Exhibit 10.4
EXECUTION
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AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT
FOR A CREDIT FACILITY
IN AN AMOUNT UP TO $150,000,000
Dated as of June 27, 2003
CAPITAL TRUST, INC.
and
CT MEZZANINE PARTNERS I LLC
as Borrowers
and
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
as Lender
TABLE OF CONTENTS Page
RECITALS 1
Section 1. Definitions and Accounting Matters...........................................2
1.01 Certain Defined Terms........................................................2
1.02 Accounting Terms and Determinations.........................................14
Section 2. Loans, Note and Prepayments.................................................14
2.01 Loans.......................................................................14
2.02 Notes.......................................................................14
2.03 Procedures for Borrowing....................................................14
2.04 Mandatory Prepayments or Pledge.............................................18
Section 3. Payments; Computations; Etc.................................................19
3.01 Repayment of Loans; Interest................................................19
3.02 Payments....................................................................20
3.03 Computations................................................................21
3.04 U.S. Taxes..................................................................21
3.05 Booking of Loans............................................................21
3.06 Lender's Funding of Eurodollar Rate Loans...................................21
3.07 Funding Costs...............................................................22
3.08 Compensation for Increased Costs............................................22
3.09 Limitation on Types of Loans; Illegality....................................23
Section 4. Collateral Security.........................................................23
4.01 Collateral; Security Interest...............................................23
4.02 Further Assurances..........................................................24
4.03 Changes in Locations, Name, etc.............................................25
4.04 Lender's Appointment as Attorney-in-Fact....................................25
4.05 Performance by Lender of Borrowers' Obligations.............................26
4.06 Proceeds....................................................................26
4.07 Remedies....................................................................26
4.08 Limitation on Duties Regarding Preservation of Collateral...................27
4.09 Powers Coupled with an Interest.............................................27
4.10 Release of Security Interest................................................27
4.11 Release of Collateral.......................................................27
4.12 Substitution of Eligible Collateral.........................................27
Section 5. Conditions Precedent........................................................28
5.01 Initial Loan................................................................28
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TABLE OF CONTENTS Page
5.02 Initial and Subsequent Loans................................................29
5.03 Additional Requirements.....................................................30
Section 6. Representations and Warranties..............................................31
6.01 Existence...................................................................31
6.02 Action......................................................................31
6.03 Financial Condition.........................................................31
6.04 Litigation..................................................................32
6.05 No Breach...................................................................32
6.06 Approvals...................................................................32
6.07 Use of Proceeds; Margin Regulations.........................................32
6.08 Taxes.......................................................................32
6.09 Investment Company Act......................................................32
6.10 Collateral; Collateral Security.............................................32
6.11 Chief Executive Office......................................................34
6.12 Location of Books and Records...............................................34
6.13 True and Complete Disclosure................................................34
6.14 Tangible Net Worth..........................................................34
6.15 ERISA.......................................................................34
Section 7. Covenants of Borrowers......................................................34
7.01 Financial Statements, Reports, etc..........................................34
7.02 Litigation..................................................................35
7.03 Existence, etc..............................................................35
7.04 Prohibition of Fundamental Changes..........................................36
7.05 Borrowing Base Deficiency...................................................36
7.06 Notices.....................................................................36
7.07 Reports.....................................................................37
7.08 Transactions with Affiliates................................................37
7.09 Foreclosure or Other Remediation by Borrowers...............................37
7.10 Limitation on Liens.........................................................37
7.11 Limitation on Distributions.................................................37
7.12 Maintenance of Tangible Net Worth...........................................37
7.13 Maintenance of Ratio of Earnings Before Interest, Taxes, Depreciation and
Amortization to Interest and Preferred Dividends............................37
7.14 Maintenance of Ratio of Total Indebtedness to Tangible Net Worth............38
7.15 Servicer; Servicing Tape....................................................38
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TABLE OF CONTENTS Page
7.16 Remittance of Prepayments...................................................38
Section 8. Events of Default...........................................................38
Section 9. Remedies Upon Default.......................................................40
Section 10. No Duty of Lender...........................................................40
Section 11. Miscellaneous...............................................................40
11.01 Waiver......................................................................40
11.02 Notices.....................................................................40
11.03 Indemnification and Expenses................................................41
11.04 Amendments..................................................................41
11.05 Successors and Assigns......................................................41
11.06 Survival....................................................................41
11.07 Captions....................................................................42
11.08 Counterparts................................................................42
11.09 Loan Agreement Constitutes Security Agreement; Governing Law................42
11.10 SUBMISSION TO JURISDICTION; WAIVERS.........................................42
11.11 WAIVER OF JURY TRIAL........................................................42
11.12 Acknowledgments.............................................................43
11.13 Hypothecation or Pledge of Loans............................................43
11.14 Servicing...................................................................43
11.15 Periodic Due Diligence Review...............................................44
11.16 Intent......................................................................44
11.17 Change of Borrowers' States of Formation....................................44
11.18 Set-Off.....................................................................44
11.19 Special Purpose Entity......................................................45
11.20 Joint and Several Liability.................................................45
11.21 Xxxxxx Xxxxxxx Downgrade....................................................45
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TABLE OF CONTENTS
SCHEDULES
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SCHEDULE 1 Filing Jurisdictions and Offices
SCHEDULE 2 Approved Appraisers
SCHEDULE 3 Approved Engineers
SCHEDULE 4 Approved Environmental Consultants
SCHEDULE 5 Existing CT Collateral
SCHEDULE 6 Existing Fund I Collateral
EXHIBITS
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EXHIBIT A Form of Third Amended and Restated Promissory Note
EXHIBIT B Form of Custodial Agreement
EXHIBIT C Form of Opinion of Counsel to Borrowers
EXHIBIT D Form of Request for Borrowing
EXHIBIT E Form of Lender's Release Letter
EXHIBIT F Form of Bailee Agreement
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AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT
AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT, dated as
of June 27, 2003, between CAPITAL TRUST, INC., a Maryland corporation ("CT"), CT
MEZZANINE PARTNERS I LLC, a Delaware limited liability company ("Fund I") (CT
and Fund I are sometimes collectively referred to herein as "Borrowers" and
individually, as the context requires, as a "Borrower") and XXXXXX XXXXXXX
MORTGAGE CAPITAL INC., a New York corporation ("Lender").
RECITALS
WHEREAS, Lender and CT are parties to that certain Amended and
Restated Master Loan and Security Agreement dated as of February 8, 2001 (as
amended to date, the "CT MLSA"), pursuant to which CT has requested that Lender
from time to time make revolving credit loans to CT to finance certain conduit
loans, multifamily and commercial mortgage loans, mezzanine loans, equity
interests and other approved collateral owned by CT, and Lender has agreed to
make such loans pursuant to the terms of the CT MLSA. In addition, CT has
requested that Lender from time to time make revolving credit loans to CT to
finance certain commercial mortgage-backed securities owned by CT, and Lender
has agreed to make such loans pursuant to the terms of that certain Amended and
Restated CMBS Loan Agreement dated as of February 8, 2001 between Xxxxxx Xxxxxxx
& Co. International Limited ("MSIL") and CT (as amended to date, the "CT
CMBSLA");
WHEREAS, Lender and Fund I are parties to that certain Master
Loan and Security Agreement dated as of September 19, 2000 (as amended to date,
the "Fund I MLSA"), pursuant to which Fund I has requested that Lender from time
to time make revolving credit loans to Fund I to finance certain conduit loans,
multifamily and commercial mortgage loans, mezzanine loans, equity interests and
other approved collateral owned by Fund I, and Lender has agreed to make such
loans pursuant to the terms of the Fund I MLSA. In addition, Fund I has
requested that Lender from time to time make revolving credit loans to Fund I to
finance certain commercial mortgage-backed securities owned by Fund I, and
Lender has agreed to make such loans pursuant to the terms of that certain CMBS
Loan Agreement dated as of September 19, 2000, between MSIL and Fund I (as
amended to date, the "Fund I CMBSLA");
WHEREAS, pursuant to the terms of the CT MLSA, Lender has made
certain revolving credit loans to CT and, as security therefor, has accepted
from CT certain pledges of approved collateral as set forth on Schedule 5 hereto
(the "Existing CT Collateral");
WHEREAS, pursuant to the terms of the Fund I MLSA, Lender has
made certain revolving credit loans to Fund I and, as security therefor, has
accepted from Fund I certain pledges of approved collateral as set forth on
Schedule 6 hereto (the "Existing Fund I Collateral");
WHEREAS, Fund I is indirectly a wholly-owned subsidiary of CT,
and CT, Lender and MSIL have determined that it will be beneficial to CT and
Fund I if the rights and obligations of the parties under the Fund I MLSA, the
Fund I CMBSLA and the CT CMBSLA and all promissory notes, guaranties, custodial
agreements, servicing agreements and other instruments related thereto, were to
be consolidated with the rights and obligations of the parties under, and set
forth and described in, the CT MLSA, and accordingly, CT, Fund I and Lender have
determined that to effectuate the foregoing, the parties will, pursuant to this
Agreement, consolidate, amend and restate the CT MLSA , Fund I MLSA, CT CMBSLA
and Fund I CMBSLA (collectively, the "Original Loan Agreements") and all
promissory notes, guaranties, custodial agreements, servicing agreements and
other instruments related thereto, for the purpose of consolidating the
obligations of CT and Fund I as jointly and severally liable borrowers
thereunder and confirming that the Existing CT Collateral and the Existing Fund
I Collateral shall continue to constitute Collateral (as defined below)
hereunder, and to make certain other agreements as more particularly set forth
herein;
WHEREAS, Borrowers have requested that Lender from time to time
make additional revolving credit loans to them to finance certain conduit loans,
multifamily and commercial mortgage loans, mezzanine loans, Equity Interests, B
Notes (each as defined below) and other approved collateral owned by either
Borrower, and Lender is prepared to make such loans upon the terms and
conditions hereof. In addition, Borrowers have requested that Lender from time
to time make additional revolving credit loans to them to finance certain
commercial mortgage-backed securities owned by either Borrower, and Lender is
prepared to make such loans pursuant to the terms and conditions hereof;
WHEREAS, Borrowers and Lender desire that the Existing CT
Collateral and the Existing Fund I Collateral shall continue to constitute
Collateral hereunder without any instruments of assignment being required;
WHEREAS, Borrowers and Lender understand that Borrowers may
enter into loan facilities with other parties on a secured and unsecured basis,
including, without limitation, loans secured by collateral similar to the
Collateral hereunder;
WHEREAS, Borrowers and Lender desire to consolidate, amend and
restate the Original Loan Agreements in their entireties to incorporate their
mutual agreements with respect thereto;
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree that
the Original Loan Agreements are hereby consolidated, amended and restated in
their entireties as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Loan Agreement in the singular will have the same
meanings when used in the plural and vice versa):
"Advance Rate" means, for any item of Eligible Collateral, the
ratio, expressed as a percentage, set forth opposite the collateral type in the
chart provided in the definition of Eurodollar Rate Spread or as otherwise
defined or limited herein.
"Affiliate" shall mean (i) with respect to Lender, any entity
which controls, is controlled by, or is under common control with Lender, and
(ii) with respect to either Borrower, any affiliate of such Borrower as such
term is defined in the Bankruptcy Code.
"Amortization Period" shall mean, if the Termination Date shall
be extended in accordance with the terms hereof, the period from and after July
16, 2005 through and including April 15, 2006.
"Appraisal" means an appraisal of any Property prepared by a
licensed appraiser listed on Schedule 3 attached hereto, as such schedule may be
amended from time to time by Borrowers or Lender upon approval by Lender in its
reasonable discretion, in accordance with the Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation, in compliance with the
requirements of Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act and utilizing customary valuation methods such as the income,
sales/market or cost approaches, as any of the same may be updated by
recertification from time to time by the appraiser performing such Appraisal.
"Asset-Specific Loan Balance" means a portion of the Loan
allocable to each item of the Eligible Collateral. Such portion initially
consists of the sum of all advances of the Loan made on account of such Eligible
Collateral, without subtracting from such advances Lender's Transaction Costs
and other advance costs and fees to the extent borrowed by either Borrower
hereunder. Wherever this Loan Agreement states that principal payments on
account of the Loan are to be allocated or applied to or against the
Asset-Specific Loan Balance of a specific item of Eligible Collateral, the
Asset-Specific Loan Balance of such item of Eligible Collateral shall be deemed
reduced accordingly by the amount of the principal payments so applied.
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"Asset Value" shall mean, as of any date in respect of an item of
Eligible Collateral, the price at which such Eligible Collateral could readily
be sold as determined in the sole good faith of Lender, which price may be
determined to be zero. Lender's determination of Asset Value, which may be made
at any time and from time to time, shall be conclusive upon the parties.
Whenever an Asset Value determination is required under this Loan Agreement, the
applicable Borrower shall cooperate with Lender in its determination of the
Asset Value of each item of Eligible Collateral (including, without limitation,
providing all information and documentation in the possession of such Borrower
regarding such item of Eligible Collateral or otherwise required by Lender in
its sole good faith business discretion).
"B Note" shall mean the original executed subordinated promissory
note or other evidence of a subordinated participation interest owned by either
Borrower with respect to a mezzanine loan or mortgage loan.
"Bailee" shall mean Paul, Hastings, Xxxxxxxx & Xxxxxx LLP or such
other third party as Lender may approve.
"Bailee Agreement" shall mean the Bailee Agreement among
Borrowers, Lender and Bailee in the form of Exhibit F hereto.
"Bailee's Trust Receipt and Certification" shall mean a Trust
Receipt and Certification in the form annexed to the Bailee Agreement as
Attachment 2.
"Bankruptcy Code" shall mean the United States Bankruptcy Reform
Act of 1978, as amended from time to time.
"Base Rate" means, as determined by Lender on a daily basis, the
higher of (a) the rate per annum established by The Chase Manhattan Bank from
time to time as its "Prime" Rate or "reference" rate (which Borrowers
acknowledge is not necessarily such bank's lowest rate) and (b) one-half
percentage point (0.5%) (50 basis points) over the Federal funds rate, as
determined by Lender in its sole discretion.
"Borrowers" shall have the meaning provided in the heading
hereof.
"Borrowing Base" shall mean the aggregate Collateral Value of all
Eligible Collateral pledged to secure the amounts from time to time outstanding
under this Loan Agreement.
"Borrowing Base Deficiency" shall have the meaning provided in
Section 2.04 hereof.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day on which the New York Stock Exchange, the Federal Reserve
Bank of New York or Custodian is authorized or obligated by law or executive
order to be closed.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Loan
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CMBS" shall mean, in the singular or plural as the context
requires, securities backed by mortgages and other liens on commercial real
estate and related collateral or by securities, interests or other obligations
backed directly or indirectly by such mortgages.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" shall have the meaning provided in Section 4.01(b)
hereof.
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"Collateral Assignment" shall mean all documents pursuant to
which either Borrower shall have collaterally assigned all of its right, title
and interest in, to and under an item of Collateral to secure a Loan made
hereunder.
"Collateral Documents" shall mean with respect to any Collateral
Loan, B Note, Equity Interest, or Other Approved Collateral, the documents
comprising the Collateral File for such item of Collateral.
"Collateral File" shall mean, as to each item of Collateral,
those documents set forth in a schedule to be delivered by Lender to Custodian
and which are delivered to the Custodian pursuant to the terms of this Loan
Agreement or the Custodial Agreement including, without limitation, all
documents required by Lender to grant and perfect a first priority security
interest in such item of Collateral.
"Collateral Loan" shall mean, as applicable, a Mortgage Loan or a
Mezzanine Loan.
"Collateral Obligor" shall mean any obligor under any Collateral
Loan or B Note, any issuer of any security comprising any portion of the
Collateral and any entity in which an Equity Interest comprises any portion of
the Collateral.
"Collateral Report" shall mean the collateral schedule and
exception report prepared by Custodian pursuant to the Custodial Agreement.
"Collateral Schedule" shall mean a list of Eligible Collateral to
be pledged pursuant to this Loan Agreement, attached to a Custodial
Identification Certificate setting forth, as to each item of Eligible
Collateral, the applicable information for such Collateral Type specified on
Annex 1 to the Custodial Agreement.
"Collateral Type" shall mean a Mortgage Loan, Mezzanine Loan, B
Note, CMBS, Equity Interest and Other Approved Collateral.
"Collateral Value" shall mean, with respect to each item of
Eligible Collateral, the Asset Value of such Eligible Collateral multiplied by
the applicable Advance Rate set forth in the definition of "Eurodollar Rate
Spread" set forth herein or as otherwise defined or limited herein; provided,
that, the Collateral Value shall be deemed to be zero or such greater amount as
determined by Lender in respect of each item of Eligible Collateral (1) in
respect of which there is a breach of a representation or warranty by a
Collateral Obligor, (2) in respect of which there is a delinquency in the
payment of principal and/or interest which continues for a period in excess of
30 days (such period to include any applicable grace periods) unless otherwise
approved by Lender, or (3) which has been released from the possession of
Custodian under the Custodial Agreement to the applicable Borrower for a period
in excess of that permitted pursuant to the terms of the Custodial Agreement.
"Collection Account" shall mean one or more accounts established
by the Servicer subject to a security interest in favor of Lender, into which
all Collections shall be deposited by the Servicer.
"Collections" shall mean, collectively, all collections and
proceeds on or in respect of the Collateral, excluding collections required to
be paid to the Servicer or a borrower on the Collateral.
"Conduit Loan" shall mean a Mortgage Loan, secured by a first
mortgage on a real property, that in Lender's determination, satisfies the
following criteria: (i) principal balance not exceeding $40,000,000; (ii)
interest at a fixed rate with prepayment protection satisfactory to Lender;
(iii) single-asset, bankruptcy remote property owner complying with all
nationally recognized statistical rating agency requirements; (iv) no
subordinate financing and mortgage and organizational documents prohibiting
subordinate financing or unsecured financing not otherwise subject to
intercreditor agreements satisfactory to rating agencies; (v) debt service
coverage ratio (as determined by Lender in its sole discretion) of not less than
1.25:1 or such higher debt service coverage ratio as may be required by rating
agencies; (vi) not having any characteristics that would impair the rating of
any securities issued
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pursuant to a securitization that included a substantial component of mortgages
similar to such mortgage; and (vii) in full compliance with such other "conduit"
underwriting and structuring requirements as Lender shall establish from time to
time.
"control" shall mean possession of the power, directly or
indirectly, to (a) vote more than fifty percent (50%) of the voting securities
having ordinary power for the election of directors of an entity, or (b) direct
or cause the direction of the management and policies of such entity, whether by
contract or otherwise.
"CT" shall mean Capital Trust, Inc., a Maryland corporation and
the sole member of CT-F1.
"CT-F1" shall mean CT-F1, LLC, a Delaware limited liability
company and the sole member of Fund I.
"Custodial Agreement" shall mean the Amended and Restated
Custodial Agreement, dated as of the date hereof, among Borrowers, Custodian and
Lender, substantially in the form of Exhibit B hereto, as the same shall be
modified and supplemented and in effect from time to time.
"Custodial Identification Certificate" shall mean the certificate
executed by the applicable Borrower in connection with the pledge of Eligible
Collateral to Lender in the form of Annex 3 to the Custodial Agreement.
"Custodian" shall mean Deutsche Bank Trust Company Americas as
custodian under the Custodial Agreement, and its successors and permitted
assigns thereunder.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Diligence Materials" means the Preliminary Due Diligence Package
together with the materials requested in the Supplemental Due Diligence List.
"Direct Mortgage" means a recorded mortgage or deed of trust in
favor of Lender on real property.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Due Diligence Review" shall mean the performance by Lender of
any or all of the reviews permitted under Section 11.15 hereof with respect to
any or all of the Collateral, as desired by Lender from time to time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.
"Eligible Collateral" shall mean Mortgage Loans, Mezzanine Loans,
B Notes, Equity Interests and Other Approved Collateral as to which the
representations and warranties in Section 6.10 hereof are correct.
"Equity Interest" shall mean any interest in a Person
constituting a share of stock or a partnership or membership interest
(including, without limitation, a preferred equity interest) or other right or
interest in a Person that is not characterized as indebtedness under GAAP.
"Equity Proceeds" shall mean the gross proceeds raised by CT from
any offering of equity capital of CT less the reasonable and customary costs
incurred by CT in connection with any such offering.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
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"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which either Borrower is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which either Borrower is a member.
"Eurocurrency Reserve Requirements" shall mean, for any day as
applied to a Loan, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day (including
without limitation basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto), dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such Governmental Authority.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Contract Period, the rate per annum equal to the rate appearing at page 3750 of
the Telerate Screen as 30, 60 or 90 day LIBOR on the second Business Day prior
to the commencement of any Eurodollar Contract Period, and if such rate shall
not be so quoted, the rate per annum at which Lender is offered Dollar deposits
at or about 10:00 A.M., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency exchange
operations in respect of its Loans are then being conducted for delivery on such
day for a period of 30 days and in an amount comparable to the amount of the
Loans to be outstanding on such day.
"Eurodollar Contract Period" means, with respect to each Loan, a
period determined by CT from time to time on the first Business Day prior to the
expiration of each prior Eurodollar Contract Period as the period for which a
Eurodollar Base Rate shall be in effect, which period shall be thirty (30) days,
sixty (60) days or ninety (90) days (or if CT shall make no determination,
thirty (30) days) and the number of days in such period being subject to
adjustment as follows: (a) in no event shall a Eurodollar Contract Period extend
beyond the Termination Date; (b) each such period shall end on the day
immediately preceding the Payment Date which occurs approximately thirty (30)
days, sixty (60) days or ninety (90) days, as applicable, after the commencement
of the period chosen by CT; and (c) the initial Eurodollar Contract Period with
respect to each Asset-Specific Loan Balance shall commence on the related
Funding Date and each succeeding Eurodollar Contract Period shall commence on
the day on which the immediately preceding Eurodollar Contract Period shall
expire.
"Eurodollar Rate" shall mean, with respect to each day a Loan is
outstanding, a rate per annum determined by Lender in its sole discretion in
accordance with the following formula (rounded upwards to the nearest 1/100th of
one percent), which rate as determined by Lender shall be conclusive absent
manifest error by Lender:
Eurodollar Base Rate
------------------------------------------
1.00 minus Eurocurrency Reserve
Requirements
"Eurodollar Rate Spread" means (A) as to each Advance Rate the
applicable Eurodollar Rate Spread set forth below opposite such Advance Rate for
the applicable Collateral type, or such other Eurodollar Rate Spread as may be
mutually agreed to by Borrowers and Lender:
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Eurodollar Rate Spread
(expressed as percentage points
Collateral Type Advance Rate per annum and as basis points)
----------------------------------------------------------------------------------------------------------
Conduit Loan 90% 1.25% 125bp
------------
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Non-Conduit Loans and Other Approved Collateral
-----------------------------------------------
(limited to 90% LTV maximum)
First Mortgage Loans (75% LTV maximum) 85% 1.75% 175bp
------------------------------------------------------------------------------------------------
B Notes, subordinate Mortgage Loans, Mezzanine equal to or less 1.50% 150bp
Loans, CMBS and Equity Interests (70% combined than 60% of the
LTV maximum) Asset Value
------------------------------------------------------------------------------------------------
greater than 60% 1.75% 175bp
but equal to or
less than 75% of
the Asset Value
------------------------------------------------------------------------------------------------
Subordinate Mortgage Loans, Mezzanine Loans, equal to or less 1.75% 175bp
CMBS, B Notes and Equity Interests (between than 50% of the
71% and 85% combined LTV maximum, except Asset Value
that Subordinate Mortgage Loans encumbering
hotel and other hospitality industry
properties and Mezzanine Loans secured by
pledges of Equity Interests in entities
owning such properties shall have a 70%
combined LTV maximum)*
------------------------------------------------------------------------------------------------
greater than 50% 2.00% 200bp
but less than
60% of the
Asset Value
------------------------------------------------------------------------------------------------
equal to or 225% 225bps
greater than 60%
but equal to or
less than 70% of
the Asset Value
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*Solely for illustrative purposes, Borrowers and Lender agree that the
following example of a transaction illustrates their intent: with
respect to an item of Collateral for which the appraised value of the
underlying real property is $100,000,000, on which a First Mortgage Loan
in the outstanding principal amount of $75,000,000 and a Mezzanine Loan
in the outstanding principal amount of $10,000,000 have been made (for
an aggregate amount of $85,000,000), with Lender advancing hereunder 85%
of a 75% LTV on the First Mortgage Loan ($63,750,000), plus 70% of such
Mezzanine Loan (70% of $10,000,000 equals $7,000,000), the aggregate
loans from Lender to Borrowers would equal $70,750,000, resulting in a
83.24% underlying loan-to-loan value. In addition, Lender will finance
loans originated by Borrowers with an aggregate underlying LTV up to 90%
and above 90% on a case-by-case basis.
and (B) notwithstanding anything set forth in clause (A) to the contrary, in
the event the Termination Date shall be extended pursuant to the terms
hereof, for the period from and after July 16, 2005 to, and including, the
date the Loans are repaid in full, as to each Advance Rate the sum of (x)
the applicable Eurodollar Rate Spread set forth opposite such Advance Rate
for the applicable Collateral type in clause (A) above, plus (y) .25
percent, or 25 basis points, per annum.
"Eurodollar Substitute Rate" means a rate of interest equal to
(a) the Base Rate minus (b) Two and eighty-five hundredths percent (2.85%) per
annum (285 basis points).
"Event of Default" shall have the meaning provided in Section 8
hereof.
"Federal Funds Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the
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quotations for the day of such transactions received by Lender from three
federal funds brokers of recognized standing selected by Lender.
"Funding Costs" shall mean, collectively, the actual costs to
Lender of breaking a Eurodollar contract (or costs that would have been incurred
if Lender had entered into and broken a Eurodollar contract for a Eurodollar
Contract Period as requested by a Borrower) prior to the expiration of the
Eurodollar Contract Period applicable thereto in connection with (a) any
prepayment (whether voluntary or involuntary) of all or any portion of an
Asset-Specific Loan Balance or other principal repayments required or permitted
under the Security Documents, that is made at any time other than at the
expiration of the related Eurodollar Contract Period, (b) any voluntary or
involuntary acceleration of the Termination Date, such that the Termination Date
occurs on any date that is not the expiration date of the Eurodollar Contract
Period with respect to any Asset-Specific Loan Balance, and (c) any other set of
circumstances not attributable solely to Lender's acts. Subject to the
foregoing, Funding Costs shall not include any diminution in yield suffered by
Lender upon re-lending or re-investing the principal of the Loan after any
prepayment of the Loan.
"Funding Date" shall mean the date on which a Loan is made
hereunder.
"GAAP" shall mean generally accepted accounting principles
consistently applied as in effect from time to time in the United States.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over any obligor
on any underlying loan, Borrowers, any of their respective Subsidiaries or any
of their properties.
"Guarantee" shall mean, as to any Person, any obligation of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss
(whether by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise);
provided that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to
make servicing advances for delinquent taxes and insurance or other obligations
in respect of a Mortgaged Property, to the extent required by Lender. The amount
of any Guarantee of a Person shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have
correlative meanings.
"Indebtedness" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
Indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; and (i) Indebtedness of general partnerships of which such
Person is a general partner.
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"Interest Rate Protection Agreement" shall mean, with respect to
any or all of the Mortgage Loans and Mezzanine Loans, any short sale of US
Treasury Securities, or futures contract, or mortgage related security, or
Eurodollar futures contract, or options related contract, or interest rate swap,
cap or collar agreement or similar arrangements providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by any obligor on
any underlying loan or either Borrower (specifically with respect to such items
of Collateral) and acceptable to Lender.
"Lender" shall have the meaning provided in the heading hereto.
"Lien" shall mean any mortgage, lien, pledge, charge,
encumbrance, security interest or adverse claim.
"Loan" and "Loans" shall have the meanings provided in Section
2.01(a) hereof.
"Loan Agreement" shall mean this Amended and Restated Master Loan
and Security Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Loan Documents" shall mean, collectively, this Loan Agreement,
the Note and the Custodial Agreement.
"Loan-to-Value Ratio" or "LTV" shall mean, as to any Eligible
Collateral, the ratio that (x) the aggregate outstanding principal balances of
all loans (including Loans hereunder) and preferred equity interests secured in
whole or in part by real property or direct or indirect beneficial interests
therein relating to such Eligible Collateral bears to (y) the value, determined
by an Appraisal reasonably acceptable to Lender, of the real property (together
with all applicable appurtenant interests and subject to all applicable liens,
encumbrances and tenancies), or direct or indirect beneficial interests which
form the basis of such Eligible Collateral.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition or prospects of
Borrowers taken as a whole, (b) the ability of either Borrower to perform its
obligations under any of the Loan Documents to which it is a party, (c) the
validity or enforceability of any of the Loan Documents, (d) the rights and
remedies of Lender under any of the Loan Documents, (e) the timely payment of
the principal of or interest on the Loans or other amounts payable in connection
therewith or (f) the aggregate value of the Collateral.
"Maximum Advance Rate" shall mean, as to any item of Eligible
Collateral, the maximum Advance Rate that shall be determined by Lender in
Lender's sole and absolute discretion; provided, that, with respect to the
specific categories of Eligible Collateral referred to in the definition of
Eurodollar Rate Spread, the Maximum Advance Rate shall not exceed the respective
Advance Rates set forth in such definition.
"Maximum Credit" shall mean One Hundred Fifty Million Dollars
($150,000,000).
"Mezzanine Loan" shall mean a loan secured by a pledge of Equity
Interests in one or more entities holding direct or indirect beneficial
interests in an entity owning (or having a ground lease interest in) a
commercial or multi-family residential property, preferred equity interests or a
second mortgage.
"Minimum Usage Fee" shall mean, on any date of calculation, the
positive amount, if any, equal to the product of (i) 175 basis points (1.75%)
multiplied by either (ii) if said calculation relates to the October 1, 2003
through December 31, 2003 calendar quarter, (A) seventeen and one-half percent
(17.50%) of the Maximum Credit minus (B) the daily average outstanding principal
amount of Loans (including Loans made under the Original Loan Agreements),
calculated over such calendar quarter, or (iii) if said calculation relates to
any calendar quarter starting on or after January 1, 2004 (A) thirty-five
percent (35%) of the Maximum Credit, minus (B) the daily average outstanding
principal amount of Loans (including Loans made under the Original Loan
Agreements), calculated over the calendar quarter
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immediately preceding such date of calculation, in each case computed on the
basis of a year of 360 days for the actual number of days elapsed (including the
first day but excluding the last day) occurring in the period for which such fee
is payable.
"Monthly Statement" shall mean, for each calendar month during
which this Loan Agreement shall be in effect, CT's reconciliation in arrears of
beginning balances, interest, principal, paid-to-date and ending balances for
each asset constituting the Collateral, together with (a) an Officer's
Certificate with respect to all Collateral (whether of CT or of Fund I) pledged
to Lender as at the end of such month, (b) a written report of any developments
or events that are reasonably likely to have a Material Adverse Effect, (c) a
written report of any and all written modifications to any documents underlying
any items of Collateral and (d) such other internally prepared reports as
mutually agreed by CT and Lender which reconciliation, Officer's Certificate and
reports shall be delivered to Lender for each calendar month during the term of
this Loan Agreement within ten (10) days following the end of each such calendar
month.
"Mortgage" shall mean the mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a valid lien on the fee or
leasehold interest in real property securing the Mortgage Note and the
assignment of rents and leases related thereto.
"Mortgage Loan" shall mean a mortgage loan (including, without
limitation, a Conduit Loan) encumbering one or more commercial or multi-family
residential properties which Custodian has been instructed to hold for Lender
pursuant to the Custodial Agreement, and which Mortgage Loan includes, without
limitation (i) the indebtedness evidenced by a Mortgage Note and secured by a
related Mortgage, and (ii) all right, title and interest of the applicable
Borrower in and to the Mortgaged Property covered by such Mortgage.
"Mortgage Note" shall mean the original executed promissory note
or other evidence of the indebtedness of a mortgagor with respect to a Mortgage
Loan.
"Mortgaged Property" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other Collateral securing repayment of the
debt evidenced by a Mortgage Note.
"MS & Co." shall mean Xxxxxx Xxxxxxx & Co. Incorporated, a
registered broker-dealer.
"MS Indebtedness" shall mean all Indebtedness from time to time
owed by Borrowers to Lender or any Affiliate of Lender including, without
limitation, under this Loan Agreement or any repurchase or other agreement
between Lender, or an Affiliate of Lender, and either Borrower.
"Multiemployer Plan" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been or are required
to be made by either Borrower or any ERISA Affiliate and that is covered by
Title IV of ERISA.
"'Non-Table' Funded Eligible Collateral" shall mean the items of
Eligible Collateral as described in Section 2.03(e) of this Loan Agreement.
"Note" shall mean the promissory note provided for by Section
2.02(a) hereof for the Loans and any promissory note delivered in substitution
or exchange therefor, in each case as the same shall be modified, amended,
supplemented or extended and in effect from time to time, including, without
limitation, that certain Third Amended and Restated Promissory Note dated as of
June 8, 1998 by Borrowers to Lender in the form attached hereto as Exhibit A,
given in substitution for that certain Second Amended and Restated Promissory
Note dated as of June 8, 1998 by CT to Lender.
"Officer's Certificate" shall mean the certificate of a
Responsible Officer as set forth in Section 5.02(b) hereof.
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"Other Approved Collateral" shall mean such other Property of
either Borrower as Lender shall accept as Collateral for the Loans.
"Payment Date" shall mean, with respect to each Loan, the first
Business Day of each calendar month following the related Funding Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, limited liability company,
trust, unincorporated association or government (or any agency, instrumentality
or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established
or maintained by either Borrower or any ERISA Affiliate during the five-year
period ended immediately before the date of this Loan Agreement or to which
either Borrower or any ERISA Affiliate makes, is obligated to make or has,
within the five-year period before the date of this Loan Agreement, been
required to make contributions and that is covered Title IV of ERISA or Section
302 of ERISA or Section 412 of the Code, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount under this Loan Agreement, the Note or any other
Loan Document that is not paid when due to Lender (whether at stated maturity,
by acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to 4% per annum plus the Base
Rate.
"Preliminary Due Diligence Package" means with respect to any
proposed Collateral, the following due diligence information relating to such
proposed Collateral to be provided by either Borrower to Lender pursuant to this
Loan Agreement:
(i) a summary memorandum outlining the proposed transaction,
including potential transaction benefits and all material
underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a prudent
lender would consider material;
(ii) current rent roll, if applicable;
(iii) cash flow pro-forma, plus historical information, if
available;
(iv) description of the property (real property, pledged loan
or other Collateral);
(v) indicative debt service coverage ratios;
(vi) indicative Loan-to-Value Ratio;
(vii) the applicable Borrower's or any Affiliate's relationship
with its potential underlying borrower or any affiliate;
(viii) if applicable, Phase I environmental report (including
asbestos and lead paint report);
(ix) if applicable, engineering and structural reports;
(x) third party reports, to the extent available and
applicable, including:
(a) current Appraisal;
(b) Phase II or other follow-up environmental report if
recommended in Phase I;
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(c) seismic reports; and
(d) operations and maintenance plan with respect to
asbestos-containing materials;
(xi) in the case of a B Note, all information which would
otherwise be provided for the underlying Collateral Loan,
and in addition, all documentation evidencing or otherwise
relating to the B Note, including, without limitation,
intercreditor agreements and participation agreements, as
applicable;
(xii) analyses and reports with respect to such other matters
concerning the Collateral as Lender may in its sole
discretion require;
(xiii) documents comprising such Collateral, or current drafts
thereof, including, without limitation, underlying debt
and security documents, guaranties, underlying borrower's
organizational documents, warrant agreements, and loan and
collateral pledge agreements, as applicable; and
(xiv) a list that specifically and expressly identifies any
Collateral Documents that relate to such Collateral but
are not in the applicable Borrower's possession.
"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Regulations T, U and X" shall mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.
"Responsible Officer" shall mean, as to any Person, the chief
executive officer, any vice chairman and the chief financial officer of such
Person or, for the purpose of executing certificates, the president, the vice
president and counsel responsible therefor.
"Secured Obligations" shall have the meaning provided in Section
4.01(a) hereof.
"Security Documents" means this Loan Agreement, the Note, and all
other agreements, instruments, certificates and documents delivered by or on
behalf of Borrowers to evidence or secure the Loan(s) or otherwise in
satisfaction of the requirements of this Loan Agreement, or the other documents
listed above as same may be amended or modified from time to time.
"Servicer" shall have the meaning provided in Section 11.14(c)
hereof.
"Servicing Agreement" shall have the meaning provided in Section
11.14(c) hereof.
"Servicing Records" shall have the meaning provided in Section
11.14(b) hereof.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person. Notwithstanding the foregoing, for purposes
of Section 8 hereof only, a Subsidiary of CT shall only include a direct
wholly-owned subsidiary of CT.
"Supplemental Due Diligence List" means, with respect to any
proposed Collateral, information or deliveries concerning such proposed
Collateral, such items that Lender shall request in addition to the Preliminary
Due Diligence Package including, without limitation, a credit approval
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memorandum representing the final terms of the underlying transaction, a final
LTV ratio computation and a final debt service coverage ratio computation for
such proposed Collateral.
"'Table Funded' Eligible Collateral" shall mean the items of
Eligible Collateral as described in Section 2.03(e) of this Loan Agreement.
"Tangible Net Worth" shall mean, as of a particular date,
(a) all amounts which would be included under capital of CT
and its consolidated Subsidiaries on a balance sheet of CT and its
consolidated Subsidiaries at such date, determined in accordance with
GAAP, less
(b) intangible assets of CT and its consolidated Subsidiaries.
"Termination Date" shall mean July 16, 2005 or such earlier date
on which this Loan Agreement shall terminate in accordance with the provisions
hereof or by operation of law; provided, however, that in the event that (i)
this Agreement shall not have been earlier terminated and (ii) no Default shall
have occurred and be continuing on July 16, 2005, the Termination Date shall be
automatically extended to April 15, 2006.
"Title Insurance Policy" shall mean, with respect to any real
property underlying a Collateral Loan, a mortgagee's title insurance policy or
policies issued to Lender and Lender's successors and assigns (or, subject to
the prior written approval of Lender, an endorsement to the applicable
Borrower's title insurance policy insuring the collateral assignment to Lender
of the applicable mortgage) by one or more title companies reasonably
satisfactory to Lender, which policy or policies shall be in form and substance
reasonably acceptable to Lender, with such endorsements as Lender shall
reasonably require and, with respect to any Collateral Loan, a mortgagee's title
insurance policy or policies issued to Lender and Lender's successors and/or
assigns by one or more title companies reasonably satisfactory to Lender
reflecting Lender's interest in such Collateral Loan.
"Total Indebtedness" shall mean, for any period, the aggregate
Indebtedness of CT and its consolidated Subsidiaries during such period less the
amount of any nonspecific balance sheet reserves maintained in accordance with
GAAP.
"Transaction Costs" shall mean, with respect to any Loan, all
actual out-of-pocket reasonable costs and expenses paid or incurred by Lender
and payable by Borrowers relating to the making of such Loan (including legal
fees and other fees described in Section 11.03 hereof). Lender shall endeavor to
limit the Transaction Costs associated with such Loan (excluding the initial
Loan) to $5,000, but the foregoing shall not limit Borrowers' obligations with
respect to Transaction Costs or constitute a "cap" on Transaction Costs for any
Loan. Transaction Costs shall not include costs incurred by Lender for overhead
and general administrative expenses.
"Trust Receipt" shall mean the receipt delivered by Custodian
pursuant to the provisions of Section 4 of the Custodial Agreement acknowledging
receipt of a Collateral File in connection with a Loan hereunder in the form of
Annex 2 to the Custodial Agreement.
"Underwriting Issues" means with respect to any Collateral as to
which either Borrower intends to request a Loan, all information that has come
to such Borrower's attention, based on the making of reasonable inquiries and
the exercise of reasonable care and diligence under the circumstances, which
would be considered a materially "negative" factor (either separately or in the
aggregate with other information), or a material defect in loan documentation or
closing deliveries (such as any absence of any material Collateral Document(s)),
to a reasonable institutional lender in determining whether to originate or
acquire the Collateral in question.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect on the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform
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Commercial Code" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
1.02 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Lender hereunder shall be
prepared, in accordance with GAAP.
Section 2. Loans, Note and Prepayments.
2.01 Loans.
(a) Lender agrees to consider, as provided herein, from time to
time either Borrower's requests that Lender make, on the terms and conditions of
this Loan Agreement, loans (each, individually, a "Loan" and, collectively, the
"Loans") to such Borrower in Dollars, from and including the Effective Date to
and including July 16, 2005, in an aggregate principal amount at any one time
outstanding up to but not exceeding the Maximum Credit as in effect from time to
time. Nothing in this Loan Agreement shall be interpreted as a commitment by
Lender to make any Loans, but rather sets forth the procedures to be used in
connection with periodic requests for Loans and the conditions to the making of
any Loans. Borrowers hereby acknowledge that Lender is under no obligation to
agree to make, or to make, any Loan pursuant to this Loan Agreement.
(a) Subject to the terms and conditions of this Loan Agreement,
during such period Borrowers may borrow, prepay and reborrow hereunder.
2.02 Notes.
(a) The Loans made by Lender shall be evidenced by a single
amended and restated promissory note of Borrowers substantially in the form of
Exhibit A hereto, dated the date hereof, payable to Lender in the principal
amount of One Hundred Fifty Million Dollars ($150,000,000), as otherwise duly
completed. Lender shall have the right to have its Note subdivided, by exchange
for promissory notes of lesser denominations or otherwise and shall have the
right to sell participating interests in such Note; provided, however, that
Lender must retain (i) in excess of fifty percent (50%) ownership interest in
the Note and (ii) have control over all decisions with respect to loan pricing
and the exercise of remedies with respect to each item of Collateral; and
provided, further, however, that Lender may subject up to one hundred percent
(100%) of the Loans made hereunder to a repurchase agreement.
(b) The date, amount and interest rate of each Loan made by
Lender to either Borrower, and each payment made on account of the principal
thereof, shall be recorded by Lender from time to time on its internal books and
records (whether electronic or otherwise). Failure of Lender to make such
notation shall not affect the obligations of Borrowers to make a payment when
due of any amount owing hereunder or under the Note in respect of the Loans.
Borrowers agree that Lender's books and records showing the MS Indebtedness
pursuant to this Loan Agreement and the other Loan Documents shall be admissible
in any action or proceeding arising therefrom, and shall constitute rebuttably
presumptive proof thereof, irrespective of whether any MS Indebtedness is also
evidenced by a promissory note or other instrument. Lender will provide to the
Borrowers a monthly statement of Loans, payments, and other transactions
pursuant to this Loan Agreement. Failure by Lender to provide such monthly
statement shall not affect the obligations of Borrowers to make a payment when
due of any amount owing hereunder or under the Note in respect of the Loans.
Such statement shall be deemed correct, accurate, and binding on Borrowers
absent manifest error.
2.03 Procedures for Borrowing.
(a) Preliminary Approval of Proposed Collateral.
(i) Either Borrower may, from time to time, submit to
Lender a Preliminary Due Diligence Package for Lender's review and
approval in order to request a borrowing
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hereunder with respect to any proposed Collateral that such Borrower
proposes to pledge to Lender and to be included in the Borrowing Base in
connection with such borrowing.
(ii) Upon Lender's receipt of a complete Preliminary Due
Diligence Package, Lender within two (2) Business Days shall have the
right to request, in Lender's sole and absolute discretion, additional
diligence materials and deliveries that Lender shall specify on a
Supplemental Due Diligence List. Upon Lender's receipt of all of the
Diligence Materials or Lender's waiver thereof, Lender, within five (5)
Business Days, shall either (i) notify such Borrower of the Maximum
Advance Rate (which may be less than the Advance Rate set forth in the
definition of Eurodollar Rate Spread) and the Asset Value for the
proposed Collateral or (ii) deny, in Lender's sole and absolute
discretion, such Borrower's request for an advance. Lender's failure to
respond to such Borrower within five (5) Business Days following receipt
of all Diligence Materials or Lender's written waiver thereof shall be
deemed to be a denial of such Borrower's request for an advance, unless
Lender and such Borrower have agreed otherwise in writing. Nothing in
this Section 2.03(a)(ii) or elsewhere in this Loan Agreement shall, or
be deemed to, prohibit Lender from determining in its sole discretion
the adequacy, correctness and appropriateness of, or from disapproving,
any and all financial and other underwriting data required to be
supplied by Borrowers under this Loan Agreement.
(b) Final Approval of Proposed Collateral. Upon Lender's
notification to the applicable Borrower of the Maximum Advance Rate and the
Asset Value for any proposed Collateral, such Borrower shall, if such Borrower
desires to obtain one or more advances secured by such proposed Collateral,
satisfy the conditions set forth below (in addition to satisfying the conditions
precedent to obtaining each advance, as set forth in Section 5 of this Loan
Agreement) as conditions precedent to Lender's approval of such proposed
Collateral as Collateral, all in a manner, and pursuant to documentation,
satisfactory in all respects to Lender and its counsel:
(i) Environmental and Engineering. If applicable, Lender
shall have received an Environmental Report and an Engineering Report,
each in form and substance satisfactory to Lender, by an Engineer and
Environmental Consultant listed on Schedules 3 and 4 attached hereto,
respectively, as each such schedule may be amended from time to time by
Lender in its reasonable discretion.
(ii) Appraisal. If applicable, Lender shall have received
an Appraisal.
(iii) Insurance. With respect to proposed Collateral that
is real property, Lender shall have received certificates or other
evidence of insurance demonstrating insurance coverage in respect of
such real property of types, in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set forth in the
Collateral Documents or the Security Documents. Such certificates or
other evidence shall indicate the applicable Borrower, as lender, will
be named as an additional insured as its interest may appear and shall
contain a loss payee endorsement in favor of such additional insured
with respect to the property policies required to be maintained under
the Collateral Documents.
(iv) Survey. With respect to a Collateral Loan, a B Note
or an Equity Interest, to the extent obtained by the applicable Borrower
from the Collateral Obligor with respect to any item of Collateral at
the origination of the underlying loan or equity interest, as the case
may be, relating thereto, Lender shall have received with respect to
proposed Collateral that is real property, a current survey of such real
property in a form satisfactory to Lender.
(v) Lien Search Reports. Lender or Lender's counsel shall
have received, as reasonably requested by Lender, satisfactory reports
of UCC, tax lien, judgment and litigation searches and title reports and
updates, as applicable, conducted by search firms and/or title companies
acceptable to Lender with respect to the Collateral, the applicable
Borrower and the
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related underlying obligor, such searches to be conducted in each
location Lender shall reasonably designate.
(vi) Title Insurance Policy.
(A) With respect to a Mortgage Loan, the applicable
Borrower shall have delivered to Lender (1) an
unconditional commitment to issue title insurance policies
in favor of Lender and Lender's successors and/or assigns
with respect to Lender's interest in the related real
property with an amount of insurance that shall be not
less than the related Asset-Specific Loan Balance (taking
into account the proposed advance) or such other amount as
Lender shall require in its sole discretion or (2) an
endorsement or confirmatory letter from the existing title
company to the existing Title Insurance Policy in favor of
Lender and Lender's successors and/or assigns that amends
the existing title insurance policy by stating that the
amount of the insurance is no less than the related
Asset-Specific Loan Balance (taking into account the
proposed advance) or such other amount of title coverage
as Lender shall require in its sole discretion.
(B) With respect to a Mezzanine Loan, a B Note or
an Equity Interest, such Borrower shall have delivered to
Lender such evidence as Lender on a case-by-case basis, in
its sole discretion, shall require of the ownership of the
real property underlying such item of Collateral
including, without limitation, a copy of a title insurance
policy dated a date, and by a title insurer, in each case
acceptable to Lender in its sole discretion, showing that
title is vested in the related Collateral Obligor or in an
entity in whom such Collateral Obligor holds a beneficial
interest.
(vii) Security Documents. The applicable Borrower shall
have executed and delivered to Lender, in form and substance
satisfactory to Lender and its counsel, all security documents
perfecting Lender's security interest in the proposed Collateral (and in
any Interest Rate Protection Agreements held by such Borrower with
respect thereto) which shall be subject to no Liens except as expressly
permitted by Lender. Each of the security documents shall contain such
representations and warranties concerning the proposed Collateral and
such other terms as shall be reasonably satisfactory to Lender.
(viii) Opinions of Counsel. Lender shall have received
from counsel to Borrowers its legal opinion as to enforceability of this
Loan Agreement and all documents executed and delivered hereunder in
connection with such Loan, (at Lender's option) an opinion from local
counsel where the applicable property is located, and an opinion to the
applicable Borrower and its successors and assigns from counsel to the
underlying obligor on the underlying loan transaction, as applicable, as
to enforceability of the loan documents governing such transaction and
such other matters as Lender shall require (including, without
limitation, opinions as to due formation, authority, choice of law and
perfection of security interests). Such legal opinions shall be
addressed to Lender and its successors and assigns, dated the related
Funding Date, and in form and substance reasonably satisfactory to
Lender.
(ix) Additional Real Estate Matters. To the extent
obtained by either Borrower from the Collateral Obligor relating to any
item of Collateral at the origination of the underlying loan or equity
interest relating thereto, such Borrower shall have delivered to Lender
such other real estate related certificates and documentation as may
have been requested by Lender, such as (i) certificates of occupancy and
letters certifying that the property is in compliance with all
applicable zoning laws, each issued by the appropriate Governmental
Authority and (ii) abstracts of all Leases in effect at the real
property relating to such Collateral.
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(x) B Notes. In the case of a B Note, Lender shall have
received all documentation specified herein as if the underlying
mezzanine loan or mortgage loan were the direct Collateral and, in
addition, all documentation evidencing or otherwise relating to the B
Note.
(xi) Other Documents. Lender shall have received such
other documents as Lender or its counsel shall request with respect to
each or any item of Collateral.
(c) Collateral Approval or Disapproval. Within two (2) Business
Days following the date upon which either Borrower has tendered performance of
the conditions enumerated in Sections 2.03(b)(i) through (xi), or has delivered
such items or documents fully executed, if applicable, in final form, Lender
shall either (i) if the Collateral Documents or the Security Documents with
respect to the proposed Collateral are not reasonably satisfactory in form and
substance to Lender, notify such Borrower that Lender has not approved the
proposed Collateral as Collateral or (ii) notify such Borrower and Bailee that
Lender has approved the proposed Collateral as Collateral and such notice shall
identify the documents to be delivered to Custodian in connection with such
proposed Collateral pursuant to Sections 2.03 and 5 of this Loan Agreement and
shall identify the party whom Lender shall designate to record and/or file, as
the case may be, any security documents necessary to perfect Lender's security
interest in the Eligible Collateral. The terms of delivery and filing and/or
recordation of such security documents shall be set forth in a separate
agreement between Lender and its designee. Lender's failure to respond to such
Borrower within two (2) Business Days shall be deemed to be a denial of such
Borrower's request that Lender approve the proposed Collateral, unless Lender
and such Borrower have agreed otherwise in writing.
(d) Procedure for Borrowing with Respect to Eligible Collateral.
Once Lender has approved the Collateral in accordance with Section 2.03(c)
above, the applicable Borrower may request a Loan hereunder, on any Business Day
during the period from and including the Effective Date to and including the
Termination Date, by delivering to Lender, with a copy to Custodian, an
irrevocable written request for borrowing, substantially in the form of Exhibit
D attached hereto, which request must be received by Lender prior to 11:00 a.m.,
New York City time, one (l) Business Day prior to the requested Funding Date.
Such request for borrowing shall (1) attach a schedule identifying the Eligible
Collateral that such Borrower proposes to pledge to Lender and to be included in
the Borrowing Base in connection with such borrowing, (2) specify the requested
Funding Date, and (3) attach an Officer's Certificate signed by a Responsible
Officer of such Borrower as required by Section 5.02(b) hereof.
Contemporaneously with the delivery of the request for borrowing, such Borrower
shall deliver to Lender with a copy to Custodian, a Custodial Identification
Certificate along with the accompanying Collateral Schedule with respect to all
proposed Eligible Collateral to be pledged to Lender on the applicable Funding
Date.
(e) Delivery of Collateral Files and Security Documents.
"Non-Table Funded" Eligible Collateral:
---------------------------------------
1) By no later than 1:00 p.m., New York City time, one (1)
Business Day prior to any Funding Date, the applicable Borrower
and/or the Bailee shall deliver to the Custodian as to any
Eligible Collateral on a case-by-case basis, (i) original
counterparts of all Collateral Documents comprising the
Collateral File, (ii) the security documents described in Section
2.03(b)(vii) above, and (iii) to the extent applicable, any other
documents, reports or updated information as Lender shall request
pursuant to Section 2.03(b)(i)-(xi) and Section 5.03(b) not
heretofore finally approved by Lender.
"Table Funded" Eligible Collateral:
-----------------------------------
1) By no later than 1:00 p.m., New York City time, on the
Funding Date, the applicable Borrower shall cause the Bailee to
deliver to the Custodian by facsimile (i) as to each item of
Eligible Collateral, the note, if applicable, evidencing the
making of a
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loan secured by such Eligible Collateral, a fully executed Bailee
Agreement and Bailee's Trust Receipt and Certification issued by
the Bailee thereunder, (ii) as to all other categories of
Eligible Collateral on a case-by-case basis, the delivery of all
fully executed documents and instruments required by Lender to
comprise the Collateral File and (iii) evidence satisfactory to
Lender that all documents necessary to perfect such Borrower's
interest in the Eligible Collateral have been delivered to a
party acceptable to Lender for recordation and filing.
2) By no later than 1:00 p.m., New York City time, on the
third Business Day following the applicable Funding Date, such
Borrower shall cause the Bailee to deliver to the Custodian the
Collateral File.
(f) No later than 1:00 p.m., New York City time, on each Funding
Date, such Borrower shall provide Custodian with a final Custodial
Identification Certificate and related Collateral Schedule with respect to the
Eligible Collateral to be pledged to the Lender on such Funding Date, indicating
any changes, if any, from the Custodial Identification Certificate and related
Collateral Schedule heretofore delivered to Lender and Custodian pursuant to
Section 2.03(d) above.
(g) If either Borrower shall deliver a request for a borrowing
pursuant to Section 2.03(d) hereof and all conditions precedent set forth in
Sections 2.03(a), 2.03(b), 2.03(c), 5.01 and 5.02 have been met, and provided no
Default or Event of Default shall have occurred and be continuing, Lender shall
make a Loan to such Borrower on the requested Funding Date, in the amount so
requested and approved by Lender.
(h) Subject to the delivery by Custodian to such Borrower and
Lender of a Trust Receipt with a Collateral Schedule in respect to all
Collateral pledged to Lender on such Funding Date by no later then 3:00 p.m. on
such date, and subject further to the provisions of Section 5 hereof, such
borrowing will then be made available to such Borrower by Lender transferring,
via wire transfer, to the following account of Borrowers: Bank of New York, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Account No. 630-0000000 for the benefit of
Capital Trust, ABA# 021-000018, Attn: Xxxxxx Xxxx ((000) 000-0000) the aggregate
amount of such borrowing in funds immediately available to CT. Lender may
consider on a case-by-case basis in its sole, absolute discretion alternative
funding arrangements requested by either Borrower.
(i) From time to time, the applicable Borrower shall forward to
the Custodian additional original documents or additional documents evidencing
any (i) assumption, modification, consolidation or extension of a Collateral
Loan, or (iii) any amendment to the operative documents with respect to an
Equity Interest, in each case approved by the Lender in accordance with the
terms of this Loan Agreement and upon receipt of any such other documents, the
Custodian shall hold such other documents as the Lender shall request from time
to time.
(j) With respect to any documents which have been delivered or
are being delivered to recording offices for recording and have not been
returned to the applicable Borrower in time to permit their delivery hereunder
at the time required, in lieu of delivering such original documents, such
Borrower shall deliver to Lender a true copy thereof with an Officer's
Certificate certifying that such copy is a true, correct and complete copy of
the original, which has been transmitted for recordation. Such Borrower shall
deliver such original documents to the Custodian promptly when they are
received.
2.04 Mandatory Prepayments or Pledge.
(a) Lender may determine and re-determine the Borrowing Base for
each Borrower on any Business Day and on as many Business Days as it may elect.
If at any time (i) the aggregate outstanding principal amount of Loans to either
Borrower exceeds the Borrowing Base for such Borrower (a "Borrowing Base
Deficiency"), as determined by Lender in its sole discretion and notified to
such Borrower on any Business Day, or (ii) either Borrower shall have received a
prepayment of the principal of any loan or preferred equity interest comprising
a portion of the Collateral (including, without
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limitation, the payment of casualty or condemnation proceeds), such Borrower
shall, in the case of (i) above, not later than one (1) Business Day after
receipt of such notice, or in the case of (ii) above, not later than one (1)
Business Day after receipt of such prepayment, either prepay the Loans made to
such Borrower in part or in whole or pledge additional Collateral (which
Collateral shall be in all respects acceptable to Lender) to Lender, such that
after giving effect to such prepayment or pledge the aggregate outstanding
principal amount of the Loans made to such Borrower does not exceed the
Borrowing Base for such Borrower as re-determined by Lender after the addition
of Collateral. So long as no Default or Event of Default has occurred and is
then continuing, all partial repayments shall be applied against the
Asset-Specific Loan Balance relating to the Loan being repaid.
(b) If at any time under any Collateral Document evidencing
Eligible Collateral (x) there is an Event of Default, or event with which the
giving of notice or lapse of time or both would become an Event of Default, or
(y) any representation or warranty made by or on behalf of the relevant
Collateral Obligor becomes false or misleading in any material respect or (z)
the relevant Collateral Obligor fails to perform or observe any material
covenant or other obligation, Lender may, in its sole discretion and without
regard to any determination of the Asset Value of such Eligible Collateral,
notify Borrowers of such occurrence and may require that the Asset-Specific Loan
Balance related to the relevant Eligible Collateral be prepaid in whole or in
part in the determination of Lender. Not later than one (1) Business Day after
the receipt of such notice, the applicable Borrower shall prepay the
Asset-Specific Loan Balance related to such Eligible Collateral. Lender may, in
its sole discretion, determine and re-determine the amount to be prepaid
irrespective of whether or not either (i) any statement of fact contained in any
Officer's Certificate delivered pursuant to Section 5.02(b) or (ii) any
representation of Borrowers set forth in Section 6.13 was true to Borrowers'
actual knowledge.
Section 3. Payments; Computations; Etc.
3.01 Repayment of Loans; Interest.
(a) Borrowers hereby promise to repay in full on the Termination
Date the aggregate outstanding principal amount of the Loans; provided, however,
in the event the Termination Date shall be extended to April 15, 2006 pursuant
to the terms hereof, Borrowers promise to repay such aggregate principal amount
of the Loans outstanding on July 16, 2005 by the payment on the first Business
Day of each calendar month during the Amortization Period beginning with August
1, 2005 and on the Termination Date, as extended (each, an "Installment Date")
of an amount equal to the quotient of (x) the aggregate principal amount of the
Loans outstanding as at July 16, 2005 divided by (y) nine (9) (such schedule of
payments, the "Amortization Schedule"); provided, further, that in the event
that Borrowers shall repay any portion of the outstanding principal in an amount
in excess of the amount then due and payable in accordance with the Amortization
Schedule, the Amortization Schedule shall be recalculated such that Borrowers
shall repay the principal amount of the Loans outstanding on the date of such
repayment (after taking such repayment into account) by the payment on each
Installment Date remaining in the Amortization Period of an amount equal to the
quotient of (x) the aggregate principal amount of the Loans outstanding on the
date of such repayment (after taking such repayment into account) divided by (y)
the number of Installment Dates remaining during the Amortization Period. Any
repayment of the principal of the Loans made by Borrowers to Lender subsequent
to an Installment Date shall be credited at the time of such payment and applied
to the payment due on next succeeding Installment Date.
(b) Borrowers hereby promise to pay to Lender interest on the
unpaid principal amount of each Loan for the period from and including the date
of such Loan to but excluding the date such Loan shall be paid in full, at a
rate per annum equal to the Eurodollar Rate plus the applicable Eurodollar Rate
Spread. Notwithstanding the foregoing, Borrowers hereby promise to pay to
Lender, to the extent permitted by applicable law, interest at the applicable
Post-Default Rate on any principal of any Loan and on any other amount payable
by Borrowers hereunder or under the Note that shall not be paid in full when due
(whether at stated maturity, by acceleration or by mandatory prepayment or
otherwise) for the period from and including the due date thereof to but
excluding the date the same is paid in full. Payment and acceptance of interest
pursuant to this subsection shall not constitute a waiver of any Default and
shall not
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otherwise limit or prejudice any right of Lender hereunder. In no event shall
Lender be entitled to receive any proceeds received from any Collateral Obligor
in connection with the refinancing and/or final distribution to Lender with
respect to any Eligible Collateral to the extent same exceeds the sums provided
to be paid to Lender under Section 7.l6 of this Loan Agreement.
(c) Accrued interest on each Loan shall be payable monthly in
arrears on the first Business Day of each month and for the last month of the
Loan Agreement on the first Business Day of such last month and on the
Termination Date, except that interest payable at the Post-Default Rate shall
accrue daily and shall be payable upon such accrual.
(d) The Loans may be prepaid in whole or in part at any time upon
two (2) Business Days' prior written notice, without any penalty or premium;
provided, however, that any such prepayment shall be accompanied by an amount
representing accrued interest on the principal amount being prepaid and all
other amounts then due under the Loan Documents (including, without limitation,
all amounts due under Section 3 hereof). Each partial prepayment that is
voluntary (as opposed to mandatory under the terms of this Loan Agreement) shall
be in an amount of not less than One Hundred Thousand Dollars ($100,000). So
long as no Default or Event of Default has occurred and is then continuing, each
voluntary prepayment shall be applied to reduce any Asset-Specific Loan Balance
as designated by Borrowers to Lender in writing.
(e) With respect to any item of Collateral, Borrowers shall repay
to Lender an amount equal to the amount of casualty or condemnation proceeds
paid to, or for the benefit of, Borrowers or any underlying obligor in respect
of such item of Collateral to the extent that the applicable Borrower is not
required under the underlying loan documents with such Borrower's obligor to
reserve, escrow, readvance or apply such proceeds for the benefit of such
obligor or the underlying real property. So long as no Default or Event of
Default has occurred and is then continuing, such amounts paid to Lender shall
be applied in reduction of the Asset-Specific Loan Balance relating to such item
of Collateral.
(f) Borrowers hereby promise to pay to Lender a Minimum Usage
Fee, in arrears for the previous calendar quarter, which obligation shall
commence on January 1, 2004 for the October 1, 2003 through December 31, 2003
calendar quarter. Said Minimum Usage Fee shall be paid on January 1, 2004 and on
the first Payment Date in each calendar quarter thereafter through and including
the Termination Date. The last such payment shall be pro-rated, as applicable.
No Minimum Usage Fee shall be payable during the Amortization Period, if any.
3.02 Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by Borrowers under this Loan
Agreement and the Note shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to Lender at the following account
maintained by Lender: Account No. 00000000, for the account of MSMCI, Citibank,
N.A., ABA No. 000000000, Attn: Whole Loan Operations, Mortgage-Backed Securities
Department, Fixed Income Division, not later than 1:00 p.m., New York City time,
on the date on which such payment shall become due (and each such payment made
after such time on such due date shall be deemed to have been made on the next
succeeding Business Day). Borrowers acknowledge that they have no rights of
withdrawal from the foregoing account. Lender shall endeavor to send Borrowers a
detailed xxxx on the date which is two (2) Business Days prior to the date on
which payment is due; provided, however, that the failure of Lender to send, or
of Borrowers to receive, such xxxx shall in no way affect Borrowers' obligation
to pay amounts due under this Loan Agreement.
(b) Except to the extent otherwise expressly provided herein, if
the due date of any payment under this Loan Agreement or the Note would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
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3.03 Computations. Interest on the Loans shall be computed on the
basis of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. Lender shall
determine any rate of interest payable on Loans hereunder, and such
determination shall be conclusive and binding, absent manifest error.
3.04 U.S. Taxes.
(a) Borrowers agree to pay to Lender such additional amounts as
are necessary in order that the net payment of any amount due to Lender
hereunder after deduction for or withholding in respect of any U.S. Tax (as
defined below) imposed with respect to such payment (or in lieu thereof, payment
of such U.S. Tax by Lender), will not be less than the amount stated herein to
be then due and payable; provided that the foregoing obligation to pay such
additional amounts, to the extent attributable to a U.S. Tax, shall not apply:
(i) to any payment to Lender hereunder unless Lender is
entitled to submit a Form W-8BEN (relating to Lender and entitling it to
a complete exemption from withholding on all interest to be received by
it hereunder in respect of the Loans) or Form W-8ECI (relating to all
interest to be received by Lender hereunder in respect of the Loans), or
(ii) to any U.S. Tax imposed solely by reason of the failure by
Lender to comply with applicable certification, information,
documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States
of America of Lender if such compliance is required by statute or
regulation of the United States of America as a precondition to relief
or exemption from such U.S. Tax.
For the purposes of this Section 3.04, (x) "Form W-8BEN" shall mean Form W-8BEN
of the Department of the Treasury of the United States of America, (y) "Form
W-8ECI" shall mean Form W8ECI of the Department of the Treasury of the United
States of America (or in relation to either such Form such successor and related
form as may from time to time be adopted by the relevant taxing authorities of
the United States of America to document a claim to which such Form relates),
and (z) "U.S. Taxes" shall mean any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America, any
political subdivision of the United States of America or any taxing authority
thereof or therein.
(b) Within 30 days after paying any such amount to Lender, and
within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the applicable Borrower
shall deliver to Lender evidence satisfactory to Lender of such deduction,
withholding or payment (as the case may be).
(c) Lender represents and warrants to Borrowers that on the date
hereof Lender is either incorporated under the laws of the United States or a
State thereof or is entitled to submit a Form W-8BEN (relating to Lender and
entitling it to a complete exemption from withholding on all interest to be
received by it hereunder in respect of the Loans) or Form W-8ECI (relating to
all interest to be received by Lender hereunder in respect of the Loans). Lender
shall not assign or sell participation interests in the Loans made or to be made
hereunder to a foreign bank if as a result thereof Lender shall be unable to
make the representations set forth in this Section 3.04(c).
3.05 Booking of Loans. Without limitation of Lender's rights to
sell, assign or transfer a Loan or any interest therein, including any
participation interest therein, at any time and from time to time, Lender may
make, carry or transfer such Loan at, to, or for the account of any of its
branch offices or the office of an Affiliate of Lender; provided, however, that
the representation in Section 3.04(c) shall remain true throughout the term of
such Loan.
3.06 Lender's Funding of Eurodollar Rate Loans. Borrowers hereby
expressly acknowledge and agree that Lender may fund a Loan in any manner it
sees fit, including (i) through the actual purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of
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Eurodollar Rate in an amount equal to the principal amount of such Loan and
having a maturity comparable to the relevant interest period or (ii) through
Lender's entering into or purchase of repurchase agreements, interest rate
agreements, swap agreements or other arrangements in such amounts as Lender
shall determine (and which amounts may or may not, in Lender's sole discretion,
be "match funded" to such Loan). Calculation of all amounts payable to Lender
under this Section 3.06 and under Section 3.07 shall be made as though Lender
had actually funded such Loan through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of Eurodollar
Rate in an amount equal to the amount of such Loan and having a maturity
comparable to the relevant interest period and through the transfer of such
Eurodollar deposit from an off-shore office of Lender to a domestic office of
Lender in the United States of America; provided, however, that Lender may fund
such Loan in any manner it sees fit and the foregoing assumptions shall be
utilized only for purposes of calculating amounts payable under this Section
3.06 and under Section 3.07, if any.
3.07 Funding Costs.
(a) Borrowers shall compensate Lender, upon written request by
Lender (which request shall set forth the basis for requesting such amounts),
for all Funding Costs.
(b) Lender shall deliver to Borrowers a statement setting forth
the amount and basis of determination of any Funding Cost, it being agreed that
such statement and the method of calculation shall be conclusive and binding on
Borrowers, absent manifest error. In addition, in the event Borrowers provide
Lender not less than five (5) Business Days prior written notice of a proposed
voluntary prepayment hereunder, Lender shall deliver to Borrowers a non-binding
good faith estimate of the applicable components and amount of Funding Costs
which would be incurred by Borrowers if Borrowers were to make a voluntary
prepayment hereunder; provided, however, that Borrowers shall remain liable for
all Funding Costs shown on the statement referred to in the first sentence of
this subsection (b), notwithstanding such good faith estimate.
(c) In lieu of prepaying the Loan when and as otherwise required
or permitted by this Loan Agreement, Borrowers may on any Business Day (a
"Deposit Funding Date") instead deposit with Lender an amount equal to the
applicable prepayment, to be held by Lender (the "Prepayment Deposit") until
such date as application of the Prepayment Deposit on account of the Loan would
not cause Lender to suffer Funding Costs (the "Deposit Application Date"). Any
Prepayment Deposit held by Lender shall: (a) constitute additional security for
the Loan, for which the parties shall enter into such security documents (and
account establishment and administration documents) as Lender shall require; (b)
be held by Lender in an interest-bearing account selected and controlled solely
by Lender, interest on which shall be added to principal and applied in the same
manner as principal; (c) at Lender's option, be accompanied by a payment (as
estimated by Lender) equal to the difference between the interest to be earned
on the Prepayment Deposit and the interest that will accrue on a portion of the
Loan equal to the Prepayment Deposit during the period from the Deposit Funding
Date to the Deposit Application Date; (d) with respect to the Collateral,
entitle Borrowers to the same rights and benefits (including the right to
releases, if any) that would have been available to Borrowers if Borrowers had
prepaid the Loan (and designated Asset-Specific Loan Balance(s)) by an amount
equal to the Prepayment Deposit; and (e) be applied on account of the Loan
(principal and interest) on the Deposit Application Date.
3.08 Compensation for Increased Costs. If Lender shall in good
faith determine that any change in any law, treaty or governmental rule,
regulation or order, or in the interpretation, administration or application
thereof, or any determination of a court or governmental authority, or
compliance with any guideline, request or directive issued or made by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(a) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, or
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advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of Lender; or
(b) imposes any other condition on or affecting Lender or its
obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to Lender of
agreeing to make, making or maintaining the Loan hereunder or to reduce any
amount received or receivable by Lender with respect thereto; then, in any such
case, Borrowers shall promptly (but in any event no later than five (5) Business
Days following any notice from Lender of the same) pay to Lender, upon receipt
of the statement referred to in the next sentence, such additional amount or
amounts as may be necessary to compensate Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Lender shall deliver to
Borrowers a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 3.08, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
3.09 Limitation on Types of Loans; Illegality. Anything herein to
the contrary notwithstanding, if:
(a) Lender determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Loans as provided herein; or
(b) Lender determines, which determination shall be conclusive,
that the relevant rate of interest referred to in the definition of "Eurodollar
Base Rate" in Section 1.01 hereof upon the basis of which the rate of interest
for Loans is to be determined is not likely adequate to cover the cost to Lender
of making or maintaining Loans; or
(c) Lender determines, which determination shall be conclusive,
that it is or will be unlawful for Lender to honor its obligation to make or
maintain Loans hereunder using a Eurodollar Rate as a result of compliance by
Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful);
then Lender shall give Borrowers prompt notice thereof and, so long as such
condition remains in effect, Lender shall be under no obligation to make
additional Loans, and Borrowers shall either prepay all such Loans as may be
outstanding or pay interest on such Loans at a rate per annum equal to the
Eurodollar Substitute Rate. In the event Lender exercises its rights under this
Section 3.09, Borrower's obligation under Section 3.01(f) hereof to pay a
Minimum Usage Fee shall terminate for the period of time such condition remains
in effect.
Section 4. Collateral Security.
4.01 Collateral; Security Interest.
(a) Borrowers hereby assign, pledge and grant a security interest
in all of its right, title and interest in, to and under the Collateral
described in Section 4.01(b) below to Lender to secure the repayment of
principal of and interest on all Loans and all other amounts owing to Lender
hereunder, under the Note, under the other Loan Documents and any and all MS
Indebtedness from time to time outstanding (collectively, the "Secured
Obligations"). Borrowers agree to xxxx their computer records to evidence the
interests granted to Lender hereunder.
(b) All of each Borrower's right, title and interest in, to and
under each of the following items of property pledged by either Borrower to
Lender from time to time and whether now owned or hereafter acquired, now
existing or hereafter created and wherever located, is hereinafter individually
and collectively referred to as the "Collateral":
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(i) all Mortgage Loans, Mezzanine Loans, B Notes, Equity
Interests, CMBS and Other Approved Collateral, including, without
limitation, the Existing CT Collateral and the Existing Fund I
Collateral;
(ii) all Collateral Documents, including without
limitation all promissory notes, all securities, any collateral pledged
or otherwise relating to such Collateral, all representations and
warranties made to, or for the benefit of, either Borrower by any
Collateral Obligor, all Servicing Records (as defined in Section
11.14(b) below) and servicing agreements, together with all files,
documents, instruments, surveys, certificates, correspondence,
appraisals, computer programs, computer storage media, accounting
records and other books and records relating thereto, in each case
subject to prior liens and encumbrances permitted by Lender;
(iii) all guaranties and insurance (issued by governmental
agencies or otherwise) and any insurance certificate or other document
evidencing such guaranties or insurance relating to any Collateral and
all claims and payments thereunder;
(iv) all other insurance policies and insurance proceeds
relating to any Collateral or the related Property;
(v) all Interest Rate Protection Agreements;
(vi) the Collection Account and all monies from time to
time on deposit in the Collection Account;
(vii) all "general intangibles", "accounts" and "chattel
paper" as defined in the Uniform Commercial Code relating to or
constituting any and all of the foregoing; and
(viii) any and all replacements, substitutions,
distributions on, or proceeds (including, without limitation,
condemnation proceeds) of, any and all of the foregoing set forth in
items (i) through (vii) of this Section 4.01(b), whether now owned or
hereafter acquired, now existing or hereafter created and wherever
located.
(c) Pursuant to the Custodial Agreement, Custodian shall hold the
Collateral Documents as exclusive bailee and agent for Lender pursuant to terms
of the Custodial Agreement and shall deliver to Lender Trust Receipts each to
the effect that it has reviewed such Collateral Documents in the manner and to
the extent required by the Custodial Agreement and identifying any deficiencies
in such Collateral Documents as so reviewed.
4.02 Further Assurances.
(a) Borrowers shall undertake, with respect to each item of
Collateral pledged hereunder as security for a Loan, any and all actions deemed
necessary by Lender for the granting by either Borrower to Lender of a valid
first priority security interest in such Collateral. Without limiting the
generality of the foregoing, the applicable Borrower shall take such steps as
are necessary for the granting and perfection of a first priority security
interest in Securities and related Collateral.
(b) At any time and from time to time, upon the written request
of Lender, and at the sole expense of Borrowers, Borrowers will promptly and
duly execute and deliver, or will promptly cause to be executed and delivered,
such further instruments and documents and take such further action as Lender
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Loan Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the Liens created hereby. Borrowers also hereby authorize Lender to
file any such financing or continuation statement without the signature of
Borrowers to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Loan Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
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4.03 Changes in Locations, Name, etc. Borrowers shall not (i)
change the location of their chief executive offices/chief places of business
from that specified in Section 6 hereof or (ii) change their respective name,
identity or corporate structure (or the equivalent) or change the location where
they maintain their records with respect to the Collateral unless they shall
have given Lender at least ten (10) days prior written notice thereof and shall
have delivered to Lender all Uniform Commercial Code financing statements and
amendments thereto as Lender shall request and taken all other actions deemed
necessary by Lender to continue its perfected status in the Collateral with the
same or better priority.
4.04 Lender's Appointment as Attorney-in-Fact.
(a) Borrowers hereby irrevocably constitute and appoint Lender
and any officer or agent thereof, with full power of substitution, as their true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Borrowers and in the name of Borrowers or in its own name,
from time to time in Lender's discretion, for the purpose of carrying out the
terms of this Loan Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Loan Agreement, and, without
limiting the generality of the foregoing, Borrowers hereby give Lender the power
and right, on behalf of Borrowers, without assent by, but with notice to,
Borrowers, if an Event of Default shall have occurred and be continuing, to do
the following:
(i) in the name of Borrowers or its own name, or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any mortgage insurance or with respect to any other
Collateral and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate
by Lender for the purpose of collecting any and all such moneys due
under any such mortgage insurance or with respect to any other
Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment under
any Collateral to make payment of any and all moneys due or to become
due thereunder directly to Lender or as Lender shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and
to enforce any other right in respect of any Collateral; (E) to defend
any suit, action or proceeding brought against either Borrower with
respect to any Collateral; (F) to settle, compromise or adjust any suit,
action or proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as Lender may deem
appropriate; and (G) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Lender were the absolute owner thereof
for all purposes, and to do, at Lender's option and Borrowers' expense,
at any time, and from time to time, all acts and things which Lender
deems reasonably necessary to protect, preserve or realize upon the
Collateral and Lender's Liens thereon and to effect the intent of this
Loan Agreement, all as fully and effectively as Borrowers might do.
Borrowers hereby ratify all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the repayment in full of all Secured
Obligations hereunder.
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(b) Borrowers also authorize Lender, at any time and from
time to time, to execute, in connection with any sale provided for in
Section 4.07 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral.
(c) The powers conferred on Lender are solely to protect
Lender's interests in the Collateral and shall not impose any duty upon
Lender to exercise any such powers. Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such
powers, and neither Lender nor any of its officers, directors, or
employees shall be responsible to Borrowers for any act or failure to
act hereunder, except for its own gross negligence or willful
misconduct.
4.05 Performance by Lender of Borrowers' Obligations. If
Borrowers fail to perform or comply with any of their agreements contained in
the Loan Documents and Lender may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of Lender incurred
in connection with such performance or compliance, together with interest
thereon at a rate per annum equal to the Post-Default Rate, shall be payable by
Borrowers to Lender on demand and shall constitute Secured Obligations.
4.06 Proceeds. If an Event of Default shall occur and be
continuing, (a) all proceeds of Collateral received by either Borrower
consisting of cash, checks and other near-cash items shall be held by such
Borrower in trust for Lender, segregated from other funds of such Borrower, and,
within two (2) Business Days of receipt by such Borrower, shall be turned over
to Lender in the exact form received by such Borrower (duly endorsed by such
Borrower to Lender, if required, in order to be negotiated by Lender) and (b)
any and all such proceeds received by Lender (whether from either Borrower or
otherwise) may, in the sole discretion of Lender, be held by Lender as
collateral security for, and/or then or at any time thereafter may be applied by
Lender against, the Secured Obligations (whether matured or unmatured), such
application to be in such order as Lender shall elect. Any balance of such
proceeds remaining after the Secured Obligations shall have been paid in full
and this Loan Agreement shall have been terminated shall be paid over to
Borrowers or to whomsoever may be lawfully entitled to receive the same. For
purposes hereof, proceeds shall include, but not be limited to, all principal
and interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.
4.07 Remedies. If an Event of Default shall occur and be
continuing, Lender may, at its option, enter into one or more Interest Rate
Protection Agreements covering all or a portion of the Collateral Loans pledged
to Lender hereunder, and Borrowers shall be responsible for all damages,
judgment costs and expenses of any kind which may be imposed on, incurred by or
asserted against Lender relating to or arising out of such Interest Rate
Protection Agreements; including without limitation any losses resulting from
such Interest Rate Protection Agreements. If an Event of Default shall occur and
be continuing, Lender may exercise, in addition to all other rights and remedies
granted to it in this Loan Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code. Without limiting
the generality of the foregoing, Lender without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon Borrowers or any other
Person (each and all of which demands, presentments, protests, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels or as an entirety at public
or private sale or sales, at any exchange, broker's board or office of Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in Borrowers, which right or equity is hereby
waived or released. Borrowers further agree, at Lender's request, to assemble
the Collateral and
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make it available to Lender at places which Lender shall reasonably select,
whether at Borrowers' premises or elsewhere. Lender shall apply the net proceeds
of any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred therein
or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of Lender hereunder, including without
limitation reasonable attorneys' fees and disbursements, to the payment in whole
or in part of the Secured Obligations, in such order as Lender may elect, and
only after such application and after the payment by Lender of any other amount
required or permitted by any provision of law, including without limitation
Section 9-608(a)(1)(C) of the Uniform Commercial Code, need Lender account for
the surplus, if any, to Borrowers. To the extent permitted by applicable law,
Borrowers waive all claims, damages and demands they may acquire against Lender
arising out of the exercise by Lender of any of its rights hereunder, other than
those claims, damages and demands arising from the gross negligence or willful
misconduct of Lender. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
Borrowers shall remain liable for any deficiency (plus accrued interest thereon
as contemplated pursuant to Section 3.01(b) hereof) if the proceeds of any sale
or other disposition of the Collateral (net of costs incurred in connection with
such sale or other disposition) are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by Lender to collect
such deficiency.
4.08 Limitation on Duties Regarding Preservation of Collateral.
Lender's duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code or otherwise, shall be to deal with it in the same manner as
Lender deals with similar property for its own account. Neither Lender nor any
of its directors, officers or employees shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of Borrowers or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
4.10 Release of Security Interest. Upon termination of this Loan
Agreement and repayment to Lender of all Secured Obligations and the performance
of all obligations under the Loan Documents, Lender shall release its security
interest in any remaining Collateral.
4.11 Release of Collateral. Provided that no Default or Event of
Default shall exist (other than one that (a) relates solely to the Collateral to
be released and (b) will be cured simultaneously with such release) and that
Borrowers shall have paid all sums then due under the Loan relating thereto,
upon (i) Borrowers' payment in full of the Asset-Specific Loan Balance with
respect to a portion of the Collateral and (ii) receipt by Lender of a written
request from the applicable Borrower for the release of such Collateral, Lender
shall as soon as practicable release (and Lender shall reasonably cooperate with
Borrowers to facilitate reasonable escrow arrangements to facilitate a
simultaneous release of) the related Collateral Documents and the related
Collateral and any liens related thereto to such Borrower or, to the extent
necessary to facilitate future savings of mortgage tax in states that impose
mortgage taxes, assign such liens as such Borrower shall request; provided, that
any such assignments shall be without recourse, representation or warranty of
any kind except that Lender shall represent and warrant that such Collateral has
not been previously assigned by Lender. Lender shall with reasonable promptness,
after a written request from such Borrower, execute any document or instrument
necessary to effectuate such release or assignment.
4.12 Substitution of Eligible Collateral. From time to time until
the Custodian is otherwise notified by the Lender, which notice shall be given
by the Lender only during the existence of an Event of Default, and with the
prior written consent of the Lender, either Borrower may substitute for one or
more items of Eligible Collateral constituting the Collateral with one or more
substitute items of Eligible Collateral having aggregate Collateral Value equal
to or greater than the Collateral Value of the Collateral being substituted for,
or obtain the release of one or more items of Collateral constituting
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Collateral hereunder: provided that, after giving effect to such substitution or
release, the Secured Obligations then outstanding shall not exceed the Borrowing
Base, which determination shall be made solely by the Lender. In connection with
any such requested substitution or release, such Borrower will provide notice to
the Custodian and the Lender no later than 3:00 p.m. New York City time, on the
date of such request, specifying the items of Collateral to be substituted for
or released and the items of substitute Collateral to be pledged hereunder in
substitution thereof, if any, and shall deliver with such notice a Custodial
Identification Certificate and a revised Collateral Schedule indicating any
substitute Collateral.
Section 5. Conditions Precedent.
5.01 Initial Loan. The obligation of Lender to make its initial
Loan hereunder is subject to the satisfaction, immediately prior to or
concurrently with the making of such Loan, of the condition precedent that
Lender shall have received all of the following items and documents, each of
which shall be satisfactory to Lender and its counsel in form and substance:
(a) Loan Documents.
(i) This Loan Agreement, duly completed and executed;
(ii) The Note, duly completed and executed, together with
a fee in an amount equal to 0.95% (95 basis points) multiplied by the
Maximum Credit (provided, that if on or prior to July 16, 2005, Borrower
elects (in lieu of taking the actions prescribed under Section 3.01(a)
hereof and making the payments under the Amortization Schedule) to renew
the revolving loan facility created hereunder for a period of at least
nine (9) calendar months, Borrower shall be credited with an amount
equal to 9/33 of said fee); and
(iii) The Custodial Agreement, duly executed and delivered
by Borrowers and Custodian. In addition, Borrowers shall have taken such
other action as Lender shall have requested in order to perfect the
security interests created pursuant to the Loan Agreement;
(b) Organizational Documents. Certified copies of the certificate
of incorporation and by-laws of CT and the articles of organization and
operating agreement of Fund I and CT-F1 and certificates evidencing all
requisite authority for Borrowers with respect to the execution, delivery and
performance of the Loan Documents and each other document to be delivered by
Borrowers from time to time in connection herewith (and Lender may conclusively
rely on such certified copies and certificates until it receives notice in
writing from either Borrower to the contrary);
(c) Legal Opinion and Certificate as to Substantive
Non-Consolidation. A legal opinion of counsel to Borrowers, substantially in the
form attached hereto as Exhibit C and a certificate of CT on behalf of itself
and Fund I and CT-F1, in form and substance satisfactory to Lender in its sole
discretion as to the separate existence of CT, Fund I and CT-F1 and certain
factual matters which would be determinative of the probability that, in the
event that any of CT, Fund I or CT-F1 were to become a debtor under 11 U.S.C.
Section 101 et seq., a federal bankruptcy court would not disregard such
separate existence and consolidate the assets and liabilities of CT, Fund I or
CT-F1 with any such debtor entity;
(d) Trust Receipt and Collateral Schedule and Exception Report. A
Trust Receipt, substantially in the form of Annex 2 of the Custodial Agreement,
dated the Effective Date, from Custodian, duly completed, with a Collateral
Schedule and Exception Report attached thereto;
(e) Servicing Agreement(s). Any Servicing Agreement, certified as
a true, correct and complete copy of the original, with the letter of the
applicable Servicer (i) consenting to termination of such Servicing Agreement
upon the occurrence of an Event of Default and (ii) agreeing to hold all moneys
received in respect of each item of Collateral for the benefit of Lender,
attached; and
(f) Other Documents. Such other documents as Lender may
reasonably request.
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5.02 Initial and Subsequent Loans. The making of each Loan to
either Borrower (including the initial Loan) on any Business Day is subject to
the delivery of all Collateral Documents pertaining to the Eligible Collateral
to be pledged for such Loan, together with all documents set forth in Section
2.03(b)(i)-(x) and the satisfaction of the following further conditions
precedent, both immediately prior to the making of such Loan and also after
giving effect thereto and to the intended use thereof:
(a) no Event of Default or Default shall have occurred and be
continuing on such date either before or after giving effect to the making of
the advance;
(b) Lender shall have received from the Borrowers and Borrowers
shall have received from each Collateral Obligor such representations and
warranties as Lender shall, in its sole discretion, deem satisfactory. The
representations and warranties made by Borrowers in Section 6 hereof, and
elsewhere in each of the Loan Documents, shall be true and complete on and as of
the date of the making of such Loan in all material respects (in the case of the
representations and warranties in Section 6.10, solely with respect to Eligible
Collateral included in the Borrowing Base) with the same force and effect as if
made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date). Lender shall have received an officer's certificate signed by a
Responsible Officer of CT certifying as to the truth and accuracy of the above,
which certificate shall also include a representation that (i) the applicable
Borrower is in compliance with all governmental licenses and authorizations,
(ii) the applicable Borrower is qualified to do business, validly existing and,
to the extent determinable, in good standing, in all required jurisdictions,
(iii) the facts set forth in the Diligence Materials related to the Collateral
for such Loan are, to the best knowledge of such Borrower after diligent
inquiry, true and correct (or shall fully explain all adverse changes from the
information previously supplied to Lender), (iv) there has been no change in the
organizational and authority documents provided to Lender pursuant to Section
5.01(b) hereof since the date of the most recent certification thereof to
Lender, and (v) there has been no Material Adverse Effect since the date of the
last advance to either Borrower hereunder;
(c) the aggregate outstanding principal amount of the Loans to
each Borrower shall not exceed the Borrowing Base applicable to such Borrower;
(d) subject to Lender's right to perform one or more Due
Diligence Reviews pursuant to Section 11.15 hereof, Lender shall have completed
its due diligence review of the Collateral Documents for each item of Collateral
and such other documents, records, agreements, instruments, mortgaged properties
or information relating to such item of Collateral as Lender in its sole
discretion deems appropriate to review and such review shall be satisfactory to
Lender in its sole discretion;
(e) Lender shall have received from Custodian a Trust Receipt,
together with a Collateral Schedule and Exception Report with Exceptions (as
defined in the Custodial Agreement) as are acceptable to Lender in its sole
discretion, in respect of the Eligible Collateral to be pledged hereunder on
such Business Day;
(f) Lender shall have received from the applicable Borrower a
Lender's Release Letter substantially in the form of Exhibit E hereto (or such
other form acceptable to Lender) covering each item of Collateral to be pledged
to Lender to the extent such Collateral is subject to a lender's lien;
(g) none of the following shall have occurred and/or be
continuing:
(i) an event or events shall have occurred resulting in
the effective absence of a "repo market" or comparable "lending market"
for financing debt obligations secured by mortgage loans or securities
for a period of (or reasonably expected to be) at least 30 consecutive
days or an event or events shall have occurred resulting in Lender not
being able to finance any Loans through the "repo market" or "lending
market" with traditional counterparties at rates which would have been
reasonable prior to the occurrence of such event or events;
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(ii) an event or events shall have occurred resulting in
the effective absence of a "securities market" for securities backed by
mortgage loans for a period of (or reasonably expected to be) at least
30 consecutive days or an event or events shall have occurred resulting
in Lender not being able to sell securities backed by mortgage loans at
prices which would have been reasonable prior to such event or events;
or
(iii) there shall have occurred a material adverse change
in the financial condition of Lender which effects (or can reasonably be
expected to effect) materially and adversely the ability of Lender to
fund its obligations under this Loan Agreement;
(h) Transaction Costs. The applicable Borrower shall have paid
Lender from the proceeds of the advance to be made in connection with such Loan,
all Transaction Costs for which bills have been submitted; provided, however,
that nothing herein shall be deemed to waive each Borrower's obligation, as
applicable, to pay all Transaction Costs whether billed before or after the
making of a Loan pursuant to which such Transaction Costs were incurred;
(i) Other Documents. Lender shall have received such other
documents, and the applicable Borrower shall have taken such other action in
order to perfect the security interests created hereunder, as Lender or its
counsel shall deem necessary; and
(j) No Xxxxxx Xxxxxxx Downgrade. MS & Co.'s corporate bond rating
as calculated by S&P or Xxxxx'x shall not have been lowered or downgraded to a
rating below A- as indicated by S&P or below A3 as indicated by Xxxxx'x.
Each request for a borrowing by either Borrower hereunder shall
constitute a certification by such Borrower that all the conditions set forth in
this Section 5 have been satisfied (both as of the date of such notice, request
or confirmation and as of the date of such borrowing).
5.03 Additional Requirements.
(a) Borrowers and Lender recognize and agree that the categories
of Collateral set forth in the Recital paragraph hereof and defined herein as
categories of assets which may be submitted by either Borrower to Lender for
review by Lender as Eligible Collateral hereunder are general in nature and that
the full scope of such Collateral categories may be unknown. Consequently, the
appropriate requirements are not fully known for (i) the documents to be
provided by Borrowers for underwriting and due diligence review by Lender and
(ii) submittals by Borrowers in order to create and perfect a first priority
security interest in the Collateral. Therefore, Borrowers and Lender agree that,
as a further condition precedent to funding a Loan in respect of any Collateral
hereunder, the applicable Borrower shall have delivered to Lender all
information and documents determined by Lender in good faith to be required for
its underwriting and examination of such Collateral and for the granting and
perfection of a first priority security interest therein.
(b) Without limiting the generality of the foregoing Section
5.03(a), the applicable Borrower shall execute and deliver all documents
necessary for the granting of a first priority security interest in any
Collateral determined by Lender to be Eligible Collateral hereunder, including
without limitation (i) all instruments evidencing indebtedness payable to such
Borrower or pledged to such Borrower as security for a loan, (ii) all
instruments granting or perfecting a security interest for the benefit of such
Borrower or pledged to such Borrower as security for a loan (including, without
limitation, collateral assignments, pledge agreements and UCC financing
statements), (iii) all instruments evidencing an interest in an entity pledged
to such Borrower as security for a loan (including, without limitation,
partnership interests, shares of corporate stock, participation interests, and
other beneficial interests of any kind), (iv) all instruments guaranteeing the
repayment of indebtedness owed to such Borrower, or pledged to such Borrower for
the repayment of a Loan and (v) all agreements among holders of debt or equity
interests providing for a priority among such parties of interests in related
assets forming the basis of an item of Collateral.
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Section 6. Representations and Warranties.
Each Borrower represents and warrants to Lender (as to itself and
the Collateral owned by it only) that throughout the term of this Loan
Agreement:
6.01 Existence. (A) Fund I (a) is a limited liability company
duly organized and validly existing under the laws of the jurisdiction of its
organization, (b) has all requisite power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted, except where the lack
of such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect on its Property, business or financial
condition or prospects; and (c) is qualified to do business, validly existing
and is, to the extent determinable, in good standing, in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary, except where failure so to qualify would not be reasonably likely
(either individually or in the aggregate) to have a Material Adverse Effect on
its Property, business or financial condition or prospects.
(B) CT (a) is a corporation duly organized and validly existing
under the laws of the jurisdiction of its organization, (b) has all requisite
power, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect on its Property, business or financial condition or
prospects; and (c) is qualified to do business, validly existing and is, to the
extent determinable, in good standing, in all other jurisdictions in which the
nature of the business conducted by it makes such qualification necessary,
except where failure so to qualify would not be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect on its
Property, business or financial condition or prospects. CT holds one hundred
percent of the membership interests in CT-F1 and CT-F1 holds one hundred percent
of the membership interests in Fund I.
6.02 Action. Borrowers have all necessary power, authority and
legal right to execute, deliver and perform their respective obligations under
each of the Loan Documents; the execution, delivery and performance by Borrowers
of each of the Loan Documents have been duly authorized by all necessary action
on their respective part; and each Loan Document has been duly and validly
executed and delivered by Borrowers and constitutes a legal, valid and binding
obligation of Borrowers, enforceable against Borrowers in accordance with its
terms.
6.03 Financial Condition. CT agrees to promptly deliver to Lender
all publicly filed financial information when and to the extent that the same is
made available to the general public. CT has heretofore furnished to Lender a
copy of (a) its consolidated balance sheet and the consolidated balance sheets
of its consolidated Subsidiaries (including Fund I) for the fiscal year of CT
ended December 31, 2002 and the related consolidated statements of income and
retained earnings and of cash flows for CT and its consolidated Subsidiaries for
such fiscal year, setting forth in each case in comparative form the figures for
the previous year, (b) its consolidated balance sheet and the consolidated
balance sheets of its consolidated Subsidiaries for such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for CT and its consolidated Subsidiaries for such fiscal year, setting
forth in each case in comparative form the figures for the previous year, with
the opinion thereon of Ernst & Young and Coopers & Xxxxxxx and (c) its
consolidated balance sheet and the consolidated balance sheets of its
consolidated Subsidiaries for the quarterly fiscal period of CT ended March 31,
2003 and the related consolidated statements of income and retained earning and
of cash flows for CT and its consolidated Subsidiaries for such quarterly fiscal
periods, setting forth in each case in comparative form the figures for the
previous year. All such financial statements are complete and correct and fairly
present, in all material respects, the consolidated financial condition of CT
and its Subsidiaries and the consolidated results of their operations as at such
dates and for such fiscal periods, all in accordance with GAAP applied on a
consistent basis. Since March 31, 2003, there has been no material adverse
change in the consolidated business, operations or financial condition of CT and
its consolidated Subsidiaries taken as a whole from that set forth in said
financial statements.
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6.04 Litigation. There are no actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or threatened) or other legal or arbitrable proceedings affecting
Borrowers or any of their respective Subsidiaries or affecting any of the
Property of any of them before any Governmental Authority that (i) questions or
challenges the validity or enforceability of any of the Loan Documents or any
action to be taken in connection with the transactions contemplated hereby, (ii)
makes a claim or claims in an aggregate amount greater than $5,000,000, (iii)
which, individually or in the aggregate, if adversely determined, could
reasonably be likely to have a Material Adverse Effect, or (iv) requires filing
with the Securities and Exchange Commission in accordance with the 1934 Act or
any rules thereunder.
6.05 No Breach. Neither (a) the execution and delivery of the
Loan Documents nor (b) the consummation of the transactions therein contemplated
in compliance with the terms and provisions thereof will conflict with or result
in a breach of the articles of incorporation or by-laws of CT or the articles of
organization or operating agreement of Fund I, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or any Servicing Agreement or other material agreement or instrument
to which either Borrower or any of their respective Subsidiaries is a party or
by which any of them or any of their Property is bound or to which any of them
is subject, or constitute a default under any such material agreement or
instrument or result in the creation or imposition of any Lien (except for the
Liens created pursuant to this Loan Agreement) upon any Property of either
Borrower or any of its respective Subsidiaries pursuant to the terms of any such
agreement or instrument.
6.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any Governmental Authority or any securities
exchange are necessary for the execution, delivery or performance by Borrowers
of the Loan Documents or for the legality, validity or enforceability thereof,
except for filings and recordings in respect of the Liens created pursuant to
this Loan Agreement.
6.07 Use of Proceeds; Margin Regulations. Neither the making of
any Loan hereunder, nor the use of the proceeds thereof, will violate or be
inconsistent with any provisions of Regulation T, U or X. In addition, no part
of the proceeds of any Loan will be used, whether directly, indirectly,
immediately, incidentally or ultimately (i) to purchase or carry any "margin
stock" within the meaning of Regulation U or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or is inconsistent with, such Regulation U or any other regulations of the Board
of Governors of the Federal Reserve System, or (iii) for any purposes prohibited
by any applicable law, order, rule, regulation, ordinance or similar code or
restriction. If requested by Lender, the Borrower, any applicable Affiliate or
Subsidiary of Borrower and the recipient of any portion of the proceeds all or
any portion of any Loan shall furnish to Lender a statement on Federal Reserve
Form G-3 referred to in Regulation U.
6.08 Taxes. Borrowers and their consolidated Subsidiaries have
filed all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by any of them, except for any
such taxes as are being appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
have been provided. The charges, accruals and reserves on the books of Borrowers
and their consolidated Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of Borrowers, adequate.
6.09 Investment Company Act. Neither CT, Fund I, CT-F1 nor any of
their respective Subsidiaries is an "investment company", or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.10 Collateral; Collateral Security.
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(a) Borrowers have not assigned, pledged, or otherwise conveyed
or encumbered any Collateral to any other Person, and immediately prior to the
pledge of such Collateral to Lender, unless otherwise approved by Lender in
writing, CT or Fund I, as the case may be, was the sole owner of such Collateral
and had good and marketable title thereto, free and clear of all Liens, in each
case except for Liens to be released simultaneously with the Liens granted in
favor of Lender hereunder. No Collateral pledged to Lender hereunder was
acquired by either Borrower from an Affiliate of either Borrower unless
otherwise approved by Lender in writing.
(b) The provisions of this Loan Agreement are effective to create
in favor of Lender a valid security interest in all right, title and interest of
Borrowers in, to and under the Collateral.
(c) (i) Upon (x) receipt by Custodian of each Mortgage Note
evidencing a Mortgage Loan, endorsed in blank by a duly authorized officer of
the applicable Borrower, (y) the recordation of the mortgage to Lender securing
such Mortgage Loan and an assignment of such mortgage and (z) the filing of a
UCC financing statement with respect to such assignment of mortgage, Lender
shall have a fully perfected first priority security interest therein, subject
only to prior liens and encumbrances permitted by Lender, in the Mortgage Loan
evidenced thereby and in such Borrower's interest in the related Property.
(ii) Upon (x) receipt by Custodian of each note evidencing a
Mezzanine Loan, endorsed in blank by a duly authorized
officer of the applicable Borrower, (y) the delivery of a
duly executed pledge to such Borrower of direct or
indirect beneficial interests in the underlying property
and the filing of UCC financing statements with respect
thereto, and (z) the delivery by such Borrower of a duly
executed pledge of such pledged interests and the filing
of UCC assignment statements with respect thereto, Lender
shall have a fully perfected first priority security
interest therein, in the Mezzanine Loan evidenced thereby,
and in such Borrower's interest in the related Property.
(iii) Upon (i) the delivery to Lender or its designee of CMBS or
other items of Collateral constituting securities (as
defined in Article 8 of the Uniform Commercial Code) in
accordance with Section 5.02 hereof and (ii) the filing of
UCC financing statements naming Lender as "Secured Party"
and either Borrower as "Debtor", and describing the
Collateral, in the jurisdictions and recording offices for
which security interests may be perfected in the
Collateral by the filing of UCC financing statements, the
security interests granted hereunder in the Collateral
will constitute fully perfected first priority security
interests under the Uniform Commercial Code in all right,
title and interest of such Borrower in, to and under such
Collateral, and, without limiting the foregoing, Lender
will have a "securities entitlement" (as defined in
Article 8 of the Uniform Commercial Code) in the
Collateral referenced in the foregoing clause (i).
(iv) As to all other Collateral (including, but not limited to,
a B Note), upon receipt by Custodian of all documents set
forth in Lender's notice to the applicable Borrower
pursuant to Section 2.03(c) hereof, Lender shall have a
fully perfected first priority security interest therein
and in such Borrower's interest in the related Property.
(d) Upon the filing of UCC financing statements naming Lender as
"Secured Party" and the applicable Borrower as "Debtor", and describing the
Collateral, in the jurisdictions and recording offices for which security
interests may be perfected in the Collateral by the filing of UCC financing
statements, the security interests granted hereunder in the Collateral will
constitute fully perfected first priority security interests under the Uniform
Commercial Code in all right, title and interest of such Borrower in, to and
under such Collateral which can be perfected by filing under the Uniform
Commercial Code.
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6.11 Chief Executive Office. Borrowers' chief executive office on
the Effective Date is located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
6.12 Location of Books and Records. The location where Borrowers
keep their books and records, including all computer tapes and records relating
to the Collateral is CT's chief executive office.
6.13 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of Borrowers to Lender in connection with the negotiation, preparation or
delivery of this Loan Agreement and the other Loan Documents or included herein
or therein or delivered pursuant hereto or thereto, when taken as a whole, (x)
do not contain any untrue statement of material fact and (y) contain all
statements of material fact necessary to make the statements herein or therein,
in light of the circumstances under which they were made, true. All written
information furnished after the date hereof by or on behalf of Borrowers to
Lender in connection with this Loan Agreement and the other Loan Documents and
the transactions contemplated hereby and thereby, will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact known to the actual knowledge of a Responsible
Officer of Borrowers, after due inquiry, that could reasonably be expected to
have a Material Adverse Effect that has not been disclosed herein, in the other
Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to Lender for use in connection
with the transactions contemplated hereby or thereby.
6.14 Tangible Net Worth. On the date hereof, Tangible Net Worth
is not less than the sum of (i) $60,000,000, plus (ii) an amount equal to 75% of
Equity Proceeds.
6.15 ERISA. Each Plan to which either Borrower or its
Subsidiaries make direct contributions, and, to the knowledge of Borrowers, each
other Plan and each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other Federal or
State law. No event or condition has occurred and is continuing as to which
Borrowers would be under an obligation to furnish a report to Lender under
Section 7.01(e) hereof assuming a request therefor has been made by Lender.
Section 7. Covenants of Borrowers. Borrowers covenant and
agree with Lender that, so long as any Loan is outstanding and until payment in
full of all Secured Obligations:
7.01 Financial Statements, Reports, etc. CT shall deliver to
Lender all publicly filed financial information when and to the extent available
to the general public. In addition to such public financial information, CT
shall also provide the following financial information:
(a) the Monthly Statement;
(b) as soon as available and in any event within forty-five (45)
days after the end of each of the first three quarterly fiscal periods of each
fiscal year of CT, a status report with respect to such period which describes
the cumulative sources and uses of the funds for the immediately preceding
calendar quarter on each asset pledged under this Loan Agreement and a detailed
report in a form reasonably satisfactory to Lender, together with the unaudited,
consolidated balance sheets of CT and its consolidated Subsidiaries as at the
end of such period, and the related unaudited, consolidated statements of income
and retained earnings and of cash flows for CT and its consolidated Subsidiaries
for such period and the portion of the fiscal year through the end of such
period, setting forth in each case in comparative form the figures for the
previous year, accompanied by a certificate of a Responsible Officer of CT,
which certificate shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of CT and
its consolidated Subsidiaries in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end audit
adjustments);
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(c) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of CT, the consolidated balance sheets of CT
and its consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for CT and its consolidated Subsidiaries for such year, setting forth in
each case in comparative form the figures for the previous year, accompanied by
an opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of CT and
its consolidated Subsidiaries as at the end of, and for, such fiscal year in
accordance with GAAP, and a certificate of such accountants stating that, in
making the examination necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Default or Event of Default;
(d) within forty-five (45) days following the end of each
quarter, or within ninety (90) days following the end of each fiscal year, as
the case may be, a certificate from a Responsible Officer of CT in form and
substance reasonably satisfactory to Lender that CT and Fund I during such
fiscal period or year have observed or performed all of their respective
covenants and other agreements, and satisfied every condition, contained in this
Loan Agreement and the other Loan Documents to be observed, performed or
satisfied by them, and that there has been no Event of Default and no Material
Adverse Effect;
(e) within fifteen (15) Business Days after Lender's request,
such further information with respect to the operation of any real property, the
Collateral, the financial affairs of either Borrower and any Plan and
Multiemployer Plan as may be requested by Lender, including all business plans
prepared by or for either Borrower; provided, however, that with respect to
information not previously known to, or in the possession of, CT relating to any
Multiemployer Plan, CT shall only be required to provide such information as may
be obtained through good faith efforts;
(f) upon Lender's request, a copy of any financial or other
report either Borrower shall receive from any underlying obligor with respect to
an item of Collateral within fifteen (15) days after such Borrower's receipt
thereof; and
(g) such other reports as Lender shall reasonably require.
7.02 Litigation. Borrowers will promptly, and in any event within
10 days after service of process on any of the following, give to Lender notice
of all litigation, actions suits, arbitrations, investigations (including,
without limitation, any of the foregoing which are pending or threatened) or
other legal or arbitrable proceedings affecting either Borrower or any of their
respective Subsidiaries or affecting any of the Property of any of them before
any Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Loan Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim or
claims in an aggregate amount greater than $1,000,000, or (iii) which,
individually or in the aggregate, if adversely determined could reasonably be
likely to have a Material Adverse Effect.
7.03 Existence, etc. Each Borrower will:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that nothing in
this Section 7.03(a) shall prohibit any transaction expressly permitted under
Section 7.04 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect on its Property, business or financial condition, or
prospects;
(c) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;
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(d) not move its chief executive office from the address referred
to in Section 6.11 unless it shall have provided Lender 10 days' prior written
notice of such change;
(e) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained; and
(f) permit representatives of Lender, during normal business
hours, to examine, copy and make extracts from its books and records, to inspect
any of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by Lender.
7.04 Prohibition of Fundamental Changes. Neither Borrower shall
enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution) or sell all or substantially all of its assets; provided, that
either Borrower may enter into a merger or consolidation if (a) the surviving or
resulting entity shall be a corporation or partnership organized under the laws
of the United States or any state thereof; (b) such entity shall expressly
assume by written agreement, in form and substance satisfactory to Lender in
Lender's sole discretion, the performance of all of such Borrower's duties and
obligations under this Loan Agreement, the Note and the Loan Documents; and (c)
such entity shall be at least as creditworthy as the affected Borrower, as
determined by Lender in Lender's sole and absolute discretion; and, provided,
further, that if after giving effect thereto, no Default would exist hereunder.
Notwithstanding the foregoing, neither Borrower shall enter into or be subject
to any transaction, and no direct or indirect change in the ownership structure
of either Borrower shall occur (whether or not within such Borrower's control),
if as a result thereof: (a) either Xxxx X. Xxxxx and Xxxxxx Xxxx would no longer
retain his respective present or comparable or more senior offices (President
and Chief Executive Officer; and Chairman of the Board, respectively) and
directorships in CT, or (b) in Lender's judgment, such individuals would no
longer collectively retain effective control of Borrowers' business and
operations. Anything in this Agreement to the contrary notwithstanding, one
hundred percent of the legal and beneficial membership interests in Fund I shall
at all times be owned by CT-F1, and one hundred percent of the legal and
beneficial membership interests in CT-F1 shall at all times be owned by CT.
7.05 Borrowing Base Deficiency. If at any time there exists a
Borrowing Base Deficiency, Borrowers shall cure same in accordance with Section
2.04 hereof.
7.06 Notices. CT, on behalf of Borrowers, shall give notice to
Lender:
(a) promptly upon receipt by either Borrower of notice or
knowledge of the occurrence of any Default or Event of Default;
(b) with respect to any Collateral pledged to Lender hereunder,
immediately upon receipt by either Borrower of any principal payment (in full or
partial) or payment in respect of an Equity Interest;
(c) with respect to any Collateral pledged to Lender hereunder,
immediately upon receipt by either Borrower of notice or knowledge that the
underlying Property has been damaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty, or otherwise damaged so
as to affect adversely the Asset Value of such pledged Collateral;
(d) promptly upon receipt of notice or knowledge by either
Borrower of (i) any default related to any Collateral unless otherwise
specifically approved by Lender in writing, (ii) any Lien or security interest
(other than security interests created hereby or by the other Loan Documents)
on, or claim asserted against, any of the Collateral, (iii) any event or change
in circumstances has or could reasonably be expected to have an adverse affect
on the Collateral Value of the Collateral for a Loan or (iv) any event or change
in circumstances which could reasonably be expected to have a Material Adverse
Effect;
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(e) with respect to any item of Collateral pledged to Lender
hereunder, promptly upon either Borrower entering into a modification of any
documents pertaining to such item of Collateral which would have a material
adverse effect on such item of Collateral; and
(f) with respect to any Collateral pledged to Lender hereunder,
immediately upon the acquisition or receipt by either Borrower or any Affiliate
of such Borrower of any interest of any kind in respect of such Collateral which
interest has not been pledged to Lender as Collateral under this Loan Agreement.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of CT setting forth details of the occurrence
referred to therein and stating what action such Borrower has taken or proposes
to take with respect thereto.
7.07 Reports. CT shall provide Lender with a quarterly report,
which report shall include, among other items, a summary of each Borrower's
delinquency and loss experience with respect to any Collateral serviced by such
Borrower, any Servicer or any designee of either, plus any such additional
reports as Lender may reasonably request with respect to either Borrower's or
any Servicer's servicing portfolio or pending originations of Collateral.
7.08 Transactions with Affiliates. Neither Borrower will, except
as approved by Lender in writing, enter into any transaction in any manner
relating to any item of Collateral hereunder, including without limitation any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate; provided, however, that Lender may consider for approval any
such transaction which is (a) otherwise permitted under this Loan Agreement, (b)
in the ordinary course of such Borrower's business and (c) upon fair and
reasonable terms no less favorable to such Borrower than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate, or
make a payment under such transactions that is not otherwise permitted by this
Section 7.08 to any Affiliate. Except as otherwise provided in this Section
7.08, in no event shall either Borrower pledge to Lender hereunder any items of
Collateral acquired by such Borrower from an Affiliate of such Borrower.
7.9 Foreclosure or Other Remediation by Borrowers. Either
Borrower may propose, and Lender will consider but shall be under no obligation
to approve, strategies for the foreclosure or other realization upon the
security for underlying loans held by such Borrower relating to items of
Collateral hereunder.
7.10 Limitation on Liens. Borrowers will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien,
security interest or claim on or to the Collateral, other than the security
interests created, or otherwise specifically permitted in writing by Lender
under this Loan Agreement, and Borrowers will defend the right, title and
interest of Lender in and to any of the Collateral against the claims and
demands of all persons whomsoever. Either Borrower may request from time to
time, subject to Lender's approval in Lender's sole determination, to sell
participation interests in its interests in items of Collateral, the sale of
which participation interests shall be arm's length transactions and subject to
such terms and conditions as Lender in its sole discretion shall require.
7.11 Limitation on Distributions. After the occurrence and during
the continuation of any Event of Default, Borrowers shall not make any payment
on account of, or set apart assets for, a sinking or other analogous fund for
the purchase, redemption, defeasance, retirement or other acquisition of any
equity or partnership interest of either Borrower, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of either Borrower.
7.12 Maintenance of Tangible Net Worth. CT shall not permit
Tangible Net Worth at any time to be less than the sum of (i) $60,000,000 plus
(ii) an amount equal to 75% of Equity Proceeds.
7.13 Maintenance of Ratio of Earnings Before Interest, Taxes,
Depreciation and Amortization to Interest and Preferred Dividends. CT shall not
permit the ratio of (a) earnings before
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interest, taxes, depreciation and amortization (excluding dividends) of CT and
its consolidated Subsidiaries to (b) the sum of (i) interest expense and (ii)
preferred dividends of CT and its consolidated Subsidiaries, to be less than
1.20:1.
7.14 Maintenance of Ratio of Total Indebtedness to Tangible Net
Worth. CT shall not permit the ratio of (a) Total Indebtedness to (b) Tangible
Net Worth at any time to be greater than 5:1. Lender may consider waiving the
foregoing requirement under certain circumstances if requested by CT; however,
Lender shall be under no obligation to do so.
7.15 Servicer; Servicing Tape. CT shall provide to Lender on the
fifteenth (15th) calendar day of each month, or if such day is not a Business
Day then on the first Business Day immediately following such day, a computer
readable file containing servicing information, including without limitation
those fields specified by Lender from time to time, on a loan-by-loan basis and
in the aggregate, with respect to the Mortgage Loans, Mezzanine Loans, B Notes
and Equity Interests serviced hereunder by either Borrower or any Servicer.
Borrowers shall not cause any Collateral to be serviced by any servicer other
than a servicer expressly approved in writing by Lender.
7.16 Remittance of Prepayments. CT shall remit, with sufficient
detail to enable Lender to appropriately identify the Loan, or Loans, to which
any amount remitted applies, to Lender on each Business Day all principal
prepayments that either Borrower has received during the previous Business Day
in an amount equal to the sum of the Asset-Specific Loan Balances being prepaid,
together with all interest due thereon through the date of such remittance, any
and all charges due with respect to such Loans and any and all costs and
expenses incurred by Lender (as provided in this Loan Agreement) in connection
with such Loans and the prepayment thereof.
Section 8. Events of Default. Each of the following events
shall constitute an event of default (an "Event of Default") hereunder:
(a) either Borrower shall default in the payment of any principal
of or interest on any Loan when due (whether at stated maturity, upon
acceleration or at mandatory or optional prepayment); or
(b) either Borrower shall default in the payment of any principal
of or interest on any MS Indebtedness when due (whether at stated maturity, upon
acceleration or at mandatory or optional prepayment); or
(c) either Borrower shall default in the payment of any other
amount payable by it hereunder or under any other Loan Document after
notification by Lender of such default, and such default shall have continued
unremedied for seven (7) Business Days; or
(d) any representation, warranty or certification made or deemed
made herein, or in any other Loan Document by either Borrower or any certificate
furnished to Lender pursuant to the provisions hereof or thereof shall prove to
have been false or misleading in any material respect as of the time made or
furnished (other than the representations and warranties set forth in Section 6
hereof which shall be considered solely for the purpose of Section 2.04(b)
hereof; unless such Borrower shall have made any such representations and
warranties with knowledge that they were materially false or misleading at the
time made); or
(e) either Borrower shall fail to comply with the requirements of
Section 7.03(a), Section 7.04, Section 7.05, Section 7.06, or Sections 7.08
through 7.16 hereof; or either Borrower shall otherwise fail to comply with the
requirements of Section 7.03 hereof and such default shall continue unremedied
for a period of ten (10) Business Days; or either Borrower shall fail to observe
or perform any other covenant or agreement contained in this Loan Agreement or
any other Loan Document and such failure to observe or perform shall continue
unremedied for a period of ten (10) Business Days; or
(f) a final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate shall be rendered against either Borrower
or any of its Subsidiaries by one or more courts,
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administrative tribunals or other bodies having jurisdiction and the same shall
not be satisfied, discharged (or provision shall not be made for such discharge)
or bonded, or a stay of execution thereof shall not be procured, within thirty
(30) days from the date of entry thereof, and such Borrower or any such
Subsidiary shall not, within said period of thirty (30) days, or such longer
period during which execution of the same shall have been stayed or bonded,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(g) either Borrower shall admit in writing its inability to pay
its debts as such debts become due; or
(h) either Borrower or any of its Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator or the like of itself or of
all or a substantial part of its property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy Code or
(vi) take any corporate or other action for the purpose of effecting any of the
foregoing; or
(i) a proceeding or case shall be commenced, without the
application or consent of either Borrower or any of its Subsidiaries, in any
court of competent jurisdiction, seeking (i) such reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of either Borrower or any
such Subsidiary or of all or any substantial part of its property, or (iii)
similar relief in respect of either Borrower or any such Subsidiary under any
law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of thirty (30) or more days; or an order
for relief against either Borrower or any such Subsidiary shall be entered in an
involuntary case under the Bankruptcy Code; or
(j) the Custodial Agreement or any Loan Document shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by either Borrower; or
(k) Either Borrower shall grant, or suffer to exist, any Lien on
any Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral in
favor of Lender or shall be Liens in favor of any Person other than Lender; or
(l) Either Borrower or any of either Borrower's Subsidiaries
shall be in default under any note, indenture, loan agreement, guaranty, swap
agreement or any other contract to which it is a party (other than MS
Indebtedness), which default (i) involves the failure to pay a matured
obligation, or (ii) permits the acceleration of the maturity of obligations by
any other party to or beneficiary of such note, indenture, loan agreement,
guaranty, swap agreement or other contract, in any such case in which the amount
of such obligation or obligations, in the aggregate, exceed $10,000,000;
(m) any materially adverse change in the Property, business,
financial condition or prospects of either Borrower or any of its Subsidiaries
shall occur, in each case as determined by Lender in its sole discretion, or any
other condition shall exist which, in Lender's sole discretion, constitutes a
material impairment of either Borrower's ability to perform its obligations
under this Loan Agreement, the Note or any other Loan Document;
(n) MS & Co.'s corporate bond rating shall have been lowered or
downgraded to a rating below A- by S&P or A3 by Xxxxx'x and Borrowers shall have
failed to repay all amounts owing to
-39-
Lender under this Agreement, the Note and the other Loan Documents within 90
days following such downgrade; or
(o) the matters set forth in the certificates delivered by
Borrowers and CT-F1 pursuant to paragraph 5.01(c) shall at any time cease to be
true.
Section 9. Remedies Upon Default.
(a) Upon the occurrence of one or more Events of Default other
than those referred to in Section 8(g) or (h), Lender may immediately declare
the principal amount of the Loans then outstanding under the Note to be
immediately due and payable, together with all interest thereon and fees and
expenses accruing under this Loan Agreement. Upon the occurrence of an Event of
Default referred to in Sections 8(g) or (h), such amounts shall immediately and
automatically become due and payable without any further action by any Person.
Upon such declaration or such automatic acceleration, the balance then
outstanding on the Note shall become immediately due and payable, without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrowers.
(b) Upon the occurrence of one or more Events of Default, Lender
shall have the right to obtain physical possession of the Servicing Records and
all other files of Borrowers relating to the Collateral and all documents
relating to the Collateral which are then or may thereafter come in to the
possession of either Borrower or any third party acting for either Borrower and
Borrowers shall deliver to Lender such assignments as Lender shall request.
Lender shall be entitled to specific performance of all agreements of Borrowers
contained in this Loan Agreement.
(c) Upon the occurrence of an Event of Default, without limiting
any other rights or remedies of Lender, Lender shall have the right to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by or for account of Lender or Lender's Affiliates to
any indebtedness at any time owing to Lender to the credit or for the account of
Borrowers against any and all of the Indebtedness of Borrowers, irrespective of
whether Lender shall have made any demand under this Loan Agreement, the Note,
any other Security Document or any other document executed in connection with
any other MS Indebtedness.
Section 10. No Duty of Lender. The powers conferred on
Lender hereunder are solely to protect Lender's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. Lender shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to Borrowers for any act or failure to
act hereunder, except for its or their own gross negligence or willful
misconduct.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
11.02 Notices. Except as otherwise expressly permitted by this
Loan Agreement, all notices, requests and other communications provided for
herein and under the Custodial Agreement (including without limitation any
modifications of, or waivers, requests or consents under, this Loan Agreement)
shall be given or made in writing (including without limitation by telex or
telecopy) delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof or thereof; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. Except as otherwise provided in this Loan Agreement
and except for notices given under Section 2 (which shall be effective only on
receipt), all such communications shall be
-40-
deemed to have been duly given when transmitted by telex or telecopy or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
11.03 Indemnification and Expenses. (a) Borrowers agree to hold
Lender, and its Affiliates and their officers, directors, employees, agents and
advisors (each an "Indemnified Party") harmless from and indemnify any
Indemnified Party against all liabilities, losses, damages, judgments, costs and
expenses of any kind which may be imposed on, incurred by or asserted against
such Indemnified Party (collectively, the "Costs") relating to or arising out of
this Loan Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Loan Agreement, the Note,
any other Loan Document or any transaction contemplated hereby or thereby, that,
in each case, results from anything other than any Indemnified Party's gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Borrowers agree to hold any Indemnified Party harmless from and
indemnify such Indemnified Party against all Costs with respect to all
Collateral Loans and Equity Interests relating to or arising out of any
violation or alleged violation of any environmental law, rule or regulation or
any consumer credit laws, including without limitation the Truth in Lending Act
and/or the Real Estate Settlement Procedures Act, that, in each case, results
from anything other than such Indemnified Party's gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Collateral for any sum owing thereunder, or to enforce any
provisions of any Collateral Documents, Borrowers will save, indemnify and hold
such Indemnified Party harmless from and against all expense, loss or damage
suffered by reason of any defense, set-off, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by either Borrower of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such account debtor or obligor or its successors from either
Borrower. Borrowers also agree to reimburse an Indemnified Party as and when
billed by such Indemnified Party for all such Indemnified Party's costs and
expenses incurred in connection with the enforcement or the preservation of such
Indemnified Party's rights under this Loan Agreement, the Note, any other Loan
Document or any transaction contemplated hereby or thereby, including without
limitation the reasonable fees and disbursements of its counsel. Borrowers
hereby acknowledge that, notwithstanding the fact that the Note is secured by
the Collateral, the obligation of Borrowers under the Note is a recourse
obligation of the Borrowers.
(b) Borrowers agree to pay as and when billed by Lender all of
the out-of-pocket costs and expenses incurred by Lender in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Loan Agreement, the Note, any other Loan Document or any
other documents prepared in connection herewith or therewith. Borrowers agree to
pay as and when billed by Lender all of the out-of-pocket costs and expenses
incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation (i)
all the reasonable fees, disbursements and expenses of counsel to Lender and
(ii) all the due diligence, inspection, testing and review costs and expenses
incurred by Lender with respect to Collateral under this Loan Agreement,
including, but not limited to, those costs and expenses incurred by Lender
pursuant to Sections 11.03(a), 11.14 and 11.15 hereof.
11.04 Amendments. Except as otherwise expressly provided in this
Loan Agreement, any provision of this Loan Agreement may be modified or
supplemented only by an instrument in writing signed by Borrowers and Lender and
any provision of this Loan Agreement may be waived by Lender.
11.05 Successors and Assigns. This Loan Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Survival. The obligations of Borrowers under Sections 3.03
and 11.03 hereof shall survive the repayment of the Loans and the termination of
this Loan Agreement. In addition, each representation and warranty made or
deemed to be made by a request for a borrowing, herein or pursuant hereto shall
survive the making of such representation and warranty, and Lender shall not be
deemed to have waived, by reason of making any Loan, any Default that may arise
because any such representation
-41-
or warranty shall have proved to be false or misleading, notwithstanding that
Lender may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time such Loan was
made.
11.07 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this Loan
Agreement.
11.08 Counterparts. This Loan Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Loan Agreement
by signing any such counterpart.
11.09 Loan Agreement Constitutes Security Agreement; Governing
Law. This Loan Agreement shall be governed by New York law without reference to
choice of law doctrine, and shall constitute a security agreement within the
meaning of the Uniform Commercial Code.
11.10 SUBMISSION TO JURISDICTION; WAIVERS. EACH BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING
WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH LENDER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
11.11 WAIVER OF JURY TRIAL. EACH BORROWER AND LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
-42-
11.12 Acknowledgments. Borrowers hereby acknowledge that:
(a) they have been advised by counsel in the negotiation,
execution and delivery of this Loan Agreement, the Note and the other Loan
Documents;
(b) Lender has no fiduciary relationship to Borrowers, and the
relationship between Borrowers and Lender is solely that of debtor and creditor;
and
(c) no joint venture exists between Lender and Borrowers.
11.13 Hypothecation or Pledge of Loans. Lender shall have free
and unrestricted use of all Collateral and nothing in this Loan Agreement shall
preclude Lender from engaging in repurchase transactions with the Collateral or
otherwise pledging, repledging, transferring, hypothecating, or rehypothecating
the Collateral or pledging or otherwise transferring its rights to payment
hereunder in respect of any Loan made hereunder; provided, that no action by
Lender referred to in this sentence shall confer on any Person other than Lender
any right against Borrowers to require any prepayment under Section 2.04 hereof
or any right to enforce against Borrowers any other provision of this Loan
Agreement, but may grant to any Person the right to require Lender to enforce
any such provisions. Nothing contained in this Loan Agreement shall obligate
Lender to segregate any Collateral delivered to Lender by Borrowers.
11.14 Servicing.
(a) Borrowers covenant to maintain or cause the servicing of the
Collateral to be maintained with respect to each type of Collateral pledged to
Lender hereunder in conformity with accepted and prudent servicing practices in
the industry for such same type of Collateral and in a manner at least equal in
quality to the servicing Borrowers provide for assets similar to such Collateral
which it owns. In the event that the preceding language is interpreted as
constituting one or more servicing contracts, each such servicing contract shall
terminate automatically upon the earliest of (i) an Event of Default, (ii) the
date on which all the Secured Obligations have been paid in full or (iii) the
transfer of servicing approved by Borrowers and Lender, Lender's consent to
which shall not be unreasonably withheld. Midland Loan Services, Inc.
("Midland")shall be the initial servicer.
(b) If the Collateral, or any portion thereof, is serviced by
either Borrower, (i) Borrowers agree that Lender is the collateral assignee of
all servicing records, including but not limited to any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of
computer tapes, proof of insurance coverage, insurance policies, appraisals,
other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of such Collateral (the "Servicing
Records"), and (ii) Borrowers grant Lender a security interest in all servicing
fees and rights relating to such Collateral and all Servicing Records to secure
the obligation of either Borrower or its designee to service in conformity with
this Section and any other obligation of Borrowers to Lender. Borrowers covenant
to safeguard such Servicing Records and to deliver them promptly to Lender or
its designee (including Custodian) at Lender's request.
(c) If the Collateral, or any portion thereof, is serviced by a
third party servicer (such third party servicer, the "Servicer"), Borrowers (i)
shall provide a copy of the servicing agreement to Lender, which shall be in
form and substance acceptable to Lender (the "Servicing Agreement"); and (ii)
hereby irrevocably assign to Lender and Lender's successors and assigns all
right, title, interest of Borrowers in, to and under, and the benefits of, any
Servicing Agreement with respect to such Collateral. Any successor to the
Servicer shall be approved in writing by Lender prior to such successor's
assumption of servicing obligations with respect to such Collateral.
(d) Each Borrower shall provide to Lender a letter from the
applicable Borrower (if such Borrower is the Servicer) or the Servicer, as the
case may be, to the effect that upon the occurrence of an Event of Default,
Lender may terminate any Servicing Agreement and transfer servicing to its
designee,
-43-
at no cost or expense to Lender, it being agreed that Borrowers will pay any and
all fees required to terminate the Servicing Agreement and to effectuate the
transfer of servicing to the designee of Lender.
(e) After the Funding Date, until the pledge of any Collateral is
relinquished by Custodian, Borrowers will have no right to modify or alter the
terms of any of the documents pertaining to such Collateral and Borrowers will
have no obligation or right to repossess such Collateral or substitute other
Collateral, except as provided in the Custodial Agreement; provided, however,
that so long as no Default or Event of Default has occurred and is continuing,
Borrowers may enter into such modifications of the terms of such documents as do
not, as to any individual item of Collateral, (i) result in a negative monetary
effect or (ii) constitute a material adverse effect.
(f) In the event either Borrower or its Affiliate is servicing
any Collateral, such Borrower shall permit Lender to inspect such Borrower's or
its Affiliate's servicing facilities, as the case may be, for the purpose of
satisfying Lender that such Borrower or its Affiliate, as the case may be, has
the ability to service such Collateral as provided in this Loan Agreement.
(g) Borrowers shall cause the Servicer to provide a copy of each
report and notice sent to either Borrower to be sent to Lender concurrently
therewith.
11.15 Periodic Due Diligence Review. Borrowers acknowledge that
Lender has the right to perform continuing due diligence reviews with respect to
the Collateral, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or determining and re-determining
the Borrowing Base under Section 2.04(a) hereof, or otherwise, and Borrowers
agree that Lender, at its option, has the right at any time to conduct a partial
or complete due diligence review on any or all of the Collateral securing the
Loans, including, without limitation, ordering new credit reports and Appraisals
on the applicable Collateral and otherwise regenerating the information used to
originate such Eligible Collateral. Upon reasonable (but no less than one (1)
Business Day) prior notice to Borrowers, Lender or its authorized
representatives will be permitted during normal business hours to examine,
inspect, and make copies and extracts of, the Collateral Files and any and all
documents, records, agreements, instruments or information relating to such
Collateral in the possession or under the control of either Borrower and/or
Custodian. Borrowers also shall make available to Lender a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Collateral Files and the Collateral. Borrowers agree to cooperate
with Lender and any third party underwriter designated by Lender in connection
with such underwriting, including, but not limited to, providing Lender and any
third party underwriter with access to any and all documents, records,
agreements, instruments or information relating to such Collateral in the
possession, or under the control, of either Borrower. Borrowers further agree
that Borrowers shall reimburse Lender for any and all out-of-pocket costs and
expenses incurred by Lender in connection with Lender's activities pursuant to
this Section 11.15.
11.16 Intent. The parties recognize that each Loan is a
"securities contract" as that term is defined in Section 741 of Title 11 of the
United States Code, as amended.
11.17 Change of Borrowers' States of Formation. If either
Borrower shall change the State under whose laws such Borrower shall be
organized, such Borrower shall promptly provide Lender with a copy of its new
articles of organization, articles of incorporation or similar document,
certified by the Secretary of State or other appropriate official of such
Borrower's new state of formation, if applicable, together with such opinions of
counsel regarding such change as Lender, in its sole discretion, shall require.
11.18 Set-Off. In addition to any rights and remedies of Lender
provided by this Loan Agreement and by law, Lender shall have the right, without
prior notice to Borrowers, any such notice being expressly waived by Borrowers
to the extent permitted by applicable law, upon any amount becoming due and
payable by Borrowers hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all deposits (general or
-44-
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by Lender or any Affiliate thereof to or for the credit or the account of
Borrowers. Lender agrees promptly to notify Borrowers after any such set-off and
application made by Lender; provided that the failure to give such notice shall
not affect the validity of such set-off and application.
11.19 Special Purpose Entity. Fund I shall: (a) not own any
assets nor engage in any business other than owning the assets and engaging in
the transactions permitted by its organizational documents; (b) except for a
$150,000,000 term redeemable securities contract between Fund I and Deutsche
Bank, AG New York Branch, other mortgage warehousing and/or mortgage/mezzanine
warehousing credit facilities similar to the instant facility, purchase money
financial credit facilities and other debt incurred in the ordinary course of
business (in each case unless (i) in contravention of any representation or
warranty set forth in Sections 6.05, 6.10 or 6.13 hereof or any covenant set
forth in Sections 7.08 or 7.10 through 7.14 hereof, or (ii) resulting in a
default under Sections 8(e), 8(k), 8(l), 8(m) or 8(o) hereof)), not incur any
indebtedness or obligation, secured or unsecured, direct or indirect, absolute
or contingent (including any guarantee thereof), other than pursuant hereto; (c)
not acquire obligations or securities of any of its Affiliates; (d) pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) only from its own assets; (e) comply with the provisions of its
organizational documents; (f) do all things necessary to observe organizational
formalities and to preserve its existence, and will not materially amend, modify
or otherwise change its organizational documents, or suffer same to be amended,
modified or otherwise changed without the prior written consent of Lender which
shall not be unreasonably withheld; (g) maintain all of its books, records,
financial statements and bank accounts separate from those of its Affiliates;
(h) be, and at all times will hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any of its Affiliates),
shall correct any known misunderstanding regarding its status as a separate
entity, shall conduct business in its own name, shall not identify itself or any
of its Affiliates as a division or part of the other and shall maintain and
utilize separate stationary, invoices and checks; (i) 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; (j) not engage
in or suffer any change of ownership, dissolution, winding up, liquidation,
consolidation or merger in whole or in part; (k) not commingle its funds or
other assets with those of any of its Affiliates or any other Person; (l)
maintain its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any of its
Affiliates or any other Person; and (m) cause each of its direct and indirect
owners to agree not to (i) file or consent to the filing of any bankruptcy,
insolvency or reorganization case or proceeding with respect to either Borrower;
institute any proceedings under any applicable insolvency law or otherwise seek
any relief under any laws relating to the relief from debts or the protection of
debtors generally with respect to either Borrower, (ii) seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequester, custodian
or any similar official for either Borrower or a substantial portion of its
properties, or (iii) make any assignment for the benefit of either Borrower's
creditors.
11.20 Joint and Several Liability. The obligations of the
Borrowers under this Loan Agreement and the Loan Documents shall be joint and
several.
11.21 Xxxxxx Xxxxxxx Downgrade. In the event (a) MS & Co.'s
corporate bond rating as calculated by S&P or Xxxxx'x shall have been lowered or
downgraded to a rating below A- as indicated by S&P or below A3 as indicated by
Xxxxx'x and (b) Borrowers shall have repaid all amounts owing to Lender under
this Agreement within ninety (90) days following such downgrade, Borrowers'
obligation under Section 3.01(f) hereof to pay a Minimum Usage Fee shall
terminate effective as of the date of such repayment in full, and Lender shall
refund to Borrowers a portion of the fee paid to Lender pursuant to Section
5.01(a)(ii) hereof in an amount equal to the product of (1) such fee multiplied
by (2) the quotient of (x) the number of days remaining from the date of such
repayment in full to, and including, the Termination Date divided by (y) the
number of days from and after the date hereof to, and including, the Termination
Date.
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SIGNATURE PAGE FOLLOWS
-46-
WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed and delivered as of the day and year first above
written.
BORROWERS
---------
CAPITAL TRUST, INC.
By:/s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
Address for Notices:
--------------------
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
CT MEZZANINE PARTNERS I LLC
By:/s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
Address for Notices:
--------------------
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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LENDER
------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Address for Notices:
--------------------
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
With a copy to:
Xxxxxxxx Chance US LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxx, III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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SCHEDULE 1
FILING JURISDICTIONS AND OFFICES
Maryland Secretary of State (CT)
Delaware Secretary of State (Fund I)
S-1
SCHEDULE 2
APPROVED APPRAISERS
1. KTR Appraisal Services
2. Xxxxxxx & Xxxxxxxxx, Inc.
3. CB Xxxxxxx Xxxxx
4. The Weitzman Group
5. Greenwich Group
6. Xxxxxx Xxxxx
7. Xxxxx & Xxxxx
8. HVS International
9. PWC
S-2
SCHEDULE 3
APPROVED ENGINEERS
1. EMG
2. KTR Realty Services
3. Xxxxxxx & Xxxxxx, Inc.
4. C.A. Rich, Inc.
5. IVI
6. Dames & Xxxxx
7. Law Environmental
8. Xxxxxxx
9. EM&CA
10. Acqua Terra
11. ATC (BCM Engineers)
12. Horn Chandler & Xxxxxx
13. National Assessment Corporation
14. Property Solutions Inc.
15. PSI
16. Xxxxx & Xxxxxx
S-3
SCHEDULE 4
APPROVED ENVIRONMENTAL CONSULTANTS
1. Acqua Terra
2. Law Environmental
3. KTR Realty Services
4. EMG
5. Xxxxxxx
6. Dames & Xxxxx
7. Xxxxx & Root
8. C.A. Rich, Inc.
9. Xxxxxxx
10. EM&CA
11. ATC (BCM Engineers)
12. Front Royal
13. IVI
14. Xxxxx & Xxxxxx
15. Certified Environmental Inc.
16. Environ Business, Inc.
17. Property Solutions, Inc.
18. PSI
19. National Assessment Corporation
20. Xxxxxxx Environmental Group
S-4
SCHEDULE 5
EXISTING CT COLLATERAL
A. "135 XXXX 00xx XXXXXX" ASSET
-------------------------------
All "Collateral" as defined and described in that certain Pledge
and Security Agreement and in that certain General Collateral Assignment, each
dated as of March 30, 1999 made by Capital Trust, Inc. to Xxxxxx Xxxxxxx
Mortgage Capital Inc., including, without limitation, that certain Mezzanine
Loan Agreement dated as of December 11, 1997 between 000 Xxxx 00xx Xxxxxx
Holdings LLC and Credit Suisse First Boston Mortgage Capital, Inc.
(predecessor-in-interest to Capital Trust, Inc.), as mezzanine lender and the
loan documents described therein.
B. "805 THIRD AVENUE" ASSET
---------------------------
All "Collateral" as defined and described in that certain Pledge and
Security Agreement and in that certain General Collateral Assignment, each dated
as of June 15, 1998 made by Capital Trust to Xxxxxx Xxxxxxx Mortgage Capital
Inc., including, without limitation, that certain Loan Agreement dated as of
June 15, 1998 between Madison Third Building Companies Mezz LLC and Capital
Trust, as mezzanine lender and the loan documents described therein.
All "Collateral" as defined and described in that certain Pledge and
Security Agreement (Stock & Special Member Interest) dated as of June 15, 1998
made by Capital Trust to Xxxxxx Xxxxxxx Mortgage Capital Inc., including,
without limitation, the Pledged Stock and the Pledged Membership Interests and
the Proceeds thereof, as defined therein.
S-5
SCHEDULE 6
EXISTING FUND I COLLATERAL
A. "XXXXXX BROTHERS" ASSET
--------------------------
All "Collateral" as defined and described in that certain Pledge and
Security Agreement (Xxxxxx Brothers-Mezzanine Loan) dated as of December 29,
2000 as amended by First Amendment to Pledge and Security Agreement (Xxxxxx
Brothers-Mezzanine Loan) dated as of November 28, 2001, and in that certain
General Collateral Assignment ( Xxxxxx Brothers-Mezzanine Loan) dated as of
December 29, 2000 as amended by First Amendment to General Collateral Assignment
(Xxxxxx Brothers-Mezzanine Loan) dated as of November 28, 2001 made by CT
Mezzanine Partners I LLC to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.,
including, without limitation, that certain Mezzanine Loan Agreement dated as of
October 26, 2000, as amended, between FGSB Mezzanine Limited Partnership and BH
Mezzanine Limited Partnership and Capital Trust (successor-by-assignment to
Xxxxxx Financial Corporation), as mezzanine lender and the loan documents
described therein.
B. "EL CONQUISTADOR" ASSET
--------------------------
All "Collateral" as defined and described in that certain Pledge and
Security Agreement (El Conquistador) and in that certain General Collateral
Assignment (El Conquistador), each dated as of September 19, 2000 made by CT
Mezzanine Partners I LLC to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.,
including, without limitation, that certain Mezzanine Loan Agreement dated as of
June 30, 2000, made by Conquistador Mezzanine (SPE) Inc. in favor of CT
Mezzanine Partners I LLC (successor-by-assignment to Bear Xxxxxxx Funding Inc.)
as mezzanine lender and the loan documents described therein.
S-6
EXHIBIT A
---------
[FORM OF THIRD AMENDED AND RESTATED PROMISSORY NOTE]
$ 150,000,000 June 8, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, CAPITAL TRUST, INC., a Maryland corporation
and CT MEZZANINE PARTNERS I LLC, a Delaware limited liability company
(collectively, the "Borrowers"), hereby jointly and severally promise to pay to
the order of XXXXXX XXXXXXX MORTGAGE CAPITAL INC. (the "Lender"), at the
principal office of Lender at 1221 Avenue of the Xxxxxxxx, 00xx xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, in lawful money of the United States, and in immediately
available funds, the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the Loans made by Lender to Borrowers under the Loan
Agreement), on the dates and in the principal amounts provided in the Loan
Agreement, and to pay interest on the unpaid principal amount of each such Loan,
at such office, in like money and funds, for the period commencing on the date
of such Loan until such Loan shall be paid in full, at the rates per annum and
on the dates provided in the Loan Agreement.
The date, amount and interest rate of each Loan made by Lender to
Borrowers, and each payment made on account of the principal thereof, shall be
recorded by Lender on its books and, prior to any transfer of this Note,
endorsed by Lender on the schedule attached hereto or any continuation thereof;
provided, that the failure of Lender to make any such recordation or endorsement
shall not affect the obligations of Borrowers to make a payment when due of any
amount owing under the Loan Agreement or hereunder in respect of the Loans made
by Lender.
This Note is the Note referred to in the Amended and Restated
Master Loan and Security Agreement dated as of June 27, 2003 (as amended,
supplemented or otherwise modified and in effect from time to time, the "Loan
Agreement") between Borrowers and Lender, and evidences Loans made by Lender
thereunder. Terms used but not defined in this Note have the respective meanings
assigned to them in the Loan Agreement.
Borrowers agree to pay all Lender's costs of collection and
enforcement (including reasonable attorneys' fees and disbursements of Lender's
counsel) in respect of this Note when incurred, including, without limitation,
reasonable attorneys' fees through appellate proceedings.
Notwithstanding the pledge of the Collateral, Borrowers hereby
acknowledge, admit and agree that Borrowers' obligations under this Note are
recourse obligations of Borrowers to which Borrowers pledge their full faith and
credit.
Borrowers, and any endorsers or guarantors hereof, (a) severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayment of this Note, (b) expressly agree that this
Note, or any payment hereunder, may be extended from time to time, and consent
to the acceptance of further Collateral, the release of any Collateral for this
Note, the release of any party primarily or secondarily liable hereon, and (c)
expressly agree that it will not be necessary for Lender, in order to enforce
payment of this Note, to first institute or exhaust Lender's remedies against
Borrowers or any other party liable hereon or against any Collateral for this
Note. No extension of time for the payment of this Note, or any installment
hereof, made by agreement by Lender with any person now or hereafter liable for
the payment of this Note, shall affect the liability under this Note of
A-1
Borrowers, even if Borrowers are not a party to such agreement; provided,
however, that Lender and Borrowers, by written agreement between them, may
affect the liability of Borrowers.
Any reference herein to Lender shall be deemed to include and
apply to every subsequent holder of this Note. Reference is made to the Loan
Agreement for provisions concerning optional and mandatory prepayments,
Collateral, acceleration and other material terms affecting this Note.
The obligations of the Borrowers under this Note shall be joint
and several.
This Note shall be governed by and construed under the laws of
the State of New York (without reference to choice of law doctrine) whose laws
Borrowers expressly elect to apply to this Note. Borrowers agree that any action
or proceeding brought to enforce or arising out of this Note may be commenced in
the Supreme Court of the State of New York, County of New York, or in the
District Court of the United States for the Southern District of New York.
CAPITAL TRUST, INC.,
a Maryland corporation
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
CT MEZZANINE PARTNERS I LLC,
a Delaware limited liability company
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
A-2
SCHEDULE OF LOANS
This Third Amended and Restated Promissory Note evidences Loans made under the
within-described Loan Agreement to Borrowers, on the dates, in the principal
amounts and bearing interest at the rates set forth below, and subject to the
payments and prepayments of principal set forth below.
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Name of Date Principal Interest Amount Unpaid Cumulative Total Notation
Collateral Made Amount Rate Paid or Principal Unpaid Principal Made by
of Loan Prepaid Amount Amount
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A-3
EXHIBIT B
---------
[FORM OF CUSTODIAL AGREEMENT]
B-1
EXHIBIT C
---------
[FORM OF OPINION OF COUNSEL OF BORROWERS]
C-1
EXHIBIT D
---------
[FORM OF REQUEST FOR BORROWING]
Amended and Restated Master Loan and Security Agreement, dated as
of June 27, 2003 (the "Loan and Security Agreement"), by and between Borrowers
and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Lender"),
Lender: Xxxxxx Xxxxxxx Mortgage Capital Inc.
Borrower: [NAME OF BORROWER]
Requested Fund Date:
------------------------------------
Transmission Date:
------------------------------------
Transmission time:
------------------------------------
[Type of Funding:
(Wet or Dry) ------------------------------------]
[Type of Loan requested:
Committed or Uncommitted ------------------------------------]
Number of Mortgage
Loans to be Pledged: ------------------------------
Unpaid Principal Balance: $
------------------------------
Requested Wire Amount: $
------------------------------
Wire Instructions:
Requested by:
[NAME OF BORROWER]
By:
---------------------------------
Name:
Title:
D-1
EXHIBIT E
---------
[FORM OF LENDER'S RELEASE LETTER]
(Date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
------------------
Facsimile:
------------------
Re: Certain Collateral Identified on Schedule A hereto and owned by [BORROWER]
The undersigned hereby releases all right, interest, lien or
claim of any kind with respect to the Collateral described in the attached
Schedule A, such release to be effective automatically without any further
action by any party upon payment in one or more installments, in immediately
available finds of $__________, in accordance with the following wire
instructions:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Very truly yours,
[LENDER]
By:
--------------------------------
Name:
Title:
E-1
EXHIBIT F
---------
[FORM OF BAILEE AGREEMENT]
[BORROWER'S NAME AND ADDRESS]
_______________ __, 20__
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bailee Agreement (the "Bailee Agreement") in connection with the
pledge by ____________________ (the "Borrower") to Xxxxxx Xxxxxxx
Mortgage Capital Inc. (the "Lender")
Gentlemen and Mesdames:
In consideration of the mutual promises set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Lender and Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
(the "Bailee") hereby agree as follows:
1. The Borrower shall deliver to the Bailee in connection with any
Mortgage Loans delivered to the Bailee hereunder an Identification Certificate
in the form of Attachment 1 attached hereto to which shall be attached a
Collateral Loan Schedule identifying which Collateral Loans are being delivered
to the Bailee hereunder. Such Collateral Loan Schedule shall contain the
following fields of information: (a) the loan identifying number; (b) the
Collateral Obligor's name; (c) the xxxxxx xxxxxxx, xxxx, xxxxx and zip code for
the applicable real property; (d) the original balance; and (e) the current
principal balance if different from the original balance.
2. On or prior to the date indicated on the Custodial Identification
Certificate delivered by the Borrower (the "Funding Date"), the Borrower shall
have delivered to the Bailee, as bailee for hire, the original documents set
forth on Schedule A attached hereto (collectively, the "Collateral File") for
each of the Collateral Loans (each a "Collateral Loan" and collectively, the
"Collateral Loans") listed in Exhibit A to Attachment 1 attached hereto (the
"Collateral Loan Schedule").
3. The Bailee shall issue and deliver to the Lender and the Custodian on
or prior to the Funding Date by facsimile (a) in the name of the Lender, an
initial trust receipt and certification in the form of Attachment 2 attached
hereto (the "Bailee's Trust Receipt and Certification") which Bailee's Trust
Receipt and Certification shall state that the Bailee has received the documents
comprising the Collateral File as set forth in the Custodial Identification
Certificate (as defined in that certain [Amended and Restated] Custodial
Agreement dated as of June 27, 2003, among [Borrower], Lender and Custodian (as
defined in Section 5 below), in addition to such other documents required to be
delivered to Lender and/or Custodian pursuant to the [Amended and Restated]
Master Loan and Security Agreement dated as of June 27, 2003, among [Borrower]
and Lender (the "Loan Agreement").
4. On the applicable Funding Date, in the event that the Lender fails to
make a Loan to the Borrower secured by the Collateral Loans identified in the
related Custodial Identification Certificate, the Lender shall deliver by
facsimile to the Bailee at (000) 000-0000 to the attention of Xxxxxx X. Xxxxxx,
Esq., an authorization (the "Facsimile Authorization") to release the Collateral
Files with respect to the
F-1
Collateral Loans identified therein to the Borrower. Upon receipt of such
Facsimile Authorization, the Bailee shall release the Collateral Files to the
Borrower in accordance with the Borrower's instructions.
5. Following the Funding Date, the Bailee shall forward the Collateral
Files to Deutsche Bank Trust Company Americas, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000, Attention: Mortgage Custody-[QT032C - Fund III][MF001C -
CT/Fund I] (the "Custodian") by insured overnight courier for receipt by the
Custodian no later than 1:00 p.m. on the third Business Day following the
applicable Funding Date (the "Delivery Date").
6. From and after the applicable Funding Date until the time of receipt
of the Facsimile Authorization or the applicable Delivery Date, as applicable,
the Bailee (a) shall maintain continuous custody and control of the related
Collateral Files as bailee for the Lender and (b) is holding the related
Collateral Loans as sole and exclusive bailee for the Lender unless and until
otherwise instructed in writing by the Lender.
7. The Borrower agrees to indemnify and hold the Bailee and its
partners, directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Bailee
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than special, indirect, punitive or
consequential damages, which shall in no event be paid by the Bailee) were
imposed on, incurred by or asserted against the Bailee because of the breach by
the Bailee of its obligations hereunder, which breach was caused by negligence,
lack of good faith or willful misconduct on the part of the Bailee or any of its
partners, directors, officers, agents or employees. The foregoing
indemnification shall survive any resignation or removal of the Bailee or the
termination or assignment of this Bailee Agreement.
8. (a) In the event that the Bailee fails to produce a Mortgage Note,
assignment of collateral or any other document related to a Collateral Loan that
was in its possession within ten (10) business days after required or requested
by the Borrower or Lender (a "Delivery Failure"), the Bailee shall indemnify the
Borrower or Lender in accordance with the succeeding paragraph of this Section
8.
(b) The Bailee agrees to indemnify and hold the Lender and Borrower, and
their respective affiliates and designees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of a Custodial Delivery
Failure or the Bailee's negligence, lack of good faith or willful misconduct.
The foregoing indemnification shall survive any termination or assignment of
this Bailee Agreement.
9. The Borrower hereby represents, warrants and covenants that the
Bailee is not an affiliate of or otherwise controlled by the Borrower.
Notwithstanding the foregoing, the parties hereby acknowledge that the Bailee
hereunder may act as Counsel to the Borrower in connection with a proposed loan
and Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, if acting as Bailee, has represented
[Borrower] in connection with negotiation, execution and delivery of the Loan
Agreement.
10. In connection with a pledge of the Collateral Loans as collateral
for an obligation of the Lender, the Lender may pledge its interest in the
corresponding Collateral Files held by the Bailee for the benefit of the Lender
from time to time by delivering written notice to the Bailee that the Lender has
pledged its interest in the identified Collateral Loans and Collateral Files,
together with the identity of the party to whom the Collateral Loans have been
pledged (such party, the "Pledgee"). Upon receipt of such notice from the
Lender, the Bailee shall xxxx its records to reflect the pledge of the
Collateral Loans by
F-2
the Lender to the Pledgee. The Bailee's records shall reflect the pledge of the
Collateral Loans by the Lender to the Pledgee until such time as the Bailee
receives written instructions from the Lender that the Collateral Loans are no
longer pledged by the Lender to the Pledgee, at which time the Bailee shall
change its records to reflect the release of the pledge of the Collateral Loans
and that the Bailee is holding the Collateral Loans as custodian for, and for
the benefit of, the Lender.
11. From time to time, subject to the acceptance and approval of Lender,
Borrower may request pursuant to a request substantially in the form of Annex
5-B to the Custodial Agreement the delivery by the Custodian to the Bailee of
some or all of the Collateral File for the purposes set forth in such request,
provided that such request shall include an agreement (a "Disposition
Agreement") in execution form, among Lender, Borrower and Bailee, providing for
the disposition of such Collateral File or portion thereof. Upon receipt of the
Collateral File or such portions thereof, Bailee shall hold the same as sole and
exclusive bailee for the Lender until such time as the Collateral File, or such
portions thereof, are delivered to others in accordance with the fully executed
Disposition Agreement, or, if the Disposition Agreement has not been fully
executed, as otherwise directed by Lender, subject in either case to the
provisions set forth herein governing standards of care and indemnification and
except as otherwise provided by any document specifically amending,
supplementing or modifying the terms hereof which is executed and delivered by
all parties hereto in connection with such delivery of the Collateral File, or
such portions thereof, to Bailee. Notwithstanding anything to the contrary
contained in this Section 11, Bailee shall have the right to deliver such
Collateral File, or portions thereof, to Lender upon five (5) days written
notice to Lender.
12. The agreement set forth in this Bailee Agreement may not be
modified, amended or altered, except by written instrument, executed by all of
the parties hereto.
13. This Bailee Agreement may not be assigned by the Borrower or the
Bailee without the prior written consent of the Lender.
14. For the purpose of facilitating the execution of this Bailee
Agreement as herein provided and for other purposes, this Bailee Agreement may
be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
15. This Bailee Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
16. Capitalized terms used herein and defined herein shall have the
meanings ascribed to them in the Loan Agreement.
[signatures begin on next page]
A-3
Very truly yours,
---------------------------,
Borrower
By:____________________
Name:
Title:
ACCEPTED AND AGREED:
PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP,
Bailee
By:__________________________
Name: Xxxxxx X. Xxxxxx
ACCEPTED AND AGREED:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Lender
By:__________________________
Name:
Title:
A-4
Schedule A
[List of Pledged Documents]
A-5
Attachment 1
IDENTIFICATION CERTIFICATE
On this ____ day of ____________, 200_, ________________________ (the
"Borrower"), under that certain Bailee Agreement of even date herewith (the
"Bailee Agreement"), among the Borrower, PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP,
(the "Bailee"), and XXXXXX XXXXXXX MORTGAGE CAPITAL INC., as Lender, does hereby
instruct the Bailee to hold, in its capacity as Bailee, the Collateral Files
with respect to the Collateral Loans listed on Exhibit A hereto, which
Collateral Loans shall be subject to the terms of the Bailee Agreement as of the
date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Bailee Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Identification
Certificate to be executed and delivered by its duly authorized officer as of
the day and year first above written.
---------------------------,
Borrower
By:_________________________
Name:
Title:
A-6
Exhibit A to Attachment 1
COLLATERAL LOAN SCHEDULE
A-7
Attachment 2
FORM OF BAILEE'S TRUST RECEIPT AND CERTIFICATION
____________, 200_
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
Re: Bailee Agreement, dated as of ____________ __, 200_ (the "Bailee
Agreement") among _____________________ (the "Borrower"), Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the "Lender") and Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP (the "Bailee")
Gentlemen and Mesdames:
In accordance with the provisions of Paragraph 3 of the above-referenced
Bailee Agreement, the undersigned, as the Bailee, hereby certifies that as to
each Collateral Loan described in the Collateral Loan Schedule (Exhibit A to
Attachment 1), a copy of which is attached hereto, it has reviewed the
Collateral File and has determined that (i) all documents listed in Schedule A
attached to the Bailee Agreement are in its possession and (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Collateral Loan, and (iii) based on its examination, the foregoing documents on
their face satisfy the requirements set forth in Paragraph 2 of the Bailee
Agreement.
The Bailee hereby confirms that it is holding each such Collateral File
as agent and bailee for the exclusive use and benefit of the Lender pursuant to
the terms of the Bailee Agreement.
All initially capitalized terms used herein shall have the meanings
ascribed to them in the above-referenced Bailee Agreement.
PAUL, HASTINGS, XXXXXXXX & XXXXXX
LLP, BAILEE
By:___________________________
Name: Xxxxxx X. Xxxxxx, Esq.
A-8
