as the
same may be amended from time to time.
(b) All insurance provided for in Section 8.1 (a) shall
be obtained under valid and enforceable policies (collectively, the "POLICIES"
or in the singular, the "POLICY"), and shall be subject to the approval of
Lender as to insurance companies, amounts, deductibles, loss payees and
insureds. The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and having a claims
paying ability rating of "AA-" or better by at least two Rating Agencies, one of
which must be S&P or such other Rating Agencies approved by Lender, provided,
however, that if Borrower elects to have its insurance coverage provided by a
syndicate of insurers, then (i) if such syndicate consists of 5 or more members,
(A) at least 60% of the insurance coverage (and 100% of the first layer of such
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coverage) shall be provided by insurance companies having a claims paying
ability rating of "AA-" or better by at least two Rating Agencies, one of which
must be S&P, and (B) of the remaining 40% of the coverage, (I) 30% (of the total
syndicate) shall be provided by insurance companies having a claims paying
ability rating of "BBB-" or better by at least two Rating Agencies, one of which
must be S&P, and (II) the remaining 10% (of the total syndicate) shall be
provided by insurance carriers having a general policy rating of "A" or better
and a financial class of "XII" or better by A.M. Best Company, Inc., or (ii) if
such syndicate consists of four or fewer members, (A) at least 75% of the
insurance coverage (and 100% of the first layer of such coverage) shall be
provided by insurance companies having a claims paying ability rating of "AA" or
better by at least two Rating Agencies, one of which must be S&P, and (B) of the
remaining 25% of the coverage, (I) 15% (of the total syndicate) shall be
provided by insurance companies having a claims paying ability rating of "BBB-"
or better by at least two Rating Agencies, one of which must be S&P, and (II)
the remaining 10% (of the total syndicate) shall be provided by insurance
carriers having a general policy rating of "A" or better and a financial class
of "XII" or better by A.M. Best Company, Inc. Notwithstanding anything to the
contrary contained herein, Lender shall accept an "all-risk" Policy issued by
Factory Mutual Insurance Company ("Factory Mutual"), provided that (I) Factory
Mutual maintains a general policy rating of "A" or better and a financial class
of "XII" or better by A.M. Best Company, Inc. and a claims paying ability rating
of "A+" or better by Fitch, and (II) in connection with a Securitization, Lender
confirms that, in Lender's reasonable determination based on information from
the Rating Agencies, the ratings assigned to the portion or the Securitization
represented by the Loan will not be adversely affected as a result of the
"all-risk" Policy being issued by Factory Mutual. The Policies described in
Section 8.1(a) shall designate Lender and its successors and assigns as a
"Named Insured." Not less than ten (10) days prior to the expiration dates of
the Policies theretofore furnished to Lender, renewal Policies accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder (the
"INSURANCE PREMIUMS") shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically
allocate to the Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate
Policy insuring only the Property in compliance with the provisions of Section
8.1(a).
(d) All Policies provided for or contemplated by Section
8.1(a), except for the Policy referenced in Section 8.1(a)(v), shall name
Mortgage Borrower as the insured, Lender as a "Named Insured," and Mortgage
Lender as an additional insured, as their interests may appear, and in the case
of property damage, boiler and machinery, flood and earthquake insurance, shall
provide that the loss thereunder shall be payable to Mortgagee Lender, as
mortgagee and loss payee, and Lender, as their interests may appear.
(e) All Policies provided for in Section 8.1(a) shall
contain clauses or endorsements to the effect that:
(i) no act or negligence of Mortgage Borrower, or anyone
acting for Mortgage Borrower, or of any Tenant or other occupant, or
failure to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or
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any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
(ii) the Policies shall not be materially changed (other
than to increase the coverage provided thereby) or canceled without at
least thirty (30) days' prior written notice to Lender;
(iii) the issuers thereof shall give written notice to
Lender if the Policies have not been renewed thirty (30) days prior to
its expiration;
(iv) Lender shall not be liable for (A) any Insurance
Premiums thereon or subject to any assessments thereunder or (B) any
reporting requirements under such Policies; and
(v) any claim or defense the insurance company may have
against Borrower or Mortgage Borrower to deny payment of any claim by
Borrower or Mortgage Borrower thereunder shall not be effective against
Lender (and affirmatively providing that the insurance company will pay
the proceeds of such Policies to Lender notwithstanding any claim or
defense of the insurance company against Lender) and such Policies
shall contain an endorsement to such effect.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, without notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, obtaining such insurance coverage as Lender in its sole
discretion deems appropriate. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and shall bear interest at the Default
Rate.
Section 8.2. CASUALTY. If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a "CASUALTY"),
Borrower shall give prompt notice of such damage to Lender and shall cause
Mortgage Borrower to promptly commence and diligently prosecute the Restoration
of the Property in accordance with Section 8.4 of this Agreement and Section 8.4
of the Mortgage Loan Agreement, whether or not Mortgage Lender or Lender makes
any Net Proceeds available pursuant to Section 8.4 of the Mortgage Loan
Agreement or Section 8.4 hereof (as applicable)(unless Borrower has satisfied
all conditions set forth in Section 8.4 and Lender does not disburse the Net
Proceeds, in which case Borrower shall have no obligation under this Agreement
to restore the Property). Borrower shall cause Mortgage Borrower to pay all
costs of such Restoration whether or not such costs are covered by insurance.
Lender may, but shall not be obligated to make proof of loss if not made
promptly by Borrower, subject to the rights and obligations of Mortgage Lender
and Mortgage Borrower under the Mortgage Loan Documents. Borrower shall cause
Mortgage Borrower to adjust all claims for Insurance Proceeds in consultation
with, and approval of, Lender; provided, however, if an Event of Default has
occurred and is continuing, Lender shall have the exclusive right to participate
in the adjustment of all claims for Insurance Proceeds.
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Section 8.3. CONDEMNATION. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of the Property of which Borrower has knowledge and shall cause
Mortgage Borrower to deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall cause
Mortgage Borrower to, at its expense, diligently prosecute any such proceedings,
and shall consult with Lender, its attorneys and experts, and cooperate with
them in the carrying on or defense of any such proceedings. Notwithstanding any
taking by any public or quasi-public authority through Condemnation or otherwise
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall cause Mortgage Borrower to promptly
commence and diligently prosecute the Restoration of the Property and otherwise
comply with the provisions of Section 8.4 hereof and Section 8.4 of the Mortgage
Loan Agreement, whether or not Lender or Mortgage Lender makes any Net Proceeds
available pursuant to Section 8.4 hereof or Section 8.4 of the Mortgage Loan
Agreement (as applicable). Subject to the terms and provisions of the Mortgage
Loan Documents, if the Collateral is sold, through foreclosure or otherwise,
prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.
Section 8.4. RESTORATION. Subject to the rights of Mortgage
Lender and the obligations of Mortgage Borrower under the Mortgage Loan
Documents, the following provisions shall apply in connection with the
Restoration of the Property:
(a) If the Net Proceeds shall be less than $2,500,000 and
the costs of completing the Restoration shall be less than $2,500,000, the Net
Proceeds will be disbursed by Lender to Borrower or Mortgage Borrower upon
receipt, provided that all of the conditions set forth in Section 8.4(b)(i)
below and those conditions set forth in Section 8.4(b)(i) of the Mortgage Loan
Agreement are each met and Borrower delivers to Lender a written undertaking by
Mortgage Borrower to expeditiously commence and to satisfactorily complete with
due diligence the Restoration in accordance with the terms of this Agreement and
the Mortgage Loan Agreement.
(b) If the Net Proceeds are equal to or greater than
$2,500,000 or the costs of completing the Restoration are equal to or greater
than $2,500,000, Lender shall make the Net Proceeds available for the
Restoration in accordance with the provisions of this Section 8.4. The term "NET
PROCEEDS" for purposes of this Section 8.4 shall mean: (i) the net amount of all
insurance proceeds received by Lender pursuant to Section 8.1(a)(i), (iv), (vi)
and (vii) as a result of a Casualty, after deduction of its reasonable costs and
expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting the same ("INSURANCE PROCEEDS"), or (ii) the net amount of the Award
as a result of a Condemnation, after deduction of its reasonable costs and
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expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting the same ("CONDEMNATION PROCEEDS"), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower
or Mortgage Borrower for Restoration provided that each of the
following conditions are met:
(A) Mortgage Lender is permitting such Net
Proceeds to be applied toward the Restoration of the Property
in accordance with the Mortgage Loan Documents;
(B) no Event of Default shall have occurred and
be continuing;
(C) (1) in the event the Net Proceeds are
Insurance Proceeds, less than thirty percent (30%) of the
total floor area of the Improvements on the Property has been
damaged, destroyed or rendered unusable as a result of a
Casualty or (2) in the event the Net Proceeds are Condemnation
Proceeds, less than fifteen percent (15%) of the land
constituting the Property is taken, such land is located along
the perimeter or periphery of the Property, and no portion of
the Improvements is located on such land;
(D) Leases covering in the aggregate at least
seventy-five percent (75%) of the total rentable space in the
Property which has been demised under executed and delivered
Leases in effect as of the date of the occurrence of such
Casualty or Condemnation, whichever the case may be, and each
Major Lease in effect as of such date shall remain in full
force and effect during and after the completion of the
Restoration without abatement of rent beyond the time required
for Restoration;
(E) Borrower shall commence or cause Mortgage
Borrower to commence the Restoration as soon as reasonably
practicable (but in no event later than ninety (90) days after
such Casualty or Condemnation, whichever the case may be,
occurs) and shall diligently pursue the same to satisfactory
completion, with commencement defined for purposes hereof to
mean the filing of the requisite applications and ancillary
paperwork necessary to receive building permits;
(F) Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and
interest under the Note, which will be incurred with respect
to the Property as a result of the occurrence of any such
Casualty or Condemnation, whichever the case may be, will be
covered out of the insurance coverage referred to in Section
8.1(a)(iii) above;
(G) Lender shall be satisfied that the
Restoration will be completed on or before the earliest to
occur of (1) six (6) months prior to the Maturity Date, (2)
the earliest date required for such completion under the terms
of any Leases or material agreements affecting the Property,
(3) such time as may be required under applicable zoning law,
ordinance, rule or regulation, or (4) the expiration of the
insurance coverage referred to in Section 8.1(a)(iii);
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(H) the Property and the use thereof after the
Restoration will be in compliance with and permitted under all
Legal Requirements;
(I) the Restoration shall be done and completed
by Borrower or Mortgage Borrower, as applicable, in an
expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;
(J) such Casualty or Condemnation, as
applicable, does not result in the loss of access to the
Property or the Improvements, which access is otherwise not
replaced via new improvements to the Property or an access
easement (respectively);
(K) Borrower shall deliver, or cause to be
delivered, to Lender a signed detailed budget approved in
writing by Mortgage Borrower's architect or engineer stating
the estimated entire cost of completing the Restoration, which
budget shall be reasonable acceptable to Lender; and
(L) the Net Proceeds together with any cash or
cash equivalent deposited by Borrower or Mortgage Borrower
with Lender are sufficient in Lender's reasonable judgment to
cover the cost of the Restoration.
(ii) Subject to the terms and provisions of the Mortgage
Loan Documents, the Net Proceeds shall be held by Lender until
disbursements commence, and, until disbursed in accordance with the
provisions of this Section 8.4, shall constitute additional security
for the Debt and other obligations under the Loan Documents. The Net
Proceeds shall be disbursed by Lender to, or as directed by, Borrower
from time to time during the course of the Restoration, upon receipt of
evidence satisfactory to Lender that (A) all the conditions precedent
to such advance, including those set forth in Section 8.4(b)(i), have
been satisfied, (B) all materials installed and work and labor
performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the related Restoration item
have been paid for in full, and (C) there exist no notices of pendency,
stop orders, mechanic's or materialman's liens or notices of intention
to file same, or any other liens or encumbrances of any nature
whatsoever on the Property which have not either been fully bonded to
the satisfaction of Lender (and in accordance with applicable Legal
Requirements) and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy (as defined in the Mortgage Loan Agreement).
Notwithstanding the foregoing, Insurance Proceeds from the Policies
required to be maintained by Borrower pursuant to Section 8.1(a)(iii)
shall be controlled by Lender at all times, shall not be subject to the
provisions of this Section 8.4 and shall be used solely for the payment
of the obligations under the Loan Documents and Operating Expenses.
(iii) All plans and specifications required in connection
with the Restoration shall be subject to prior review and acceptance in
all respects by Lender and by an independent consulting engineer
selected by Lender (the "RESTORATION CONSULTANT"). Lender shall have
the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with the Restoration. The
identity of the
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contractors, subcontractors and materialmen engaged in the Restoration,
as well as the contracts in excess of $250,000 under which they have
been engaged, shall be subject to prior review and acceptance by Lender
and the Restoration Consultant. All costs and expenses incurred by
Lender in connection with making the Net Proceeds available for the
Restoration, including, without limitation, reasonable counsel fees and
disbursements and the Restoration Consultant's fees, shall be paid by
Borrower or Mortgage Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for work in place as part of
the Restoration, as certified by the Restoration Consultant, minus the
Restoration Retainage. The term "Restoration Retainage" shall mean an
amount equal to ten percent (10%) of the costs actually incurred for
work in place as part of the Restoration, as certified by the
Restoration Consultant, until the Restoration has been completed. The
Restoration Retainage shall be reduced to five percent (5%) of the
costs incurred upon receipt by Lender of satisfactory evidence that
fifty percent (50%) of the Restoration has been completed. The
Restoration Retainage shall in no event, and notwithstanding anything
to the contrary set forth above in this Section 8.4(b), be less than
the amount actually held back by Borrower or Mortgage Borrower, as
applicable, from contractors, subcontractors and materialmen engaged in
the Restoration. The Restoration Retainage shall not be released until
the Restoration Consultant certifies to Lender that the Restoration has
been completed in accordance with the provisions of this Section 8.4(b)
and that all approvals necessary for the re-occupancy and use of the
Property have been obtained from all appropriate Governmental
Authorities, and Lender receives evidence satisfactory to Lender that
the costs of the Restoration have been paid in full or will be paid in
full out of the Restoration Retainage; provided, however, that Lender
will release the portion of the Restoration Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Restoration Consultant
certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums
due to the contractor, subcontractor or materialman as may be
reasonably requested by Lender or by the title company issuing the
Title Insurance Policy, and Lender receives an endorsement to the Title
Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such
endorsement. If required by Lender, the release of any such portion of
the Restoration Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements
of the Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion of Lender in
consultation with the Restoration Consultant, be sufficient to pay in
full the balance of the costs which are estimated by the Restoration
Consultant to be incurred in connection with the completion of the
Restoration, Borrower
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or Mortgage Borrower shall deposit the deficiency (the "NET PROCEEDS
DEFICIENCY") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with
Lender shall be held by Lender and shall be disbursed for costs
actually incurred in connection with the Restoration on the same
conditions applicable to the disbursement of the Net Proceeds, and
until so disbursed pursuant to this Section 8.4(b) shall constitute
additional security for the Debt and other obligations under the Loan
Documents.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited
with Lender after the Restoration Consultant certifies to Lender that
the Restoration has been completed in accordance with the provisions of
this Section 8.4(b) and Section 8.4(b) of the Mortgage Loan Agreement,
and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in
full, shall be remitted by Lender to Borrower (or as directed by
Borrower), provided no Event of Default shall have occurred and shall
be continuing under the Note, this Agreement or any of the other Loan
Documents.
(c) All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 8.4(b)(vii) above may (x) be retained and applied
by Lender toward the payment of the Debt whether or not then due and payable in
such order, priority and proportions as Lender in its sole discretion shall deem
proper, or, (y) at the sole discretion of Lender, the same may be paid, either
in whole or in part, to Borrower for such purposes and upon such conditions as
Lender shall designate.
(d) Notwithstanding anything herein to the contrary, in
the event that the Property is being restored by Mortgage Borrower pursuant to
the Mortgage Loan Documents, Lender shall agree to the release of the Net
Proceeds for Restoration of the Property pursuant to the terms and provisions of
the Mortgage Loan Documents, subject to Lender's rights to receive and approve
in its discretion all deliverables set forth in this Section 8.4.
ARTICLE IX
RESERVE FUNDS
Borrower shall cause Mortgage Borrower to comply with all of
its obligations under Article IX of the Mortgage Loan Agreement. Notwithstanding
anything to the contrary contained in this Agreement, if at any time and for any
reason (including, without limitation, the satisfaction of the Mortgage Loan),
Mortgage Borrower is no longer maintaining any of the Reserve Accounts (as
defined in the Mortgage Loan Agreement) in accordance with the terms of the
Mortgage Loan Documents or, with respect to the Replacement Reserve Funds, the
Reserve Letter of Credit in lieu thereof in accordance with the terms of the
Mortgage Loan Agreement, (i) Borrower shall be required to promptly establish
and maintain with Lender and for the benefit of Lender reserves in replacement
and substitution thereof, which substitute reserves shall be subject to all of
the same terms and conditions applicable under the Mortgage Loan Documents with
respect to the Reserve Accounts being replaced (including, but not limited to,
Article X of the Mortgage Loan Agreement relating to cash management and
Borrower shall, and shall cause
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Mortgage Borrower to, acknowledge and agree to the amendments to this Agreement
relating to such substitution to cash management provided such amendments are
substantially similar to Article X of the Mortgage Loan Agreement), and (ii) to
the extent not prohibited by Mortgage Lender under the Mortgage Loan Documents,
Borrower shall or shall cause Mortgage Lender to remit to Lender any funds from
Reserve Accounts that were remaining in such reserves at the time of the
termination of such reserves for the purpose of funding the equivalent
substitute reserves.
ARTICLE X
CASH MANAGEMENT
Borrower and Lender acknowledge and agree that all Rent and
other income from the Property will be deposited and disbursed in accordance
with Article X of the Mortgage Loan Agreement entitled "Cash Management."
Notwithstanding anything to the contrary contained in this Agreement, if at any
time and for any reason (including, without limitation, the satisfaction of the
Mortgage Loan), Mortgage Borrower is no longer maintaining the accounts
established pursuant to Article X of the Mortgage Loan Agreement or if the cash
management arrangement referred to in the Mortgage Loan Agreement is no longer
in full force and effect, Borrower shall promptly enter into a substitute cash
management agreement and related lockbox agreement with Agent (as defined in the
Mortgage Loan Agreement) (or such other depository institution as Lender shall
direct, or another agent selected by Borrower and reasonably acceptable to
Lender) on substantially the same terms as the agreements entered into as of the
date hereof in connection with the related Mortgage Loan.
ARTICLE XI
EVENTS OF DEFAULT; REMEDIES
Section 11.1. EVENT OF DEFAULT.
The occurrence of any one or more of the following events
shall constitute an "EVENT OF DEFAULT":
(a) if any regularly scheduled portion of the Debt is not
paid on or prior to the date the same is due or if the entire Debt is not paid
on or before the Maturity Date or if any other portion of the Debt is not paid
within five (5) days of the date the same is due;
(b) intentionally omitted;
(c) if the Policies are not kept in full force and
effect, or if certified copies of the Policies are not delivered to Lender as
provided in Section 8.1;
(d) if Borrower breaches any covenant contained in
Article 6 or any covenant contained in Article 7 hereof;
(e) if any representation or warranty of, or with respect
to, Borrower, Mortgage Borrower, Borrower Principal, or any member, general
partner, principal or beneficial
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owner of any of the foregoing, made herein, in any other Loan Document, or in
any certificate, report, financial statement or other instrument or document
furnished to Lender at the time of the closing of the Loan or during the term of
the Loan shall have been false or misleading in any material respect when made
(a "REP & WARRANTY BREACH"), unless (i) Borrower notifies Lender of such Rep &
Warranty Breach promptly upon becoming aware of it and (ii) such Rep & Warranty
Breach (A) was unintentional, (B) is immaterial and (iii) if capable of being
cured, is cured within thirty (30) days following notice from Lender;
(f) if (i) Borrower or Mortgage Borrower shall commence
any case, proceeding or other action (A) under any Creditors Rights Laws,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or Borrower or
Mortgage Borrower shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower or Mortgage any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days; or (iii) there shall be commenced against Borrower or
Mortgage any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof; or (iv) Borrower
or Mortgage Borrower shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Borrower or Mortgage shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due;
(g) if Borrower shall be in default beyond applicable
notice and grace periods under any other pledge agreement or other security
agreement covering any part of the Collateral, whether it be superior or junior
in lien to the Pledge Agreement;
(h) intentionally omitted;
(i) if any federal tax lien is filed against Borrower,
any member or general partner of Borrower, Borrower Principal, the Collateral or
the Property and same is not discharged of record within thirty (30) days after
same is filed;
(j) if a judgment is filed against the Borrower in excess
of $50,000 which is not fully covered by insurance or which is not vacated or
discharged within 90 days;
(k) if any default occurs under any guaranty or indemnity
executed in connection herewith and such default continues after the expiration
of applicable grace periods, if any;
(1) if Borrower or Mortgage Borrower shall permit any
event within its control to occur that would cause any REA to terminate without
notice or action by any party thereto or would entitle any party to terminate
any REA and the term thereof by giving notice to
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Borrower or Mortgage Borrower; or any REA shall be surrendered, terminated or
canceled for any reason or under any circumstance whatsoever except as provided
for in such REA; or any term of any REA shall be modified or supplemented
without Lender's prior written consent; or Borrower or Mortgage Borrower shall
fail, within ten (10) Business Days after demand by Lender, to exercise its
option to renew or extend the term of any REA or shall fail or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
such REA except as provided for in such REA;
(m) if any of the assumptions contained in any opinion
relating to issues of substantive consolidation delivered to Lender in
connection with the Loan, or in any other opinion relating to substantive
consolidation delivered subsequent to the closing of the Loan, is or shall
become untrue in any material respect;
(n) If any of Borrower or its Subsidiaries shall breach
any of the terms of:
(i) Section 2.5(g) (Payments upon a Liquidation Event);
(ii) Section 5.15 (Liens);
(iii) intentionally deleted;
(iv) Section 5.25 (Special Distributions);
(v) Section 5.28 (Limitations);
(vi) Section 5.29 (Limitations on Distributions);
(vii) Section 5.30 (Other Limitations);
(viii) intentionally deleted;
(ix) Section 5.32 (Refinancing);
(o) if a Mortgage Loan Event of Default occurs; or
(p) if Borrower shall continue to be in default under any
other term, covenant or condition of this Agreement or any of the Loan Documents
for more than ten (10) days after notice from Lender in the case of any default
which can be cured by the payment of a sum of money or for thirty (30) days
after notice from Lender in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and
Borrower shall have commenced to cure such default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the same,
such thirty (30) day period shall be extended for so long as it shall require
Borrower in the exercise of due diligence to cure such default, it being agreed
that no such extension shall be for a period in excess of sixty (60) days.
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Section 11.2. REMEDIES.
(a) Upon the occurrence of an Event of Default (other
than an Event of Default described in Section 11.1(f) above) and at any time
thereafter Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, take such action, without notice or demand, that Lender deems advisable
to protect and enforce its rights against Borrower and in the Collateral,
including, without limitation, declaring the Debt to be immediately due and
payable, and Lender may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents and may exercise all the rights and remedies of a
secured party under the UCC, as adopted and enacted by the State of Delaware or
States where any of the Collateral is located, against Borrower and the
Collateral, including, without limitation, all rights or remedies.available at
law or in equity; and upon any Event of Default described in Section 11.1(f)
above, the Debt and all other obligations of Borrower hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and Borrower hereby expressly waives any such notice
or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
(b) Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Lender against Borrower under this Agreement or any of the other Loan
Documents executed and delivered by, or applicable to, Borrower or at law or in
equity may be exercised by Lender at any time and from time to time, whether or
not all or any of the Debt shall be declared due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Collateral. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singularly, successively,
together or otherwise, at such time and in such order as Lender may determine in
its sole discretion, to the fullest extent permitted by law, without impairing
or otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
ARTICLE XII
ENVIRONMENTAL PROVISIONS
Section 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants, based upon the Environmental
Report of the Property and information that Borrower knows or should reasonably
have known, that: (a) there are no Hazardous Materials or underground storage
tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws and with permits issued pursuant thereto (if
such permits are required), if any, and (ii) either (A) in the case of Hazardous
Materials, in amounts not in excess of that necessary to operate the Property
for the purposes set forth herein or (B) fully disclosed to and approved by
Lender in writing pursuant to the Environmental Report; (b) there are no past,
present or threatened Releases of Hazardous Materials in violation of any
Environmental Law or which would require remediation by a Governmental Authority
in, on, under or from the Property except as described in the
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Environmental Report; (c) there is no threat of any Release of Hazardous
Materials migrating to the Property except as described in the Environmental
Report; (d) there is no past or present non-compliance with Environmental Laws,
or with permits issued pursuant thereto, in connection with the Property except
as described in the Environmental Report; (e) Borrower does not know of, and has
not received, any written or oral notice or other communication from any Person
relating to Hazardous Materials in, on, under or from the Property; and (f)
Borrower has truthfully and fully provided to Lender, in writing, any and all
information relating to environmental conditions in, on, under or from the
Property known to Borrower or contained in Borrower's files and records,
including but not limited to any reports relating to Hazardous Materials in, on,
under or migrating to or from the Property and/or to the environmental condition
of the Property.
Section 12.2. ENVIRONMENTAL COVENANTS.
Borrower covenants and agrees that so long as Mortgage
Borrower owns, manages, is in possession of, or otherwise controls the operation
of the Property: (a) all uses and operations on or of the Property, whether by
Mortgage Borrower or any other Person, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) there shall be no
Releases of Hazardous Materials in, on, under or from the Property; (c) there
shall be no Hazardous Materials in, on, or under the Property, except those that
are both (i) in compliance with all Environmental Laws and with permits issued
pursuant thereto, if and to the extent required, and (ii) (A) in amounts not in
excess of that necessary to operate the Property for the purposes set forth
herein or (B) fully disclosed to and approved by Lender in writing; (d) cause
Mortgage Borrower to keep the Property free and clear of all Environmental
Liens; (e) cause Mortgage Borrower to, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 12.4 below,
including but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (f) Borrower shall cause
Mortgage Borrower, at its sole cost and expense, to perform any environmental
site assessment or other investigation of environmental conditions in connection
with the Property, pursuant to any reasonable written request of Lender, upon
Lender's reasonable belief that the Property is not in full compliance with all
Environmental Laws and share with Lender the reports and other results thereof,
and Lender and other Indemnified Parties shall be entitled to rely on such
reports and other results thereof; (g) Borrower shall or shall cause Mortgage
Borrower to, at its sole cost and expense, comply with all reasonable written
requests of Lender to (i) reasonably effectuate remediation of any Hazardous
Materials in, on, under or from the Property that are found to be in violation
of Environmental Law; and (ii) comply with any Environmental Law; (h) Borrower
shall not allow Mortgage Borrower, any tenant or other user of the Property to
violate any Environmental Law; and (i) Borrower shall immediately notify Lender
in writing after it has become aware of (A) any presence or Release or
threatened Release of Hazardous Materials in, on, under, from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws related
in any way to the Property; (C) any actual or potential Environmental Lien
against the Property; (D) any required or proposed remediation of environmental
conditions relating to the Property; and (E) any written or oral notice or other
communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) relating in any way to
Hazardous Materials. Any failure of Borrower to perform its obligations pursuant
to this Section 12.2 shall constitute bad faith waste with respect to the
Property.
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Section 12.3. LENDER'S RIGHTS.
Lender and any other Person designated by Lender, including
but not limited to any representative of a Governmental Authority, and any
environmental consultant, and any receiver appointed by any court of competent
jurisdiction, shall have the right, but not the obligation, to enter upon the
Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in Lender's sole discretion) and taking samples of soil, groundwater
or other water, air, or building materials, and conducting other invasive
testing. To the extent that any such Person is an agent of Lender, Lender shall
require that such Person is bonded and insured. Provided Lender gives Borrower
at least 2 days advance notice and agrees to use reasonable efforts to minimize
interference with any tenants, Borrower shall cooperate with and provide (or
cause Mortgage Borrower to provide) access to Lender and any such person or
entity designated by Lender. Other than in connection with what Lender
determines to be an emergency situation, Lender agrees not to conduct any
invasive testing.
Section 12.4. OPERATIONS AND MAINTENANCE PROGRAMS.
If recommended by the Environmental Report or any other
environmental assessment or audit of the Property, Borrower shall cause Mortgage
Borrower to establish and comply with an operations and maintenance program with
respect to the Property, in form and substance reasonably acceptable to Lender,
prepared by an environmental consultant reasonably acceptable to Lender, which
program shall address any asbestos-containing material or lead based paint that
may now or in the future be detected at or on the Property. Without limiting the
generality of the preceding sentence, Lender may require (a) periodic notices or
reports to Lender with regard to Borrower's operations and maintenance programs
in form, substance and at such intervals as Lender may specify, (b) an amendment
to such operations and maintenance program to address changing circumstances,
laws or other matters, (c) at Borrower's sole expense, supplemental examination
of the Property by consultants specified by Lender, (d) provided Lender gives
Borrower at least 2 days advance notice and agrees to use reasonable efforts to
minimize interference with any tenants, access to the Property by Lender, its
agents or servicer, to review and assess the environmental condition of the
Property and Mortgage Borrower's compliance with any operations and maintenance
program, and (e) variation of the operations and maintenance program in response
to the reports provided by any such consultants.
Section 12.5. ENVIRONMENTAL DEFINITIONS.
"ENVIRONMENTAL LAW" means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations, standards,
policies and other government directives or requirements, including but not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act and the Resource Conservation and Recovery Act, that apply to Borrower or
the Property and relate to Hazardous Materials or protection of human health or
the environment. "ENVIRONMENTAL LIENS" means all Liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other Person. "ENVIRONMENTAL REPORT" means the written reports
resulting from the environmental site assessments of the Property delivered to
Lender in connection with the Loan.
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"HAZARDOUS MATERIALS" shall mean petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials in any form that is or could become friable; underground or
above-ground storage tanks, whether empty or containing any substance; any
substance the presence of which on the Property is prohibited by any federal,
state or local authority; any substance that requires special handling; and any
other material or substance now or in the future defined as a "hazardous
substance," "hazardous material", "hazardous waste", "toxic substance", "toxic
pollutant", "contaminant", or "pollutant" within the meaning of any
Environmental Law. "RELEASE" of any Hazardous Materials includes but is not
limited to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Materials.
ARTICLE XIII
SECONDARY MARKET
Section 13.1. TRANSFER OF LOAN. Lender may, at any time, sell,
transfer or assign the Loan Documents, or grant participations therein
("PARTICIPATIONS") or syndicate the Loan ("SYNDICATION") or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest
in a rated or unrated public offering or private placement ("SECURITIES") (the
Syndication or the issuance of Participations and/or Securities, a
"SECURITIZATION").
Section 13.2. DELEGATION OF SERVICING. At the option of
Lender, the Loan may be serviced by a servicer/trustee selected by Lender
("SERVICER") and Lender may delegate all or any portion of its responsibilities
under this Agreement and the other Loan Documents to such servicer/trustee
pursuant to a servicing agreement between Lender and such servicer/trustee.
Section 13.3. DISSEMINATION OF INFORMATION. Lender may forward
to each purchaser, transferee, assignee, or servicer of, and each participant,
or investor in, the Loan, or any Participations and/or Securities or any of
their respective successors (collectively, the "INVESTOR") or any Rating Agency
rating the Loan, or any Participations and/or Securities, each prospective
Investor, and any organization maintaining databases on the underwriting and
performance of commercial mortgage loans, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
Mortgage Borrower, any managing member or general partner thereof, Borrower
Principal, and the Property, including financial statements, whether furnished
by Borrower or otherwise, as Lender determines necessary or desirable. Borrower
irrevocably waives any and all rights it may have under applicable Legal
Requirements to prohibit such disclosure, including but not limited to any right
of privacy.
Section 13.4. COOPERATION. At the request of the holder of the
Note and, to the extent not already required to be provided by Borrower under
this Agreement, Borrower and Borrower Principal shall use reasonable efforts to
provide information not in the possession of the holder of the Note in order to
satisfy the market standards to which the holder of the Note
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customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with such sales or transfers, including,
without limitation, to:
(a) provide, or cause Mortgage Borrower to provide, (i)
updated financial, budget and other information with respect to the Property,
the Collateral, Borrower, Mortgage Borrower, Sponsor, Borrower Principal and
Manager and (ii) modifications and/or updates to the appraisals, market studies,
environmental reviews and reports (Phase I reports and, if appropriate, Phase II
reports) and engineering reports of the Property obtained in connection with the
making of the Loan (all of the foregoing being referred to as the "PROVIDED
INFORMATION"), together, if customary, with appropriate verification and/or
consents of the Provided Information through letters of auditors or opinions of
counsel of independent attorneys acceptable to Lender and the Rating Agencies;
(b) make changes to the organizational documents of
Borrower or Mortgage;
(c) at Borrower's expense, cause counsel to render or
update existing opinion letters as to enforceability and non-consolidation,
which may be relied upon by the holder of the Note, the Rating Agencies and
their respective counsel, which shall be dated as of the closing date of the
Securitization;
(d) provided Lender gives at least 2 days advance notice
and agrees to use reasonable efforts to minimize interference with any tenants,
permit site inspections, appraisals, market studies and other due diligence
investigations of the Property, as may be reasonably requested by the holder of
the Note or the Rating Agencies or as may be necessary or appropriate in
connection with the Securitization;
(e) make the representations and warranties with respect
to the Property, the Collateral, Borrower, Mortgage Borrower, Borrower
Principal, Manager and the Loan Documents as Borrower has made in the Loan
Documents and, subject to such knowledge or diligence qualifiers as may be
necessary, such other representations and warranties with respect to Borrower,
Mortgage Borrower, the Property, the Collateral and Manager, as may be
reasonably requested by the holder of the Note or the Rating Agencies;
(f) execute such amendments to the Loan Documents as may
be requested by the holder of the Note or the Rating Agencies or otherwise to
effect the Securitization including, without limitation, bifurcation of the Loan
into two or more components and/or separate notes and/or creating a
senior/subordinate note structure; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate, the stated maturity or the amortization of
principal set forth in the Note, except in connection with a bifurcation of the
Loan which may result in varying fixed interest rates and amortization
schedules, but which shall have the same initial weighted average coupon of the
original Note, or (ii) in the reasonable judgment of Borrower, modify or amend
any other material economic term of the Loan, or (iii) in the reasonable
judgment of Borrower, materially increase Borrower's obligations and
liabilities, or materially decrease Borrower's rights, under the Loan Documents.
Borrower acknowledges that in connection with a Securitization, Lender may
change the Selected Day in its sole discretion, but in no event to earlier than
the fifth (5th) of each month.
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(g) deliver to Lender and/or any Rating Agency, (i) one
or more certificates executed by an officer of Borrower certifying as to the
accuracy, as of the closing date of the Securitization, of all representations
made by Borrower in the Loan Documents as of the Closing Date in all relevant
jurisdictions or, if such representations are no longer accurate, certifying as
to what modifications to the representations would be required to make such
representations accurate as of the closing date of the Securitization, and (ii)
certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower as of
the date of the closing date of the Securitization;
(h) have reasonably appropriate personnel participate in
a bank meeting and/or presentation for the Rating Agencies or Investors; and
(i) cooperate with and assist Lender in obtaining ratings
of the Securities from two (2) or more of the Rating Agencies.
Borrower shall pay all costs and expenses incurred by Borrower
in connection with the compliance of Borrower and, if applicable, Mortgage
Borrower and Borrower Principal, with requests made under this Section 13.4,
including, without limitation, any additional costs and expenses payable in
connection with the substitution for Factory Mutual of an acceptable insurer
pursuant to Section 8.1 hereof; provided, however, that Borrower shall not be
responsible for the payment of any costs or expenses incurred by or on behalf of
Lender, or any Rating Agency fees, in connection with a Securitization.
In the event that Borrower requests any consent or approval
hereunder and the provisions of this Agreement or any Loan Documents require the
receipt of written confirmation from each Rating Agency with respect to the
rating on the Securities, or, in accordance with the terms of the transaction
documents relating to a Securitization, such a rating confirmation is required
in order for the consent of Lender to be given, Borrower shall pay all of the
costs and expenses of Lender, Lender's servicer and each Rating Agency in
connection therewith, and, if applicable, shall pay any fees imposed by any
Rating Agency as a condition to the delivery of such confirmation.
Section 13.5. SECURITIZATION INDEMNIFICATION.
(a) Borrower and Borrower Principal understand that
certain of the Provided Information may be included in disclosure documents in
connection with the Securitization, including, without limitation, a prospectus,
prospectus supplement, offering memorandum or private placement memorandum
(each, a "DISCLOSURE DOCUMENT") and may also be included in filings with the
Securities and Exchange Commission pursuant to the Securities Act or the
Exchange Act, or provided or made available to investors or prospective
investors in the Securities, the Rating Agencies, and service providers relating
to the Securitization. In the event that the Disclosure Document is required to
be revised prior to the sale of all Securities, Borrower and Borrower Principal
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.
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(b) Borrower and Borrower Principal agree to provide in
connection with each of (i) a preliminary and a final offering memorandum or
private placement memorandum or similar document (including any Investor or
Rating Agency "term sheets" or presentations relating to the Property and/or the
Loan) or (ii) a preliminary and final prospectus or prospectus supplement, as
applicable, which are delivered to Borrower and Borrower Principal for review,
an indemnification certificate (A) certifying that (I) Borrower and Borrower
Principal have carefully examined such memorandum or prospectus or other
document actually delivered by or on behalf of Lender (including any Investor or
Rating Agency "term sheets" or presentations relating to the Property and/or the
Loan), as applicable, including without limitation, the sections entitled
"Special Considerations," and/or "Risk Factors," and "Certain Legal Aspects of
the Mortgage Loan," or similar sections, and all sections relating to Borrower,
Borrower Principal, Manager, their Affiliates, the Loan, the Loan Documents and
the Property, and any risks or special considerations relating thereto, and any
other sections reasonably requested by Lender (all such sections, collectively,
the "DISCLOSED MATERIALS"), and (II) to the best of Borrower's knowledge except
as specifically identified by Borrower, the Disclosed Materials do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 13.5, Lender hereunder shall include
its officers and directors) and the Affiliate of Lender that (i) has filed the
registration statement, if any, relating to the Securitization and/or (ii) which
is acting as issuer, depositor, sponsor and/or a similar capacity with respect
to the Securitization (any Person described in (i) or (ii), an "ISSUER PERSON"),
and each director and officer of any Issuer Person, and each Person or entity
who controls any Issuer Person within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the "ISSUER
GROUP"), and each Person which is acting as an underwriter, manager, placement
agent, initial purchaser or similar capacity with respect to the Securitization,
each of its directors and officers and each Person who controls any such Person
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the "UNDERWRITER GROUP") for any Losses to which
Lender, the Issuer Group or the Underwriter Group may become subject insofar as
the Losses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Disclosed Materials or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in the Disclosed Materials or necessary in
order to make the statements in the Disclosed Materials or in light of the
circumstances under which they were made, not misleading (collectively the
"SECURITIES LIABILITIES") and (C) agreeing to reimburse Lender, the Issuer Group
and the Underwriter Group for any legal or other expenses reasonably incurred by
Lender and Issuer Group in connection with investigating or defending the
Securities Liabilities; provided, however, that Borrower will be liable in any
such case under clauses (B) or (C) above only to the extent that any such
Securities Liabilities arise out of or is based upon any such untrue statement
or omission made therein in reliance upon the Disclosed Materials or any reports
delivered by or on behalf of Borrower or Borrower Principal in connection with
the underwriting of the Loan, including, without limitation, financial
statements of Borrower or Borrower Principal, operating statements, rent rolls,
environmental site assessment reports and Property condition reports with
respect to the Property. This indemnity agreement will be in addition to any
liability which Borrower and Borrower Principal may otherwise have. Moreover,
the indemnification provided for in Clauses (B) and (C) above shall be effective
whether or not an indemnification certificate described in (A) above is provided
and,
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if Borrower or Borrower Principal do not provide the indemnification
certificate, shall be applicable based on information previously provided by
Borrower and Borrower Principal or their Affiliates.
(c) In connection with filings under the Exchange Act or
any information provided to holders of Securities on an ongoing basis, Borrower
and Borrower Principal agree to indemnify (i) Lender, the Issuer Group and the
Underwriter Group for Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Securities Liabilities arise
out of or are based upon the omission or alleged omission to state in the
Provided Information a material fact required to be stated in the Provided
Information in order to make the statements in the Provided Information, in
light of the circumstances under which they were made not misleading and (ii)
reimburse Lender, the Issuer Group or the Underwriter Group for any legal or
other expenses reasonably incurred by Lender, the Issuer Group or the
Underwriter Group in connection with defending or investigating the Securities
Liabilities.
(d) Promptly after receipt by an indemnified party under
this Section 13.5 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 13.5, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party under this Section 13.5 the indemnifying party shall
be responsible for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there are any legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party shall not be
liable for the expenses of more than one such separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreements provided for in
Section 13.5(c) or Section 13.5(d) is or are for any reason held to be
unenforceable by an indemnified party in respect of any losses, claims, damages
or liabilities (or action in respect thereof) referred to therein which would
otherwise be indemnifiable under Section 13.5(c) or Section 13.5(d), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims,
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damages or liabilities (or action in respect thereof); provided, however, that
no Person guilty of fraudulent misrepresentation (within the meaning of Section
ll(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the indemnified party's, Borrower's
and Borrower Principal's relative knowledge and access to information concerning
the matter with respect to which claim was asserted; (ii) the opportunity to
correct and prevent any statement or omission; and (iii) any other equitable
considerations appropriate in the circumstances. Lender, Borrower and Borrower
Principal hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
(f) The liabilities and obligations of Borrower, Borrower
Principal and Lender under this Section 13.5 shall survive the satisfaction of
this Agreement and the satisfaction and discharge of the Debt.
Section 13.6. [INTENTIONALLY OMITTED].
Section 13.7. [INTENTIONALLY OMITTED].
Section 13.8. MORTGAGE LOAN SECURITIZATION. Borrower also
agrees to cooperate with Mortgage Lender in connection with the Securitization
of the Mortgage Loan as set forth in Section 13.4 of the Mortgage Loan Agreement
and, to the extent set forth therein, at Borrower's expense.
ARTICLE XIV
INDEMNIFICATIONS
Section 14.1. GENERAL INDEMNIFICATION. Borrower shall
indemnify, defend and hold harmless the Indemnified Parties from and against any
and all Losses imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
one or more of the following: (a) any accident, injury to or death of persons or
loss of or damage to property occurring in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (b) any use, nonuse or condition in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (c) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (d) any failure of the Property or
the Collateral to be in compliance with any applicable Legal Requirements; (e)
any and all claims and demands whatsoever which may be asserted against Lender
by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; (f)
the holding or investing of the Mortgage Reserve Accounts or the performance of
the Required Work (as defined in the Mortgage Loan Agreement), or (g) the
payment of any commission, charge or brokerage fee to anyone which may be
payable in connection with the funding of the Loan (collectively, the
"INDEMNIFIED LIABILITIES"); provided, however, that Borrower shall not have any
obligation to Lender hereunder to the extent that such Indemnified Liabilities
arise from the gross negligence, illegal acts, fraud or willful misconduct
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of Lender. To the extent that the undertaking to indemnify, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall pay the maximum portion that
it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Lender.
Section 14.2. INTANGIBLE TAX INDEMNIFICATION. Borrower shall,
at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making of the
Pledge Agreement, the Note or any of the other Loan Documents, but excluding any
income, franchise or other similar taxes.
Section 14.3. ERISA INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Section 4.9 or Section 5.18 of this Agreement.
Section 14.4. SURVIVAL. The obligations and liabilities of
Borrower and Borrower Principal under this Article 14 shall fully survive
indefinitely notwithstanding any termination, satisfaction, or assignment of the
Pledge Agreement. Notwithstanding the foregoing, if the Loan is paid off in full
on the Maturity Date, Borrower shall have no further liability under this
Article 14 with respect to any event that occurs subsequent to the Maturity
Date.
ARTICLE XV
EXCULPATION
Section 15.1. EXCULPATION.
(a) Except as otherwise provided herein or in the other
Loan Documents, Lender shall not enforce the liability and obligation of
Borrower or Borrower Principal, as applicable, to perform and observe the
obligations contained herein or in the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring an action under the UCC, an action for specific
performance or any other appropriate action or proceeding to enable Lender to
enforce and realize upon this Agreement, the Note, the Pledge Agreement and the
other Loan Documents, and the interest in the Collateral and any other
collateral given to Lender created by this Agreement, the Note, the Pledge
Agreement and the other Loan Documents; provided, however, that, except as
specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower or Borrower Principal, as applicable, only
to the extent of Borrower's or Borrower Principal's interest in the Collateral
and in any other collateral given to Lender. Lender, by accepting this
Agreement, the Note, the Pledge Agreement and the other
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Loan Documents, agrees that it shall not, except as otherwise provided in this
Section 15.1, xxx for, seek or demand any deficiency judgment against Borrower
or Borrower Principal in any such action or proceeding, under or by reason of or
under or in connection with this Agreement, the Note, the Pledge Agreement or
the other Loan Documents. The provisions of this Section 15.1 shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Agreement, the Note, the Pledge Agreement or the
other Loan Documents; (ii) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
this Agreement and the Pledge Agreement; (iii) affect the validity or
enforceability of any indemnity (including, without limitation, those contained
in Section 13.5 and Article 14 of this Agreement and the Environmental
Indemnity), guaranty, master lease or similar instrument made in connection with
this Agreement, the Note, the Pledge Agreement and the other Loan Documents;
(iv) impair the right of Lender to obtain the appointment of a receiver; (v)
impair the enforcement of the assignment of leases provisions contained in the
Pledge Agreement; or (vi) impair the right of Lender to obtain a deficiency
judgment or other judgment on the Note against Borrower or Borrower Principal if
necessary to obtain any Insurance Proceeds or Awards to which Lender would
otherwise be entitled under this Agreement; provided however, Lender shall only
enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1
to the contrary, Borrower and Borrower Principal shall be personally liable to
Lender on a joint and several basis for Losses due to:
(i) fraud or intentional misrepresentation by Borrower,
Borrower Principal or any other Affiliate of Borrower or Borrower
Principal in connection with the execution and the delivery of this
Agreement, the Note, the Pledge Agreement, any of the other Loan
Documents, or any certificate, report, financial statement or other
instrument or document furnished to Lender at the time of the closing
of the Loan or during the term of the Loan;
(ii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of Rents received by Mortgage Borrower or Borrower
after the occurrence of an Event of Default;
(iii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of tenant security deposits or Rents collected in
advance;
(iv) the misapplication or the misappropriation of
Insurance Proceeds or Awards;
(v) Borrower's or Mortgage Borrower's failure to pay
Taxes, Other Charges (except to the extent that sums sufficient to pay
such amounts have been deposited in escrow with Mortgage Lender
pursuant to the terms of the Mortgage Loan Agreement or with Lender
pursuant to the terms hereof and there exists no impediment to Mortgage
Lender's or Lender's utilization thereof), charges for labor or
materials or other charges that can create liens on the Property beyond
any applicable notice and cure periods specified herein;
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(vi) Borrower or Mortgage Borrower's failure to return or
to reimburse Lender for all Personal Property taken from the Property
by or on behalf of Mortgage Borrower or Borrower and not replaced with
Personal Property of the same utility and of the same or greater value;
(vii) the misappropriation by Mortgage Borrower or Borrower
of any Net Liquidation Proceeds or other amounts due to Lender;
(viii) any act of intentional waste or arson by Mortgage
Borrower, Borrower, any principal, Affiliate, member or general partner
thereof or by Borrower Principal, any principal, Affiliate, member or
general partner thereof; or
(ix) Borrower's gross negligence or willful misconduct.
(c) Notwithstanding the foregoing, the agreement of
Lender not to pursue recourse liability against Borrower and Borrower Principal
as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of
no further force and effect and the Debt shall be fully recourse to Borrower and
Borrower Principal jointly and severally in the event of (i) a default by
Borrower or Borrower Principal of any of the covenants set forth in Article 6,
or a breach by Mortgage Borrower under Article 6 of the Mortgage Loan Agreement,
provided, however, that a breach of the covenants set forth in Article 6 of this
Agreement or the Mortgage Loan Agreement, as applicable, shall not result in
recourse liability hereunder unless such breach was material and, within fifteen
(15) days of notice from Lender, Borrower fails to cure such breach and fails to
deliver to Lender a new or revised substantive non-consolidation opinion, in
form and substance and from counsel reasonably satisfactory to Lender in
accordance with the Rating Agency standards for the same, to the effect that
such failure does not negate/impair the opinion previously delivered to Lender,
(ii) a default by Borrower, Borrower Principal or of any of the covenants set
forth in Article 7 hereof, or (iii) if (A) a voluntary bankruptcy or insolvency
proceeding is commenced by Borrower or Mortgage Borrower, or (B) an involuntary
bankruptcy or insolvency proceeding is commenced against Borrower or Mortgage
Borrower which is not dismissed within ninety (90) days of filing (provided,
however, that Borrower and Borrower Principal shall not have recourse liability
hereunder in connection with any involuntary bankruptcy or insolvency proceeding
unless such involuntary proceeding is solicited, procured, consented to or
acquiesced in by Borrower, Mortgage Borrower, Borrower Principal or any
Affiliate of the foregoing in bad faith collusion with an intent to circumvent
the prohibition on recourse liability against the Borrower or Borrower Principal
set forth herein).
(d) Nothing herein shall be deemed to be a waiver of any
right which Lender may have under Section 506(a), 506(b), llll(b) or any other
provision of the U.S. Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Pledge Agreement or to require that all collateral
shall continue to secure all of the indebtedness owing to Lender in accordance
with this Agreement, the Note, the Pledge Agreement or the other Loan Documents.
(e) Notwithstanding any provisions of this Article 15 to
the contrary, in no event shall Borrower's failure to pay Operating Expenses in
the event cash flow is insufficient to pay such expenses be considered an act of
waste.
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(f) Notwithstanding any other provision hereof, in the
event that of a foreclosure under the Pledge Agreement, and the subsequent
transfer of interests in Mortgage Borrower to Lender, Borrower Principal shall
be released from its liabilities under this Article 15 with respect to any
matters arising from events occurring subsequent to the date of such transfer,
as of the effective date of such transfer of interests in Mortgage Borrower.
ARTICLE XVI
NOTICES
Section 16.1. 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, return receipt
requested, (b) expedited prepaid overnight delivery service, either commercial
or United States Postal Service, with proof of attempted delivery, or by (c)
telecopier (with answer back acknowledged provided an additional notice is given
pursuant to subsection (b) above), addressed as follows (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):
If to Lender: Bank of America, N. A.
Capital Markets Servicing Group
000 Xxxxx Xxxxxx Xxxxxx
6th Floor
CA9-706-06-42
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Servicing Manager
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Bank of America Legal Department
GCIB/CMBS
NC1-007-20-01
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties - 555 W. Fifth Mezzanine, LLC/
Xxxxxxx Properties - 808 S. Olive Mezzanine, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
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With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties - 555 W. Fifth, LLC/
Principal Xxxxxxx Properties - 808 S. Olive, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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.
ARTICLE XVII
FURTHER ASSURANCES
Section 17.1. REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record:
(i) with respect to any Loan Document other than the Note, Borrower will issue,
in lieu thereof, a replacement of such other Loan Document, dated the date of
such lost, stolen, destroyed or mutilated Loan Document in the same principal
amount thereof and otherwise of like tenor and (ii) with respect to the Note,
(a) Borrower will execute a reaffirmation of the Debt as evidenced by such Note
acknowledging that Lender has informed Borrower that the Note was lost, stolen
destroyed or mutilated and that such Debt continues to be an obligation and
liability of the Borrower as set forth in the Note, a copy of which shall be
attached to such reaffirmation and (b) if requested by Lender, Borrower will
execute a replacement note and Lender or Lender's custodian (at Lender's option)
shall provide to Borrower Lender's (or Lender's custodian's) then standard form
of lost note affidavit and indemnity, which such form shall be reasonably
acceptable to Borrower.
Section 17.2. [INTENTIONALLY OMITTED.]
Section 17.3. FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every further acts,
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deeds, conveyances, deeds of trust, mortgages, assignments, security agreements,
control agreements, notices of assignments, transfers and assurances as Lender
shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Agreement or for filing or registering of the Pledge
Agreement, or for complying with all Legal Requirements. Borrower, on demand,
will execute and deliver, and in the event it shall fail to so execute and
deliver, hereby authorizes Lender to execute in the name of Borrower or without
the signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements and financing statement amendments to evidence more
effectively, perfect and maintain the priority of the security interest of
Lender in the Collateral. Borrower grants to Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Lender at law and in equity,
including without limitation, such rights and remedies available to Lender
pursuant to this Section 17.3.
Section 17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY
STAMP LAWS.
(a) If any law is enacted or adopted or amended after the
date of this Agreement which imposes a tax, either directly or indirectly, on
the Debt or Lender's interest in the Property or the Collateral, Borrower will
pay the tax, with interest and penalties thereon, if any. If Lender is advised
by counsel chosen by it that the payment of tax by Borrower would be unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of usury
then Lender shall have the option by written notice of not less than one hundred
twenty (120) days to declare the Debt immediately due and payable
(b) Borrower will not claim or demand or be entitled to
any credit or credits on account of the Debt for any part of the Taxes or Other
Charges assessed against the Property or the Collateral, or any part thereof
which imposes a tax either directly or indirectly on the Debt or Lender's
interest in the Property or the Collateral, and no deduction shall otherwise be
made or claimed from the assessed value of the Property or the Collateral, or
any part thereof, for real estate or personal property tax purposes by reason of
the Mortgage, the Pledge Agreement or the Debt. If such claim, credit or
deduction shall be required by law, Lender shall have the option, by written
notice of not less than one hundred twenty (120) days, to declare the Debt
immediately due and payable.
(c) If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note, the Pledge Agreement, or any of the
other Loan Documents or impose any other tax or charge on the same, Borrower
will pay for the same, with interest and penalties thereon, if any.
Section 17.5. EXPENSES.
Borrower covenants and agrees to pay or, if Borrower fails to
pay, to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable, actual attorneys' fees and
disbursements and the allocated costs of internal
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legal services and all actual disbursements of internal counsel) reasonably
incurred by Lender in accordance with this Agreement in connection with (a) the
underwriting and closing of the Loan, including, without limitation, expenses
related to Lender's legal representation, underwriting, third party reports,
travel and site inspections, interest rate hedging and other customary items
(except with respect to a Securitization, any costs and expenses related to
which that are payable by Borrower shall be as set forth in Article 13 hereof)
and all the costs of furnishing all opinions by counsel for Borrower (including
without limitation any opinions requested by Lender as to any legal matters
arising under this Agreement or the other Loan Documents with respect to the
Property or the Collateral); (b) Borrower's ongoing performance of and
compliance with Borrower's respective agreements and covenants contained in this
Agreement, the Pledge Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(c) following a request by Borrower, Lender's ongoing performance and compliance
with all agreements and conditions contained in this Agreement, the Pledge
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date; (d) the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Lender; (e) securing Borrower's compliance
with any requests made pursuant to the provisions of this Agreement; (f) the
filing and recording fees and expenses, title insurance and reasonable fees and
expenses of counsel for providing to Lender all required legal opinions, and
other similar expenses incurred in creating and perfecting the Lien in favor of
Lender pursuant to this Agreement, the Pledge Agreement and the other Loan
Documents; (g) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, this Agreement,
the other Loan Documents, the Collateral, or any other security given for the
Loan; and (h) enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the other Loan Documents or with respect to the
Property or the Collateral or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "workout" or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment of any such costs and
expenses to the extent the same arise by reason of the gross negligence, illegal
acts, fraud or willful misconduct of Lender.
ARTICLE XVIII
WAIVERS
Section 18.1. REMEDIES CUMULATIVE; WAIVERS.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower or Borrower Principal pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender's rights, powers and remedies may be pursued singularly,
concurrently or otherwise, at such time and in such order as Lender may
determine in Lender's sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised
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from time to time and as often as may be deemed expedient. A waiver of one
Default or Event of Default with respect to Borrower shall not be construed to
be a waiver of any subsequent Default or Event of Default by Borrower or to
impair any remedy, right or power consequent thereon.
Section 18.2. MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement, or of the Note, or of any other
Loan Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on
Borrower, shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances.
Section 18.3. DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the Note
or under 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 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, 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 18.4. TRIAL BY JURY.
BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER,
BORROWER PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER,
BORROWER PRINCIPAL AND LENDER.
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Section 18.5. WAIVER OF NOTICE.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
Section 18.6. REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where by law or under this Agreement or the other Loan Documents, Lender or such
agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages (except to the extent that Borrower can prove Lender's bad
faith or willful misconduct), and Borrower's 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 Lender
has acted reasonably shall be determined by an action seeking declaratory
judgment. Lender agrees that, in such event, it shall cooperate in expediting
any action seeking injunctive relief or declaratory judgment.
Section 18.7. WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower, for itself
and its successors and assigns, waives all rights to a marshalling of the assets
of Borrower, Mortgage Borrower and other Persons with interests in Borrower or
Mortgage Borrower, and of the Property and the Collateral, and agrees not to
assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Collateral
for the collection of the Debt without any prior or different resort for
collection or of the right of Lender to the payment of the Debt out of the net
proceeds of the Collateral in preference to every other claimant whatsoever.
Section 18.8. WAIVER OF STATUTE OF LIMITATIONS.
Borrower hereby expressly waives and releases, to the fullest
extent permitted by law, the pleading of any statute of limitations as a defense
to payment of the Debt or performance of its other obligations set forth in the
Loan Documents.
Section 18.9. WAIVER OF COUNTERCLAIM.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.
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Section 18.10. GRADSKY WAIVERS.
Borrower Principal hereby waives each of the following:
(a) Any rights of Borrower Principal of subrogation,
reimbursement, indemnification, and/or contribution against Borrower or any
other person or entity, and any other rights and defenses that are or may become
available to Borrower Principal or any other person or entity by reasons of
Sections 2787-2855, inclusive of the California Civil Code;
(b) Any rights or defenses that may be available by
reason of any election of remedies by Lender (including, without limitation, any
such election which in any manner impairs, effects, reduces, releases, destroys
or extinguishes Borrower Principal's subrogation rights, rights to proceed
against Borrower for reimbursement, or any other rights of Borrower Principal to
proceed against any other person, entity or security, including but not limited
to any defense based upon an election of remedies by Lender under the provisions
of Section 580(d) of the California Code of Civil Procedure or any similar law
of California or of any other State or of the United Sates); and
(c) Any rights or defenses Borrower Principal may have
because its obligations under this Agreement (the "BORROWER PRINCIPAL
OBLIGATIONS") are secured by the Collateral. These rights or defenses include,
but are not limited to, any rights or defenses that are based upon, directly or
indirectly, the application of Section 580a, Section 580b, Section 580d or
Section 726 of the California Code of Civil Procedure to the Borrower Principal
Obligations.
The provisions of this subsection (c) mean, among other
things:
(y) Lender may collect from Borrower Principal without
first foreclosing on the Collateral; and
(z) If Lender forecloses on the Collateral:
(1) The Borrower Principal
Obligations shall not be reduced by the price for
which the Collateral is sold at the foreclosure sale
or the value of the Collateral at the time of the
sale.
(2) Lender may collect from
Borrower Principal even if Lender, by foreclosing on
the Collateral, has destroyed any right of Borrower
Principal to collect from Borrower. Further, the
provisions of this Agreement constitute an
unconditional and irrevocable waiver of any rights
and defenses Borrower Principal may have because
Borrower's obligations are secured by the Collateral.
These rights and defenses, include, but are not
limited to, any rights or defenses based upon Section
580a, Section 580b, Section 580d or Section 726 of
the California Code of Civil Procedure.
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ARTICLE XIX
GOVERNING LAW
Section 19.1. CHOICE OF LAW.
This Agreement shall be deemed to be a contract entered into
pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York.
Section 19.2. SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Section 19.3. PREFERENCES.
Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
Creditors Rights Laws, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
ARTICLE XX
MISCELLANEOUS
Section 20.1. SURVIVAL.
This Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
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Section 20.2. LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
Section 20.3. HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
Section 20.4. COST OF ENFORCEMENT.
In the event (a) that the Pledge Agreement is foreclosed in
whole or in part, (b) of the bankruptcy, insolvency, rehabilitation or other
similar proceeding in respect of Mortgage Borrower or Borrower or any of its
constituent Persons or an assignment by Mortgage Borrower or Borrower or any of
its constituent Persons for the benefit of its creditors, or (c) Lender
exercises any of its other remedies under this Agreement or any of the other
Loan Documents, Borrower shall be chargeable with and agrees to pay all costs of
collection and defense, including attorneys' fees and costs, incurred by Lender
or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.
Section 20.5. SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as
a part of this Agreement with the same effect as if set forth in the body
hereof.
Section 20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement,
the Note and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to such documents which
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 20.7. NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships
created hereunder and under the other Loan Documents be solely that of borrower
and lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy
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relationship between Borrower and Lender nor to grant Lender any interest in the
Collateral other than that of secured party, pledgee or lender.
(b) This Agreement and the other Loan Documents are
solely for the benefit of Lender and Borrower and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone
other than Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein.
All conditions to the obligations of Lender to make the Loan hereunder are
imposed solely and exclusively for the benefit of Lender and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that Lender will refuse to make the
Loan in the absence of strict compliance with any or all thereof and no other
Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sole discretion, Lender deems it advisable or desirable
to do so.
(c) The general partners, members, principals and (if
Borrower is a trust) beneficial owners of Borrower are experienced in the
ownership and operation of properties similar to the Property and the
Collateral, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property and
the Collateral. Borrower is not relying on Lender's expertise, business acumen
or advice in connection with the Property or the Collateral.
(d) Notwithstanding anything to the contrary contained
herein, Lender is not undertaking the performance of (i) any obligations under
the Leases; or (ii) any obligations with respect to such agreements, contracts,
certificates, instruments, franchises, permits, trademarks, licenses and other
documents.
(e) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to this
Agreement, the Pledge Agreement, the Note or the other Loan Documents,
including, without limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal, or
insurance policy, Lender shall not be deemed to have warranted, consented to, or
affirmed the sufficiency, the legality or effectiveness of same, and such
acceptance or approval thereof shall not constitute any warranty or affirmation
with respect thereto by Lender.
(f) Borrower recognizes and acknowledges that in
accepting this Agreement, the Note, the Pledge Agreement and the other Loan
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the representations and warranties set forth in Article 4 of this Agreement
without any obligation to investigate the Property or the Collateral and
notwithstanding any investigation of the Property or the Collateral by Lender;
that such reliance existed on the part of Lender prior to the date hereof, that
the warranties and representations are a material inducement to Lender in making
the Loan; and that Lender would not be willing to make the Loan and accept this
Agreement, the Note, the Pledge Agreement and the other Loan Documents in the
absence of the warranties and representations as set forth in Article 4 of this
Agreement.
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Section 20.8. PUBLICITY.
All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public which refers
to the Loan, Lender, Banc of America Securities LLC, or any of their Affiliates
shall be subject to the prior written approval of Lender, not to be unreasonably
withheld. After the closing of the Loan, Lender shall be permitted to make any
news, releases, publicity or advertising by Lender or its Affiliates through any
media intended to reach the general public which refers to the Loan, the
Property, the Collateral, Mortgage Borrower, Borrower, Borrower Principal and
their respective Affiliates without the approval of Borrower or any such
Persons. Borrower also agrees that Lender may share any information pertaining
to the Loan with Bank of America Corporation, including its bank subsidiaries,
Bane of America Securities LLC and any other Affiliates of the foregoing, in
connection with the sale or transfer of the Loan or any Participations and/or
Securities created.
Section 20.9. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and advisors in entering into the Loan without relying in
any manner on any statements, representations or recommendations of Lender or
any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
Section 20.10. ENTIRE AGREEMENT.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written between Borrower and Lender are superseded by
the terms of this Agreement and the other Loan Documents.
Section 20.11. CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC).
Notwithstanding anything which may be contained in this Agreement to the
contrary, so long as the Loan is outstanding, Lender shall have:
(a) the right to designate any party to receive payment
of all fees, costs and expenses otherwise payable to Lender under this Agreement
or the other Loan Documents;
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(b) the right to consult with and advise Borrower's
management regarding the significant business activities and business and
financial developments of Borrower, provided, however, that such consultations
shall not include discussions of environmental compliance programs or disposal
of hazardous substances. Consultation meetings should occur on a regular basis
(no less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times;
(c) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to restrict financing
to be obtained in connection with future property transactions, refinancing of
any acquisition financings, and unsecured debt;
(d) the right, without restricting any other right of
Lender under this Agreement (including any similar right), to restrict, upon the
occurrence of an Event of Default, Borrower's payments of management consulting
or similar fees to affiliates of Borrower (or their personnel), other than in
accordance with the express terms of the Management Agreement;
(e) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to approve any
operating budget and/or capital expenditures of Borrower that (i) vary by more
than 15% from the expenses set forth in the related approved Annual Budget
and/or approved capital plan for the immediately preceding fiscal year or (ii)
when added to all prior operating and capital expenditures for the year, exceed
15% of aggregate budgeted operating and capital expenditures set forth in the
related approved Annual Budget and/or approved capital plan for the immediately
preceding fiscal year;
(f) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), upon the occurrence
and during the continuance of an Event of Default, to vote the owners'
interests in Borrower pursuant to irrevocable proxies granted, at the request of
Borrower in advance for this purpose; and
(g) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to restrict the
transfer to voting interests in Borrower held by its members or partners (as the
case may be), and the right to restrict the transfer of interests in such member
or partner (as the case may be), except for any transfer that is expressly
permitted hereunder.
Section 20.12. LIABILITY. If Borrower consists of more than
one Person, the obligations and liabilities of each such Person hereunder shall
be joint and several. This Agreement shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns
forever.
Section 20.13. CONTRIBUTION.
(a) As a result of the transactions contemplated by this
Agreement, each Borrower will benefit, directly and indirectly, from each
Borrower's obligation to pay the Debt and perform its obligations hereunder and
under the other Loan Documents (collectively, the "OBLIGATIONS") and in
consideration therefore each Borrower desires to enter into an allocation and
contribution agreement among themselves as set forth in this Section 20.13 to
allocate such benefits among themselves and to provide a fair and equitable
agreement to make contributions
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among each of Borrowers in the event any payment is made by any individual
Borrower hereunder to Lender (such payment being referred to herein as a
"CONTRIBUTION," and for purposes of this Section 20.13, includes any exercise
of recourse by Lender against any Collateral of a Borrower and application of
proceeds of such Collateral in satisfaction of such Borrower's obligations, to
Lender under the Loan Documents).
(b) Each Borrower shall be liable hereunder with respect
to the Obligations only for such total maximum amount (if any) that would not
render its Obligations hereunder or under any of the Loan Documents subject to
avoidance under Section 548 of the U.S. Bankruptcy Code or any comparable
provisions of any State law.
(c) In order to provide for a fair and equitable
contribution among Borrowers in the event that any Contribution is made by an
individual Borrower (a "FUNDING BORROWER"), such Funding Borrower shall be
entitled to a Reimbursement Contribution ("REIMBURSEMENT CONTRIBUTION") from all
other Borrowers for all payments, damages and expenses incurred by that Funding
Borrower in discharging any of the Obligations, in the manner and to the extent
set forth in this Section 20.13.
(d) For purposes hereof, the "BENEFIT AMOUNT" of any
individual Borrower as of any date of determination shall be the net value of
the benefits to such Borrower and its Affiliates from extensions of credit made
by Lender to (i) such Borrower and (ii) to the other Borrowers hereunder and the
Loan Documents to the extent such other Borrowers have guaranteed or mortgaged
their property to secure the Obligations of such Borrower to Lender.
(e) Each Borrower shall be liable to a Funding Borrower
in an amount equal to the greater of (i) the (A) ratio of the Benefit Amount of
such Borrower to the total amount of Obligations, multiplied by (B) the amount
of Obligations paid by such Funding Borrower, or (ii) ninety-five percent (95%)
of the excess of the fair saleable value of the property of such Borrower over
the total liabilities of such Borrower (including the maximum amount reasonably
expected to become due in respect of contingent liabilities) determined as of
the date on which the payment made by a Funding Borrower is deemed made for
purposes hereof (giving effect to all payments made by other Funding Borrowers
as of such date in a manner to maximize the amount of such Contributions).
(f) In the event that at any time there exists more than
one Funding Borrower with respect to any Contribution (in any such case, the
"APPLICABLE CONTRIBUTION"), then Reimbursement Contributions from other
Borrowers pursuant hereto shall be allocated among such Funding Borrowers in
proportion to the total amount of the Contribution made for or on account of the
other Borrowers by each such Funding Borrower pursuant to the Applicable
Contribution. In the event that at any time any Borrower pays an amount
hereunder in excess of the amount calculated pursuant to this Section 20.13
above, that Borrower shall be deemed to be a Funding Borrower to the extent of
such excess and shall be entitled to a Reimbursement Contribution from the other
Borrowers in accordance with the provisions of this Section.
(g) Each Borrower acknowledges that the right to
Reimbursement Contribution hereunder shall constitute an asset in favor of
Borrower to which such Reimbursement Contribution is owing.
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(h) No Reimbursement Contribution payments payable by a
Borrower pursuant to the terms of this Section 20.13 shall be paid until all
amounts then due and payable by all of Borrowers to Lender, pursuant to the
terms of the Loan Documents, are paid in full in cash. Nothing contained in this
Section 20.13 shall limit or affect in any way the Obligations of any Borrower
to Lender under this Note or any other Loan Documents.
(i) Each Borrower waives:
(i) any right to require Lender to proceed against any
other Borrower or any other person or to proceed against or exhaust any
security held by Lender at any time or to pursue any other remedy in
Lender's power before proceeding against Borrower;
(ii) any defense based upon any legal disability or other
defense of any other Borrower, any guarantor of any other person or by
reason of the cessation or limitation of the liability of any other
Borrower or any guarantor from any cause other than full payment of all
sums payable under the Note, this Agreement and any of the other Loan
Documents;
(iii) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on
behalf of any other Borrower or any principal of any other Borrower or
any defect in the formation of any other Borrower or any principal of
any other Borrower;
(iv) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger
in amount nor in any other respects more burdensome than that of a
principal;
(v) any defense based upon any failure by Lender to
obtain collateral for the indebtedness or failure by Lender to perfect
a lien on any collateral;
(vi) presentment, demand, protest and notice of any kind;
(vii) any defense based upon any failure of Lender to give
notice of sale or other disposition of any collateral to any other
Borrower or to any other person or entity or any defect in any notice
that may be given in connection with any sale or disposition of any
collateral;
(viii) any defense based upon any failure of Lender to
comply with Applicable Laws in connection with the sale or other
disposition of any collateral, including, without limitation, any
failure of Lender to conduct a commercially reasonable sale or other
disposition of any collateral;
(ix) any defense based upon any use of cash collateral
under Section 363 of the U.S. Bankruptcy Code;
(x) any defense based upon any agreement or stipulation
entered into by Lender with respect to the provision of adequate
protection in any bankruptcy proceeding;
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(xi) any defense based upon any borrowing or any grant of
a security interest under Section 364 of the U.S. Bankruptcy Code;
(xii) any defense based upon the avoidance of any security
interest in favor of Lender for any reason;
(xiii) any defense based upon any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, including any discharge of, or bar or stay
against collecting, all or any of the obligations evidenced by the Note
or owing under any of the Loan Documents; and
(xiv) any defense or benefit based upon Borrower's, or any
other party's, resignation of the portion of any obligation secured by
the Mortgage or the Pledge Agreement to be satisfied by any payment
from any other Borrower or any such party.
(j) Each Borrower waives:
(i) all rights and defenses arising out of an election of
remedies by Lender even though the election of remedies, such as
non-judicial foreclosure with respect to security for the Loan or any
other amounts owing under the Loan Documents, has destroyed Borrower's
rights of subrogation and reimbursement against any other Borrower;
(ii) all rights and defenses that Borrower may have
because any of Debt is secured by real property. This means, among
other things: (i) Lender may collect from Borrower without first
foreclosing on any real or personal property collateral pledged by any
other Borrower, (ii) if Lender forecloses on any real property
collateral pledged by any other Borrower, (a) the amount of the Debt
may be reduced only by the price for which that collateral is sold at
the foreclosure sale, even if the collateral is worth more than the
sale price, (b) Lender may collect from Borrower even if any other
Borrower, by foreclosing on the real property collateral, has destroyed
any right Borrower may have to collect from any other Borrower. This is
an unconditional and irrevocable waiver of any rights and defenses
Borrower may have because any of the Debt is secured by real property;
and
(iii) except as may be expressly and specifically permitted
herein, any claim or other right which Borrower might now have or
hereafter acquire against any other Borrower or any other person that
arises from the existence or performance of any obligations under the
Note, this Agreement, the Mortgage, the Pledge Agreement or the other
Loan Documents, including, without limitation, any of the following:
(i) any right of subrogation, reimbursement, exoneration, contribution,
or indemnification; or (ii) any right to participate in any claim or
remedy of Lender against any other Borrower or any collateral security
therefor, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law.
[NO FURTHER TEXT ON THIS PAGE]
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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.
Xxxxxxx Properties - 555 W. Fifth Mezzanine, LLC,
a Delaware limited liability company, its sole
member
By: Xxxxxxx Properties, L.P. a Maryland limited
partnership, its sole member
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By: Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Xxxxxxx Properties - 808 S. Olive Mezzanine, LLC,
a Delaware limited liability company, its sole
member
By: Xxxxxxx Properties, L.P., a Maryland
limited partnership, its sole member
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By: Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
BORROWER PRINCIPAL:
Acknowledged and agreed to with respect to its
obligations set forth in Article 4, Article
13, Article 15 and Article 18 hereof:
XXXXXXX PROPERTIES, L.P., a Maryland
limited partnership
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
LENDER:
BANK OF AMERICA, N.A., a national banking
association
By: [ILLEGIBLE]
--------------------------------------
Name:
Title: Principal
