Exhibit 4.1
LOAN AGREEMENT
Dated as of December 21, 2006
Between
FSP 00 XXXXX XXXXX XXXXXX CORP.,
as Borrower
and
BANK OF AMERICA, N.A.,
as Lender
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION..............................1
SECTION 1.1.DEFINITIONS.....................................................1
SECTION 1.2.PRINCIPLES OF CONSTRUCTION.....................................15
ARTICLE 2 GENERAL TERMS.......................................................15
SECTION 0.0.XXXX COMMITMENT; DISBURSEMENT TO BORROWER......................15
SECTION 0.0.XXXX PAYMENTS..................................................16
SECTION 2.3.LATE PAYMENT CHARGE............................................17
SECTION 2.4.PREPAYMENT; DEFEASANCE.........................................17
SECTION 2.5.PAYMENTS AFTER DEFAULT.........................................22
SECTION 2.6.USURY SAVINGS..................................................22
ARTICLE 3 CONDITIONS PRECEDENT................................................23
SECTION 3.1.REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS.....23
SECTION 0.0.XXXXXXXX OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES...23
SECTION 3.3.RELATED DOCUMENTS..............................................24
SECTION 3.4.ORGANIZATIONAL DOCUMENTS.......................................25
SECTION 3.5.OPINIONS OF BORROWER'S COUNSEL.................................25
SECTION 3.6.ANNUAL BUDGET..................................................25
SECTION 3.7.TAXES AND OTHER CHARGES........................................25
SECTION 3.8.COMPLETION OF PROCEEDINGS......................................25
SECTION 3.9.PAYMENTS.......................................................25
SECTION 3.10.TRANSACTION COSTS.............................................25
SECTION 0.00.XX MATERIAL ADVERSE CHANGE....................................26
SECTION 3.12.LEASES AND RENT ROLL..........................................26
SECTION 3.13.TENANT ESTOPPELS..............................................26
SECTION 3.14.REA ESTOPPELS.................................................26
SECTION 3.15.SUBORDINATION AND ATTORNMENT..................................26
SECTION 0.00.XXX LOT.......................................................26
SECTION 3.17.PHYSICAL CONDITIONS REPORT....................................27
SECTION 0.00.XXXXXXXXXX AGREEMENT..........................................27
SECTION 3.19.APPRAISAL.....................................................27
SECTION 0.00.XXXXXXXXX STATEMENTS..........................................27
SECTION 0.00.XXX OPERATING INCOME..........................................27
SECTION 3.22.FURTHER DOCUMENTS.............................................27
ARTICLE 4 REPRESENTATIONS AND WARRANTIES......................................27
SECTION 4.1.ORGANIZATION...................................................28
SECTION 4.2.STATUS OF BORROWER.............................................28
SECTION 4.3.VALIDITY OF DOCUMENTS..........................................28
SECTION 0.0.XX CONFLICTS...................................................29
SECTION 4.5.LITIGATION.....................................................29
SECTION 4.6.AGREEMENTS.....................................................29
SECTION 4.7.SOLVENCY.......................................................29
SECTION 4.8.FULL AND ACCURATE DISCLOSURE...................................30
SECTION 0.0.XX PLAN ASSETS.................................................30
SECTION 4.10.NOT A FOREIGN PERSON..........................................30
SECTION 4.11.ENFORCEABILITY................................................30
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SECTION 0.00.XXXXXXXX PURPOSES.............................................31
SECTION 4.13.COMPLIANCE....................................................31
SECTION 0.00.XXXXXXXXX INFORMATION.........................................31
SECTION 4.15.CONDEMNATION..................................................31
SECTION 4.16.UTILITIES AND PUBLIC ACCESS; PARKING..........................31
SECTION 4.17.SEPARATE LOTS.................................................32
SECTION 4.18.ASSESSMENTS...................................................32
SECTION 0.00.XXXXXXXXX.....................................................32
SECTION 4.20.USE OF PROPERTY...............................................32
SECTION 4.21.CERTIFICATE OF OCCUPANCY; LICENSES............................32
SECTION 4.22.FLOOD ZONE....................................................32
SECTION 4.23.PHYSICAL CONDITION............................................33
SECTION 4.24.BOUNDARIES....................................................33
SECTION 4.25.LEASES AND RENT ROLL..........................................33
SECTION 4.26.FILING AND RECORDING TAXES....................................34
SECTION 0.00.XXXXXXXXXX AGREEMENT..........................................34
SECTION 4.28.ILLEGAL ACTIVITY..............................................34
SECTION 0.00.XXXXXXXXXXXX EXPENSES.........................................34
SECTION 4.30.PERSONAL PROPERTY.............................................34
SECTION 4.31.TAXES.........................................................35
SECTION 4.32.PERMITTED ENCUMBRANCES........................................35
SECTION 4.33.FEDERAL RESERVE REGULATIONS...................................35
SECTION 4.34.INVESTMENT COMPANY ACT........................................35
SECTION 4.35.RECIPROCAL EASEMENT AGREEMENTS................................35
SECTION 0.00.XX CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE...............36
SECTION 4.37.INTELLECTUAL PROPERTY.........................................36
SECTION 4.38.SURVEY........................................................36
SECTION 4.39.EMBARGOED PERSON..............................................37
SECTION 4.40.PATRIOT ACT...................................................37
SECTION 4.41.SURVIVAL......................................................38
ARTICLE 5 BORROWER COVENANTS..................................................38
SECTION 5.1.EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS..................38
SECTION 5.2.MAINTENANCE AND USE OF PROPERTY................................39
SECTION 5.3.WASTE..........................................................39
SECTION 5.4.TAXES AND OTHER CHARGES........................................39
SECTION 5.5.LITIGATION.....................................................40
SECTION 5.6.ACCESS TO 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....................................41
SECTION 0.00.XXXXXXXXX REPORTING...........................................41
SECTION 5.12.ESTOPPEL STATEMENT............................................45
SECTION 5.13.LEASING MATTERS...............................................45
SECTION 0.00.XXXXXXXX MANAGEMENT...........................................48
SECTION 5.15.LIENS.........................................................49
SECTION 5.16.DEBT CANCELLATION.............................................49
SECTION 5.17.ZONING........................................................49
SECTION 5.18.ERISA.........................................................49
SECTION 0.00.XX JOINT ASSESSMENT...........................................50
SECTION 5.20.RECIPROCAL EASEMENT AGREEMENTS................................50
SECTION 5.21.ALTERATIONS...................................................50
SECTION 0.00.XXX CREDITS...................................................50
ARTICLE 6 ENTITY COVENANTS....................................................50
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SECTION 6.1.SINGLE PURPOSE ENTITY/SEPARATENESS.............................50
SECTION 6.2.CHANGE OF NAME, IDENTITY OR STRUCTURE..........................54
SECTION 0.0.XXXXXXXX AND OPERATIONS........................................55
SECTION 6.4.INDEPENDENT DIRECTOR...........................................55
ARTICLE 7 NO SALE OR ENCUMBRANCE..............................................56
SECTION 7.1.TRANSFER DEFINITIONS...........................................56
SECTION 0.0.XX SALE/ENCUMBRANCE............................................56
SECTION 7.3.PERMITTED TRANSFERS............................................57
SECTION 7.4.LENDER'S RIGHTS................................................57
SECTION 7.5.ASSUMPTION.....................................................58
ARTICLE 8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION......................60
SECTION 0.0.XXXXXXXXX......................................................60
SECTION 8.2.CASUALTY.......................................................63
SECTION 8.3.CONDEMNATION...................................................63
SECTION 8.4.RESTORATION....................................................64
ARTICLE 9 RESERVE FUNDS.......................................................67
SECTION 9.1.REQUIRED REPAIRS...............................................67
SECTION 9.2.REPLACEMENTS...................................................68
SECTION 9.3.TENANT IMPROVEMENTS AND LEASING COMMISSIONS....................68
SECTION 9.4.REQUIRED WORK..................................................69
SECTION 9.5.RELEASE OF RESERVE FUNDS.......................................71
SECTION 0.0.XXX AND INSURANCE RESERVE FUNDS................................74
SECTION 9.7.EXCESS CASH RESERVE............................................75
SECTION 9.8.OPERATING EXPENSES; EXTRAORDINARY EXPENSES.....................75
SECTION 9.9.RESERVE FUNDS GENERALLY........................................76
ARTICLE 10 CASH MANAGEMENT....................................................79
SECTION 10.1.LOCKBOX ACCOUNT AND CASH MANAGEMENT ACCOUNT...................79
ARTICLE 11 EVENTS OF DEFAULT; REMEDIES........................................79
SECTION 11.1.EVENT OF DEFAULT..............................................79
SECTION 11.2.REMEDIES......................................................81
ARTICLE 12 ENVIRONMENTAL PROVISIONS...........................................82
SECTION 12.1.ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES..................82
SECTION 12.2.ENVIRONMENTAL COVENANTS.......................................82
SECTION 12.3.LENDER'S RIGHTS...............................................83
SECTION 12.4.OPERATIONS AND MAINTENANCE PROGRAMS...........................83
SECTION 12.5.ENVIRONMENTAL DEFINITIONS.....................................84
SECTION 12.6.INDEMNIFICATION...............................................84
ARTICLE 13 SECONDARY MARKET...................................................86
SECTION 13.1.TRANSFER OF LOAN..............................................86
SECTION 13.2.DELEGATION OF SERVICING.......................................86
SECTION 13.3.DISSEMINATION OF INFORMATION..................................86
SECTION 13.4.COOPERATION...................................................86
SECTION 13.5.SECURITIZATION INDEMNIFICATION................................88
SECTION 13.6.RATING SURVEILLANCE...........................................90
ARTICLE 14 INDEMNIFICATIONS...................................................91
SECTION 14.1.GENERAL INDEMNIFICATION.......................................91
SECTION 00.0.XXXXXXXX AND INTANGIBLE TAX INDEMNIFICATION...................91
SECTION 14.3.ERISA INDEMNIFICATION.........................................91
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SECTION 14.4.SURVIVAL......................................................92
ARTICLE 15 EXCULPATION........................................................92
SECTION 15.1.EXCULPATION...................................................92
ARTICLE 16 NOTICES............................................................94
SECTION 16.1.NOTICES.......................................................94
ARTICLE 17 FURTHER ASSURANCES.................................................95
SECTION 17.1.REPLACEMENT DOCUMENTS.........................................95
SECTION 17.2.RECORDING OF MORTGAGE, ETC....................................95
SECTION 17.3.FURTHER ACTS, ETC.............................................96
SECTION 17.4.CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.......96
SECTION 17.5.EXPENSES......................................................97
ARTICLE 18 WAIVERS............................................................97
SECTION 18.1.REMEDIES CUMULATIVE; WAIVERS..................................97
SECTION 18.2.MODIFICATION, WAIVER IN WRITING...............................98
SECTION 18.3.DELAY NOT A WAIVER............................................98
SECTION 18.4.TRIAL BY JURY.................................................98
SECTION 18.5.WAIVER OF NOTICE..............................................99
SECTION 18.6.REMEDIES OF BORROWER..........................................99
SECTION 18.7.WAIVER OF MARSHALLING OF ASSETS...............................99
SECTION 18.8.WAIVER OF STATUTE OF LIMITATIONS..............................99
SECTION 18.9.WAIVER OF COUNTERCLAIM.......................................100
SECTION 18.10.GRADSKY WAIVERS.............................................100
ARTICLE 19 GOVERNING LAW.....................................................101
SECTION 19.1.CHOICE OF LAW................................................101
SECTION 19.2.SEVERABILITY.................................................101
SECTION 19.3.PREFERENCES..................................................101
ARTICLE 20 MISCELLANEOUS.....................................................101
SECTION 20.1.SURVIVAL.....................................................101
SECTION 20.2.LENDER'S DISCRETION..........................................102
SECTION 20.3.HEADINGS.....................................................102
SECTION 20.4.COST OF ENFORCEMENT..........................................102
SECTION 20.5.SCHEDULES INCORPORATED.......................................102
SECTION 20.6.OFFSETS, COUNTERCLAIMS AND DEFENSES..........................102
SECTION 00.0.XX JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES................................................103
SECTION 20.8.PUBLICITY....................................................104
SECTION 20.9.CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE................104
SECTION 20.10.ENTIRE AGREEMENT............................................104
SECTION 00.00.XXX DISCLOSURE..............................................104
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of December 21, 2006 (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 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(together with its successors and/or assigns, "Lender") and FSP 00 XXXXX XXXXX
XXXXXX CORP., a Delaware corporation, having an address at 000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 (together with its successors
and/or assigns, "Borrower").
RECITALS:
Borrower desires to obtain the Loan (defined below) from Lender.
Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents
(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 1
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, provided that (i)
McGladrey & Xxxxxx, LLP and (ii) Braver PC are acceptable to Lender as of the
date hereof.
"Account Collateral" shall mean (i) the Accounts, and all cash, checks,
drafts, certificates and instruments, if any, from time to time deposited or
held in the Accounts; (ii) any and all amounts in or credited to the Accounts
invested in Permitted Investments; (iii) all interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing; and (iv) to the extent not covered by clauses (i) - (iii) above, all
"proceeds" (as defined under the UCC as in effect in the State in which the
Accounts are located) of any or all of the foregoing.
"Accounts" shall mean the Lockbox Account, the Cash Management Account,
the Tax and Insurance Reserve Account, and any other account or sub-account
established by this Agreement, the Mortgage, or the other Loan Documents.
"Acts of Terror" shall have the meaning set forth in Section 8.1(a)
hereof.
"Actual Operating Expenses" shall mean, with respect to a given period of
time, the portion of Operating Expenses actually payable with respect to the
operation of the Property.
"Additional Required Repair" shall have the meaning set forth in Section
9.5(f) 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.
"Affiliated Manager" shall have the meaning set forth in Section 7.1
hereof.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Alteration Threshold" means $500,000.00.
"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.
"Assignment of Management Agreement" shall mean that certain Assignment
and Subordination of Management Agreement dated the date hereof among Lender,
Borrower and Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"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.
"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).
"Cash Management Account" shall have the meaning set forth in Section
10.1(a) hereof.
"Casualty" shall have the meaning set forth in Section 8.2.
"Certified Coverage" shall mean the scope of coverage afforded by and
described in TRIA.
"Charter" shall mean that certain Amended and Restated Certificate of
Incorporation of Borrower.
"Closing Date" shall mean the date of the funding of the Loan.
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"Control" shall have the meaning set forth in Section 7.1 hereof.
"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.
"Condemnation Proceeds" shall have the meaning set forth in Section 8.4(b)
"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, 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 Mortgage 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.
"Disclosure Document" shall have the meaning set forth in Section 13.4
hereof.
"Eligible Account" shall mean a separate and identifiable account from all
other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R.
ss.9.10(b), having in either case a combined capital surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"Eligible Institution" shall mean Bank of America, N.A. or a depository
institution or trust company insured by the Federal Deposit Insurance
Corporation, the short term unsecured debt obligations or commercial paper of
which are rated at least "A-1+" by S&P, "P-1" by Xxxxx'x and "F-1+" by Fitch in
the case of accounts in which funds are held for thirty (30) days or less (or,
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in the case of accounts in which funds are held for more than thirty (30) days,
the long term unsecured debt obligations of which are rated at least "AA-" by
Fitch and S&P and "Aa2" by Xxxxx'x).
"Embargoed Person" shall mean any person identified by OFAC or any other
Person with whom a Person resident in the United States of America may not
conduct business or transactions by prohibition of federal law or Executive
Order of the President of the United States of America.
"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.
"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.
"Exchange Act Filing" shall have the meaning set forth in Section 5.11(c)
hereof.
"Fitch" shall mean Fitch, Inc.
"FSP LLC" shall mean FSP 00 Xxxxx Xxxxx Xxxxxx LLC, a Delaware limited
liability company.
"FSP Transferee" shall mean an entity wholly owned and controlled by
Franklin Street Properties Corp.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
"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) 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 Parties" shall mean (a) Lender, (b) any prior owner or holder
of the Loan or Participations in the Loan, (c) any servicer or prior servicer of
the Loan, (d) any Investor or any 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,
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partners, members, employees, agents, servants, representatives, contractors,
subcontractors, 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.
"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.
"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 13.6(b) hereof.
"Issuer Person" shall have the meaning set forth in Section 13.6(b)
hereof.
"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 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, at any time in force
affecting 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.
"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, 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.
"Loan" shall mean the loan made by Lender to Borrower pursuant to this
Agreement.
"Loan Documents" shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Management Agreement, the Lockbox 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.
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"Lockbox" shall mean the post office address maintained by Lockbox Bank on
behalf of Borrower and Lender pursuant to the terms of the Lockbox Agreement and
to which Borrower shall direct all Rents and other income from the Property be
sent pursuant to the Tenant Direction Letters.
"Lockbox Account" shall have the meaning set forth in Section 10.1(a)
hereof.
"Lockbox Agreement" shall mean that certain Three Party Agreement Relating
to Lockbox Services by and among Borrower, Lender and Lockbox Bank, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time, relating to the operation and maintenance of, and application of funds
in, the Lockbox Account.
"Lockbox Bank" shall mean Bank of America, N.A., or any successor Eligible
Institution approved or appointed by Lender acting as Lockbox Bank under the
Lockbox Agreement.
"Lockout Period" shall mean the period commencing on the date hereof and
ending on January 1, 2008.
"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 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) accounts for ten percent (10%) or more
of the Property's aggregate Net Operating Income, or (B) demises 45,000 square
feet or more of the Property's gross leasable area, (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, (iii) the Master Lease and (iv)
any instrument guaranteeing or providing credit support for any Lease meeting
the requirements of (i), (ii) or (iii) above.
"Management Agreement" shall mean the management agreement entered into by
and between Borrower and Manager, pursuant to which Manager is to provide
management and other services with respect to the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified in accordance
with the terms of this Agreement.
"Manager" shall mean Xxxx Companies US, Inc., a Minnesota corporation or
such other entity selected as the manager of the Property in accordance with the
terms of this Agreement.
"Master Lease" shall mean that certain Amended and Restated Master Lease
Agreement dated as of November 9, 2006 between Borrower, as landlord, and FSP
LLC, as tenant.
"Maturity Date" shall mean January 1, 2012.
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"Maximum Legal Rate" shall mean the maximum nonusurious 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.
"Monthly Payment Amount" shall mean the monthly payment of interest and
principal due on each Scheduled Payment Date as set forth in Section 2.2(b)
hereof.
"Moody's" shall mean Xxxxx'x Investor Services, Inc.
"Mortgage" shall mean that certain first priority mortgage/deed of
trust/deed to secure debt and security agreement dated the date hereof, executed
and delivered by Borrower as security for the Loan and encumbering the Property,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"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.
"Non-Certified Coverage" shall mean Terrorism Coverage, which such
coverage (i) is not limited by TRIA or such other applicable laws, rules, or
regulations, and (ii) shall cover both foreign or domestic Acts of Terror.
"Note" shall mean that certain promissory note of even date herewith in
the principal amount of $76,200,000.00, 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 an interest rate equal to 5.287% per annum.
"OFAC" shall have the meaning set forth in Section 4.38 hereof.
"Offering Document Date" shall have the meaning set forth in Section
5.11(c)(i)(D) hereof.
"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.
"Participations" shall have the meaning set forth in Section 13.1 hereof.
"Patriot Act" shall have the meaning set forth in Section 4.38 hereof.
"Permitted Encumbrances" shall mean collectively, (a) the Lien and
security interests created by the Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Title Insurance Policy, (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet due or delinquent, and
(d) such other title and survey exceptions as Lender has approved or may approve
in writing in Lender's sole discretion.
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"Permitted Investments" shall mean to the extent available from Lender or
Lender's servicer for deposits in the Reserve Accounts and the Lockbox Account,
any one or more of the following obligations or securities acquired at a
purchase price of not greater than par, including those issued by a servicer of
the Loan, the trustee under any securitization or any of their respective
Affiliates, payable on demand or having a maturity date not later than the
Business Day immediately prior to the date on which the funds used to acquire
such investment are required to be used under this Agreement and meeting one of
the appropriate standards set forth below:
o Cash on hand, and time or demand deposits with, or withdrawable
accounts in, financial institutions.
o Certificates of deposit with maturities of one year or less.
o Government securities, in addition to Treasury obligations, include
securities issued by (1):
o Federal Housing Administration (FHA),
o Federal National Mortgage Association (FNMA),
o Federal Home Loan Bank,
o Federal Land Bank,
o Federal Intermediate Credit Bank,
o Banks for Cooperatives and
o Public Housing Administration.
Government securities also include certain guarantee agreements issued by the
Commodity Credit Corporation, guaranty agreements of the Small Business
Administration, certain participation certificates issued by the General
Services Administration, and obligations of the U.S. Postal Service.
Notwithstanding the foregoing, Lender shall hold any funds deposited with
Lender in escrow in a business savings account which shall bear interest at a
business savings account rate (or if such rate is then currently unavailable, at
a similar rate determined by Lender).
"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 prepared by a company
satisfactory to Lender regarding the physical condition of the Property,
satisfactory in form and substance to Lender in its sole discretion.
"Policies" shall have the meaning set forth in Section 8.1(b) hereof.
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"Prepayment Calculation Date" shall have the meaning set forth in Section
2.4 hereof.
"Prepayment Date" shall have the meaning set forth in Section 2.4 hereof.
"Prohibited Transfer" shall have the meaning set forth in Section 7.2
hereof.
"Property" shall mean the parcel of real property, the Improvements
thereon and all Personal Property owned by Borrower and encumbered by the
Mortgage, together with all rights pertaining to such property and Improvements,
as more particularly described in the granting clause of the Mortgage and
referred to therein as the "Property".
"Provided Information" shall have the meaning set forth in Section 13.4(a)
hereof.
"Qualified Manager" shall mean Manager or a reputable and experienced
professional management organization (a) which manages, together with its
affiliates, at least ten (10) first class office buildings totaling at least
5,000,000 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 Lender shall have received (i) written confirmation from the Rating
Agencies that the employment of such manager will not result in a downgrade,
withdrawal or qualification of the initial, or if higher, then current ratings
issued in connection with a Securitization, or if a Securitization has not
occurred, any ratings to be assigned in connection with a Securitization, and
(ii) with respect to any Affiliated Manager, a revised substantive
non-consolidation opinion if one was delivered in connection with the closing of
the Loan.
"Rating Agencies" shall mean each of S&P, Xxxxx'x and Fitch, or any other
nationally-recognized statistical rating agency which has been approved by
Lender and which rate (or are anticipated to rate) the Securities.
"REA" shall mean any construction, operation and reciprocal easement
agreement or similar agreement (including any separate agreement or other
agreement between Borrower and one or more other parties to an REA with respect
to such REA) affecting the Property or portion thereof.
"Release" shall have the meaning set forth in Section 12.5 hereof.
"REMIC Trust" shall mean a "real estate mortgage investment conduit"
(within the meaning of Section 860D, or applicable successor provisions, of the
Code) that holds the Note.
"Rent Roll" shall have the meaning set forth in Section 4.24 hereof.
"Rents" shall have the meaning set forth in the Mortgage.
"Reserve Accounts" shall mean the Tax and Insurance Reserve Account, or
any other escrow account established by the Loan Documents.
"Reserve Funds" shall mean the Tax and Insurance Reserve Funds, or any
other escrow funds established by the Loan Documents.
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"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 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.
"Sale or Pledge" shall have the meaning set forth in Section 7.1 hereof.
"Scheduled Payment Date" shall have the meaning set forth in Section
2.2(b) 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
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"State" shall mean the state or states in which the Property or any part
thereof is located.
"Tax and Insurance Reserve Funds" shall have the meaning set forth in
Section 9.6 hereof.
"Tax and Insurance Reserve Account" shall have the meaning set forth in
Section 9.6 hereof.
"Taxes" shall mean all real estate and personal property taxes and
assessments, now or hereafter levied or assessed or imposed against the Property
or 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
Borrower.
"Tenant Direction Letter" shall have the meaning set forth in Section
10.2(a)(i) hereof.
"Termination Fee Deposit" shall have the meaning set forth in Section
5.13(e).
"Title Insurance Policy" shall mean that certain ALTA mortgagee title
insurance policy issued with respect to the Property and insuring the lien of
the Mortgage.
"Transferee" shall have the meaning set forth in Section 7.5 hereof.
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"TRIA" shall mean the Terrorism Risk Insurance Act of 2002, as the same
may be extended from time to time.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in the State where the applicable Property is located.
"Underwriter Group" shall have the meaning set forth in Section 13.5(b)
hereof.
"Yield Maintenance" shall have the meaning set forth in Section 2.4
hereof.
"Yield Rate" shall have the meaning set forth in Section 2.4 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.
ARTICLE 2
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 Mortgage
and the other Loan Documents.
(d) Borrower shall use the proceeds of the Loan to (i) pay certain costs
in connection with the financing of the Property, (ii) make deposits into the
Reserve Funds on the Closing Date in the amounts provided herein, (iii) pay
costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender, (iv) fund any working capital requirements of the Property,
and (v) together with the proceeds from the sale of preferred stock in the
Borrower from the Private Offering (as defined in the Charter), to repay that
certain loan in the original principal amount of $127,000,000.00 from Franklin
Street Properties Corp. to Borrower.
Section 2.2. Loan Payments
(a) The Loan shall bear interest at a fixed rate per annum equal to 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.
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(b) Borrower hereby agrees to pay sums due under the Note as follows: An
initial payment of $123,099.02 is due on the Closing Date for interest from the
Closing Date through and including December 31, 2006. Thereafter, except as may
be adjusted in accordance with the last sentence of Section 2.2(c), consecutive
monthly installments of interest shall be payable pursuant to the terms of
Section 2.2(d) (the "Monthly Payment Amount") on the first (1st) day of each
month beginning on February 1, 2007 (each a "Scheduled Payment Date") until the
entire indebtedness evidenced hereby is fully paid, except that any remaining
indebtedness, if not sooner paid, shall be due and payable on the Maturity Date.
(c) [intentionally omitted].
(d) Each payment by Borrower hereunder or under the Note shall be payable
at X.X. Xxx 00000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, or by wire transfer to
Bank of America, N.A., ABA #000-000-000, Account #4782779943 for credit to CMSG,
Loan #3404536, 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. 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 first to
the payment of interest computed at the Note Rate, and the balance toward the
reduction of the principal amount of the Note. 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,
including, but not limited to, application to principal installments in inverse
order of maturity. 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.
Section 2.3. Late Payment Charge
If any principal or interest payment is not paid by Borrower on or
before the date the 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.
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Section 2.4. Prepayment
Except as otherwise expressly permitted by this Article 2.4, no voluntary
prepayments, whether in whole or in part, of the Loan or any other amount at any
time due and owing under this Note can be made by Borrower or any other Person
without the express written consent of Lender.
(a) Lockout Period; Voluntary Prepayment. Borrower shall have no
right to make, and Lender shall have no obligation to accept, any voluntary
prepayment, whether in whole or in part, of the Loan, or any other amount under
this Note or the other Loan Documents, at any time during the Lockout Period. At
any time following the expiration of the Lockout Period, the principal balance
of this Note may be voluntarily prepaid in whole, but not in part, upon the
satisfaction of the following conditions:
(i) no Event of Default shall exist under any of the Loan
Documents;
(ii) not less than thirty (30) (but not more than ninety (90))
days prior written notice shall be given to Lender specifying a date
on which the prepayment shall occur, such date being a Scheduled
Payment Date (the "Prepayment Date");
(iii) Borrower has paid to Lender all accrued and unpaid
interest on the Loan through and including the Prepayment Date
together with all other sums due under this Note and the other Loan
Documents; and
(iv) Borrower has paid to Lender a prepayment premium in an
amount equal to Yield Maintenance (as defined and calculated in
accordance with Section 2.4(c) below).
(b) Involuntary Prepayment. In the event of any involuntary
prepayment of the Loan or any other amount under this Note, whether in whole or
in part, in connection with or following Lender's acceleration of this Note or
otherwise, and whether the Mortgage is satisfied or released by foreclosure
(whether by power of sale or judicial proceeding), deed in lieu of foreclosure
or by any other means, including, without limitation, repayment of the Loan by
Borrower or any other Person pursuant to any statutory or common law right of
redemption, Borrower shall, in addition to any portion of the principal balance
of the Loan prepaid (together with all interest accrued and unpaid thereon and
in the event the prepayment is made on a date other than a Scheduled Payment
Date, a sum equal to the amount of interest which would have accrued under this
Note on the amount of such prepayment if such prepayment had occurred on the
next Scheduled Payment Date), pay to Lender a prepayment premium in an amount
equal to Yield Maintenance together with, if such involuntary prepayment occurs
during the Lockout Period, an amount equal to one percent (1%) of the portion of
the Loan being prepaid.
(c) As used herein, "Yield Maintenance" means a prepayment premium
in an amount equal to the greater of (i) 1% of the portion of the Loan being
prepaid, and (ii)
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the product obtained by multiplying:
(A) the portion of the Loan being prepaid, times;
(B) the difference obtained by subtracting (I) the Yield Rate
from (II) the Note Rate, times;
(C) the present value factor calculated using the following
formula:
1-(1+r)^-n
----------
r
r = Yield Rate
n = the number of years and any fraction thereof,
remaining between the date the prepayment is made and the Maturity Date.
As used herein, "Yield Rate" means the corresponding yield rate for
the period between the date of prepayment and the Maturity Date on a U.S.
Treasury Security, as reported in The Wall Street Journal on the fifth Business
Day preceding the Prepayment Calculation Date. If the Yield Rate is not
published for such U.S. Treasury Security, then the "Yield Rate" shall mean the
yield rate for the nearest equivalent U.S. Treasury Security (as selected at
Lender's sole and absolute discretion) as reported in The Wall Street Journal on
the fifth Business Day preceding the Prepayment Calculation Date. If the
publication of such Yield Rate in The Wall Street Journal is discontinued,
Lender shall determine such Yield Rate from another source selected by Lender in
Lender's sole and absolute discretion. The "Prepayment Calculation Date" shall
mean, as applicable, the date on which (i) Lender applies any prepayment to the
reduction of the outstanding principal amount of this Note, (ii) Lender
accelerates the Loan, in the case of a prepayment resulting from acceleration,
or (iii) Lender applies funds held under any Reserve Account, in the case of a
prepayment resulting from such an application (other than in connection with
acceleration of the Loan).
(d) Insurance Proceeds and Awards; Excess Interest. Notwithstanding
any other provision herein to the contrary, and provided no 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 Awards 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) Open Prepayment Period. At any time commencing on the Scheduled
Payment Date which is six (6) months prior to the Maturity Date and ending on
the Business Day that immediately precedes the Maturity Date, upon giving Lender
at least thirty (30) days (but not more than ninety (90) days) prior written
notice, Borrower may voluntarily prepay (without payment of Yield Maintenance or
other premium) this Note in whole (but not in part) on a Scheduled Payment Date.
Lender shall accept a prepayment pursuant to this Section 2.4(e) on a day other
than a Scheduled Payment Date provided that, in addition to payment of the full
outstanding principal balance of this Note, Borrower pays to Lender a sum equal
to the amount of interest which would have accrued on this Note if such
prepayment occurred on the next Scheduled Payment Date.
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(f) Limitation on Partial Prepayments. In no event shall Lender have
any obligation to accept a partial prepayment.
Section 2.5. 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 to Lender all cash flow from the Property in
accordance with the terms of the Article 10 hereof, 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
Mortgage. 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 2.6. 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 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.
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ARTICLE 3
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 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 Insurance; Reports; Leases
(a) Mortgage, Loan Agreement and Note. Lender shall have received from
Borrower a fully executed and acknowledged counterpart of the Mortgage and
evidence that counterparts of the Mortgage and Uniform Commercial Code financing
statements have been delivered to the title company for recording, in the
reasonable judgment of Lender, so as to effectively create upon such recording
valid and enforceable Liens upon the Property, of the requisite priority, in
favor of Lender (or such other trustee as may be required or desired under local
law), subject only to the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents. Lender shall have also received from
Borrower fully executed counterparts of the this Agreement, the Note and
Assignment of Management Agreement and all other Loan Documents.
(b) Title Insurance. Lender shall have received a Title Insurance Policy
issued by a Old Republic National Title Insurance Company and dated as of the
Closing Date, with reinsurance and direct access agreements acceptable to
Lender. Such Title Insurance Policy shall (i) provide coverage in the amount of
the Loan, (ii) insure Lender that the Mortgage creates a valid lien on the
Property of the requisite priority, 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), (iii)
contain such endorsements and affirmative coverages as Lender may reasonably
request, and (iv) name Lender as the insured. The Title Insurance Policy shall
be assignable. Lender also shall have received evidence that all premiums in
respect of such Title Insurance 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 X.X. Xxxxxxx
& Associates, Inc. in accordance with the 2005 Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys. The survey shall meet the
classification of an "Urban Survey" and the following additional items from the
list of "Optional Survey Responsibilities and Specifications" (Table A) should
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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 each 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, 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 Property, 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 the Borrower 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, 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, 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.
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Section 3.5. Opinions of Borrower's Counsel
Lender shall have received opinions of Borrower's counsel with respect to
due execution, authority, enforceability of the Loan Documents and such other
matters as Lender may require, 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
Borrower shall have paid all Taxes and Other Charges (including any in
arrears) relating to the Property, which amounts may be funded with proceeds of
the 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, Securitization and closing of the Loan, including
title insurance premiums and other title company charges; recording,
registration, filing and similar fees, taxes and charges; transfer, mortgage,
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; Securitization 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, Borrower, 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
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occupancy and leases thereof, and all other features of the transaction shall be
as represented to Lender without material adverse change. Neither Borrower nor
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.
Section 3.13. Tenant Estoppels
Borrower has delivered satisfactory tenant estoppels.
Section 3.14. [Intentionally omitted]
Section 3.15. [Intentionally omitted]
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. Issuance of the Title Insurance Policy with the
tax lot endorsement will satisfy this condition.
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
with respect to the Property which shall be satisfactory in form and substance
to Lender.
Section 3.19. Appraisal
Lender shall have received an appraisal of the Property, which shall be
satisfactory in form and substance to Lender.
Section 3.20. Financial Statements
Lender has received the financial statements required for closing.
Section 3.21. Intentionally omitted
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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.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the Closing Date that:
Section 4.1. Organization
Borrower (a) has been duly organized and is validly existing and in good
standing with requisite power and authority to own the Property 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 the Property and the businesses and operations
relating thereto, (c) possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own the
Property and to transact the businesses in which it is now engaged, and the sole
business of Borrower is the ownership, management and operation of the Property,
and (d) in the case of Borrower, has full power, authority and legal right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the
Property pursuant to the terms of the Loan Documents, and has full power,
authority and legal right to keep and observe all of the terms of the Loan
Documents to which it is a party. Borrower represents and warrants that the
chart attached hereto as Exhibit B sets forth an accurate listing of the owners
of the common equity interests in Borrower.
Section 4.2. Status of Borrower
Borrower's exact legal name is correctly set forth on the first page of
this Agreement, on the Mortgage 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.
Section 4.3. Validity of Documents
Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party. This Agreement and such other Loan Documents have been duly
executed and delivered by or on behalf of Borrower and constitute the legal,
valid and binding obligations of Borrower enforceable against Borrower 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).
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Section 4.4. No Conflicts
The execution, delivery and performance of this Agreement and the other
Loan Documents by Borrower 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) upon any of the property or assets of Borrower pursuant
to the terms of any agreement or instrument to which Borrower is a party or by
which any of Borrower'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 or
any of Borrower'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 of
this Agreement or any of the other Loan Documents has been obtained and is in
full force and effect.
Section 4.5. Litigation
There are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending or, to Borrower's
knowledge, threatened against or affecting Borrower or the Property, which
actions, suits or proceedings, if determined against Borrower or the Property,
would materially adversely affect the condition (financial or otherwise) or
business of Borrower or the condition or ownership of the Property.
Section 4.6. Agreements
Borrower is not a party to any agreement or instrument or subject to any
restriction which would materially and adversely affect Borrower or the
Property, or Borrower's business, properties or assets, operations or condition,
financial or otherwise. Borrower is not 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 or the Property is bound. Borrower has no material financial
obligation under any agreement or instrument to which Borrower is a party or by
which Borrower or the Property is otherwise bound, other than (a) obligations
incurred in the ordinary course of the operation of the Property and (b)
obligations under the Loan Documents.
Section 4.7. Solvency
Borrower has (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 exceeds and will,
immediately following the making of the Loan, exceed the total liabilities of
Borrower, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. No petition in bankruptcy has been filed against
Borrower or Affiliated Manager in the last ten (10) years, and neither nor
Affiliated Manager in the last ten (10) years has made an assignment for the
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benefit of creditors or taken advantage of any Creditors Rights Laws. Neither
Borrower nor 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 any
Affiliated Manager.
Section 4.8. Full and Accurate Disclosure
No statement of fact made by or on behalf of Borrower in this Agreement or
in any of the other Loan Documents or in any other document or certificate
delivered by or on behalf of Borrower 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 which has not been disclosed to Lender which adversely
affects, nor as far as Borrower can reasonably foresee, might adversely affect,
the Property or the business, operations or condition (financial or otherwise)
of Borrower.
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(42) 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
Borrower is not a foreign corporation, foreign partnership, foreign trust,
foreign estate or nonresident alien or a disregarded entity owned by any of them
(as those terms are defined in the Internal Revenue Code of 1986), and if
requested by Lender, Borrower will so certify (or in the case of a disregarded
entity, its owner will certify) to Lender or a person designated by Lender under
penalties of perjury to the accuracy of this representation, and will provide in
such certification such additional information as Lender may reasonably request.
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 would
the operation of any of the terms of the Loan Documents, or the exercise of any
right thereunder, render the Loan Documents unenforceable, 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.
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Section 4.12. Business Purposes
The Loan is solely for the business purpose of Borrower, and is not for
personal, family, household, or agricultural purposes.
Section 4.13. Compliance
Except as expressly disclosed by Borrower to Lender in writing in
connection with the closing of the Loan, Borrower and the Property, and the use
and operation thereof, 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, Borrower
is not 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 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 and/or the
Property, to the extent created by or for Borrower, (a) are true, complete and
correct in all material respects, (b) accurately represent the financial
condition of Borrower 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. Borrower does not have 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 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 from that set forth in
said financial statements.
Section 4.15. Condemnation
No Condemnation or other proceeding has been commenced or, to Borrower's
best knowledge, is threatened or contemplated with respect to all or any portion
of the Property or for the relocation of roadways providing access to the
Property.
Section 4.16. Utilities and Public Access; Parking
The Property has adequate rights of access to public ways and is served by
water, sewer, sanitary sewer and storm drain facilities adequate to service the
Property for full utilization of the Property for its intended uses. All public
utilities necessary to the full use and enjoyment of the Property as currently
used and enjoyed are located either in the public right-of-way abutting the
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Property (which are connected so as to serve the Property without passing over
other property) or in recorded easements serving the Property and such easements
are set forth in and insured by the Title Insurance Policy. All roads necessary
for the use of the Property for its current purposes have been completed and
dedicated to public use and accepted by all Governmental Authorities. The
Property has, or is served by, parking to the extent required to comply with all
Legal Requirements.
Section 4.17. Separate Lots
The Property is assessed for real estate tax purposes as one or more
wholly independent tax lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot or lots, and no other land or
improvements is assessed and taxed together with the Property or any portion
thereof.
Section 4.18. Assessments
To Borrower's knowledge after due inquiry, there are no pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments. Lender
acknowledges that Borrower has notified Lender that the municipality may
initiate an assessment with respect to sidewalk repairs. Borrower has not
received any written notice from the municipality with respect to any such
assessment and has no knowledge of the likelihood, timing or magnitude of any
such assessment.
Section 4.19. Insurance
Borrower has obtained and has delivered to Lender certified copies of all
Policies or, to the extent such Policies are not available as of the Closing
Date, certificates of insurance with respect to all such Policies reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement.
No claims have been made under any of the Policies, and to Borrower's knowledge,
no Person, including Borrower, has done, by act or omission, anything which
would impair the coverage of any of the Policies.
Section 4.20. Use of Property
The Property is used exclusively for office and retail purposes and other
appurtenant and related uses.
Section 4.21. Certificate of Occupancy; Licenses
All certifications, permits, licenses and approvals, including, without
limitation, certificates of completion or occupancy and any applicable liquor
license required for the legal use, occupancy and operation of the Property for
the purpose intended herein, have been obtained and are valid and in full force
and effect. Borrower shall keep and maintain (or cause to be kept and
maintained) all licenses necessary for the operation of the Property for the
purpose intended herein. The use being made of the Property is in conformity
with the final certificate of occupancy (or compliance, if applicable) and any
permits or licenses issued for the Property.
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Section 4.22. Flood Zone
None of the Improvements on the Property are located in an area identified
by the Federal Emergency Management Agency as an area having special flood
hazards, or, if any portion of the Improvements is located within such area,
Borrower has obtained the insurance prescribed in Section 8.1(a)(i).
Section 4.23. Physical Condition
Except as set forth in the Physical Conditions Report, to Borrower's
knowledge after due inquiry, the Property, including, without limitation, all
buildings, improvements, parking facilities, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects. Except as set forth in the Physical Conditions Report,
to Borrower's knowledge after due inquiry, there exists no structural or other
material defects or damages in the Property, as a result of a Casualty or
otherwise, and whether latent or otherwise. Borrower has not received notice
from any insurance company or bonding company of any defects or inadequacies in
the Property, or any part thereof, which would adversely affect the insurability
of the same or cause the imposition of extraordinary premiums or charges thereon
or of any termination or threatened termination of any policy of insurance or
bond.
Section 4.24. Boundaries
Except as set forth in the survey described in Section 3.2(c), (a) none of
the Improvements which were included in determining the appraised value of the
Property lie outside the boundaries and building restriction lines of the
Property to any material extent, and (b) no improvements on adjoining properties
encroach upon the Property and no easements or other encumbrances upon the
Property encroach upon any of the Improvements so as to materially affect the
value or marketability of the Property.
Section 4.25. Leases and Rent Roll
Borrower has delivered to Lender a true, correct and complete rent roll
for the Property (a "Rent Roll") which includes all Leases affecting the
Property (including schedules for all executed Leases for Tenants not yet in
occupancy or under which the rent commencement date has not occurred). Except as
set forth in the Rent Roll (as same has been updated by written notice thereof
to Lender) and estoppel certificates delivered to Lender on or prior to the
Closing Date: (a) each Lease is in full force and effect; (b) the premises
demised under the Leases have been completed and the Tenants under the Leases
have accepted possession of and are in occupancy of all of their respective
demised premises; (c) the Tenants under the Leases have commenced the payment of
rent under the Leases, there are no offsets, claims or defenses to the
enforcement thereof, and Borrower has no monetary obligations to any Tenant
under any Lease; (d) all Rents due and payable under the Leases have been paid
and no portion thereof has been paid for any period more than thirty (30) days
in advance; (e) the rent payable under each Lease is the amount of fixed rent
set forth in the Rent Roll, and there is no claim or basis for a claim by the
Tenant thereunder for an offset or adjustment to the rent; (f) no Tenant has
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made any written claim of a material default against the landlord under any
Lease which remains outstanding nor has Borrower or Manager received, by
telephonic, in-person, e-mail or other communication, any notice of a material
default under any Lease; (g) to Borrower's knowledge there is no present
material default by the Tenant under any Lease; (h) all security deposits under
the Leases have been collected by Borrower; (i) Borrower is the sole owner of
the entire landlord's interest in each Lease; (j) each Lease is the valid,
binding and enforceable obligation of Borrower and the applicable Tenant
thereunder and there are no agreements with the Tenants under the Leases other
than as expressly set forth in the Leases; (k) no Person has any possessory
interest in, or right to occupy, the Property or any portion thereof except
under the terms of a Lease; (l) none of the Leases contains any option or offer
to purchase or right of first refusal to purchase the Property or any part
thereof; (m) neither the Leases nor the Rents have been assigned, pledged or
hypothecated except to Lender, and no other Person has any interest therein
except the Tenants thereunder; and (n) to Borrower's knowledge no conditions
exist which now give any Tenant or party the right to "go dark" pursuant to the
provision of its Lease and/or the REA.
Section 4.26. Filing and Recording Taxes
All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, the Mortgage, have been paid or will be paid, and, under
current Legal Requirements, the Mortgage is enforceable in accordance with its
terms by Lender (or any subsequent holder thereof).
Section 4.27. Management Agreement
The Management Agreement is in full force and effect and there is no
default thereunder by any party thereto and, to Borrower's knowledge, no event
has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. No management fees under the Management
Agreement are accrued and unpaid.
Section 4.28. Illegal Activity
No portion of 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 4.29. Construction Expenses
All costs and expenses of any and all labor, materials, supplies and
equipment used in the construction of the Improvements have been paid in full.
To Borrower's knowledge after due inquiry, there are no claims for payment for
work, labor or materials affecting the Property which are or may become a lien
prior to, or of equal priority with, the Liens created by the Loan Documents.
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Section 4.30. Personal Property
Borrower has paid in full for, and is the owner of, all Personal Property
(other than tenants' property) used in connection with the operation of the
Property, free and clear of any and all security interests, liens or
encumbrances, except for Permitted Encumbrances and the Lien and security
interest created by the Loan Documents.
Section 4.31. Taxes
Borrower has filed all federal, state, county, municipal, and city income,
personal property and other tax returns required to have been filed by them and
have paid all taxes and related liabilities which have become due pursuant to
such returns or pursuant to any assessments received by them. Borrower knows of
no basis for any additional assessment in respect of any such taxes and related
liabilities for prior years.
Section 4.32. 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 Loan Documents, materially and adversely affects the value of the
Property, impairs the use or the operation of the Property or impairs Borrower's
ability to pay its obligations in a timely manner.
Section 4.33. 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 4.34. 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; or (b) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
Section 4.35. Reciprocal Easement Agreements
(a) Neither Borrower, nor any other party is currently in default (nor has
any notice been given or received with respect to an alleged or current default)
under any of the terms and conditions of the REA, and the REA remains unmodified
and in full force and effect;
(b) All easements granted pursuant to the REA which were to have survived
the site preparation and completion of construction (to the extent that the same
has been completed), remain in full force and effect and have not been released,
terminated, extinguished or discharged by agreement or otherwise;
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(c) All sums due and owing by Borrower to the other parties to the REA (or
by the other parties to the REA to the Borrower) pursuant to the terms of the
REA, including without limitation, all sums, charges, fees, assessments, costs,
and expenses in connection with any taxes, site preparation and construction,
non-shareholder contributions, and common area and other property management
activities have been paid, are current, and no lien has attached on the Property
(or threat thereof been made) for failure to pay any of the foregoing;
(d) The terms, conditions, covenants, uses and restrictions contained in
the REA do not conflict in any manner with any terms, conditions, covenants,
uses and restrictions contained in any Lease or in any agreement between
Borrower and occupant of any peripheral parcel, including without limitation,
conditions and restrictions with respect to kiosk placement, tenant restrictions
(type, location or exclusivity), sale of certain goods or services, and/or other
use restrictions; and
(e) The terms, conditions, covenants, uses and restrictions contained in
each Lease do not conflict in any manner with any terms, conditions, covenants,
uses and restrictions contained in the REA, any other Lease or in any agreement
between Borrower and occupant of any peripheral parcel, including without
limitation, conditions and restrictions with respect to kiosk placement, tenant
restrictions (type, location or exclusivity), sale of certain goods or services,
and/or other use restrictions.
Section 4.36. No Change in Facts or Circumstances; Disclosure
All information, to the extent created by or for Borrower, submitted by
Borrower or its agents to Lender and in all financial statements, rent rolls,
reports, certificates and other documents, to the extent created by or for
Borrower, submitted in connection with the Loan or in satisfaction of the terms
thereof and all statements of fact made by Borrower in this Agreement or in any
other Loan Document, are accurate, complete and correct in all material
respects. 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
Property or the business operations or the financial condition of Borrower.
Borrower has disclosed to Lender all material facts and has not failed to
disclose any material fact that could cause any representation or warranty made
herein to be materially misleading.
Section 4.37. 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 others. To Borrower's knowledge, there is no infringement by
others of trademarks, trade names and service marks of Borrower.
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Section 4.38. Survey
The Survey for the Property delivered to Lender in connection with this
Agreement has been prepared in accordance with the provisions of Section 3.2(c)
hereof, and to the knowledge of Borrower does not fail to reflect any material
matter affecting the Property or the title thereto.
Section 4.39. Compliance with Anti-Terrorism Laws
None of Borrower nor any Person who Controls Borrower currently is
identified by the Office of Foreign Assets Control, Department of the Treasury
("OFAC") or otherwise qualifies as a Embargoed Person, and Borrower has
implemented procedures to ensure that no Person who now or hereafter owns a
direct or indirect equity interest in Borrower is an Embargoed Person or is
Controlled by an Embargoed Person. Borrower is not in violation of any
applicable law relating to anti-money laundering or anti-terrorism, including,
without limitation, those related to transacting business with Embargoed Persons
or the requirements of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S.
Public Law 107-56, and the related regulations issued thereunder, including
temporary regulations (collectively, as the same may be amended from time to
time, the "Patriot Act"). To the best of Borrower's knowledge, no tenant at the
Property is currently identified by OFAC or otherwise qualifies as an Embargoed
Person, or is owned or Controlled by an Embargoed Person. Borrower has
determined that Manager has implemented procedures approved by Borrower to
ensure that no tenant at the Property is currently identified by OFAC or
otherwise qualifies as an Embargoed Person, or is owned or Controlled by an
Embargoed Person.
Section 4.40. Patriot Act
Borrower shall not (a) be or become subject at any time to any law,
regulation, or list of any government agency (including, without limitation, the
list maintained by OFAC and accessible through the OFAC website) that prohibits
or limits any lender from making any advance or extension of credit to Borrower
or from otherwise conducting business with Borrower, or (b) fail to provide
documentary and other evidence of Borrower's identity as may be requested by any
lender at any time to enable any lender to verify Borrower's identity or to
comply with any applicable law or regulation, including, without limitation, the
Patriot Act. In addition, Borrower hereby agrees to provide to Lender any
additional information that Lender deems necessary from time to time in order to
ensure compliance with all applicable laws concerning money laundering and
similar activities. Notwithstanding anything to the contrary contained in this
Section 4.40, in no event shall Borrower be required to disclose any
confidential information regarding the holders of its preferred stock, except as
required for legal or regulatory compliance, provided that, if requested by
Lender, Borrower delivers to Lender a certification that none of the holders of
preferred stock is identified by OFAC or otherwise qualifies as a Embargoed
Person
Section 4.41. 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
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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.
ARTICLE 5
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 Mortgage (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 5.1. Existence; Compliance with Legal Requirements
(a) 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 with all Legal Requirements
applicable to it 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 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 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 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 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 or Lender; (v) Borrower
shall have furnished the security as may be required in the proceeding or by
Lender to ensure compliance by Borrower with the Legal Requirements; and (vi)
Borrower shall have furnished to Lender all other items reasonably requested by
Lender.
Section 5.2. Maintenance and Use of Property
Borrower shall cause the Property to be maintained 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
5.21, materially altered (except for normal replacement of the Personal
Property) without the prior written consent of Lender. 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 any 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 pay all Taxes and Other Charges now or hereafter levied
or assessed or imposed against the Property or any part thereof as the same
become due and payable; provided, however, Borrower's obligation to directly pay
Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 9.6 hereof. Borrower shall 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 furnish
such receipts for payment of Taxes in the event that such Taxes have been paid
by Lender pursuant to Section 9.6 hereof). Borrower shall not suffer and shall
promptly cause to be paid and discharged any Lien or charge whatsoever which may
be or become a Lien or charge against the Property, and shall promptly pay for
all utility services provided to the Property.
(b) After prior written notice to Lender, Borrower, at its own expense,
may 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 or Other Charges, 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 promptly upon final determination thereof
pay the amount of any such Taxes or Other Charges, 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 or Other Charges
from the Property; and (vi) Borrower shall furnish such security as may be
required in the proceeding, or deliver to Lender such reserve deposits as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon (unless Borrower has paid all
of the Taxes or Other Charges under protest). Lender may pay over any such cash
deposit or part thereof held by Lender to the claimant entitled thereto at any
time when, in the judgment of Lender, the entitlement of such claimant is
established or the Property (or part thereof or interest therein) shall be in
danger of being sold, forfeited, terminated, canceled or lost or there shall be
any danger of the Lien of the Mortgage being primed by any related Lien.
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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 which
might materially adversely affect Borrower's condition (financial or otherwise)
or business or the Property.
Section 5.6. Access to Property
Subject to the rights of Tenants under Leases, Borrower shall permit
agents, representatives and employees of Lender to inspect the Property or any
part thereof at reasonable hours upon reasonable advance notice.
Section 5.7. Notice of Default
Borrower shall promptly advise Lender of any material adverse change in
the condition (financial or otherwise) of Borrower or the Property or of the
occurrence of any Default or 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 agreement or
instrument affecting or pertaining to the Property and any amendments,
modifications or changes thereto.
Section 5.10. Awards; Insurance Proceeds
Borrower shall 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 shall keep adequate books and records of account in
accordance with GAAP, or in accordance with other methods acceptable to Lender
in its sole discretion, consistently applied and shall furnish to Lender:
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(i) prior to a Securitization, at the request of Lender, monthly,
and following a Securitization, quarterly and annual certified rent rolls
signed and dated by Borrower, detailing the names of all Tenants (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 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 twenty (20) days after the end of each calendar
month, thirty (30) days after the end of each fiscal quarter or sixty (60)
days after the close of each fiscal year of Borrower, as applicable;
(ii) prior to a Securitization, at the request of Lender, monthly,
and following a Securitization, quarterly and annual operating statements
of the Property, prepared and certified by Borrower in the form required
by Lender, 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, 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 in the form required by 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, as applicable, as the case may be. For this purpose, Lender
acknowledges that in the event that Borrower becomes a public reporting
company pursuant to the Exchange Act, delivery of copies of Borrower's
unaudited 10-Q and audited 10-K statements shall satisfy the delivery
requirements of this Section 5.11(a)(iii).
(b) Upon request from Lender, Borrower shall promptly furnish to Lender:
(i) a property management report for the Property, showing the
number of inquiries made and/or rental applications received from tenants
or prospective tenants and deposits received from tenants and any other
information requested by Lender, in reasonable detail and certified by
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
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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 shall furnish 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) [Intentionally Deleted]
(e) All items requiring the certification of Borrower shall, except where
Borrower is an individual, require a certificate executed by the general
partner, managing member, chief executive officer or chief operating officer of
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 Mortgage 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) Borrower shall use commercially reasonable efforts 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.
Section 5.13. Leasing Matters.
(a) Borrower may 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 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
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Lender, (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 in excess of twelve (12) months
thereunder, and (viii) is written on the standard form of lease approved by
Lender. All proposed Leases which do 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 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 observe and perform all the obligations imposed
upon the landlord under the Leases 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 promptly send copies to Lender of all notices of material default which
Borrower shall send or receive; (iii) shall 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; (iv) shall not 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 execute any other assignment of the
landlord's interest in any of the Leases or the Rents; and (vi) shall not
consent to any assignment of or subletting under any Leases not in accordance
with their terms, without the prior written consent of Lender
(c) Borrower may, without the prior written consent of Lender, 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, at Borrower's
expense. Borrower shall 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.
(d) Notwithstanding anything contained herein to the contrary, Borrower
shall not, without the prior written consent of Lender, enter into, renew,
extend, amend, modify, waive any provisions of, terminate, reduce Rents under,
accept a surrender of space under, or shorten the term of any Major Lease,
provided that this section shall not limit the automatic expiration of the
Master Lease as so provided for therein.
(e) Borrower shall deposit in escrow with Lender any sum or termination
fee payable (whether by election or in connection with a bankruptcy of a Tenant)
to Borrower in connection with any early termination of a Major Lease of space
at the Property (the "Termination Fee Deposit") on the date of Borrower's
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receipt thereof. Provided no Event of Default exists, Lender shall disburse such
deposited funds to pay for the costs of tenant improvements and leasing
commissions incurred in connection with the releasing of any such space
("Vacated Space"), upon request by Borrower and delivery to Lender of invoices
and such supporting documentation as Lender may reasonably request, including,
without limitation, evidence that the work has been completed in a manner
satisfactory to the applicable tenant. Upon completion of any payment for any
tenant improvements and leasing commission in connection with the releasing of
any Vacated Space, and provided that such Vacated Space is leased in accordance
with the terms of this Agreement and for a base term expiring not less two (2)
years after the Maturity Date, Lender shall disburse to Borrower any remaining
sums from the Termination Fee Deposit with respect to such Vacated Space.
(f) Notwithstanding anything to the contrary contained herein, to the
extent Lender's prior approval and/or consent is required for any leasing
matters set forth in this Section 5.13, Lender shall have twenty (20) 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 bold lettering with the following language:
"LENDER'S RESPONSE IS REQUIRED WITHIN TWENTY (20) 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". In the event
that Lender fails to approve or disapprove the leasing matter in question within
such time (which such disapproval (if applicable) shall set forth the reasons
for the same), 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 reasonably required by Lender.
Section 5.14. Property Management
(a) Borrower shall (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 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
with respect to which Lender has elected to accelerate the Loan, and Lender
determines that a Manager Termination Event (defined below) exists; or (iii) a
default has occurred and is continuing under the Management Agreement, Borrower
shall, at the request of Lender, terminate the Management Agreement upon thirty
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(30) days prior notice to Manager and 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. "Manager Termination Event" shall mean
a determination by Lender, made in the exercise of Lender's reasonable good
faith discretion, that replacing Manager with a replacement manager is likely to
result in a positive affect on the value of the Property. If Lender fails to
determine that a Manager Termination Event exists, then Lender (together with
any successor or any purchaser at foreclosure) shall be deemed to waive any
right to terminate the Management Agreement as a result of an Event of Default.
(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 Assignment 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 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 Borrower
or Manager within thirty (30) days from the date of such notice or that Borrower
or Manager have failed to diligently undertake correcting such conditions within
such thirty (30) day period, Lender may direct Borrower to terminate 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, without the prior written consent of Lender (which
consent shall not be unreasonably withheld, conditioned or delayed): (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
Subject to Borrower's right to contest same pursuant to the terms of the
Mortgage, Borrower shall not, without the prior written consent of Lender,
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.
Section 5.16. Debt Cancellation
Borrower shall not cancel or otherwise forgive or release any claim or
debt (other than termination of Leases in accordance herewith) owed to Borrower
by any Person, except for adequate consideration and in the ordinary course of
Borrower's business.
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Section 5.17. Zoning
Borrower shall not 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 written 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.
(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.ss.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. ss.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.ss.2510.3-101(c) or (e).
Section 5.19. No Joint Assessment
Borrower shall not 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. Reciprocal Easement Agreements
Borrower shall not enter into, terminate or modify any material terms or
conditions contained in any REA without Lender's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Borrower
shall enforce, comply with, and cause each of the parties to the REA to comply
with all of the material economic terms and conditions contained in the REA.
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Section 5.21. Alterations
(a) Lender's prior approval 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 are structural in nature 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 the
applicable Rating Agencies, (iii) other securities acceptable to Lender and the
Rating Agencies, or (iv) a completion bond, provided that such completion bond
is acceptable to the Lender and the Rating Agencies. 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.
(b) Notwithstanding anything to the contrary contained herein, to the
extent Lender's prior approval and/or consent is required pursuant to Section
5.21(a) above, Lender shall have forty-five (45) 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 bold lettering with the following language: "LENDER'S RESPONSE IS
REQUIRED WITHIN FORTY-FIVE (45) 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". In the event that Lender fails
to approve or disapprove the alteration in question within such time (which such
disapproval (if applicable) shall set forth the reasons for the same), 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.
ARTICLE 6
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:
(i) engage in any business or activity other than the ownership,
operation and maintenance of the Property, and activities incidental
thereto;
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(ii) 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) except with respect to a Permitted Transfer (as described in
Section 7.3 below), 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;
(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) except with respect to FSP LLC, own any subsidiary, or make any
investment in, any Person;
(vi) commingle its assets with the assets of any other Person, or
permit any Affiliate or constituent party independent access to its bank
accounts
(vii) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than (A) the Debt, (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 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 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 is a separate legal entity and
that it maintains separate books and records;
(ix) other than the Asset Management Agreement and in connection
with the Private Offering (as defined in the Charter), enter into any
contract or agreement with any general partner, member, shareholder,
principal, guarantor of the obligations of 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;
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(xi) 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;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns or files a consolidated
federal income tax return with any Person (unless prohibited or required,
as the case may be, by applicable Legal Requirements);
(xiv) 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) fail to allocate 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;
(xvii) fail to remain solvent or pay its own liabilities (including,
without limitation, salaries of its own employees) only from its own
funds;
(xviii) except with respect to a Permitted Transfer (as described in
Section 7.3 below), acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable;
(xix) violate or cause to be violated the assumptions made with
respect to Borrower and its principals in any opinion letter pertaining to
substantive consolidation delivered to Lender in connection with the Loan,
if required in connection with a Securitization; or
(xx) fail to maintain a sufficient number of employees in light of
its contemplated business operations.
(b) Borrower shall cause FSP LLC to at all times comply with each of the
covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and
(viii) - (xviii), to the extent applicable to FSP LLC, as if such
representation, warranty or covenant was made directly by FSP LLC; (ii) will not
engage in any business or activity other than as landlord under the Master Lease
and activities ancillary thereto; (iii) will not acquire or own any assets other
than its interest in the Master Lease; and (iv) will not incur any debt, secured
or unsecured, direct or contingent (including guaranteeing any obligation).
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Section 6.2. Change of Name, Identity or Structure
Except with respect to a Permitted Transfer (as described in Section 7.3
below), 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, which consent shall not be unreasonably
withheld, conditioned or delayed. In addition, except with respect to a
Permitted Transfer (as described in Section 7.3 below), 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 Section 6.1 and Section
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 the
Property, 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
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 Property.
ARTICLE 7
NO SALE OR ENCUMBRANCE
Section 7.1. Transfer Definitions
For purposes of this Article 7 an "Affiliated Manager" shall mean any
managing agent in which Borrower or any affiliate of such entities has, directly
or indirectly, any legal, beneficial or economic interest; "Control" shall mean
the power to direct the management and policies of a Restricted Party (excluding
any transfer of interests in Franklin Street Properties Corp., so long as such
entity is publicly traded on a nationally recognized exchange), directly or
indirectly, whether through the ownership of voting securities or other
beneficial interests, by contract or otherwise; "Restricted Party" shall mean
Borrower, any Affiliated Manager, or any holder of common stock, partner, member
or non-member manager, or any direct or indirect legal or beneficial owner of
Borrower, any Affiliated Manager or any non-member manager; 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,
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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. Notwithstanding
anything to the contrary contained in this Section 7.1, in no event shall the
term "Restricted Party" be deemed to include holders of preferred stock in
Borrower.
Section 7.2. No Sale/Encumbrance
(a) Borrower shall not cause or permit a Sale or Pledge of 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, which consent shall not be unreasonably withheld,
conditioned or delayed.
(b) A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) subject to Section
5.13, an agreement by 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,
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; or (vii) the removal
or the resignation of 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: (I)(a) the transfer of
preferred stock in Borrower by devise or descent or by operation of law upon the
death of a holder of preferred stock in Borrower; (b) transfers of preferred
stock in Borrower for estate planning purposes to the spouse or any lineal
descendant of a holder of preferred stock in Borrower, or to a trust for the
benefit of any one or more of such individual, spouse or lineal descendant; (c)
(i) prior to completion of the Private Offering (as defined in the Charter), the
transfer of preferred stock in Borrower pursuant to the Charter, provided that
(x) no holder of preferred stock in Borrower shall beneficially or
constructively acquire more than 9.8% of such preferred stock in Borrower and
(y) Borrower shall deliver prompt subsequent notice of such transfer to Lender,
and (ii) subsequent to the completion of the Private Offering, the transfer of
preferred stock in Borrower pursuant to the Charter provided that (x) the
consent of the holder(s) of the common stock in Borrower shall not be required
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for such transfer and (y) Borrower shall deliver prompt subsequent notice of
such transfer to Lender; and (d) the transfer of Xxxxxx X. Xxxxxx'x fractional
share of common stock in Borrower to Franklin Street Properties Corp; provided
that at all times, (1) all holders of the preferred stock in Borrower are
Accredited Investors to the extent required pursuant to Regulation D of the
Securities Act, and (2) the common stock in Borrower is owned, directly or
indirectly, and Controlled by Franklin Street Properties Corp. and/or Xxxxxx
Xxxxxx.
(II) a transfer of the Property in its entirety to, and the related
assumption of the Loan by an FSP Transferee, provided that each of the following
terms and conditions are satisfied:
(a) no Default or Event of Default has occurred;
(b) Borrower shall have (i) delivered written notice to Lender of the
terms of such prospective transfer not less than thirty (30) days before the
date on which such transfer is scheduled to close and, concurrently therewith,
all such information concerning the proposed Transferee as Lender shall
reasonably require and (ii) paid to Lender a non-refundable processing fee in
the amount of $10,000;
(c) Borrower shall have paid to Lender, concurrently with the closing of
such transfer, all out-of-pocket costs and expenses, including reasonable
attorneys' fees, incurred by Lender in connection with the transfer;
(d) Borrower and FSP Transferee, without any cost to Lender, shall furnish
any information requested by Lender for the preparation of, and shall authorize
Lender to file, new financing statements and financing statement amendments and
other documents to the fullest extent permitted by applicable law, and shall
execute any additional documents reasonably requested by Lender;
(e) Borrower shall have delivered to Lender, without any cost or expense
to Lender, such endorsements to Lender's Title Insurance Policy insuring that
fee simple or leasehold title to the Property, as applicable, is vested in FSP
Transferee (subject to Permitted Encumbrances), hazard insurance endorsements or
certificates and other similar materials as Lender may deem necessary at the
time of the transfer, all in form and substance satisfactory to Lender;
(f) FSP Transferee shall have furnished to Lender, if FSP Transferee is a
corporation, partnership, limited liability company or other entity, all
appropriate papers evidencing FSP Transferee's organization and good standing,
and the qualification of the signers to execute the assumption of the Debt,
which papers shall include certified copies of all documents relating to the
organization and formation of FSP Transferee and of the entities, if any, which
are partners or members of FSP Transferee. FSP Transferee and such constituent
partners, members or shareholders of Transferee (as the case may be), as Lender
shall require, shall comply with the covenants set forth in Article 6 hereof;
(g) FSP Transferee shall assume the obligations of Borrower under any
Management Agreement or provide a new management agreement with a new manager
which meets with the requirements of Section 5.14 hereof and assign to Lender as
additional security such new management agreement;
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(h) FSP Transferee shall furnish an opinion of counsel satisfactory to
Lender and its counsel (A) that FSP Transferee's formation documents provide for
the matters described in subparagraph (g) above, (B) that the assumption of the
Debt has been duly authorized, executed and delivered, and that the Note, the
Mortgage, this Agreement, the assumption agreement and the other Loan Documents
are valid, binding and enforceable against FSP Transferee in accordance with
their terms, (C) that FSP Transferee and any entity which is a controlling
stockholder, member or general partner of FSP Transferee, have been duly
organized, and are in existence and good standing, and (E) with respect to such
other matters as Lender may reasonably request; and
(i) FSP Transferee shall, prior to such transfer, deliver a substantive
non-consolidation opinion to Lender, which opinion shall be in form, scope and
substance acceptable in all respects to Lender and the Rating Agencies, if
required based on the ownership structure of Transferee.
(III) the merger of an FSP Transferee with and into Borrower, provided
that each of the following terms and conditions are satisfied:
(a) no Default or Event of Default has occurred;
(b) Borrower shall have (i) delivered written notice to Lender of the
terms of such prospective transfer not less than thirty (30) days before the
date on which such transfer is scheduled to close and, concurrently therewith,
all such information concerning the proposed FSP Transferee as Lender shall
reasonably require and (ii) paid to Lender a non-refundable processing fee in
the amount of $10,000;
(c) Borrower shall have paid to Lender, concurrently with the closing of
such transfer, all out-of-pocket costs and expenses, including reasonable
attorneys' fees, incurred by Lender in connection with the transfer;
(d) Borrower, without any cost to Lender, shall execute any additional
documents reasonably requested by Lender;
(e) Borrower shall have furnished to Lender all appropriate papers
evidencing the merger of FSP Transferee with and into Borrower; and
(f) Borrower shall shall furnish an opinion of counsel satisfactory to
Lender and its counsel with respect to such other matters as Lender may
reasonably request.
A consent by Lender with respect to a transfer of the Property in its entirety
to, and the related assumption of the Loan by, an FSP Transferee pursuant to
this Section 7.3 shall not be construed to be a waiver of the right of Lender to
consent to any subsequent Sale or Pledge of the Property. Upon the transfer of
the Property pursuant to this Section 7.5, Borrower shall be relieved of all
liability under the Loan Documents for acts, events, conditions, or
circumstances occurring or arising after the date of such transfer, except to
the extent that such acts, events, conditions, or circumstances are the
proximate result of acts, events, conditions, or circumstances that existed
prior to the date of such transfer, whether or not discovered prior or
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subsequent to the date of such transfer. Notwithstanding anything to the
contrary contained in this Section 7.3, in no event shall Borrower be required
to disclose any confidential information regarding the holders of its preferred
stock, subject to legal and/or regulatory compliance and provided that, if
requested by Lender, Borrower delivers to Lender a certification that none of
the holders of preferred stock is identified by the Office of Foreign Assets
Control, Department of the Treasury ("OFAC") or otherwise qualifies as a
Embargoed Person.
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 to reflect the proposed
Prohibited Transfer, (b) receipt of payment of a transfer fee equal to one half
of one percent (0.50%) of the outstanding principal balance of the Loan and all
of Lender's expenses incurred in connection with such Prohibited Transfer, (c)
receipt of written confirmation from the Rating Agencies that the Prohibited
Transfer will not result in a downgrade, withdrawal or qualification of the
initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, (d) the proposed transferee's
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in Article 6) and the other Loan Documents,
(e) a Qualified Manager for the Property and a new management agreement, if
applicable, satisfactory to Lender, 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. In the event an opinion letter pertaining to substantive consolidation
was delivered to Lender and the Rating Agencies in connection with the
Securitization of the Loan, and if any Sale or Pledge permitted under this
Article 7 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 opinion letter pertaining
to substantive consolidation to Lender reflecting such Prohibited Transfer,
which opinion shall be in form, scope and substance acceptable in all respects
to Lender and the Rating Agencies.
Section 7.5. Assumption
Notwithstanding the foregoing provisions of this Article 7, following the
date which is six (6) months from the Closing Date, Lender shall not
unreasonably withhold consent to a transfer of the Property in its entirety to,
and the related assumption of the Loan by, any Person (a "Transferee") provided
that each of the following terms and conditions are satisfied:
(a) no Default or Event of Default has occurred;
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(b) Borrower shall have (i) delivered written notice to Lender of the
terms of such prospective transfer not less than sixty (60) days before the date
on which such transfer is scheduled to close and, concurrently therewith, all
such information concerning the proposed Transferee as Lender shall reasonably
require and (ii) paid to Lender a non-refundable processing fee in the amount of
$10,000. Unless the Transferee is an FSP Transferee, Lender shall have the right
to approve or disapprove the proposed transfer based on its then current
underwriting and credit requirements for similar loans secured by similar
properties which loans are sold in the secondary market, such approval not to be
unreasonably withheld. In determining whether to give or withhold its approval
of the proposed transfer, Lender shall consider the experience and track record
of Transferee and its principals in owning and operating facilities similar to
the Property, the financial strength of Transferee and its principals, the
general business standing of Transferee and its principals and Transferee's and
its principals' relationships and experience with contractors, vendors, tenants,
lenders and other business entities; provided, however, that, notwithstanding
Lender's agreement to consider the foregoing factors in determining whether to
give or withhold such approval, such approval shall be given or withheld based
on what Lender determines to be commercially reasonable and, if given, may be
given subject to such conditions as Lender may deem reasonably appropriate;
(c) Borrower shall have paid to Lender, concurrently with the closing of
such transfer, (i) unless the Transferee is an FSP Transferee, a non-refundable
assumption fee in an amount equal to one half of one percent (0.50%) of the then
outstanding principal balance of the Note, and (ii) all out-of-pocket costs and
expenses, including reasonable attorneys' fees, incurred by Lender in connection
with the transfer;
(d) Transferee assumes and agrees to pay the Debt as and when due subject
to the provisions of Article 15 hereof and, prior to or concurrently with the
closing of such transfer, Transferee and its constituent partners, members or
shareholders as Lender may require, shall execute, without any cost or expense
to Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate said assumption;
(e) Borrower and Transferee, without any cost to Lender, shall furnish any
information requested by Lender for the preparation of, and shall authorize
Lender to file, new financing statements and financing statement amendments and
other documents to the fullest extent permitted by applicable law, and shall
execute any additional documents reasonably requested by Lender;
(f) Borrower shall have delivered to Lender, without any cost or expense
to Lender, such endorsements to Lender's Title Insurance Policy insuring that
fee simple or leasehold title to the Property, as applicable, is vested in
Transferee (subject to Permitted Encumbrances), hazard insurance endorsements or
certificates and other similar materials as Lender may deem necessary at the
time of the transfer, all in form and substance satisfactory to Lender;
(g) Transferee shall have furnished to Lender, if Transferee is a
corporation, partnership, limited liability company or other entity, all
appropriate papers evidencing Transferee's organization and good standing, and
the qualification of the signers to execute the assumption of the Debt, which
papers shall include certified copies of all documents relating to the
organization and formation of Transferee and of the entities, if any, which are
partners or members of Transferee. Transferee and such constituent partners,
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members or shareholders of Transferee (as the case may be), as Lender shall
require, shall comply with the covenants set forth in Article 6 hereof;
(h) Transferee shall assume the obligations of Borrower under any
Management Agreement or provide a new management agreement with a new manager
which meets with the requirements of Section 5.14 hereof and assign to Lender as
additional security such new management agreement;
(i) Transferee shall furnish an opinion of counsel satisfactory to Lender
and its counsel (A) that Transferee's formation documents provide for the
matters described in subparagraph (g) above, (B) that the assumption of the Debt
has been duly authorized, executed and delivered, and that the Note, the
Mortgage, this Agreement, the assumption agreement and the other Loan Documents
are valid, binding and enforceable against Transferee in accordance with their
terms, (C) that Transferee and any entity which is a controlling stockholder,
member or general partner of Transferee, have been duly organized, and are in
existence and good standing, and (E) with respect to such other matters as
Lender may reasonably request;
(j) if required by Lender and only if the Transferee is not an FSP
Transferee, Lender shall have received confirmation in writing from the Rating
Agencies that rate the Securities to the effect that the transfer will not
result in a qualification, downgrade or withdrawal of any rating initially
assigned or to be assigned to the Securities;
(k) Borrower's obligations under the contract of sale pursuant to which
the transfer is proposed to occur shall expressly be subject to the satisfaction
of the terms and conditions of this Section 7.5; and
(l) Transferee shall, prior to such transfer, deliver a substantive
non-consolidation opinion to Lender, which opinion shall be in form, scope and
substance acceptable in all respects to Lender and the Rating Agencies, if
required based on the ownership structure of Transferee.
A consent by Lender with respect to a transfer of the Property in its entirety
to, and the related assumption of the Loan by, a Transferee pursuant to this
Section 7.5 shall not be construed to be a waiver of the right of Lender to
consent to any subsequent Sale or Pledge of the Property. Upon the transfer of
the Property pursuant to this Section 7.5, Borrower shall be relieved of all
liability under the Loan Documents for acts, events, conditions, or
circumstances occurring or arising after the date of such transfer, except to
the extent that such acts, events, conditions, or circumstances are the
proximate result of acts, events, conditions, or circumstances that existed
prior to the date of such transfer, whether or not discovered prior or
subsequent to the date of such transfer. Notwithstanding anything to the
contrary contained in this Section 7.5, in no event shall Lender be obligated to
give its consent to an Assumption prior to a Securitization in the event Lender
shall have determined that the consideration to be paid by the applicable
Transferee in connection with such Assumption is less than the appraised value
of the Property as such appraised value was determined by Lender in connection
with the closing of the Loan.
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ARTICLE 8
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
Section 8.1. Insurance
(a) Borrower shall obtain and maintain, or cause to be maintained, at all
times insurance for Borrower and the Property providing at least the following
coverages:
(i) comprehensive "special causes of loss" form of insurance (or its
equivalent) on the Improvements and the Personal Property (A) in an amount
equal to not less than 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); (B) written on a replacement cost basis and
containing either an agreed amount endorsement with respect to the
Improvements and Personal Property or a waiver of all co-insurance
provisions; (C) providing for no deductible in excess of $25,000 for all
such insurance coverage; (D) at all times insuring against at least those
hazards that are commonly insured against under a "special causes of loss"
form of policy, as the same shall exist on the date hereof, and together
with any increase in the scope of coverage provided under such form after
the date hereof; and (E) if any of the Improvements or the use of the
Property shall at any time constitute 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
special causes of loss form required under this subsection (i);
(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;
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(iii) loss of rents insurance or business income insurance, as
applicable, (A) with loss payable to Lender; (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 completion of Restoration or the
expiration of eighteen (18) 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 six (6) 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 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 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 "special causes of loss"
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
an amount not less than $50,000,000 per occurrence 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
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(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 not contain exclusions for acts of terrorism or similar acts
of sabotage (with respect to either Certified Coverage or Non-Certified
Coverage), but may exclude acts of war and nuclear, chemical and biological acts
("Acts of Terror"), or alternatively, Borrower shall have obtained and shall
maintain throughout the term of Loan affirmative coverage thereunder insuring
against Acts of Terror satisfactory to Lender in all respects and in the amounts
and subject to the deductibles described in Sections 8.1(a)(i) and 8.1(a)(iii)
above (the "Terrorism Coverage"). Notwithstanding anything to the contrary
contained herein, (i) if, after the Closing Date and at the expiration of any
applicable Policy, it is no longer customary for Qualified Insurers insuring
properties similar to the Property to (1) exclude acts of war and/or nuclear,
chemical and/or biological acts, the Borrower shall obtain and maintain
Terrorism Coverage without each of such referenced exclusions which are no
longer customarily excluded by such Qualified Insurers and (2) exclude Acts of
Terror from such Policies, then Borrower shall obtain and maintain said Policies
without said exclusion and (ii) in the event that TRIA is no longer in effect,
the Terrorism Coverage for acts similar to acts included within the Certified
Coverage under TRIA shall be maintained in the amount of full replacement cost
and business income as provided in this Section 8.1. In connection with the
requirement of the immediately preceding sentence, in no event shall Borrower be
required to pay annual premiums in excess of two hundred percent (200%) of the
cost of such premiums as of the Closing Date in order to obtain the Terrorism
Coverage, but Borrower shall be obligated to purchase such portion of the
Terrorism Coverage as is obtainable by payment of an annual premium equal to the
two hundred percent (200%) and subject to the deductible contained in Section
8.1(a) above, provided that in making the calculations contemplated in this
sentence, the cost of the premiums as of the Closing Date shall be adjusted
annually to reflect any increase during the preceding year in the Consumer Price
Index.
(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 "A" or better
by S&P (and the equivalent from the other Rating Agencies) (or such other
ratings promulgated from time to time by S&P and Xxxxx'x for properties and
transactions similar in type and size to the Property and the Loan). The
Policies described in Section 8.1(a) shall designate Lender and its successors
and assigns as additional insureds, mortgagees and/or loss payee as deemed
appropriate by Lender. To the extent such Policies are not available as of the
Closing Date, Borrower shall deliver to Lender prior to the Closing Date an
Xxxxx 28 or similar certificate of insurance evidencing the coverages and
amounts required hereunder and, upon request of Lender as soon as available
after the Closing Date, certified copies of all Policies. Not less than ten (10)
days prior to the expiration dates of any insurance coverage in place with
respect to the Property, Borrower shall deliver to Lender an Xxxxx 28 or similar
certificate, accompanied by evidence satisfactory to Lender of payment of the
premiums due in connection therewith (the "Insurance Premiums"), and, as soon as
available thereafter, certified copies of all renewal Policies.
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(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 Borrower as the
insured and Lender as the additional insured, as its interests may appear, and
in the case of property damage, boiler and machinery, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder shall be
payable to Lender.
(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 Borrower, or anyone acting for 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 any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned, provided
that this subsection shall not apply to the Policies described in Section
8.1(a)(ii) Section 8.1(a)(vii);
(ii) the Policies shall not be materially changed (other than to
increase the coverage provided thereby) or canceled by the insurer without
at least thirty (30) days' (ten (10) days' in the case of non-payment of
premium) prior written notice to Lender and any other party named therein
as an additional insured;
(iii) the issuers thereof shall give written notice to Lender if the
Policies have not been renewed thirty (30) days prior to its expiration;
and
(iv) Lender shall not be liable for any Insurance Premiums thereon
or subject to any assessments thereunder.
(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, until paid, shall be secured by the Mortgage and
shall bear interest at the Default Rate.
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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, if Restoration is commercially feasible, shall promptly
commence and diligently prosecute the Restoration of the Property in accordance
with Section 8.4, whether or not Lender makes any Net Proceeds available
pursuant to Section 8.4. Borrower shall 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. Borrower shall
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.
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 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, 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 and,
if Restoration is commercially feasible, Borrower shall promptly commence and
diligently prosecute the Restoration of the Property and otherwise comply with
the provisions of Section 8.4, whether or not Lender makes any Net Proceeds
available pursuant to Section 8.4. If the Property 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
The following provisions shall apply in connection with the Restoration of
the Property:
(a) If the Net Proceeds shall be less than five percent (5%) of the
outstanding principal balance of the Loan and the costs of completing the
Restoration shall be less than five percent (5%) of the outstanding principal
balance of the Loan, the Net Proceeds will be disbursed by Lender to Borrower
upon receipt, provided that all of the conditions set forth in Section 8.4(b)(i)
are met and Borrower delivers to Lender a written undertaking to expeditiously
commence and to satisfactorily complete with due diligence the Restoration in
accordance with the terms of this Agreement.
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(b) If the Net Proceeds are equal to or greater than five percent (5%) of
the outstanding principal balance of the Loan or the costs of completing the
Restoration are equal to or greater than five percent (5%) of the outstanding
principal balance of the Loan, 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 (viii) 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 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 for
Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be continuing;
(B) (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 and the amount of damage does not
exceed thirty percent (30%) of the Property's fair market value
immediately prior to the occurrence of such Casualty, or (2) in the
event the Net Proceeds are Condemnation Proceeds, less than ten
percent (10%) of the land constituting the Property is taken, such
land is located along the perimeter or periphery of the Property,
and less than fifteen percent (15%) of the aggregate floor area of
the Improvements is taken and the taking does not exceed fifteen
percent (15%) of the Property's fair market value immediately prior
to the occurrence of such taking;
(C) 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;
(D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days
after such Casualty or Condemnation, whichever the case may be,
occurs) and shall diligently pursue the same to satisfactory
completion;
(E) 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
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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;
(F) 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);
(G) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all Legal
Requirements;
(H) the Restoration shall be done and completed by Borrower in
an expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;
(I) such Casualty or Condemnation, as applicable, does not
result in the loss of access to the Property or the Improvements;
(J) Borrower shall deliver, or cause to be delivered, to
Lender a signed detailed budget approved in writing by Borrower's
architect or engineer stating the entire cost of completing the
Restoration, which budget shall be acceptable to Lender; and
(K) the Net Proceeds together with any cash or cash equivalent
deposited by Borrower with Lender are sufficient in Lender's
reasonable judgment to cover the cost of the Restoration.
(ii) 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 discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title
company issuing the Title Insurance Policy. Notwithstanding the foregoing,
Business Interruption Proceeds 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,
including the payment of Actual Operating Expenses.
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(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
contractors, subcontractors and materialmen engaged in the Restoration, as
well as the contracts in excess of $50,000 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.
(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 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.
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(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
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 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, 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) 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. If, pursuant to this Section 8.4, Lender shall receive and retain Net
Proceeds, (i) the lien of the Mortgage shall be reduced only by the amount
thereof received and retained by Lender and actually applied by Lender in
reduction of the Debt; and (ii) notwithstanding any other provisions hereof,
Borrower shall not be required to repair or restore the portion of the Property
affected by such Casualty or Condemnation to the condition or character the
Property was in immediately prior to such Casualty or Condemnation so long as no
Event of Default exists, but Borrower shall be required to remove all debris
with respect to the portion of the Property not required to be restored in a
manner that is safe and is not dangerous to health or other property and is in
compliance with all applicable laws.
(d) In the event of foreclosure of the Mortgage, or other transfer of
title to the Property in extinguishment in whole or in part of the Debt, all
right, title and interest of Borrower in and to the Policies then in force
concerning the Property and all proceeds payable thereunder shall thereupon vest
in the purchaser at such foreclosure, Lender or other transferee in the event of
such other transfer of title.
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ARTICLE 9
RESERVE FUNDS
Section 9.1. Intentionally omitted
Section 9.2. Intentionally omitted
Section 9.3. Intentionally omitted
Section 9.4. Intentionally omitted
Section 9.5. Intentionally omitted
Section 9.6. Tax and Insurance Reserve Funds
Borrower shall establish on the date hereof an Eligible Account with
Lender or Lender's agent sufficient to discharge Borrower's obligations for the
payment of Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1
hereof (the "Tax and Insurance Reserve Account") into which Borrower shall
deposit on the date hereof $720,573.44, which amount, when added to the required
monthly deposits set forth in the next sentence, is sufficient to make the
payments of Taxes and Insurance Premiums as required herein. Borrower shall
deposit into the Tax and Insurance Reserve Account on each Scheduled Payment
Date (a) one-twelfth of the Taxes that Lender estimates will be payable during
the next ensuing twelve (12) months or such higher amount necessary to
accumulate with Lender sufficient funds to pay all such Taxes at least thirty
(30) days prior to the earlier of (i) the date that the same will become
delinquent and (ii) the date that additional charges or interest will accrue due
to the non-payment thereof, provided that such monthly deposits shall not be
required if Borrower maintains on deposit with Lender an escrow equal to the
full amount of Taxes due over the next succeeding twelve (12) month period, and
(b) except to the extent Lender has waived the insurance escrow because the
insurance required hereunder is maintained under a blanket insurance Policy
acceptable to Lender in accordance with Section 8.1(c), one-twelfth of the
Insurance Premiums that Lender estimates will be payable during the next ensuing
twelve (12) months for the renewal of the coverage afforded by the Policies upon
the expiration thereof or such higher amount necessary to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (a) and (b) above
hereinafter called the "Tax and Insurance Reserve Funds"). Lender will apply the
Tax and Insurance Reserve Funds to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.
In making any disbursement from the Tax and Insurance Reserve Account, Lender
may do so according to any xxxx, statement or estimate procured from the
appropriate public office or tax lien service (with respect to Taxes) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the accuracy
of such xxxx, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax
and Insurance Reserve Funds shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Section 5.4 and Section 8.1 hereof, Lender shall promptly
send notice of such excess amount to Borrower and, if requested by Borrower,
shall promptly return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Reserve Account. In
allocating any such excess, Lender may deal with the person shown on Lender's
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records as being the owner of the Property. Any amount remaining in the Tax and
Insurance Reserve Account after the Debt has been paid in full shall be returned
to Borrower or the person shown on Lender's records as being the owner of the
Property and no other party shall have any right or claim thereto. If at any
time Lender reasonably determines that the Tax and Insurance Reserve Funds are
not or will not be sufficient to pay Taxes and Insurance Premiums by the dates
set forth in (a) and (b) above, Lender shall notify Borrower of such
determination and Borrower shall pay to Lender any amount necessary to make up
the deficiency within ten (10) days after notice from Lender to Borrower
requesting payment thereof. In the event that Borrower requests Lender's consent
to an amendment or modification to this Section 9.6, Lender shall not
unreasonably withhold, condition or delay its consent to such request provided
that such amendment or modification does not materially or adversely impact
Lender, as determined by Lender in its sole discretion.
Section 9.7. Reserve Funds Generally
(a) (i) No earnings or interest on the Reserve Accounts shall be payable
to Borrower. Neither Lender nor any loan servicer that at any time holds or
maintains the Reserve Accounts shall have any obligation to keep or maintain
such Reserve Accounts or any funds deposited therein in interest-bearing
accounts, except with respect to a Termination Fee Deposit as described below in
Section 9.7(a)(ii). Except for Termination Fee Deposits, if Lender or any such
loan servicer elects in its sole and absolute discretion to keep or maintain any
Reserve Account or any funds deposited therein in an interest-bearing account,
(i) such funds shall not be invested except in Permitted Investments, and (ii)
all interest earned or accrued thereon shall be for the account of and be
retained by Lender or such loan servicer.
(ii) Notwithstanding the foregoing, any funds deposited in escrow with Lender
arising from a Termination Fee Deposit shall be invested in Permitted
Investments and bear interest at a business savings account rate (or if such
rate is then currently unavailable, at a similar rate determined by Lender) and
interest shall be credited to Borrower. In no event shall Lender or any loan
servicer that at any time holds or maintains such funds be required to select
any particular interest-bearing account or the account that yields the highest
rate of interest, provided that selection of the account shall be consistent
with the general standards at the time being utilized by Lender or the loan
servicer, as applicable, in establishing similar accounts for loans of
comparable type. Borrower agrees that it shall include all such interest as the
income of Borrower (and, if Borrower is a partnership or other pass-through
entity, the partners, members or beneficiaries of Borrower, as the case may be),
and shall be the owner such funds for federal and applicable state and local tax
purposes, except to the extent that Lender retains any interest for its own
account during the occurrence and continuance of an Event of Default as provided
herein
(b) Borrower grants to Lender a first-priority perfected security interest
in, and assigns and pledges to Lender, each of the Reserve Accounts and any and
all Reserve Funds now or hereafter deposited in the Reserve Accounts as
additional security for payment of the Debt. Until expended or applied in
accordance herewith, the Reserve Accounts and the Reserve Funds shall constitute
additional security for the Debt. The provisions of this Section 9.7 are
intended to give Lender or any subsequent holder of the Loan "control" of the
Reserve Accounts within the meaning of the UCC.
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(c) The Reserve Accounts and any and all Reserve Funds now or hereafter
deposited in the Reserve Accounts shall be subject to the exclusive dominion and
control of Lender, which shall hold the Reserve Accounts and any or all Reserve
Funds now or hereafter deposited in the Reserve Accounts subject to the terms
and conditions of this Agreement. Borrower shall have no right of withdrawal
from the Reserve Accounts or any other right or power with respect to the
Reserve Accounts or any or all of the Reserve Funds now or hereafter deposited
in the Reserve Accounts, except as expressly provided in this Agreement.
(d) Lender shall furnish or cause to be furnished to Borrower, without
charge, an annual accounting of each Reserve Account in the normal format of
Lender or its loan servicer, showing credits and debits to such Reserve Account
and the purpose for which each debit to each Reserve Account was made.
(e) As long as no Event of Default has occurred, Lender shall make
disbursements from the Reserve Accounts in accordance with this Agreement. All
such disbursements shall be deemed to have been expressly pre-authorized by
Borrower, and shall not be deemed to constitute the exercise by Lender of any
remedies against Borrower unless an Event of Default has occurred and is
continuing and Lender has expressly stated in writing its intent to proceed to
exercise its remedies as a secured party, pledgee or lienholder with respect to
the Reserve Accounts.
(f) If any Event of Default occurs, Borrower shall immediately lose all of
its rights to receive disbursements from the Reserve Accounts until the earlier
to occur of (i) the date on which such Event of Default is cured to Lender's
satisfaction, or (ii) the payment in full of the Debt. Lender may, at its
election, hold any intersest accruing on any Termination Fee Deposit during the
existence of an Event of Default. Upon the occurrence of any Event of Default,
Lender may exercise any or all of its rights and remedies as a secured party,
pledgee and lienholder with respect to the Reserve Accounts. Without limitation
of the foregoing, upon any Event of Default, Lender may use and disburse the
Reserve Funds (or any portion thereof) for any of the following purposes: (A)
repayment of the Debt, including, but not limited to, principal prepayments and
the prepayment premium applicable to such full or partial prepayment (as
applicable); (B) reimbursement of Lender for all losses, fees, costs and
expenses (including, without limitation, reasonable legal fees) suffered or
incurred by Lender as a result of such Event of Default; (C) payment of any
amount expended in exercising any or all rights and remedies available to Lender
at law or in equity or under this Agreement or under any of the other Loan
Documents; (D) payment of any item from any of the Reserve Accounts as required
or permitted under this Agreement; or (E) any other purpose permitted by
applicable law; provided, however, that any such application of funds shall not
cure or be deemed to cure any Event of Default. Without limiting any other
provisions hereof, each of the remedial actions described in the immediately
preceding sentence shall be deemed to be a commercially reasonable exercise of
Lender's rights and remedies as a secured party with respect to the Reserve
Funds and shall not in any event be deemed to constitute a setoff or a
foreclosure of a statutory banker's lien. Nothing in this Agreement shall
obligate Lender to apply all or any portion of the Reserve Funds to effect a
cure of any Event of Default, or to pay the Debt, or in any specific order of
priority. The exercise of any or all of Lender's rights and remedies under this
Agreement or under any of the other Loan Documents shall not in any way
prejudice or affect Lender's right to initiate and complete a foreclosure under
the Mortgage.
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(g) The Reserve Funds shall not constitute escrow or trust funds and may
be commingled with other monies held by Lender. Notwithstanding anything else
herein to the contrary, Lender may commingle in one or more Eligible Accounts
any and all funds controlled by Lender, including, without limitation, funds
pledged in favor of Lender by other borrowers, whether for the same purposes as
the Reserve Accounts or otherwise. Without limiting any other provisions of this
Agreement or any other Loan Document, the Reserve Accounts may be established
and held in such name or names as Lender or its loan servicer, as agent for
Lender, shall deem appropriate, including, without limitation, in the name of
Lender or such loan servicer, as agent for Lender. In the case of any Reserve
Account which is held in a commingled account, Lender or its loan servicer, as
applicable, shall maintain records sufficient to enable it to determine at all
times which portion of such account is related to the Loan. The Reserve Accounts
are solely for the protection of Lender. With respect to the Reserve Accounts,
Lender shall have no responsibility beyond the allowance of due credit for the
sums actually received by Lender or beyond the reimbursement or payment of the
costs and expenses for which such accounts were established in accordance with
their terms. Upon assignment of the Loan by Lender, any Reserve Funds shall be
turned over to the assignee and any responsibility of Lender as assignor shall
terminate. The requirements of this Agreement concerning Reserve Accounts in no
way supersede, limit or waive any other rights or obligations of the parties
under any of the Loan Documents or under applicable law.
(h) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the Reserve
Accounts or the Reserve Funds deposited therein or permit any Lien to attach
thereto, except for the security interest granted in this Section 9.9, or any
levy to be made thereon, or any UCC Financing Statements, except those naming
Lender as the secured party, to be filed with respect thereto.
(i) Borrower will maintain the security interest created by this Section
9.7 as a first priority perfected security interest and will defend the right,
title and interest of Lender in and to the Reserve Accounts and the Reserve
Funds against the claims and demands of all Persons whomsoever. At any time and
from time to time, upon the written request of Lender, and at the sole expense
of Borrower, Borrower will promptly and duly execute and deliver such further
instruments and documents and will take such further actions as Lender
reasonably may request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted.
ARTICLE 10
CASH MANAGEMENT
Section 10.1. Lockbox Account and Cash Management Account
(a) Borrower acknowledges and confirms that Borrower has established, and
Borrower covenants that it shall maintain, (i) pursuant to the Lockbox
Agreement, an Eligible Account into which Borrower shall, and shall cause
Manager to, deposit or cause to be deposited, all Rents and other revenue from
the Property (such account, all funds at any time on deposit therein and any
proceeds, replacements or substitutions of such account or funds therein, are
referred to herein as the "Lockbox Account"), and (ii) an Eligible Account into
which funds in the Lockbox Account shall be transferred pursuant to the terms of
Section 10.2(b) hereof (such account, the sub-accounts thereof, all funds at any
time on deposit therein and any proceeds, replacements or substitutions of such
account or funds therein, are referred to herein as the "Cash Management
Account").
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(b) The Lockbox Account and Cash Management Account shall each be in the
name of Borrower for the benefit of Lender, provided that Borrower shall be the
owner of all funds on deposit in such accounts for federal and applicable state
and local tax purposes (except to the extent Lender retains any interest earned
on the Cash Management Account for its own account following the occurrence and
during the continuance of an Event of Default). Sums on deposit in the Cash
Management Account shall not be invested except in such Permitted Investments as
determined and directed by Lender and all income earned thereon shall be the
income of Borrower and be applied to and become part of the Cash Management
Account, to be disbursed in accordance with this Article 10. Neither Lockbox
Bank nor Lender shall have any liability for any loss resulting from the
investment of funds in Permitted Investments in accordance with the terms and
conditions of this Agreement.
(c) The Lockbox Account and Cash Management Account shall be subject to
the exclusive dominion and control of Lender and, except as otherwise expressly
provided herein, neither Borrower, Manager nor any other party claiming on
behalf of, or through, Borrower or Manager, shall have any right of withdrawal
therefrom or any other right or power with respect thereto.
(d) Borrower agrees to pay the customary fees and expenses of Deposit Bank
(incurred in connection with maintaining the Lockbox Account) and Lender
(incurred in connection with maintaining the Cash Management Account) and any
successors thereto in connection therewith, as separately agreed by them from
time to time.
(e) Lender shall be responsible for the performance only of such duties
with respect to the Cash Management Account as are specifically set forth
herein, and no duty shall be implied from any provision hereof. Lender shall not
be under any obligation or duty to perform any act which would involve it in
expense or liability or to institute or defend any suit in respect hereof, or to
advance any of its own monies. Borrower shall indemnify and hold Lender and its
directors, employees, officers and agents harmless from and against any loss,
cost or damage (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by such parties in connection with the Cash Management
Account other than such as result from the gross negligence or willful
misconduct of Lender or intentional nonperformance by Lender of its obligations
under this Agreement.
Section 10.2. Deposits and Withdrawals
(a) Borrower represents, warrants and covenants that:
(i) Concurrently with the execution of this Agreement, Borrower
shall notify and advise each Tenant under each Lease (whether such Lease
is presently effective or executed after the date hereof) to send directly
to the Lockbox all payments of Rents or any other item payable under such
Leases pursuant to an instruction letter in the form of Exhibit C attached
hereto (a "Tenant Direction Letter"). If Borrower fails to provide any
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such notice (and without prejudice to Lender's rights with respect to such
default), Lender shall have the right, and Borrower hereby grants to
Lender a power of attorney (which power of attorney shall be coupled with
an interest and irrevocable so long as any portion of the Debt remains
outstanding), to sign and deliver a Tenant Direction Letter;
(ii) Borrower shall, and shall cause Manager to, instruct all
Persons that maintain open accounts with Borrower or Manager with respect
to the Property or with whom Borrower or Manager does business on an
"accounts receivable" basis with respect to the Property to deliver all
payments due under such accounts to the Lockbox. Neither Borrower nor
Manager shall direct any such Person to make payments due under such
accounts in any other manner;
(iii) All Rents or other income from the Property shall (A) be
deemed additional security for payment of the Debt and shall be held in
trust for the benefit, and as the property, of Lender, (B) not be
commingled with any other funds or property of Borrower or Manager, and
(C) if received by Borrower or Manager notwithstanding the delivery of a
Tenant Direction Letter, be deposited in the Lockbox Account within one
(1) Business Day of receipt;
(iv) Without the prior written consent of Lender, so long as any
portion of the Debt remains outstanding, neither Borrower nor Manager
shall terminate, amend, revoke or modify any Tenant Direction Letter in
any manner whatsoever or direct or cause any Tenant to pay any amount in
any manner other than as provided in the related Tenant Direction Letter;
and
(v) So long as any portion of the Debt remains outstanding, neither
Borrower, Manager nor any other Person shall open or maintain any accounts
other than the Lockbox Account into which revenues from the ownership and
operation of the Property are deposited. The foregoing shall not prohibit
Borrower from utilizing one or more separate accounts for the disbursement
or retention of funds that have been transferred to Borrower pursuant to
the express terms of this Agreement.
(b) Provided no Event of Default exists, Lockbox Bank shall be authorized
to transfer all collected and available balances in the Lockbox Account to
Borrower. If an Event of Default exists, Lockbox Bank shall transfer all
collected and available balances in the Lockbox Account to the Cash Management
Account and all rights of Borrower with respect to funds in the Lockbox Account
shall immediately cease and be automatically vested with Lender, and (ii) Lender
shall have the right to transfer, or cause to be transferred, and Borrower
hereby irrevocably authorizes Lender to transfer, or cause to be transferred,
and Lender shall transfer, on each Business Day by wire transfer or other method
of transfer mutually agreeable to Lockbox Bank and Lender of immediately
available funds, all collected and available balances in the Lockbox Account to
the Cash Management Account.
(c) Notwithstanding anything to the contrary herein, Borrower acknowledges
that Borrower is responsible for monitoring the sufficiency of funds deposited
in the Cash Management Account and that Borrower is liable for any deficiency in
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available funds, irrespective of whether Borrower has received any account
statement, notice or demand from Lender or Lender's servicer.
(d) If an Event of Default shall have occurred and be continuing, Borrower
hereby irrevocably authorizes Lender to make any and all withdrawals from the
Lockbox Account and Cash Management Account and transfers between any of the
Reserve Accounts as Lender shall determine in Lender's sole and absolute
discretion and Lender may use all funds contained in any such accounts for any
purpose, including but not limited to repayment of the Debt in such order,
proportion and priority as Lender may determine in its sole and absolute
discretion. Lender's right to withdraw and apply funds as stated herein shall be
in addition to all other rights and remedies provided to Lender under this
Agreement, the Note, the Mortgage and the other Loan Documents.
Section 10.3. Security Interest
(a) To secure the full and punctual payment of the Debt and performance of
all obligations of Borrower now or hereafter existing under this Agreement and
the other Loan Documents, Borrower hereby grants to Lender a first-priority
perfected security interest in each of the Accounts and the Account Collateral.
Furthermore, Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any of the
foregoing or permit any Lien to attach thereto or any levy to be made thereon or
any UCC Financing Statements to be filed with respect thereto. Borrower will
maintain the security interest created by this Section 10.3(a) as a first
priority perfected security interest and will defend the right, title and
interest of Lender in and to each of the Accounts and the Account Collateral
against the claims and demands of all Persons whomsoever.
(b) Borrower authorizes Lender to file any financing statement or
statements required by Lender to establish or maintain the validity, perfection
and priority of the security interest granted herein in connection with the
Lockbox Account and Cash Management Account. Borrower agrees that at any time
and from time to time, at the expense of Borrower, Borrower will promptly and
duly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Lender may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby (including, without limitation, any
security interest in and to any Permitted Investments) or to enable Lender to
exercise and enforce its rights and remedies hereunder.
(c) Upon the occurrence of an Event of Default, Lender may exercise any or
all of its rights and remedies as a secured party, pledgee and lienholder with
respect to the Accounts and the Account Collateral. Without limitation of the
foregoing, upon any Event of Default, Lender may use the Accounts and the
Account Collateral for any of the following purposes: (A) repayment of the Debt,
including, but not limited to, principal prepayments and the prepayment premium
applicable to such full or partial prepayment (as applicable); (B) reimbursement
of Lender for all losses, fees, costs and expenses (including, without
limitation, reasonable legal fees) suffered or incurred by Lender as a result of
such Event of Default; (C) payment of any amount expended in exercising any or
all rights and remedies available to Lender at law or in equity or under this
Agreement or under any of the other Loan Documents; (D) payment of any item as
required or permitted under this Agreement; or (E) any other purpose permitted
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by applicable law; provided, however, that any such application of funds shall
not cure or be deemed to cure any Event of Default. Without limiting any other
provisions hereof, each of the remedial actions described in the immediately
preceding sentence shall be deemed to be a commercially reasonable exercise of
Lender's rights and remedies as a secured party with respect to the Accounts and
the Account Collateral and shall not in any event be deemed to constitute a
setoff or a foreclosure of a statutory banker's lien. Nothing in this Agreement
shall obligate Lender to apply all or any portion of the Accounts and the
Account Collateral to effect a cure of any Event of Default, or to pay the Debt,
or in any specific order of priority. The exercise of any or all of Lender's
rights and remedies under this Agreement or under any of the other Loan
Documents shall not in any way prejudice or affect Lender's right to initiate
and complete a foreclosure under the Mortgage.
(d) Definitions. Notwithstanding anything to the contrary contained
herein, For purposes of this Article 10 only, Business Day shall mean a day on
which Lender and Lockbox Bank are both open for the conduct of substantially all
of their respective banking business at the office in the city in which the Note
is payable, with respect to Lender and at the office in the city where the
Lockbox Account is maintained, with respect to Lockbox Bank (in both instances,
excluding Saturdays and Sundays).
ARTICLE 11
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 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;
provided, however, with respect to any failure by Borrower to pay any regularly
scheduled installment of interest hereunder when due (other than any installment
of interest or any other amount due on the Maturity Date), and up to one (1)
time during any twelve month period and not more than two (2) times during the
term of the Loan, Borrower shall have two (2) Business Days after receipt of
written notice thereof from Lender in which to cure such Event of Default (which
cure shall include payment of the late payment charge and interest on such past
due amount calculated at the Default Rate from the date such amount was
originally due), after which time Lender may, at its option and without further
notice, exercise any of its rights and remedies available to it pursuant to this
Agreement and the other Loan Documents or at law or in equity; provided,
further, that with respect to any failure by Borrower to pay any other portion
of the Debt (other than any installment of interest or any other amount due on
the Maturity Date or with respect to amounts required to be deposited in any
Reserve Account or any Termination Fee Deposit), Borrower shall have five (5)
days after receipt of written notice thereof from Lender in which to cure such
Event of Default, after which time Lender may, at its option and without further
notice, exercise any of its rights and remedies available to it pursuant and the
other Loan Documents or at law or in equity;
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(b) except as otherwise expressly provided in the Loan Documents, if any
of the Taxes or Other Charges are not paid prior to the thirtieth (30th) day
following the date when the same are due and payable (but in no event later than
the date on which same would be delinquent), unless there is sufficient money in
the Tax and Insurance Reserve Account for payment of amounts then due and
payable and Lender's access to such money has not been constrained or restricted
in any manner;
(c) if the Policies are not kept in full force and effect, or if the
Insurance Certificates and certified copies of the Policies are not delivered to
Lender as provided in, and within the respective time periods set forth in,
Section 8.1; provided, that, with respect to an Event of Default under this
Section 11.1(c) relating only to the delivery of the Insurance Certificates and
certified copies of the Policies, Borrower shall be deemed to have cured such
Event of Default if (i) within fifteen (15) days of such Event of Default,
Borrower delivers (or causes to be delivered) to Lender the Insurance
Certificates and certified copies of the Policies as required by Section 8.1
hereof, (ii) the Policies were in full force and effect for the entirety of such
fifteen (15) day period and (iii) Borrower reimburses Lender for any
actual-of-pocket expenses incurred by Lender in connection with Lender's
exercising rights under Section 8.1(f), provided that nothing contained in this
Section 11.1(c) shall limit Lender's rights under Article 8;
(d) if Borrower breaches any representation or covenant with respect to
itself or any SPE Component Entity (if any) contained in Article 6 or any
covenant contained in Article 7 hereof; provided, however, that a breach by
Borrower or any SPE Party of the representations or covenants set forth in
Article 6 hereof shall not result in an Event of Default hereunder unless such
breach was material and, within fifteen (15) days of such breach, Borrower fails
to cure such breach and, if requested by Lender, fails to deliver to Lender a
non-consolidation opinion in form and substance reasonably satisfactory to
Lender;
(e) if any representation or warranty of, or with respect to, Borrower,
Borrower Principal, any SPE Component Entity (if any), or any member, general
partner, principal or beneficial 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 and the same has a material adverse effect on the
value of the Property or the Loan;
(f) if (i) 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 shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against Borrower
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 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
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within sixty (60) days from the entry thereof; or (iv) 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 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 mortgage, deed of trust, deed to secure debt or other
security agreement covering any part of the Property, whether it be superior or
junior in lien to the Mortgage;
(h) if the Property becomes subject to any material mechanic's,
materialman's or other Lien other than a Lien for any Taxes or Other Charges not
then due and payable and the Lien shall remain undischarged of record (by
payment, bonding or otherwise) for a period of thirty (30) days after the
earlier to occur of (A) the service of the complaint on Borrower in accordance
with applicable Legal Requirements or (B) Borrower's receiving notice of such
action;
(i) if any federal tax lien is filed against Borrower or the Property and
same is not discharged of record within thirty (30) days after same is filed;
(j) if a final, non-appealable judgment not covered by the Policies is
filed against the Borrower in excess of $100,000 which is not vacated, bonded or
discharged within thirty (30) 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;
(l) if 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 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 material term of any REA shall be modified or supplemented without
Lender's prior written consent; or 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; or
(m) 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,
subject to any delays caused solely by Force Majeure, no such extension shall be
for a period in excess of one hundred twenty (120) 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 Property, 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 against Borrower and the Property, 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
Property. 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 12
ENVIRONMENTAL PROVISIONS
Section 12.1. Environmental Representations and Warranties
Except as otherwise disclosed in the Environmental Report, Borrower
represents and warrants 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 an 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
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
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not received, any written or oral notice or other communication from any Person
relating to Hazardous Materials in, on, under or from the Property; (f) the
Property is free of Mold; and (g) 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 or the presence of Mold at the Property.
Section 12.2. Environmental Covenants
Borrower covenants and agrees that so long as 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 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 or (C) with respect to Mold, not in a
condition, location, or of a type which may pose a risk to human health or
safety or the environment or which may result in damage to or would adversely
affect or impair the value or marketability of the Property; (d) Borrower shall
keep the Property free and clear of all Environmental Liens; (e) Borrower shall,
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, at its sole cost and expense, 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
keep the Property free of Mold; and (h) Borrower shall, 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; and (ii) comply with any Environmental Law; (i) Borrower shall not
knowingly allow any tenant or other user of the Property to violate any
Environmental Law; and (j) 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 reasonable discretion). Borrower shall reasonably cooperate with and
provide reasonable access to Lender and any such person or entity designated by
Lender.
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 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
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) access to the Property
by Lender, its agents or servicer, to review and assess the environmental
condition of the Property and 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, as well as common law, 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. "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",
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"toxic substance", "toxic pollutant", "contaminant", or "pollutant" within the
meaning of any Environmental Law. "Mold" shall mean any mold, fungi, bacterial
or microbial matter present at or in the Property, including, without
limitation, building materials which is in a condition, location or a type which
may pose a risk to human health or safety or the environment, may result in
damage to or would adversely affect or impair the value or marketability of the
Property. "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.
Section 12.6. Indemnification
(a) Borrower covenants and agrees at its sole cost and expense, to
protect, defend, indemnify, release and hold Indemnified Parties harmless 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: (i) any presence of any Hazardous
Materials in, on, above, or under the Property; (ii) any past, present or
threatened Release of Hazardous Materials in, on, above, under or from the
Property; (iii) any activity by Borrower, any Person affiliated with Borrower,
and any Tenant or other user of the Property in connection with any actual,
proposed or threatened use, treatment, storage, holding, existence, disposition
or other Release, generation, production, manufacturing, processing, refining,
control, management, abatement, removal, handling, transfer or transportation to
or from the Property of any Hazardous Materials at any time located in, under,
on or above the Property or any actual or proposed remediation of any Hazardous
Materials at any time located in, under, on or above the Property, whether or
not such remediation is voluntary or pursuant to court or administrative order,
including but not limited to any removal, remedial or corrective action; (iv)
any past, present or threatened non-compliance or violations of any
Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including but not limited to
any failure by Borrower, any person or entity affiliated with Borrower, and any
tenant or other user of the Property to comply with any order of any
Governmental Authority in connection with any Environmental Laws; (v) the
imposition, recording or filing or the threatened imposition, recording or
filing of any Environmental Lien encumbering the Property; (vi) any acts of
Borrower, any person or entity affiliated with Borrower, and any tenant or other
user of the Property in (A) arranging for disposal or treatment, or arranging
with a transporter for transport for disposal or treatment, of Hazardous
Materials at any facility or incineration vessel containing such or similar
Hazardous Materials or (B) accepting any Hazardous Materials for transport to
disposal or treatment facilities, incineration vessels or sites from which there
is a Release, or a threatened Release of any Hazardous Substance which causes
the incurrence of costs for remediation; and (vii) any misrepresentation or
inaccuracy in any representation or warranty or material breach or failure to
perform any covenants or other obligations pursuant to this Agreement relating
to environmental matters.
(b) Upon written request by any Indemnified Party, Borrower shall defend
same (if requested by any Indemnified Party, in the name of the Indemnified
Party) by attorneys and other professionals approved by the Indemnified Parties.
Notwithstanding the foregoing, any Indemnified Parties may, in their sole
discretion, engage their own attorneys and other professionals to defend or
assist them, and, at the option of Indemnified Parties, their attorneys shall
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control the resolution of any claim or proceeding. Upon demand, Borrower shall
pay or, in the sole discretion of the Indemnified Parties, reimburse, the
Indemnified Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and other
professionals in connection therewith.
(c) Notwithstanding the foregoing, Borrower shall not have any liability
for any Losses imposed upon or incurred by or asserted against any Indemnified
Parties and described in subsection (a) above to the extent that Borrower can
conclusively prove both that such Losses were caused solely by actions,
conditions or events that occurred after the date that Lender (or any purchaser
at a foreclosure sale) actually acquired title to the Property and that such
Losses were not caused by the direct or indirect actions of Borrower or any
partner, member, principal, officer, director, trustee or manager of Borrower or
any employee, agent, contractor or Affiliate of Borrower. The obligations and
liabilities of Borrower under this Section 12.6 shall fully survive indefinitely
notwithstanding any termination, satisfaction, assignment, entry of a judgment
of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Mortgage, except that, upon payment in full of the Loan,
Borrower shall be released from liability under this Section 12.6 upon delivery
to Lender of a environmental report in form and substance and from an engineer
acceptable to Lender and dated no earlier than the date on which the Loan is
paid in full.
ARTICLE 13
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") (a 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 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, any managing member or general partner thereof, and the
Property, including financial statements, whether furnished by Borrower or
otherwise, as Lender determines necessary or desirable. Subject to the Exchange
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Act, 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. Intentionally omitted
Section 13.5. 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 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 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 updated financial, budget and other information with respect
to the Property, Borrower and Manager and provide 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, together with information required to be provided pursuant to Section
13.4, 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) [Intentionally Deleted];
(c) at Borrower's expense, cause counsel to render or update existing
opinion letters as to enforceability, 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) 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,
Borrower and the Loan Documents as are made in the Loan Documents and such other
representations and warranties 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
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(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 under the Loan
Documents;
(g) deliver to Lender and/or any Rating Agency, (i) one or more
certificates executed by an officer of the 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.
All reasonable third party costs and expenses incurred by Borrower or
Lender in connection with Borrower's complying with requests made under this
Section 13.5 (including, without limitation, the fees and expenses of the Rating
Agencies) shall be paid by Borrower, provided that, except in connection with
the delivery of a substantive nonconsolidation opinion, if required hereunder
pursuant to Section 13.5(c) above, Borrower shall not be required to spend more
than $10,000 to comply with this Section 13.5.
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 13.6. Securitization Indemnification
(a) Borrower understands that certain of the Provided Information may be
included in any 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 will reasonably
cooperate with the holder of the Note in updating the Disclosure Document by
providing the holder of the Note with any reasonably requested information to
keep the Disclosure Document accurate and complete in all material respects.
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(b) Borrower agrees 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, an indemnification
certificate (A) certifying that Borrower has carefully examined such memorandum
or prospectus or other document (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,
Manager, their Affiliates, the Loan, the Loan Documents and the Property, and
any risks or special considerations relating thereto, and that, to the best of
Borrower's knowledge, such sections (and any other sections reasonably
requested) 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 13.6, 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 such sections (including any Investor or Rating Agency "term
sheets" or presentations relating to the Property and/or the Loan) or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in such sections (including any Investor or
Rating Agency "term sheets" or presentations relating to the Property and/or the
Loan) or necessary in order to make the statements in such sections (including
any Investor or Rating Agency "term sheets" or presentations relating to the
Property and/or the Loan) 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
and in conformity with information furnished to Lender or any member of the
Issuer Group or Underwriter Group by or on behalf of Borrower in connection with
the preparation of the memorandum or prospectus or other document (including any
Investor or Rating Agency "term sheets" or presentations relating to the
Property and/or the Loan) or in connection with the underwriting of the Loan,
including, without limitation, financial statements of Borrower, operating
statements, rent rolls, environmental site assessment reports and Property
condition reports with respect to the Property. This indemnity agreement will be
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in addition to any liability which Borrower 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 shall be applicable based on information previously provided by Borrower or
their Affiliates if Borrower do not provide the indemnification certificate.
(c) In connection with filings under the Exchange Act or any information
provided to holders of Securities on an ongoing basis, Borrower 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 13.6
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 13.6, 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 13.6 the indemnifying party shall not 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 13.6(c)
or Section 13.6(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 13.6(c) or Section 13.6(d), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
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thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(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 and Borrower'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 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 and Lender under this
Section 13.6 shall survive the satisfaction of this Agreement and the
satisfaction and discharge of the Debt.
ARTICLE 14
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 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; or (f) the holding or investing of the Reserve Accounts,
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 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.
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Section 14.2. Mortgage and 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 Provided Information.
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. Provided Information Indemnification
In addition to, but without duplication of, any indemnification provided
pursuant to Article 13, 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 Provided
Information.
Section 14.5. Survival
The obligations and liabilities of Borrower under this Article 14 shall
fully survive indefinitely notwithstanding any termination, satisfaction,
assignment, entry of a judgment of foreclosure, exercise of any power of sale,
or delivery of a deed in lieu of foreclosure of the Mortgage.
ARTICLE 15
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 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 a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable Lender to
enforce and realize upon this Agreement, the Note, the Mortgage and the other
Loan Documents, and the interest in the Property, the Rents and any other
collateral given to Lender created by this Agreement, the Note, the Mortgage and
the other Loan Documents; provided, however, that any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender. Lender, by accepting this Agreement, the Note, the Mortgage and
the other 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 in any such action or proceeding, under or by reason of or under or in
connection with this Agreement, the Note, the Mortgage or the other Loan
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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 Mortgage 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
Mortgage; (iii) affect the validity or enforceability of any indemnity
(including, without limitation, those contained in Section 12.6, Section 13.5
and Article 14 of this Agreement), guaranty, master lease or similar instrument
made in connection with this Agreement, the Note, the Mortgage 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 Mortgage; or (vi) impair the right of Lender to obtain a
deficiency judgment or other judgment on the Note against Borrower 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 shall be personally liable to Lender on a joint and several basis for
Losses due to:
(i) fraud or intentional misrepresentation by Borrower or any other
Affiliate of Borrower in connection with the execution and the delivery of
this Agreement, the Note, the Mortgage, 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) Borrower's misapplication or misappropriation of Rents received
by Borrower after the occurrence of an Event of Default;
(iii) Borrower's misapplication or misappropriation of tenant
security deposits or Rents collected in advance;
(iv) the misapplication or misappropriation of Insurance Proceeds or
Awards;
(v) Borrower's failure to pay Taxes, Other Charges (except to the
extent that (A) sums sufficient to pay such amounts have been deposited in
escrow with Lender pursuant to the terms hereof and there exists no
impediment to Lender's utilization thereof or (B) there is insufficient
cash flow from the operation of the Property), charges for labor or
materials or other charges that can create liens on the Property beyond
any applicable notice and cure periods specified herein;
(vi) any act of intentional waste or arson by Borrower, any
principal, Affiliate, member or general partner thereof; or
(vii) Borrower's failure following any Event of Default to deliver
to Lender upon demand all Rents and books and records relating to the
Property.
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(c) Notwithstanding the foregoing, the agreement of Lender not to pursue
recourse liability 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 in the event (i) of a breach by Borrower of any of the
covenants set forth in Article 6 hereof, to the extent that such breach is (A)
material and (B) is not cured within thirty (30) days of the earlier to occur of
notice from Lender or Borrower's knowledge of such breach (such cure to include,
if required by Lender, delivery of a revised non-consolidation opinion, if one
was required in connection with the Securitization, in form and substance
reasonably acceptable to Lender, (ii) of a breach of any of the covenants set
forth in Article 7 hereof, (iii) the Property or any part thereof shall become
an asset in a voluntary bankruptcy or insolvency proceeding of Borrower, (iv)
Borrower or any Affiliate, officer, director, or representative which controls,
directly or indirectly, Borrower, or joins in the filing of, an involuntary
petition against Borrower under any Creditors Rights Laws, or solicits or causes
to be solicited petitioning creditors for any involuntary petition against
Borrower from any Person; (v) Borrower files an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other Person under any Creditors Rights Laws, or solicits or causes
to be solicited petitioning creditors for any involuntary petition from any
Person; or (vi) any Affiliate, officer, director, or representative which
controls Borrower consents to or acquiesces in or joins in an application for
the appointment of a custodian, receiver, trustee, or examiner for Borrower or
any portion of the Property.
(d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(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 Mortgage 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 Mortgage or the other Loan Documents.
(e) Notwithstanding anything to the contrary contained in this Article 15,
in no event shall Lender have any recourse against Borrower's directors,
officers, shareholders, employees or agents.
ARTICLE 16
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):
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If to Lender: Bank of America, N.A.
Capital Markets Servicing Group
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Servicing Manager
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Borrower: FSP 00 Xxxxx Xxxxx Xxxxxx Corp.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to: WilmerHale
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X.X. Xxxxxxxxxx, 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 17
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: (a) 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 (b) with respect
to the Note, (i) 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 (ii) 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.
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Section 17.2. Recording of Mortgage, etc.
Borrower forthwith upon the execution and delivery of the Mortgage and
thereafter, from time to time, will cause the Mortgage and any of the other Loan
Documents creating a lien or security interest or evidencing the lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Note, the Mortgage, the other Loan Documents, any note,
deed of trust or mortgage supplemental hereto, any security instrument with
respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state,
county and municipal taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of the Mortgage, any deed of
trust or mortgage supplemental hereto, any security instrument with respect to
the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
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, 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, registering or recording the Mortgage, 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
Property. 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 deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, 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
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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 any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of the Mortgage 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.
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 Mortgage, 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 legal services and all actual
disbursements of internal counsel) reasonably incurred by Lender in accordance
with this Agreement in connection with (a) the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby 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);
(b) Borrower's ongoing performance of and compliance with Borrower's respective
agreements and covenants contained in this 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 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 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
Property, 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 in
connection with any refinancing or restructuring of the credit arrangements
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provided under this Agreement in the nature of a "work-out" 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 18
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 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 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.
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Section 18.4. Trial by Jury
BORROWER 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 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 AND BORROWER IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY BORROWER AND LENDER.
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, 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, Borrower's partners and others with interests in Borrower, and of the
Property, 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 Property 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 Property in preference to
every other claimant whatsoever.
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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.
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.
ARTICLE 19
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 Minnesota, and (b) with respect to the security
interest in each of the Reserve Accounts, the Cash Management Account and the
Lockbox Account, the laws of the state where each such account is located shall
apply.
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.
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ARTICLE 20
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.
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 Mortgage is foreclosed in whole or in part, (b)
of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of Borrower or any of its constituent Persons or an assignment by
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.
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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 relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary 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 Borrower and Lender are relying solely
upon such expertise and business plan in connection with the ownership and
operation of the Property. Borrower is not relying on Lender's expertise,
business acumen or advice in connection with the Property.
(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 Mortgage,
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.
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(f) Borrower recognizes and acknowledges that in accepting this Agreement,
the Note, the Mortgage 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 and notwithstanding any investigation of the Property
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 Mortgage and the other Loan Documents
in the absence of the warranties and representations as set forth in Article 4
of this Agreement.
Section 20.8. Publicity
All news releases, publicity or advertising by Borrower or its Affiliates
through any media intended to reach the general public (excluding any prospectus
or similar document issued to investors or potential investors in any Affiliate
of Borrower or otherwise as required by the SEC or other governmental authority)
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. 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 (i) the amount of the Loan,
(ii) the fact that the Loan bears a fixed rate and a five (5) year term, (iii)
the street address and location of the Improvements and the fact that the
Improvements are primarily used as an office building, and (iv) Franklin Street
Properties as the entity controlling the Borrower, 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, Banc 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. Without in any way limiting the
provisions of Article 13 hereof or Lender's rights thereunder, any other news,
releases, publicity or advertising by Lender or its Affiliates relating to any
provisions or terms of the Loan (other than the amount, interest rate, maturity
date thereof, or any other items required to be disclosed pursuant to a public
company disclosure) shall require the prior approval of Borrower, which such
approval shall not be unreasonably withheld, conditioned or delayed.
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
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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.
[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.
BORROWER:
FSP 00 XXXXX XXXXX XXXXXX CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Xxxxxx X. Xxxxxx
President
LENDER:
BANK OF AMERICA, N.A.,
a national banking association
By: /s/ Xxxx Xxxxxx
---------------------
Xxxx Xxxxxx
Principal
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EXHIBIT A
Annual Budget
NONE
EXHIBIT B
Borrower Equity Ownership Structure
Attached
------------------------------
One Share Common Stock
99% Owned by Franklin
--------------------------------- Street Properties Corp.
_______ 1% Owned by Xxxxxx X. Xxxxxx
FSP 00 XXXXX XXXXX XXXXXX CORP. ------------------------------
Real Estate Investment Trust ------------------
_______ 700 Shares of
--------------------------------- Preferred Stock
| ------------------
|
|
|
----------------------------------
FSP 00 Xxxxx Xxxxx Xxxxxx LLC
Sole Member: FSP 00 Xxxxx Xxxxx
Xxxxxx Corp.
----------------------------------
EXHIBIT C
Form of Tenant Direction Letter
[BORROWER LETTERHEAD]
____________ ___, 20__
[TENANTS UNDER LEASES]
Re: Lease dated ________ between _______________,
as Landlord, and _______________, as Tenant,
concerning premises known as ________________
Gentlemen:
This letter shall constitute notice to you that the undersigned has
granted a security interest in the captioned lease and all rents, additional
rent and all other monetary obligations to landlord thereunder (collectively,
"Rent") in favor of Bank of America, N.A., as lender ("Lender"), to secure
certain of the undersigned's obligations to Lender. The undersigned hereby
irrevocably instructs and authorizes you to disregard any and all previous
notices sent to you in connection with Rent and hereafter to deliver all Rent to
the following address:
___________________________
___________________________
___________________________
The instructions set forth herein are irrevocable and are not subject to
modification in any manner, except that Lender, or any successor lender so
identified by Lender, may by written notice to you rescind the instructions
contained herein.
Sincerely,
[BORROWER]
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges notice of the security interest of Lender and
hereby confirms that the undersigned has received no notice of any other pledge
or assignment of the Rent and will honor the above instructions.
[Tenant]
By: ____________________________
Name:
Its:
Dated as of: __________ ___, 20__
SCHEDULE I
REQUIRED REPAIRS
NONE
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SCHEDULE II
REPLACEMENTS
NONE
