EXHIBIT 10.12
$150,000,000
CREDIT AGREEMENT
Dated as of May 15, 0000
Xxxxxxx
XXX XXXXXXX FUNDING, INC.,
AS BORROWER,
and
GERMAN AMERICAN CAPITAL CORPORATION,
AS LENDER
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. CERTAIN DEFINED TERMS ................................................. 1
1.02. COMPUTATION OF TIME PERIODS ...........................................27
1.03. ACCOUNTING TERMS ......................................................27
ARTICLE II
AMOUNT AND TERMS OF THE ADVANCES
2.01. THE ADVANCES...........................................................27
2.02. MAKING THE ADVANCES ...................................................28
2.03. REPAVMENT OF ADVANCES .................................................29
2.04. PREPAYMENTS ...........................................................29
2.05. INTEREST ..............................................................31
2.06. INCREASED COSTS, ETC. .................................................32
2.07. PAYMENTS AND COMPUTATIONS ........... .................................33
2.08. TAXES .................................................................33
2.09. USE OF PROCEEDS .......................................................35
2.10. LATE CHARGE ...........................................................35
2.11. SECURITY FOR THE ADVANCES .............................................35
2.12. THE NOTE...............................................................35
ARTICLE III
CONDITIONS OF LENDING
3.01. CONDITIONS PRECEDENT TO INITIAL ADVANCE ...............................36
3.02. CONDITIONS PRECEDENT TO EACH ADVANCE ..................................38
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. REPRESENTATIONS AND WARRANTIES OF BORROWER ............................39
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ARTICLE V
COVENANTS OF THE BORROWER
5.01. [Reserved] ............................................................43
5.02. AFFIRMATIVE COVENANTS..................................................43
5.03. NEGATIVE COVENANTS.....................................................45
5.04. REPORTING REQUIREMENTS.................................................47
ARTICLE VI
EVENTS OF DEFAULT
6.01. EVENTS OF DEFAULT......................................................49
ARTICLE VII
SECONDARY MARKET; SERVICING
7.01. PARTICIPATIONS.........................................................51
7.02. SERVICING..............................................................52
ARTICLE VIII
PARTIAL RELEASE OF COLLATERAL
8.01. PARTIAL RELEASE OF COLLATERAL..........................................52
ARTICLE IX
MISCELLANEOUS
9.01. AMENDMENTS, ETC........................................................53
9.02. NOTICES.ETC............................................................53
9.03. NO WAIVER; REMEDIES....................................................54
9.04. COSTS, EXPENSES........................................................54
9.05. RIGHT OF SET-OFF.......................................................55
9.06. BINDING EFFECT.........................................................56
9.07. EXECUTION IN COUNTERPARTS..............................................56
9.08. JURISDICTION,ETC.......................................................56
9.09. GOVERNING LAW..........................................................56
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9.10. WAIVER OF JURY TRIAL...................................................56
9.11. CONFIDENTIALITY........................................................57
9.12. RECOURSE LIMITATION....................................................57
SCHEDULES
Schedule A - Domestic and Eurodollar Lending Offices
Schedule B - Disclosure Schedule
Schedule C - Intentionally Omitted
Schedule D - Mortgage File
Schedule E - Intentionally Omitted
EXHIBITS
Exhibit A - Form of Promissory Note
Exhibit B - Intentionally Omitted
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Mortgage Loan Schedule
Exhibit E - Form of Monthly Report
Exhibit F - Form of Custodial Agreement
Exhibit G - Form of Notice of Borrowing
Exhibit H - Form of Collateral Assignment of Mortgage and Note
Exhibit I - Form of Keepwell Agreement
Exhibit J - Form of Side Letter
Exhibit K - Form of Request for Partial Release
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 15, 1998 between LNR FLORIDA FUNDING,
INC., a Florida corporation ("BORROWER") and GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation (together with its successors and assigns,
"LENDER").
PRELIMINARY STATEMENTS:
(1) Borrower is in the business of purchasing, originating and
servicing multi-family residential and commercial mortgage loans.
(2) Borrower has requested that Lender make Advances to Borrower from
time to time in an aggregate amount outstanding at any time of not more than One
Hundred Fifty Million and 00 /100 Dollars ($150,000,000) in order to provide
funds to the Borrower to make or acquire mortgage loans. The Lender has
indicated its willingness to agree to lend such amount on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADVANCE" has the meaning specified in SECTION 2.01.
"ADVANCE AMOUNT" means the principal amount of any Advance.
"ADVANCE RATE" means ninety percent (90%).
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
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"APPLICABLE LENDING OFFICE" means Lender's Eurodollar Lending Office
with respect to each Eurodollar Rate Advance and Lender's Domestic Lending
Office with respect to each Base Rate Advance.
"APPLICABLE MARGIN" means, with respect to any Eurodollar Rate Advance,
75 basis points (0.75%) per annum.
"APPRAISAL" means an appraisal of a Mortgaged Property prepared by an
Appraiser in accordance with the Uniform Standards of Appraisal Practice of the
Appraisal Foundation and complying with the requirements of Title 11 of the
Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 and
otherwise in form and substance acceptable to the Lender, as may be updated by
recertification from time to time.
"APPRAISER" means any Independent appraiser approved by Lender.
"ASSIGNMENT OF MORTGAGE" means an assignment of Mortgage, in
substantially the form of EXHIBIT H attached hereto, and any separate Assignment
of Rents sufficient under the laws of the jurisdiction in which the applicable
Mortgaged Property is located to effect the transfer of all right, title and
interest of the Borrower in such Mortgage and Assignment of Rents.
"ASSIGNMENT OF RENTS" means, with respect to any Mortgaged Property,
any assignment of leases, rents and profits or similar agreement executed by
Mortgagor, assigning to the mortgagee all of the income, rents and profits
derived from the ownership, operation, leasing or disposition of all or a
portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"AUTHORIZATION" means any authorization, approval, franchise, license,
variance, land use entitlement, sewer and waste water discharge permit, storm
water discharge permit, air pollution authorization to operate, certificate of
occupancy, municipal water and sewer connection permit, and any like or similar
permit now or hereafter required for the construction of any improvements
located on any Mortgaged Property or for the use, occupancy or operation of such
Mortgaged Property and all amendments, modifications, supplements and addenda
thereto.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall be equal to the lesser of (i) the
maximum non-usurious rate permitted by Law or (ii) the greater of (A) the rate
of interest announced publicly by
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Deutsche Bank AG, New York Branch, in New York, from time to time, as its "Prime
Rate" and (B) one percent (1%) above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance which bears interest in accordance
with SECTION 2.05(a)(i).
"BORROWER" has the meaning specified in the recital of parties to this
Agreement.
"BORROWER'S ACCOUNT" means an account of Borrower maintained by
Borrower and designated by notice to Lender not less than two (2) days prior to
the Closing Date.
"BORROWING BASE CERTIFICATE" means a certificate in substantially the
form of EXHIBIT C hereto, duly certified by the chief financial officer of
Borrower.
"BORROWING BASE DEFICIENCY" means, at any time, the excess of (a) the
aggregate principal amount of Advances outstanding at such time over (b) the
Capital Limit.
"BORROWING LIMIT" means the lesser of (a) One Hundred Fifty Million and
00/100 Dollars ($150,000,000) and (b) the Capital Limit.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in New York City, and, if the applicable Business
Day relates to any Eurodollar Rate Advances, a Business Day on which commercial
banks are open for international business (including dealings in dollar deposits
in the London interbank market).
"CAPITAL LIMIT" means the (a) sum of (i) the product of (x) the
aggregate Loan Value of the Eligible Mortgage Loans constituting Collateral and
(y) the Advance Rate, plus (ii) all cash and cash equivalents of Borrower plus
(iii) the fair market value of any nonliquid assets, as determined by Lender in
its sole discretion, as part of Facility Equity, less (b) the Minimum Collateral
Value.
"CAPITALIZED LEASES" means, with respect to any Person, any leases of
any property by such Person, as lessee, which, in accordance with GAAP, is
required to be accounted for as a capital lease on the balance sheet of such
Person.
"CASH COLLATERAL ACCOUNT" has the meaning specified in SECTION 2.04.
"CHANGE OF CONTROL" means with respect to any Person (i) the sale or
transfer by Persons who are the direct beneficial owners of such Person as of
the Closing Date of more than forty-nine and nine-tenths percent (49.9%) of the
direct or indirect right to
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distributions from such Person in the aggregate to Persons who were not direct
beneficial owners as of such date or (ii) the sale or transfer by such direct
beneficial owners of such Person as of the Closing Date of more than forty-nine
and nine-tenths percent (49.9%) of the direct or indirect voting rights in such
Person to Persons who were not direct beneficial owners as of such date.
"CLOSING DATE" means the date on which Borrower shall execute and
deliver the Loan Documents and Lender shall disburse the proceeds of the Initial
Advance.
"CMBS" means commercial mortgage backed securities evidencing an
interest in or secured by a pool of Mortgage Loans.
"COLLATERAL" means, collectively, all Eligible Mortgage Loans, any
Hedge Agreements entered into by Borrower in connection with any Mortgage Loans,
all Borrower's right, title and interest in and to the related Mortgage Loan
Documents and all other property, whether real, personal or mixed, tangible or
intangible, owned or to be owned or leased or to be leased or otherwise held or
to be held by Borrower or in which Borrower shall have or shall acquire an
interest, to the extent that Borrower's interest therein is now or hereafter
granted, assigned, transferred, mortgaged or pledged to Lender or in which a
security interest is granted to Lender to secure all or any part of the
Obligations.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Assignments of
Mortgage, and any other agreement that creates or purports to create a Lien in
favor of Lender.
"COMMERCIAL PROPERTY" means a fee simple estate in or a ground lease on
a parcel of real property, together with all improvements thereon, which
property is used for commercial purposes other than multifamily residential,
including without limitation congregate care and assisted living facilities,
nursing homes, retail shopping centers, hotels, office buildings, industrial
properties and warehouse facilities, together with any personal property,
fixtures, leases, and other property or rights of the owner pertaining thereto.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.
"CUSTODIAL AGREEMENT" means the Custodial Agreement of even date
herewith, by and among Borrower, Lender and the Custodian, substantially in the
form of EXHIBIT F annexed hereto, as it may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
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"CUSTODIAN" means LaSalle National Bank, the financial institution
selected to act as Custodian pursuant to the Custodial Agreement, and any other
financial institution subsequently selected by Lender to so act, and reasonably
acceptable to Borrower.
"DEBT" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than ninety (90) days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person for lease payments payable by such Person as lessee
under Capitalized Leases, (f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any capital stock of or other ownership or profit
interest in such Person or any other Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (h) all Debt of others referred to
in clauses (a) through (g) above or clause (i) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (iii) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor against
loss; and (i) all Debt referred to in clauses (a) through (h) above of another
Person secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Debt.
"DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"DEFAULTED LOAN" means, as of any date of determination, a Mortgage
Loan for which any one of the following applies: (a) as to which the Mortgagor
has failed to make a monthly payment and such failure has continued for sixty
(60) days or more or has failed to make a balloon payment, if any; (b) as to
which the Mortgagor has entered into or consented to a bankruptcy, appointment
of a receiver or conservator or a similar insolvency or similar proceeding, or
the Mortgagor has become the subject of a decree or order for such a proceeding
which shall have remained in force undischarged or unstayed for a period of
forty-five (45) days;
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(c) as to which Borrower shall have received notice of the foreclosure or
proposed foreclosure of any other lien on the related Mortgaged Property; (d) as
to which, in the judgment of Borrower, a payment default has occurred or is
imminent and is not likely to be cured by the Mortgagor within 30 days; (e) as
to which the Mortgagor has failed to make any payment of ground rents, taxes,
assessments, water rates, sewer rents, municipal charges or insurance premiums,
in either case, in accordance with the related Mortgage Loan Documents; (f) as
to which the Mortgagor has defaulted or failed to perform or observe a term,
covenant or condition in the Mortgage Loan Documents and such default or
failure, is likely to have a material and adverse affect on the value of the
Mortgage Loan, the related Mortgaged Property or the priority of the security
interest on such Mortgaged Property; or (g) as to which the Mortgagor admits in
writing its inability to pay its debts generally as they become due, files a
petition to take advantage of any applicable insolvency or reorganization
statute, makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations.
"DETERMINATION DATE" with respect to each Interest Period, the second
Business Day prior to the Interest Reset Date.
"DISCLOSED LITIGATION" has the meaning specified in SECTION 3.01(B).
"DISCLOSURE SCHEDULE" means the schedule of litigation attached to this
Agreement as SCHEDULE B.
"DOLLARS" and the sign "$" means the lawful money of the United States
of America.
"DOMESTIC LENDING OFFICE" means the office of Lender specified as its
"Domestic Lending Office" on SCHEDULE A hereto or such other office of Lender as
Lender may from time to time specify to Borrower.
"ELIGIBLE MORTGAGE LOANS" means a Mortgage Loan meeting the following
criteria, except with respect to matters disclosed in writing to, and approved
in writing by, Lender prior to the making of an Advance with respect to the
affected Mortgage Loan:
(a) MORTGAGE LOAN SCHEDULE. The information set forth in the Mortgage
Loan Schedule is true, complete and correct in all material respects.
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(b) ORIGINATION/ACQUISITION OF MORTGAGE LOANS. The underwriting,
origination or acquisition and closing policies and procedures utilized by
Borrower with respect to the Mortgage Loan conformed, in all material respects,
to its customary underwriting and closing policies and procedures for comparable
mortgage loans originated or acquired (as the case may be) in effect at the time
of the underwriting and origination or acquisition of such Mortgage Loan, with
such exceptions thereto as are believed to be customarily acceptable to
reasonable and prudent commercial mortgage lenders or acquirors; PROVIDED,
HOWEVER, such Mortgage Loans may not qualify for inclusion in a "real estate
mortgage investment conduit."
(c) PAYMENT CURRENT. All payments required to be made with respect to
the Mortgage Loan under the terms of the Mortgage Note or Mortgage (inclusive of
any grace or cure period) up to the Closing Date have been made.
(d) NO CROSS-COLLATERALIZATION, EQUITY PARTICIPATION, NEGATIVE
AMORTIZATION OR PARTICIPATION INTEREST. The Mortgaged Property is not security
for any obligation other than the Mortgage Loan. Except as set forth in the
Mortgage Loan Schedule, the Mortgage Loan contains no equity participation by
Borrower and is a whole loan and not a participation certificate; neither the
related Mortgage Note nor the related Mortgage provides for any contingent or
additional interest in the form of participation in the cash flow of the related
Mortgaged Property; the Mortgage Note does not provide for negative
amortization. The indebtedness evidenced by such Mortgage Note is not
convertible to an ownership interest in the Mortgaged Property (other than
through foreclosure of the Mortgage) or the related Mortgagor. Borrower has no
ownership interest in the related Mortgaged Property or the Mortgagor other than
in the Mortgage Loan which is being collaterally assigned by Borrower hereunder.
(e) COMPLIANCE WITH APPLICABLE LAWS. As of the date of its origination,
the Mortgage Loan either complied with, or was exempt from, applicable state or
federal laws, regulations and other requirements pertaining to usury. With
respect to Mortgage Loans originated by Borrower, Borrower has complied in all
material respects with the requirements of any and all other federal, state or
local laws applicable to the origination of the Mortgage Loan, including,
without limitation, truth-in-lending, real estate settlement procedures, equal
credit opportunity and disclosure laws.
(f) PROCEEDS FULLY DISBURSED. The proceeds of the Mortgage Loan have
been fully disbursed, and there is no requirement for future advances
thereunder.
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(g) DOCUMENTS VALID. To Borrower's knowledge and based upon an opinion
of counsel to Mortgagor obtained at the closing of its origination, each of the
Mortgage Note, the Mortgage and each other written agreement in connection
therewith is genuine and is the legal, valid and binding obligation of the
Mortgagor, the related indemnitor or other party executing such document,
enforceable in accordance with its terms. To Borrower's knowledge, there is no
valid offset, defense, abatement, counterclaim or right of rescission in favor
of the Mortgagor or any other obligated Person with respect to the Mortgage
Note, Mortgage or other written agreement relating to the Mortgage Loan, nor
will the operation of any of the terms of the Mortgage Note or the Mortgage, or
the exercise of any right thereunder, render either the Mortgage or the Mortgage
Note unenforceable or subject to any valid right of rescission, offset,
counterclaim or defense, including, without limitation, the defense of usury,
and Borrower has no actual knowledge that any such right of rescission, offset,
counterclaim or defense has been asserted or is available with respect thereto.
(h) ASSIGNMENT OF MORTGAGE: NOTE ENDORSEMENT. The Assignment of
Mortgage (but for the insertion of the name of the assignee and any related
recording information which is not yet available to the Borrower) is in
recordable form and constitutes the Borrower's legal, valid and binding
assignment to Lender of the Mortgage and the related Assignment of Leases and
Rents. The Borrower's endorsement and delivery of the Mortgage Note to Lender in
accordance with the terms of this Agreement constitutes the Borrower's legal,
valid and binding assignment to Lender of such Mortgage Note, and together with
the Borrower's execution and delivery of such Assignment of Mortgage to Lender,
legally and validly conveys all right, title and interest of Borrower in the
Mortgage Loan to Lender other than rights to servicing of the Mortgage Loan.
(i) FIRST LIEN. To Borrower's knowledge based upon the title insurance
policy (or binding commitment therefor) secured with respect to each Mortgage
Loan, the Mortgage is a valid and enforceable first lien on the Mortgaged
Property (including all buildings and improvements on such Mortgaged Property
and all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time prior to the Closing Date of the
Mortgage Loan with respect to the foregoing, but excluding any related personal
property), which Mortgaged Property is free and clear of all encumbrances and
liens having priority over the first lien of such Mortgage, except for Permitted
Encumbrances.
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(j) NO MODIFICATION. RELEASE OR SATISFACTION. Neither the Mortgage nor
the Mortgage Note has been impaired, waived, modified, altered, satisfied,
canceled, subordinated or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage and the Mortgagor has not been released
from its obligations under the Mortgage, in whole or in any part, in each such
event in a manner which would materially interfere with the benefits of the
security intended to be provided by the Mortgage. Except for instruments
included in the Mortgage File and which are disclosed to Lender, no instrument
has been executed that would effect any such waiver, modification, alteration,
satisfaction, cancellation, subordination, rescission or release.
(k) NO TAXES OR ASSESSMENTS. Based upon the title insurance policy (or
binding commitment therefor) secured with respect to each Mortgage Loan, all
taxes and governmental assessments, or if payable in installments, the
installment thereof, which became due and owing prior to the date of origination
of the Mortgage Loan in respect of the Mortgaged Property (excluding any related
personal property) and which, if left unpaid, would be, or might become, a lien
on the Mortgaged Property having priority over the Mortgage, have been paid, or
an escrow of funds in an amount sufficient to cover such taxes and assessments
has been established.
(1) ESCROW DEPOSITS. All escrow deposits and other escrow payments
required under the Mortgage Note, the Mortgage and any other Mortgage Loan
Documents executed in connection with the origination of the Mortgage Loan to be
paid prior to the Closing Date have been paid to, and are in the possession, or
under the control of Borrower or its agent, or have been applied in accordance
with their intended purposes.
(m) NO BUYDOWNS OR THIRD PARTV ADVANCES. Borrower has not, directly or
indirectly, advanced funds to, induced or solicited any payment from, a Person
other than the Mortgagor, or, to Borrower's knowledge, received any payment from
a Person other than the Mortgagor, for the payment of any amount required under
the Mortgage Note or the Mortgage, except for interest accruing from the date of
such Mortgage Note or the date of disbursement of the proceeds of such Mortgage
Loan, whichever is later, to the date which precedes by 30 days the first due
date under such Mortgage Note. The Mortgage Loan Documents contain no provision
which may constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment mortgage loan.
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(n) NO CONDEMNATION. No proceedings for the total or partial
condemnation of the Mortgaged Property were pending or threatened as of the date
of origination.
(o) NO MECHANICS' LIENS. To Borrower's knowledge based upon the title
insurance policy (or a binding commitment therefor), the Mortgaged Property
(excluding any related personal property) as of the date of origination was free
and clear of any mechanics' and materialmen's liens or liens in the nature
thereof and no rights are outstanding that, under law, could give rise to any
such liens, any of which liens are or may be prior to, or equal with, the lien
of the Mortgage, except those which are insured against by the lender's title
insurance policy referred to in subparagraph (t) below.
(p) TITLE SURVEY: IMPROVEMENTS. The Mortgage File includes an asbuilt
survey with respect to the Mortgaged Property which satisfied the requirements
of the title insurance company for its deletion of the standard general
exceptions for encroachments, boundary and other survey matters and for
easements not shown by the public records from the title insurance policy as
required by Borrower's customary practices in originating commercial loans
similar to the Mortgage Loans included herein. To Borrower's knowledge based
upon the survey, except for encroachments, encumbrances and other matters which
do not materially and adversely affect the value of the Mortgaged Property as
security for the Mortgage Loan, (i) none of the improvements which were included
for the purpose of determining the value of the Mortgaged Property at the time
of the Appraisal lies outside the boundaries and building restriction lines of
the Mortgaged Property, (ii) no improvements on adjoining properties materially
encroach upon the Mortgaged Property so as to materially and adversely affect
the value of the Mortgaged Property as security for the Mortgage Loan, and (iii)
to Borrower's knowledge (based upon an opinion of counsel obtained from the
Mortgagor, a zoning endorsement to the title insurance policy, an architect or
engineer's certificate, or a letter from the applicable zoning authority), no
improvements located on or forming a part of the Mortgaged Property are in
material violation of any applicable zoning and building laws or ordinances
(except to the extent they may constitute legal non-conforming uses).
(q) MORTGAGE FILES. The Mortgage File contains the agreements,
instruments and documents listed in SCHEDULE D
(r) TITLE. Borrower is the sole legal owner and beneficial holder of
the Mortgage Loan or is a participant or a member of a syndication of such
Mortgage Loan, has full right and authority to sell and assign the Mortgage Loan
or its
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participant or syndicate interest, and is transferring the Mortgage Loan or its
participant or syndicate interest to Lender free and clear of any and all liens,
encumbrances, pledges, charges or security interests of any nature encumbering
the Mortgage Loan, except Permitted Liens.
(s) COMPLIANCE WITH LAWS. To Borrower's knowledge (based upon a
representation or opinion of counsel obtained from the Mortgagor), the Mortgagor
has obtained all inspections, licenses, permits, Authorizations, and
certificates necessary for compliance in all material respects with applicable
laws and governmental regulations, including, but not limited to, certificates
of occupancy and fire underwriter certificates. Borrower has no knowledge that
the Mortgaged Property is in material noncompliance with such laws or
regulations, is being used, operated or occupied unlawfully in any material
respects or has failed to have or obtain such inspections, licenses or
certificates, as the case may be.
(t) TITLE INSURANCE.The Mortgaged Property (excluding any related
personal property) is covered by an ALTA lender's title insurance policy ("Title
Policy") or, if an ALTA lender's title insurance policy is unavailable, another
state-approved form of lender's title insurance policy, issued by a nationally
recognized title insurance company, in an amount not less than the stated
original principal amount of the Mortgage Loan insuring Borrower, and its
successors and assigns, that the related Mortgage is a valid first lien on the
Mortgaged Property, subject only to Permitted Encumbrances (or if the Title
Policy has not been issued, then a binding commitment therefor has been
delivered at closing). Such title insurance policy (or if not yet issued, the
coverage to be provided thereby) is in full force and effect. Borrower has not
taken, or omitted to take, any action, and, to Borrower's knowledge no other
Person has taken, or omitted to take, any action, that would materially impair
the coverage benefits of the title insurance policy. If available in Borrower's
judgment at a reasonable cost, such title policy includes an endorsement with
respect to zoning and permitted uses as well as the following endorsements or
their equivalents: (1) ALTA 8.1 (commercial environmental protection), (2) CLTA
100 (comprehensive), (3) CLTA 104 (assignment of beneficial interest) and (4)
CLTA 116 (designation of improvements). As of the date of the Assignment of
Mortgage, Borrower has not made any claim under the title insurance policy.
(u) HAZARD INSURANCE. The related Mortgaged Property is insured by the
types and amounts of coverage required by the Mortgage (subject to a customary
deductible). All premiums due and payable on such insurance policies prior to
the Closing Date have been paid and nothing has occurred that would materially
impair the benefits of coverage thereunder. The Mortgage obligates the Mortgagor
to
12
maintain all such insurance and, at the Mortgagor's failure to do so, authorizes
the mortgagee to maintain such insurance at the Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor. Any insurance proceeds in
respect of a casualty loss or taking, will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, or to the payment
of the outstanding principal balance of such Mortgage Loan together with any
accrued interest thereon in accordance with the requirements of the Mortgage.
(v) UCC FINANCING STATEMENTS. One or more Uniform Commercial Code
financing statements covering all furniture, fixtures, equipment and other
personal property (1) which are collateral under the Mortgage or under a
security or similar agreement executed and delivered in connection with the
Mortgage Loan and (2) in which a security interest can be perfected by the
filing of Uniform Commercial Code financing statement(s) under applicable law
have been filed or recorded (or have been sent for filing or recording) in all
Uniform Commercial Code filing offices in the jurisdiction where the Mortgage
Property is located necessary to the perfection of a security interest in such
furniture, fixtures, equipment and other personal property under applicable law
(unless such security interest is otherwise perfected under applicable law).
(w) DEFAULT. BREACH AND ACCELERATION. To Borrower's knowledge, there is
no material default, breach, violation or event of acceleration existing under
the Mortgage or the Mortgage Note and no event which, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
a nonmonetary default, breach, violation or event of acceleration.
(x) CUSTOMARY PROVISIONS. The Mortgage Loan Documents are on standard
forms customarily acceptable to reasonable and prudent mortgage lenders and with
no material deviations therefrom except as disclosed to Lender. The Mortgage
Note or the Mortgage contain customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the practical
realization against the Mortgaged Property of the material benefits of the
security, including, but not limited to, judicial or, if applicable, nonjudicial
foreclosure.
(y) INSPECTION. Borrower inspected the Mortgaged Property or caused the
Mortgaged Property to be inspected in connection with the origination or
acquisition of such Mortgage Loan, and no earlier than six months prior to the
applicable Closing Date.
13
(z) NO NOTICE OF BANKRUPTCY. Borrower has no actual knowledge nor has
it received any notice that the Mortgagor is a debtor in any state or federal
bankruptcy, reorganization or insolvency proceeding.
(aa) NO GROUND LEASE. Except as disclosed to Lender, the Mortgage Loan
is secured by a fee interest in the Mortgaged Property and not by any ground
lease.
(bb) DEED OF TRUST. With respect to the Mortgage that is a deed of
trust or trust deed, a trustee, duly qualified under applicable law to serve as
such, has either been properly designated and currently so serves or may be
substituted in accordance with applicable law. Except in connection with a
trustee's sale after default by the Mortgagor or in connection with the release
of the Mortgaged Property following the payment of the Mortgage Loan in full, no
fees or expenses are payable by Borrower or Lender to such trustee.
(cc) TYPE OF MORTGAGED PROPERTY. The Mortgaged Property consists of a
fee simple interest (or if disclosed to Lender, a leasehold interest) in real
property and improvements thereon as set forth in the schedule attached hereto
as EXHIBIT D. The Mortgaged Property is improved as a commercial Mortgaged
Property or a multifamily Mortgaged Property as set forth on the schedule
attached hereto as EXHIBIT D.
(dd) MORTGAGE ACCELERATION PROVISIONS. The Mortgage contains a
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that (1) subject to a one-time transfer right
pursuant to the Mortgage, the Mortgaged Property is sold or transferred without
the prior written consent of the mortgagee thereunder or (2) the Mortgagor
encumbers the Mortgaged Property without the prior written consent of the
mortgagee thereunder.
(ee) NO ADDITIONAL COLLATERAL. The Mortgage Note is not, and has not
been, secured by any collateral except the liens and security interests
evidenced by the Mortgage Loan Documents assigned pursuant to the Assignment of
Mortgage. The Mortgage was not given as collateral or security for the
performance of obligations of any Person other than Borrower under the Mortgage
Note.
(ff) ASSIGNMENT OF LEASES AND RENTS. The Mortgage Loan Documents
contain the provisions of an Assignment of Rents or a separate Assignment of
Rents is part of the Mortgage Loan Documents. Any Assignment of Leases and Rents
creates a valid first priority perfected present assignment of, or security
interest in, the right to receive all payments due under the related leases, if
any, subject only to the Permitted Encumbrances, to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium or other laws relating to
or affecting the
14
rights of creditors generally and general principles of equity (regardless of
whether considered in a proceeding in equity or at law); and no Person other
than the Mortgagor owns any interest in the right to receive any payments due
under any such leases that is superior to or of equal priority with the
mortgagee's interest therein except for a Person holding a Permitted
Encumberence.
(gg) ENVIRONMENTAL ASSESSMENT. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment) ("ASSESSMENT REPORT"), which was (were)
performed on behalf of Borrower by an environmental professional independent of
Borrower, or as to which the related report was delivered to Borrower in
connection with its origination or acquisition of such Mortgage Loan; and
Borrower, having made no independent inquiry other than reviewing the resulting
Assessment Report(s) and/or employing an environmental consultant to perform the
assessment(s) referenced herein, has no knowledge of any material and adverse
environmental conditions or circumstance affecting such Mortgaged Property that
was not disclosed in the related Assessment Report(s). Borrower has not taken
any action with respect to such Mortgage Loan or the related Mortgaged Property
that could subject Lender, or its successors and assigns in respect of the
Mortgage Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Borrower has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related Assessment Report. To the extent
any such condition or circumstance was disclosed, there has been escrowed an
amount of money considered sufficient by Borrower, based upon the related
Assessment Reports, to cure and remedy such condition or circumstance as
recommended in the related Assessment Report or such condition has been cured
and remedied. The related Mortgage requires the Mortgagor to comply with all
applicable federal, state and local environmental laws and regulations.
(hh) FLOOD ZONE. To Borrower's knowledge based upon the survey obtained
with respect to each Mortgage Loan, if any portion of a Mortgaged Property was,
at the time of the origination of the related Mortgaged Loan, in an area
identified in the Federal Register by the Federal Emergency ManagementAgency as
having special flood hazards, and flood insurance was available, a flood
insurance policy meeting any requirements of the then current guidelines of the
Federal Insurance Administration is in effect with an insurance carrier
acceptable to Borrower, in an amount representing coverage not less than the
least of (1) the outstanding principal balance of such Mortgage Loan, (2) the
full insurable value of such Mortgaged Property, and (3) the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended.
15
(ii) ADVERSE PROCEEDINGS. To Borrower's knowledge, there are no
actions, suits or proceedings before any court, administrative agency or
arbitrator concerning the Mortgage Loan or the Mortgaged Property that might
materially and adversely affect title to the Mortgage Loan or the validity or
enforceability of the related Mortgage or that might materially and adversely
affect the value of the Mortgaged Property as security for the Mortgage Loan,
the use for which such premises were intended or the marketability of such
Mortgaged Property.
(jj) PROPERTY CONDITION. Based solely on the engineering report
received at the origination of the Mortgage Loan or such other engineering
report reviewed by Borrower, and otherwise to the Borrower's knowledge (A) the
Mortgaged Property is in good repair and free of structural defects, damage and
waste that would materially and adversely affect the value of such Mortgaged
Property other than matters described in such report for which an escrow of
funds or reserves has been provided or as of the Closing Date has been repaired
or corrected in all material respects, and there is no proceeding pending for
the total or partial condemnation thereof and (B) all building systems are in
good working order subject to ordinary wear and tear. With respect to Mortgage
Loans originated by Borrower, Borrower inspected the related Mortgaged Property
in connection with the origination of the related Mortgaged Loan.
(kk) ADDITIONAL FINANCING. Except for Permitted Encumbrances, the
Mortgage Loan does not permit the Mortgagor to obtain additional financing
secured by the Mortgaged Property, the lien of which is senior to, on a parity
with, or subordinate to the Mortgage Loan, without the consent of the mortgagee.
(11) ACCESS ROUTES. At the time of origination of the Mortgage Loan
(based upon a representation from Mortgagor and a review of the survey), the
Mortgagor had sufficient rights with respect to ingress and egress and similar
matters identified in the appraisal of the Mortgaged Property as being critical
to the appraised value thereof.
16
(mm) RECORDATION. The Mortgage is properly recorded (or, if not
recorded, has been submitted for recording), is in form and substance acceptable
for recording and, when properly recorded, will be sufficient under the laws of
the jurisdiction wherein the Mortgaged Property is located to reflect of record
the lien of such Mortgage.
(nn) NO FRAUD. Neither Borrower nor any of its officers or employees
has participated in or condoned any fraud in connection with the origination,
underwriting or servicing of the Mortgage Loan. Borrower has no knowledge of any
fraud committed against it as a lender with respect to the Mortgage Loan.
(oo) MANAGEMENT AGREEMENT. Borrower has reviewed the Management
Agreement for the related Mortgaged Property (if any) (the "MANAGEMENT
AGREEMENT") and any acknowledgment agreement from the Manager thereunder, and
based on such review and to the knowledge of Borrower (based solely on a
representation of Mortgagor, if any), the Management Agreement is in full force
and effect, and no default, or event which, with the passage of time or the
giving of notice or both, would constitute a default, has occurred under such
Management Agreement.
(pp) APPRAISAL. The Mortgage File contains an Appraisal of the
Mortgaged Property by an appraiser, who, to the knowledge of Borrower, had no
interest, direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, whose compensation, under the terms of the appraiser's
engagement, to the knowledge of Borrower, was not (directly or indirectly) based
upon the approval or disapproval of the Mortgage Loan (other than a reduction of
such compensation due to an early termination of the engagement); and who (1)
was MAI certified, or (2) if Lender expressly approved in writing, after written
disclosure to it, was state-licensed or state-certified if required by
applicable law and was a member of, and had a professional designation from, a
nationally recognized appraisal organization other than MAI. To the knowledge of
Borrower, such Appraisal satisfied Borrower's customary underwriting and closing
requirements and procedures. The market value used by Borrower in calculating
the loan-to-value ratio of the Mortgage Loan was not greater than the appraised
value as set forth in such Appraisal.
(qq) RECOURSE. The Mortgage Loan Documents contain Borrower's standard
provisions providing for recourse against the Mortgagor for damages sustained in
connection with the Mortgagor's fraud, material misrepresentation, or
misappropriation. The Mortgage Loan Documents contain provisions pursuant to
which the Mortgagor has agreed to indemnify the mortgagee for damages resulting
from violations of Environmental Laws.
17
(rr) LEGAL OPINIONS. The Mortgage File for the Mortgage Loan contains
an opinion from counsel in such form as is customarily acceptable to
reasonable and prudent mortgage lenders and with no material deviations
therefrom except as disclosed to Lender.
(ss) MORTGAGE NOTE. When a Mortgage Note is delivered to Lender or its
designee, it will be the only promissory note evidencing the related
Mortgaged Loan that has been manually signed by the Mortgagor, except for
any earlier promissory notes consolidated with such Mortgage Note, an
original of which is included in the related Mortgage File.
Without limitation of Lender's rights to declare that any Mortgage Loan
no longer constitutes an Eligible Mortgage Loan by reason of any deviation from
the foregoing criteria, to the extent that the Lender has approved in writing a
Mortgage Loan containing any deviation from the foregoing criteria for an
Eligible Mortgage Loan, which has been disclosed to Lender, in connection with
its review of a Mortgage Loan, such Mortgage Loan shall constitute an Eligible
Mortgage Loan hereunder notwithstanding the continued existence of such
deviation.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
18
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"EURODOLLAR LENDING OFFICE" means the office of Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule A hereto or such other
office of Lender as Lender may from time to time specify to Borrower.
"EURODOLLAR RATE" means, for any Interest Period, (a) either (i) the
quotation (expressed as percentage per annum) appearing on Telerate Page 3750 as
of 11:00 a.m., New York time, on the relevant Determination Date for such
Interest Period for U.S. Dollar deposits for the relevant Interest Period in the
London interbank market (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) or, if no such rate appears on
Telerate Page 3750, or (ii) the arithmetic mean (rounded upward, if necessary,
to the nearest one hundred-thousandth of a percentage point) of the rates quoted
at approximately 11:00 am., London time, on such Determination Date, by four (4)
major banks in the London interbank market, selected by Lender, to prime banks
in the London interbank market for U.S. Dollar deposits for the relevant
Interest Period commencing on the first day of such Interest Period and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time, provided
that, if fewer than four such quotations are provided as requested, the rate of
interest that is in effect on such Determination Date will be the Eurodollar
Rate for the immediately preceding Interest Period divided by (b) one (1) minus
the Eurodollar Rate Reserve Percentage. The foregoing notwithstanding, the
Eurodollar Rate for any Stub Interest Period shall be determined on the basis of
a one-month Interest Period commencing on the date of the applicable Advance.
"EURODOLLAR RATE ADVANCE" means any Advance which bears interest in
accordance with SECTION 2.05(A)(II).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period means the
reserve percentage applicable two (2) Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
19
"EVENT OF DEFAULT" has the meaning specified in SECTION 6.01.
"EXCLUDED TAXES" has the meaning specified in SECTION 2.08(A).
"EXCULPATED PARTIES" has the meaning specified in SECTION 9.12.
"FACILITY EQUITY" means (a) the sum of (i) the aggregate Loan Value of
all Mortgage Loans pledged as Collateral, plus (ii) all cash and cash
equivalents of Borrower plus (iii) the fair market value of any nonliquid assets
accepted by Lender in its sole discretion as part of Facility Equity (such fair
market value determination to be made by Lender in its sole discretion) less (b)
the aggregate unpaid principal balance of the Advances.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to 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 for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.
"FISCAL YEAR" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on November 30 in any calendar year or such other fiscal
year as the Borrower may select from time to time in accordance with the terms
of this Agreement.
"FLOATING RATE LOAN" means an Eligible Mortgage Loan that bears
interest at a flutuating rate.
"GAAP" means generally accepted accounting principles consistently
applied and consistent with those applied in the preparation of the financial
statements referred to in SECTION 5.04.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state,
county, municipality or other political subdivision or branch thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any agency, board,
commission, court, department or officer thereof.
20
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Debt or
other obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Debt or obligation; PROVIDED, HOWEVER,
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"HAZARDOUS MATERIALS" means (a) refined petroleum products, by-products
or breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements to which a Mortgagor is
a party.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 9.04(B).
"INDEPENDENT" means, with respect to any specified Person, such a
Person who (a) does not have any direct financial interest or any material
indirect financial interest in the Borrower or in any of its Affiliates, (b) is
not connected with the Borrower as an officer, employee, promoter, underwriter,
trustee, partner or director and (c) is not controlled by or under common
control with the Borrower.
"INITIAL ADVANCE" means the initial Advance by the Lender pursuant to
this Agreement.
"INITIAL MATURITY DATE" means June 1, 1999.
21
"INTEREST PAYMENT DATE" means the first (1st) day of each calendar
month while any portion of the Loan remains unpaid; PROVIDED, HOWEVER, that if
such Interest Payment Date is not a Business Day, such Interest Payment Date
shall be the immediately succeeding Business Day.
"INTEREST PERIOD" means, a period commencing on the date of the Initial
Advance hereunder and ending the next succeeding Interest Payment Date and each
successive one month period from and including each Interest Payment Date to but
excluding the next succeeding Interest Payment Date; PROVIDED, HOWEVER, that
with respect to any Advance that is funded by Lender on a day other than an
Interest Payment Date, the initial Interest Period for such Advance (a "STUB
INTEREST PERIOD") shall be the period commencing on the date of such Advance and
ending on the next succeeding Interest Payment Date; and provided further that
no Interest Period shall extend beyond the Maturity Date.
"INTEREST RESET DATE" means the first day of the applicable Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"KEEPWELL AGREEMENT" means that certain keepwell agreement by and
between Borrower and Lender substantially in the form attached hereto as EXHIBIT
I.
"LAWS" means all present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, determinations,
awards and court orders of any federal, state, municipal or local government,
governmental authority, regulatory agency or authority.
"LENDER" has the meaning specified in the Preliminary Statement.
"LENDER'S ACCOUNT" means an account of the Lender designated in writing
by the Lender to the Borrower.
"LIBOR BREAKAGE" means the amount of losses, costs, charges and damages
which are actually incurred or which would be incurred by Lender (as reasonably
determined by Lender) as a result of any early termination of any arrangement,
or the entry into a new arrangement, with any other member of the London
interbank market for the funding of any portion of any Advance (determined as
though such Lender had funded 100% of such portion in the London interbank
market and calculated as of the date of the applicable repayment or
acceleration).
22
"LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"LNR" has the meaning specified in SECTION 4.01(E).
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Note, (iii) the
Collateral Documents and (iv) any other written agreement, document or
instrument evidencing, securing or otherwise related to the Advances, in each
case as amended or otherwise modified from time to time.
"LOAN SERVICER" has the meaning specified in SECTION 7.02.
"LOAN VALUE" means, (a) with respect to any Mortgage Loan, an amount
equal to the lesser of (i) the outstanding principal amount of the applicable
Mortgage Loan, (ii) the purchase price paid by Borrower to acquire the Loan or
(iii) the fair market value of such Mortgage Loan, as determined by Lender in
its sole discretion, and (b) with respect to any other Collateral, the fair
market value of such Collateral, as determined by Lender in its sole discretion.
"MARGIN CALL NOTICE" has the meaning specified in SECTION 2.04(B).
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance or
properties of Borrower and its Subsidiaries, taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties of Borrower and its Subsidiaries, taken as a whole, (b) the rights
and remedies of the Lender under any Loan Document or (c) the ability of
Borrower to perform its Obligations under any Loan Document to which it is or is
to be a party.
"MATURITY DATE" means, with respect to any Advance, the date which is
the earlier to occur of (i) the Termination Date and (ii) the date which is the
first anniversary of the funding of such Advance.
"MINIMUM COLLATERAL VALUE" means an amount equal to Fifteen Million and
00/100 Dollars ($15,000,000.00).
23
"MORTGAGE" means the mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, one or more
Mortgaged Properties securing a Mortgage Note, together with any rider, addendum
or amendment thereto, as amended from time to time.
"MORTGAGE CONSTANT" means ten percent (10%) per annum with respect to
any Mortgage Loan.
"MORTGAGE FILE" means, with respect to any Eligible Mortgage Loan, the
documents listed on SCHEDULE D attached hereto.
"MORTGAGE LOAN" means a mortgage loan originated or acquired by the
Borrower, or participation or similar interests in such Mortgage Loans, and
secured by a Mortgaged Property, including the related Mortgage Note, Mortgage,
the Borrower's interest in any Hedge Agreements and other Mortgage Loan
Documents, as well as any reserves, escrows or other deposits maintained in
connection with such mortgage loan.
"MORTGAGE LOAN DOCUMENTS" means, with respect to any Mortgage Loan, the
related Mortgage Note, Mortgage, Assignment of Rents, Hedge Agreement and any
other agreement, instrument or document evidencing or securing such Mortgage
Loan.
"MORTGAGE NOTE" means, with respect to any Mortgage Loan, the
promissory note or other evidence of indebtedness of the Mortgagor under such
Mortgage Loan, including any amendments or modifications, or any renewal or
substitution notes, as of such date.
"MORTGAGED PROPERTY" means the real property securing a Mortgage Loan,
consisting of either a Multifamily Property or a Commercial Property.
"MORTGAGOR" means the borrower under any Mortgage Loan.
"MULTIFAMILY PROPERTY" means a fee simple estate in or a ground lease
on a parcel of real property, together with all improvements thereon, which
property consists of five (5) or more residential dwelling units, together with
any personal property, fixtures, leases, and other property or rights of the
owner pertaining thereto.
"NET CASH PROCEEDS" means, with respect to any sale, transfer or other
disposition of any Mortgage Loan, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary out-of-pocket brokerage commissions, underwriting fees
and discounts, legal fees, finder's fees and other similar fees and commissions,
(b) reasonable and customary out-of-pocket closing costs and (c) the amount of
taxes payable in connection with or as a result of such transaction, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person and are properly attributable to such transaction or to
the asset that is the subject thereof.
24
"NON-RENEWAL NOTICE" has the meaning specified in SECTION 2.02(C).
"NOTE" means a promissory note of Borrower payable to the order of the
Lender, in substantially the form attached hereto as EXHIBIT A, evidencing the
indebtedness of Borrower to the Lender resulting from the Advances made by the
Lender.
"NOTICE OF BORROWING" has the meaning specified in SECTION 2.02.
"OBLIGATION" means, with respect to any Person, any payment or
performance obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
SECTION 6.01(F). Without limiting the generality of the foregoing, the
Obligations of Borrower under the Loan Documents include (a) the obligation to
pay principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by Borrower under any Loan
Document and (b) the obligation of Borrower to reimburse any amount in respect
of any of the foregoing that the Lender, in its sole discretion, may elect to
pay or advance on behalf of Borrower.
"ORGANIZATIONAL DOCUMENTS" means, (i) with respect to any Person that
is a corporation, the certificate of incorporation or charter and by-laws of
such Person, (ii) with respect to any Person that is a partnership, the
partnership agreement and, if a limited partnership, certificate of limited
partnership of such Person, and (iii) with respect to any Person that is a
limited liability company, the articles of organization and the operating
agreement of such Person.
"OTHER TAXES" has the meaning specified in SECTION 2.08(B).
"PERMITTED ENCUMBRANCES" means, collectively and with respect to a
Mortgaged Property encumbered by an Eligible Mortgage Loan, (i) Liens for real
estate taxes and special assessments not yet due and payable, (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of the related mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Eligible Mortgage Loan, none of which materially
interferes with the benefits of the security intended to be provided by such
Mortgage, (iii) exceptions and exclusions specifically referred to in Borrower's
mortgagee title insurance policy, none of which materially interferes with the
benefits of the security intended to be provided by the related Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property in
relation to the appraised value of such Mortgaged Property utilized in
connection with the origination of the related Eligible Mortgage Loan, (iv)
other matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially
25
interfere with the benefits of the security intended to be provided by the
Mortgage thereon, or (v) other encumbrances and liens specifically approved by
Lender after its due diligence of such Mortgage Loan in connection with
confirming that a Mortgage Loan constitutes an Eligible Mortgage Loan.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies not yet due and payable; (b) Liens imposed by law, such as landlord's,
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 90 days; and (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELEASE PRICE" means, with respect to an Eligible Mortgage Loan, the
payment to be made by Borrower in order to effect the release of such Eligible
Mortgage Loan from the Liens of the Loan Documents thereon, which Release Price
shall be equal to the sum of (a) the product of (x) the Loan Value for the
applicable Mortgage Loan on the date of release and (y) the applicable Advance
Rate, PLUS (b) LIBOR Breakage, if any, and shall be adjusted by Lender to
account for any principal payments made from time to time by the Borrower in
respect of such Mortgage Loan.
"RESPONSIBLE OFFICER" means the following officers of Borrower or any
officer of Borrower subsequently designated in writing by Borrower as a
"Responsible Officer": (i) President; (ii) Vice-President; (iii) Chief Operating
Officer; (iv) Chief Executive Officer; and (v) Chief Financial Officer.
"SECURITIZATION" means the creation and issuance of CMBS in a
registered or unregistered offering or offerings.
"SECURITY AGREEMENT" has the meaning specified in SECTION 3.01(D)(VII).
26
"SIDE LETTER" means a letter agreement in substantially the form
attached hereto as EXHIBIT J between LNR Corporation and Deutsche Xxxxxx
Xxxxxxxx, Inc., pursuant to which LNR Corporation agrees to retain Deutsche
Xxxxxx Xxxxxxxx, Inc. as lead manager in connection with any Securitization of
Mortgage Loans pledged as Collateral hereunder.
"SOLVENT" AND "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"STUB INTEREST PERIOD" has the meaning specified in the definition of
"INTEREST PERIOD".
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"TAXES" has the meaning specified in SECTION 2.08(A).
"TERMINATION DATE" means June 1, 1999, subject to extension in
accordance with SECTION 2.02(C).
"TANGIBLE NET WORTH" means, as to any Person and as of determination,
the net worth of such Person at such time, determined in accordance with GAAP,
less the amount of all intangible items, including, without limitation,
goodwill, franchises, licenses, patents, trade marks, trade names, copyrights,
service marks, brand names, write-ups of assets and any unallocated excess costs
of investments in subsidiaries over equity in underlying net assets at dates of
acquisition.
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"TRANSFER" means, with respect to any item of property, any conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation, granting of
a security interest in, granting of options with respect to, or other
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest in such property.
"TRUST RECEIPT" means, with respect to any Eligible Mortgage Loan, the
Trust Receipt issued by the Custodian with respect thereto, pursuant to the
Custodial Agreement and in the form attached thereto, certifying that the
Custodian is holding, on behalf of the Lender as collateral assignee, the
documents described in the Custodial Agreement with respect to such Eligible
Mortgage Loan.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
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ARTICLE II
AMOUNT AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. The Lender agrees, on the terms and
conditions hereinafter set forth, to make advances (each, an "ADVANCE") to the
Borrower from time to time on any Business Day during the period from the date
hereof until the Termination Date in an aggregate principal amount not to exceed
the Borrowing Limit. Each Advance shall, unless approved in advance by Lender,
be in a minimum principal amount of $1,000,000 or an integral multiple of
$10,000 in excess thereof. Within the Borrowing Limit in effect from time to
time, the Borrower may borrow under this SECTION 2.01, prepay pursuant to
SECTION 2.04 and reborrow under this SECTION 2.01.
SECTION 2.02. MAKING THE ADVANCES. (a) Upon satisfaction of the
conditions precedent to Lender's obligations pursuant to this Agreement, the
Advances shall be made on notice, given not later than 11:00 A.M. (New York City
time) on the second Business Day prior to the date of the proposed disbursement
of the Advance, by the Borrower to Lender. Such notice (a "NOTICE OF BORROWING")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
in substantially the form of EXHIBIT G hereto, specifying therein (i) the
requested date of such Advance and (ii) the amount of such Advance. Subject to
the satisfaction of the conditions precedent to Lender's obligations under this
Agreement, the Lender shall, on the date of the proposed Advance, make funds in
an amount equal to the amount of such Advance available to Borrower by crediting
Borrower's Account.
(b) Lender and Borrower shall consult one another and cooperate with
respect to the identification of potential Eligible Mortgage Loans for inclusion
as Collateral under this Agreement. In order to obtain formal approval from
Lender of a particular Mortgage Loan as an Eligible Mortgage Loan, Borrower
shall submit to Lender a review package with respect to such Mortgage Loan
containing the following:
(i) an underwriting narrative for the applicable Mortgage Loan
including the indicative debt service coverage ratio and loan-to-value
ratio of the applicable Mortgaged Property;
(ii) the most recent rent roll, to the extent available, for the
applicable Mortgaged Property;
(iii) current and, to the extent available, historical financial
statements for the applicable Mortgaged Property for the three (3) most
recent fiscal years;
29
(iv) all available financial information with respect to the applicable
Mortgagor;
(v) copies of any Appraisal, engineering report, environmental
assessment or other report prepared by any third party consultants;
(vi) an analysis of any unusual features of the applicable Mortgage
Loan (e.g., that the Mortgagor's interest is a condominium or a ground
lease); and
(vii) such other information as Lender may reasonably request.
In addition, Borrower shall, at the request of Lender provide Lender the
opportunity to conduct a site inspection of the applicable Mortgaged Property.
Lender shall endeavor in good faith to respond in writing within five (5)
Business Days after submission of the information set forth above as to whether
the proposed Mortgage Loan constitutes an Eligible Mortgage Loan under this
Agreement. Borrower shall not submit any Notice of Borrowing requesting an
Advance with respect to any Mortgage Loans until such time as Borrower has
received written confirmation from Lender that such Mortgage Loans constitute
Eligible Mortgage Loans and as to the Loan Value of such Eligible Mortgage
Loans.
(c) EXTENSION OF TERMINATION DATE. Unless either Lender or Borrower
elects, by notice (the "NON-RENEWAL NOTICE") delivered to the other no later
than one hundred eighty (180) days prior to the Initial Maturity Date, not to
extend the term of the facility contemplated by this Agreement (any such
election to be at the sole discretion of the party making same), the Termination
Date shall be automatically extended to June 1, 2000.
SECTION 2.03. REPAYMENT OF ADVANCES. (a) MATURITY. Subject to the
provisions of SECTION 2.04, Borrower shall repay to Lender the aggregate
outstanding principal amount of each Advance outstanding on the applicable
Maturity Date.
(b) ADVANCES REPAID BY ADVANCES. To the extent the Termination Date is
extended pursuant to SECTION 2.02(C), an Advance may be repaid by another
Advance against the same Mortgage Loans covered by the Advance being repaid;
PROVIDED that (i) no Material Adverse Change has occurred with respect to the
prior Advance and (ii) all of the conditions precedent to Lender's obligations
pursuant to this Agreement have been satisfied with respect to such subsequent
Advance.
SECTION 2.04. PREPAYMENTS. (a) VOLUNTARY. The principal amount of the
Advances made by Lender pursuant to this Agreement may be prepaid in whole or in
part at the option of Borrower, upon not less than five (5) Business Days'
notice to Lender.
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(b) MANDATORY. (i) COLLECTIONS OF PRINCIPAL. Borrower shall, on each
Interest Payment Date, prepay an aggregate principal amount of the Advances
outstanding equal to (A) the amount of principal paid by Mortgagors during the
period commencing on the immediately preceding Interest Payment Date and ending
on the day before such Interest Payment Date with respect to the Mortgage Loans
comprising Collateral for the Obligations of the Borrower under the Loan
Documents and (B) the Advance Rate.
(ii) NET CASH PROCEEDS. Borrower shall, on the date of receipt of the
Net Cash Proceeds by Borrower or any of its Subsidiaries from the sale, transfer
or other disposition of any Collateral, prepay an aggregate principal amount of
the Advances equal to the lesser of (A) the amount of such Net Cash Proceeds and
(B) the principal amount of the Advance made with respect to the applicable
Mortgage Loan sold, transferred or otherwise disposed.
(iii) MARGIN CALL. In the event that on any Business Day prior to the
Termination Date, Lender, acting in good faith, shall determine in its sole
discretion that (A) any Mortgage Loan constituting Collateral hereunder no
longer qualifies as an Eligible Mortgage Loan or (B) there has been a reduction
in the Loan Values of any Eligible Mortgage Loans constituting Collateral and,
as a result, a Borrowing Base Deficiency then exists, Lender shall deliver a
notice (a "MARGIN CALL NOTICE") to the Borrower requesting that Borrower cure
such Borrowing Base Deficiency. Each Margin Call Notice shall set forth in
reasonable detail the basis for such Borrowing Base Deficiency, including
identification of those Mortgage Loans no longer constituting Eligible Mortgage
Loans (as the reasons for such determination) and with respect to which the
Lender has reduced the related Loan Value. Within two (2) Business Days
following receipt of a Margin Call Notice, Borrower shall cure such Borrowing
Base Deficiency by either (x) prepaying an aggregate principal amount of the
Advances equal to the amount of any Borrowing Base Deficiency, (y) pledging
additional Eligible Mortgage Loans to Lender having an aggregate Loan Value
equal to the amount of the applicable Borrowing Base Deficiency or (z) obtaining
a release of the applicable Mortgage Loans in accordance with the terms and
conditions of ARTICLE VIII by prepaying the Release Price with respect to such
Mortgage Loans. For purposes of this subsection, if at any time such Mortgage
Loan shall otherwise become a Defaulted Loan, then such Mortgage Loan, as the
case may be, shall no longer constitute an Eligible Mortgage Loan.
(iv) CHANGE OF CONTROL. In the event that there is a Change of Control
of Borrower, Lender may (i) by notice to Borrower declare the Note, all interest
thereon, and other amounts payable under this Agreement and the other Loan
Documents to be due and payable as of the date set forth in such notice, which
date shall be not less than sixty (60) days after the date of such notice,
whereupon Borrower shall prepay on such date all such amounts without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Borrower, and (ii) declare its obligation to make
further Advances to be terminated, whereupon the same shall forthwith terminate.
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All prepayments under this SUBSECTION (B) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid. If any
payment required to be made under this SECTION 2.04(B) (or any prepayment as a
result of an acceleration following the occurrence of an Event of Default) on
account of Eurodollar Rate Advances would be made other than on the last day of
the applicable Interest Period therefor, the Borrower shall concurrently with
such prepayment, reimburse the Lender for any LIBOR Breakage; PROVIDED, HOWEVER,
that in lieu of paying such LIBOR Breakage, the Borrower shall have the option
to make such prepayment into an account of the Lender (the "CASH COLLATERAL
ACCOUNT") in which event such funds shall be held by the Lender in the Cash
Collateral Account as additional security for the Advances and shall not be
applied to the repayment of the applicable Advance until the last day of the
applicable Interest Period. In such event the Borrower shall execute and deliver
such documents as the Lender shall reasonably request in order to establish,
perfect and evidence the Lender's interests in the Cash Collateral Account.
SECTION 2.05. INTEREST. (a) SCHEDULED INTEREST. Borrower shall pay
interest on the unpaid principal amount of each Advance owing to the Lender from
the date of such Advance until such principal amount shall be paid in full, at
the following rates per annum:
(i) BASE RATE ADVANCES. For periods, if any, during which this
Agreement provides that such Advance shall accrue interest based upon the Base
Rate, a rate per annum equal at all times to the Base Rate in effect from time
to time; payable in arrears monthly on each Interest Payment Date during such
periods and on the date such Base Rate Advance shall be converted or paid in
full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Margin, payable in
arrears monthly on each Interest Payment Date.
Except as expressly provided in SECTION 2.06, interest on all outstanding
Advances shall accrue and be payable in accordance with CLAUSE (II) of this
SECTION 2.05(A).
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
an Event of Default, Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to the Lender, payable in arrears on each Interest
Payment Date and on demand, at a rate per annum equal at all times to the lesser
of (x) the maximum non-usurious rate permitted by law or (y) five percent (5%)
per annum above the rate per annum required to be paid on such Advance pursuant
to CLAUSE (A)(I) or (A)(II) above and (ii) to the fullest extent permitted by
law, the amount of any interest, fee or other amount payable hereunder that is
not paid when due, from the date such amount shall be due until such amount
shall be paid in full, payable in arrears on the date such amount shall be paid
in full and on demand, at a rate per annum equal at all times to the lesser of
(x) the maximum non-usurious rate permitted by law or (y) five percent (5%) per
annum above the rate per annum required to be paid on the applicable Advances.
32
(c) NOTICE OF INTEREST RATE. Lender (or a Loan Servicer on behalf of
Lender) shall, prior to the commencement of each Interest Period, determine and
provide Borrower with a statement of the Eurodollar Rate applicable for the
related Interest Period and the applicable interest rate for the related
Interest Period. After determining the applicable interest rate, Lender (or a
Loan Servicer on behalf of Lender) shall calculate the aggregate interest
payment payable on the outstanding Advances on the relevant Interest Payment
Date and shall, as soon as practicable, notify Borrower of such rates and the
amount of the applicable interest installments. The determination of the
interest rate payable on the outstanding Advances and the calculation of each
interest installment by Lender (or a Loan Servicer on behalf of Lender) shall,
in the absence of manifest error, be presumptive evidence of the amount due;
PROVIDED, HOWEVER, that any error in the determination of such interest rates
and the calculation of each interest installment made by Lender (or a Loan
Servicer on behalf of Lender) shall not relieve Borrower from its obligations
hereunder.
SECTION 2.06. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to Lender of agreeing to make or of
making, funding or maintaining any Eurodollar Rate Advance (excluding for
purposes of this SECTION 2.06 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which SECTION 2.08 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which Lender is
organized or has its Applicable Lending Office or any political subdivision
thereof), then Borrower shall from time to time, upon notice thereof and demand
by Lender therefor, pay to Lender additional amounts sufficient to compensate
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to Borrower by Lender, shall be presumptive evidence of the
amount due.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by Lender or any
corporation controlling Lender as a result of or based upon the existence of
Lender's commitment to lend hereunder and other commitments of such type, then,
upon demand by Lender, Borrower shall pay to Lender, from time to time as
specified by Lender, additional amounts sufficient to compensate Lender in the
light of such circumstances, to the extent that Lender reasonably determines
such increase in capital to be allocable to the existence of Lender's commitment
to lend hereunder. A certificate as to such amounts submitted to Borrower by
Lender shall be presumptive evidence of the amount due.
33
(c) If, Lender notifies Borrower that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to Lender of making,
funding or maintaining any Advance as a Eurodollar Rate Advance for such
Interest Period, (i) such Advance will automatically, on the last day of the
then existing Interest Period therefor, convert from a Eurodollar Rate Advance
into a Base Rate Advance and (ii) the obligation of Lender to make or maintain
Eurodollar Rate Advances shall be suspended until Lender shall notify Borrower
that it has determined that the circumstances causing such suspension no longer
exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for Lender or its Eurodollar Lending
Off'ce to perform its obligations hereunder to fund or maintain any Eurodollar
Rate Advances hereunder, then, on notice thereof and demand therefor by Lender
to Borrower (i) such Advances will automatically, upon such demand, convert into
Base Rate Advances and (ii) the obligation of the Lender to make or maintain
Eurodollar Rate Advances shall be suspended until Lender shall notify Borrower
that it has determined that the circumstances causing such suspension no longer
exist.
SECTION 2.07. PAYMENTS AND COMPUTATIONS. (a) Borrower shall make each
payment hereunder and under the Note, irrespective of any right of counterclaim
or set-off, not later than 3:00 P.M. (New York City time) on each Interest
Payment Date in U.S. dollars to Lender at the Lender's Account in same day
funds.
(b) Borrower hereby authorizes Lender, if and to the extent payment
owed to Lender is not made when due hereunder or under the Note, to charge from
time to time against any or all of Borrower's accounts with Lender any amount so
due.
(c) All computations of interest and fees shall be made by Lender (or
any Loan Servicer on behalf of Lender) on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by Lender (or any Loan Servicer on
behalf of Lender) of an interest rate or fee hereunder shall be presumptive
evidence of the amount due.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
34
SECTION 2.08. TAXES. (a) Any and all payments by Borrower hereunder or
under the Note shall be made, in accordance with SECTION 2.07, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
EXCLUDING taxes that are imposed on Lender's overall net income by the United
States and taxes that are imposed on the Lender's overall net income (and
franchise taxes imposed in lieu thereof) by the local, state or foreign
jurisdiction under the laws of which Lender is organized or any political
subdivision thereof and taxes that are imposed on Lender's overall net income
(and franchise taxes imposed in lieu thereof) by the local, state or foreign
jurisdiction of Lender's Applicable Lending Office or any political subdivision
thereof (all such excluded taxes being hereafter referred to as "EXCLUDED TAXES"
and all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Note
being hereinafter referred to as "TAXES"). If Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under the
Note to Lender (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.08) Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions and (iii) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Note or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Note other than Excluded Taxes (hereinafter referred to as
"OTHER TAXES").
(c) Borrower shall indemnify Lender for and hold it harmless against
the full amount of Taxes and Other Taxes, and for the full amount of taxes of
any kind imposed by any jurisdiction on amounts payable by Borrower to Lender
under this SECTION 2.08, imposed on or paid by Lender and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto (other than penalties, additions to tax, interest and
expenses resulting from a delay caused by Lender). This indemnification shall be
made within 30 days from the date Lender makes written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at its address referred to in SECTION 9.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Note by or on behalf of Borrower
through an account or branch outside the United States or by or on behalf of
Borrower by a payor that is not a United States person, if Borrower determines
that no Taxes are payable in respect thereof, Borrower shall furnish, or shall
cause such payor to furnish, to the Lender, at such address, an opinion of
counsel acceptable to Lender stating that such payment is exempt from Taxes. For
purposes of this SUBSECTION (D) and SUBSECTION (E), the terms "UNITED STATES"
and "UNITED STATES PERSON" shall have the meanings specified in SECTION 7701 of
the Internal Revenue Code.
35
(e) Lender shall, on or prior to the date of its execution and delivery
of this Agreement, and from time to time thereafter as requested in writing by
Borrower (but only so long thereafter as Lender remains lawfully able to do so),
provide Borrower with two original Internal Revenue Service forms 1001 or 4224,
as appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Note. If any form or document referred to in this SUBSECTION (E) requires
the disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form 1001 or 4224 that Lender reasonably considers to be confidential,
Lender shall give notice thereof to Borrower and shall not be obligated to
include in such form or document such confidential information, so long as
Borrower is still able to satisfy Internal Revenue Service requirements to
enable it not to withhold tax on payments or, if not able to satisfy such
requirements, Borrower will be entitled to withhold tax on such payments
hereunder.
(f) For any period with respect to which Lender has failed to provide
Borrower with the appropriate form described in SUBSECTION (E) above (OTHER THAN
if such failure is due to a change in law occurring after the date on which a
form originally was required to be provided or if such form otherwise is not
required under SUBSECTION (E) above), Lender shall not be entitled to
indemnification under SUBSECTION (A) or (C) with respect to Taxes imposed by the
United States by reason of such failure; PROVIDED, HOWEVER, that should Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, Borrower shall take such steps as Lender shall reasonably request to
assist Lender to recover such Taxes.
SECTION 2.09. USE OF PROCEEDS. The proceeds of the Loan shall be
available (and Borrower agrees that it shall use such proceeds) solely to fund
or acquire Eligible Mortgage Loans.
SECTION 2.10. LATE CHARGE. In the event that any installment of
interest or principal shall become overdue for a period in excess of five (5)
days, a "late charge" in an amount equal to five percent (5%) of the amount so
overdue may be charged to Borrower by Lender for the purpose of defraying the
expenses incident to handling such delinquent payments. Such late charge shall
be in addition to, and not in lieu of, any other remedy the Lender may have and
is in addition to Lender's right to collect reasonable fees and charges of any
agents or attorneys which Lender may employ in connection with any Default.
36
SECTION 2.11. SECURITY FOR THE ADVANCES. Subject to SECTION 9.12 the
Advances shall constitute one general obligation of Borrower to Lender and
Borrower's obligations hereunder and under the other Loan Documents shall be
secured by the Collateral Documents and the security interests and Liens granted
therein.
SECTION 2.12. THE NOTE. Borrower's obligation to pay the principal of
and interest on the Advances shall be evidenced by the Note, duly executed and
delivered by Borrower on the Closing Date. The Note shall be payable as to
principal, interest and all other amounts due under the Loan Documents, as
specified in this agreement, the Note, and the other Loan Documents.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation
of Lender to make the Initial Advance hereunder is subject to the satisfaction
of the following conditions precedent before or concurrently with the Closing
Date:
(a) Before giving effect to the transactions contemplated by this
Agreement, there shall have occurred no Material Adverse Change since November
30, 1997.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting Borrower or any of its Subsidiaries pending or threatened
before any court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect other than the matters described on the
Disclosure Schedule (the "DISCLOSED LITIGATION") or (ii) purports to affect the
legality, validity or enforceability of this Agreement, the Note, any other Loan
Document or the consummation of the transactions contemplated hereby.
(c) Borrower shall have paid all accrued expenses of Lender which
Borrower is required to pay under the Loan Documents (including the accrued,
reasonable fees and expenses of counsel to Lender).
(d) Lender shall have received on or before the Closing Date the
following, each dated such day (unless otherwise specified), in form and
substance satisfactory to Lender (unless otherwise specified):
(i) The Note payable to the order of Lender.
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(ii) Certified copies of the resolutions of the Board of Directors of
Borrower approving this Agreement, the Note and each other Loan Document
to which it is or is to be a party, and of all documents evidencing other
necessary action and governmental and other third party approvals and
consents, if any, with respect to the Advances, this Agreement, the Note
and each other Loan Document.
(iii) A copy of the Organizational Documents of Borrower, together with
each amendment thereto, and, in the case of the certificate of
incorporation of Borrower, certified (as of the Closing Date) by the
Secretary of State of the jurisdiction of its formation or incorporation
as being a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of State of the
jurisdiction of its formation, dated reasonably near the Closing Date,
certifying that (A) Borrower has paid all franchise taxes to the date of
such certificate and (B) Borrower is duly incorporated or formed and in
good standing under the laws of the State of the jurisdiction of its
organization.
(v) A certificate of Borrower, signed on behalf of the Borrower by a
duly authorized officer of Borrower, dated the Closing Date (the
statements made in which certificate shall be true on and as of the
Closing Date), certifying as to (A) the truth in all material respects of
the representations and warranties contained in the Loan Documents as
though made on and as of the Closing Date and (B) the absence of any event
occurring and continuing, or resulting from any Advance, that constitutes
a Default.
(vi) A certificate of the Secretary or an Assistant Secretary of an
authorized officer of Borrower certifying the names and true signatures of
the officers of Borrower authorized to sign this Agreement, the Note and
each other Loan Document to which they are or are to be parties and the
other documents to be delivered hereunder and thereunder.
(vii) A security agreement in form and substance satisfactory to Lender
pledging to Lender and granting Lender a security interest in all of
Borrower's right, title and interest in the Collateral described therein
(such agreement, as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "SECURITY AGREEMENT"), duly
executed by Borrower, together with:
38
(A) acknowledgment copies of proper financing statements, delivered
for filing on or before the Closing Date under the Uniform Commercial Code
of the State of Florida, as well as any other jurisdictions deemed
necessary or desirable by Lender, covering the Collateral described in the
Security Agreement,
(B) completed requests for information, dated on or before the
Closing Date, listing all effective financing statements filed in the
jurisdictions referred to in clause (A) above that name Borrower as
debtor, together with copies of such other financing statements, and
(C) evidence of the completion of all other recordings and filings
of or with respect to the Security Agreement that Lender may deem
necessary or desirable in order to perfect and protect the Liens created
thereby.
(viii) The Side Letter, duly executed by Borrower.
(ix) The Keepwell Agreement, duly executed by Borrower.
(x) A favorable opinion of (A) Bilzin Xxxxxxx Xxxx Price & Xxxxxxx
LLP with respect to the valid existence, due authorization and execution
of the Loan Documents by Borrower and (B) Bilzin Xxxxxxx Xxxx Price &
Xxxxxxx LLP, special counsel for Borrower, with respect to the
enforceability of the Loan Documents, in each case, in form satisfactory
to Lender.
(e) Borrower shall have Facility Equity in an amount equal to or
greater than the Minimum Collateral Value.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of
Lender to make each Advance (including the Initial Advance), shall be subject to
the satisfaction of the following further conditions precedent before or
concurrently with the date of such Advance:
(a) the following statements shall be true and Lender shall have
received a certificate signed by a duly authorized officer of a member of
Borrower, dated the date of such Advance, stating that (and each of the
giving of the applicable Notice of Borrowing and the acceptance by
Borrower of the proceeds of such Advance shall constitute a representation
and warranty by Borrower that both on the date of such Notice of Borrower
and on the date of such Advance such statements are true):
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(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Advance and to the application of
the proceeds therefrom, as though made on and as of such date and each
Mortgage Loan, in respect in which such Advance is made, is an Eligible
Mortgage Loan, subject to any exceptions approved in advance by Lender;
(ii) no event has occurred and is continuing, or would result from
such Advance or from the application of the proceeds therefrom, that
constitutes a Default;
(iii) the funding of such Advance would not exceed the Borrowing
Limit (based upon the Loan Values at the time of Borrower's request for
such Advance) or violate any of the limitations set forth in SECTION 2.02;
(iv) no Borrowing Base Deficiency (based upon the Loan Values at
the time of Borrower's request for such Advance) exists or would result
from such Advance or from the application of the proceeds therefrom; and
(v) the information relating to the Mortgage Loans contained in the
schedule attached hereto as EXHIBIT D shall be attached to such
certificate and such certificate shall state that said information is true
and correct.
(b) Lender shall have received on or before the date of the proposed
Advance, the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to Lender (unless otherwise specified):
(i) a Borrowing Base Certificate;
(ii) a duly executed Assignments of Mortgage and endorsements to
each Mortgage Note prepared in blank; and
(iii) the Mortgage File for each Mortgage Loan added to the
Collateral since the date of the last Advance.
(c) Lender shall have received such other approvals, opinions or
documents as Lender may reasonably request.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower
represents and warrants as follows:
(a) Borrower (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation, (ii)
is duly qualified and in good standing in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse Effect and (iii)
has all requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed
to be conducted.
(b) The execution, delivery and performance by Borrower of this
Agreement, the Note and each other Loan Document to which it is or is to
be a party, and the consummation of the transactions contemplated hereby,
are within Borrower's powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene Borrower's Organizational
Documents, (ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934 and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting Borrower or any of the Mortgaged Properties or
(iv) except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties of Borrower. Borrower is not in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which is reasonably likely to have a Material
Adverse Effect.
(c) Except as already made or obtained, no Authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i)
the due execution, delivery, recordation, filing or performance by
Borrower of this Agreement, the Note or any other Loan Document to which
it is or is to be a party, or for the consummation of the transactions
contemplated hereby, (ii) the grant by Borrower of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance
of the Liens created by the Collateral Documents (including the first
priority nature thereof), or (iv) the exercise by Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for items (iii) and (iv)
above for which a blanket UCC-1 Financing Statement and recording of the
Assignment of Mortgage is required.
41
(d) This Agreement has been, and the Note and each other Loan Document
when delivered hereunder will have been, duly executed and delivered by
Borrower. This Agreement is, and the Note and each other Loan Document
when delivered hereunder will be, the legal, valid and binding obligation
of Borrower, enforceable against the Borrower in accordance with its
terms.
(e) The Consolidated balance sheet of LNR Property Corporation ("LNR")
and its Subsidiaries as at November 30, 1997, and the related Consolidated
statement of income and Consolidated statement of cash flows of LNR and
its Subsidiaries for the fiscal year then ended, accompanied by an opinion
of its independent public accountants, which shall be a nationally
recognized independent public accountant firm, that such statements fairly
represent in all material respects the Consolidated financial condition of
LNR and its Subsidiaries as at such date and the Consolidated results of
the operations of LNR and its Subsidiaries for the period ended on such
date, all in accordance with GAAP, and since November 30, 1997, there has
been no Material Adverse Change.
(f) No information, exhibit or report furnished by Borrower to Lender
in connection with the negotiation of the Loan Documents or pursuant to
the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein not misleading.
(g) Except for any Disclosed Litigation, there is no action, suit,
investigation, litigation or proceeding affecting Borrower, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality, validity
or enforceability of this Agreement, the Note or any other Loan Document
or the consummation of the transactions contemplated hereby.
(h) No proceeds of the Advances will be used to acquire any equity
security of a class that is registered pursuant to SECTION 12 of the
Securities Exchange Act of 1934, as amended.
(i) Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of the
Advances will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
42
(j) Borrower is not and will not be an "employee benefit plan" as
defined in SECTION 3(3) of ERISA, which is subject to Title I of ERISA,
and the assets of Borrower do not and will not constitute "plan assets" of
one or more such plans for purposes of Title I of ERISA.
(k) Borrower is not and will not be a "governmental plan" within the
meaning of SECTION 3(32) of ERISA and transactions by or with the Borrower
are not and will not be subject to state statutes applicable to Borrower
regulating investments of and fiduciary obligations with respect to
governmental plans.
(l) Borrower is not (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "afflliate" of either a
"holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject
to any other Law that purports to restrict or regulate its ability to
borrow money.
(m) Borrower is not a party to any indenture, loan or credit agreement
or any lease or other agreement or instrument or subject to any charter or
corporate restriction that would be reasonably likely to have a Material
Adverse Effect.
(n) When recorded or filed with the appropriate governmental offices,
and when and as the related Mortgage Loan Documents have been delivered to
the Custodian, the Collateral Documents create a valid and perfected first
priority lien on and security interest in the Collateral, securing the
payment of the Secured Obligations. Borrower is the legal and beneficial
owner of the Collateral free and clear of any Lien, except for the liens
and security interests created or permitted under the Loan Documents.
(o) Borrower has filed, has caused to be filed or has been included in
all tax returns (federal, state, local and foreign) required to be filed
and has paid all taxes shown thereon to be due, together with applicable
interest and penalties, for which the failure to file or pay would have a
Material Adverse Effect.
(p) Borrower is Solvent.
(q) The location of Borrower's principal place of business and chief
executive office is at the respective addresses set forth in SECTION 9.02.
(r) Borrower is not a "foreign person" within the meaning of /section/
1445(f)(3) of the Code.
(s) Borrower is not a party to any collective bargaining agreements.
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. [RESERVED]
SECTION 5.02. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or the Lender shall have any commitment hereunder, Borrower will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970, where
the failure to so comply would be reasonably likely to result in a
Material Adverse Effect.
(b) PAYMENT OF TAXES. ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property unless the failure to
pay or discharge same would not have a Material Adverse Effect; PROVIDED,
HOWEVER, that neither Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws, the failure to comply with which would be reasonably
likely to result in a Material Adverse Effect.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which Borrower or
such Subsidiary operates, the failure to comply with which would
reasonably likely result in a Material Adverse Effect.
44
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises; PROVIDED,
HOWEVER, that neither Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if Borrower or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Borrower or such Subsidiary, as the case may be, and that the loss
thereof is not disadvantageous in any material respect to Borrower, such
Subsidiary or Lender.
(f) VISITATION RIGHTS. From time to time, upon reasonable notice and
during normal business hours, permit Lender or any agents or
representatives thereof, to examine and make copies of and abstracts from
the records and books of account of, and visit the offfices of, Borrower
and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(h) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate; PROVIDED, HOWEVER, Borrower or its Subsidiaries may enter into
such a transaction with Affiliates so long as such transaction would not
result in a Material Adverse Effect.
(i) ERISA. Deliver to Lender such certifications or other evidence from
time to time, as reasonably requested by the Lender, that (i) Borrower is
not an "employee benefit plan" as defined in SECTION 3(3) of ERISA, which
is subject to Title I of ERISA, or a "governmental plan" within the
meaning of SECTION 3(32) of ERISA; (ii) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances
is true:
(A) equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. /section/ 2510.3-l0l (b)(2);
45
(B) less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. /section/ 2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. /section/
2510.3-101(c) or (e) or an investment company registered under
The Investment Company Act of 1940.
(j) SERVICING OF LOANS. Borrower, either directly or through one or
more of its Affiliates, shall make all reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans
comprising Collateral, shall provide reasonable advance notice to Mortgagors of
required principal and/or interest payments and shall otherwise service and
administer such Mortgage Loans in accordance with applicable law and customary
and usual servicing practices consistent with the higher of (i) those that a
prudent institutional commercial and multifamily mortgage investor or lender
would use in servicing mortgage loans like the Mortgage Loans for its own
account and (ii) the care, skill, prudence and diligence with which Borrower and
its Affiliates service and administer commercial and multifamily mortgage loans
generally.
SECTION 5.03. NEGATIVE COVENANTS. So long as any Advance shall remain
unpaid, or Lender shall have any remaining Commitment hereunder, Borrower will
not, at any time:
(a) LIENS. ETC. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
on or with respect to the Mortgage Loans that are Collateral hereunder or
any interests therein or rights thereunder or any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names
Borrower as debtor, or sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing statement,
or assign any accounts or other right to receive income, EXCLUDING,
HOWEVER, from the operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on SCHEDULE B
hereto;
46
(iv) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or
other similar bonds, or other similar obligations arising in the
ordinary course of business;
(v) judgment and other similar liens arising in connection with
court proceedings, provided the execution or other enforcement of such
liens is effectively stayed and the claims secured thereby are being
actively and contested in good faith and by appropriate proceeding;
(vi) easements, rights of way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with
the Borrower's occupation, use and enjoyment of the property or assets
encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto; and
(vii) the replacement, extension or renewal of any Lien permitted
by clauses (ii) and (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby.
(b) LEASE OBLIGATIONS. Create, incur, assume or suffer to exist, any
obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii)
for the rental or hire of other real or personal property of any kind
under leases or agreements to lease, including Capitalized Leases having
an original term of one year or more, other than leases of equipment or
office space entered into in the ordinary course of business provided that
the total annual monetary obligations under any such leases shall not
exceed $1,000,000 in aggregate.
(c) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP as reasonably
determined by Borrower.
(d) MERGERS, ETC. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except that (i) any Subsidiary of Borrower may merge into or consolidate
with any other Subsidiary of Borrower provided that, in the case of any
such merger or consolidation, the Person formed by such merger or
consolidation shall be a Subsidiary of Borrower and (ii) Borrower may
merge into or consolidate with LNR or any of its Subsidiaries; PROVIDED,
HOWEVER, that any such permitted merger shall be subject to the following
condition: if Borrower is not the surviving entity, then the surviving
entity must assume all of the obligations of Borrower in and to the Loan
Documents.
47
(e) NEGATIVE PLEDGE. Enter into or suffer to exist any agreement
prohibiting the creation or assumption of any Lien upon any of its
property or assets unless such agreement shall exempt from such
prohibitions Liens in favor of Lender.
(f) ERISA. Engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise
by the Lender of any of its rights under the Note, this Agreement and
the Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under ERISA.
(g) FISCAL YEAR. Change its Fiscal Year.
(h) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on, or contemplated to be carried on, at the date hereof.
(i) SERVICING. Enter into any servicing agreement or otherwise
transfer servicing rights with respect to the Mortgage Loans with any
Person that is not an Affiliate of Borrower without the written consent
of the Lender.
SECTION 5.04. REPORTING REQUIREMENTS. So long as any Advance shall
remain unpaid or the lender shall have any remaining commitment hereunder,
Borrower will furnish to Lender:
(a) DEFAULT NOTICE. As soon as possible and in any event
within five (5) days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of
Borrower setting forth details of such Default and the action that
Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIAL. As soon as available and in any event
within 45 days after the end of each of the first three quarters of
each Fiscal Year, a Consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statement
of income of Borrower and its Subsidiaries for the period commencing at
the end of the previous fiscal quarter and ending with the end of such
fiscal quarter and a Consolidated statement of income of Borrower and
its Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by
the chief financial officer of Borrower as having been prepared in
accordance with GAAP, together with a certificate of said officer
stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that Borrower has taken and proposes to take with
respect thereto.
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(c) ANNUAL FINANCIAL. As soon as available and in any event within one
hundred twenty (120) days after the end of each Fiscal Year, a copy of the
annual unaudited Consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such Fiscal Year and a Consolidated
statement of income and a Consolidated statement of cash flows of Borrower
and its Subsidiaries for such Fiscal Year, together with a certificate of
the chief financial officer of Borrower stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that
Borrower has taken and proposes to take with respect thereto.
(d) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting Borrower or any of its
Subsidiaries of the type described in SECTION 4.01(G), and promptly after
the occurrence thereof, notice of any material adverse change in the
status or the financial effect on Borrower or any of its Subsidiaries of
the Disclosed Litigation from that described on the Disclosure Schedule.
(e) BORROWING BASE CERTIFICATE. As soon as available and in any event
within (a) fifteen (15) days after the end of each month and (ii) five (5)
days after any prepayment, sale, transfer or other disposition of any
Mortgage Loans, a Borrowing Base Certificate, as at the end of the
previous month (or the previous week, if furnished more often than
monthly), certified by a Responsible Officer of Borrower.
(f) MONTHLY ASSET REPORTS. As soon as available and in any event within
fifteen (15) days after the end of each calendar month, a report in form
reasonably acceptable to the Lender setting forth with respect to each
Mortgage Loan the information set forth on EXHIBIT E attached hereto.
(g) OTHER INFORMATION. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower as Lender may from time to time reasonably request.
49
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) Borrower shall fail to pay the outstanding principal of the
Advances on the Maturity Date, (ii) Borrower shall fail to make any
required payment or pledge any additional collateral as required pursuant
to SECTION 2.04(B)(III) within the two (2) Business Day period provided in
such Section or (iii) Borrower shall fail to pay any other required
payment of principal or any payment of interest on any Advance, or any
other payment under any Loan Document, in each case under this clause
(iii), within five (5) Business Day(s) after the same becomes due and
payable; or
(b) any representation or warranty made by Borrower (or any of its
officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) Borrower shall fail to perform or observe any term, covenant or
agreement contained in SECTION 5.02(E) or SECTION 5.03; or
(d) Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for thirty (30) days
after the earlier of the date on which (A) a Responsible Officer of
Borrower becomes aware of such failure or (B) written notice thereof shall
have been given to Borrower by the Lender; or
(e) Borrower, or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal amount of at least
$1,000,000 either individually or in the aggregate (but excluding Debt
outstanding hereunder) of such party, when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to
such Debt; or any other event shall occur or condition shall exist under
any agreement or instrument relating to any such Debt, if the effect of
such event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease
such Debt shall be required to be made (other than by a regularly
scheduled required offer), in each case prior to the stated maturity
thereof; PROVIDED, HOWEVER, that if such failure or default shall be cured
by Borrower and any acceleration of the related Debt rescinded, such event
shall no longer constitute an Event of Default hereunder; or
50
(f) Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
Borrower or any of it Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of sixty (60) days or any of
the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial
part of its property) shall occur; or Borrower or any of its Subsidiaries
shall take any corporate action to authorize any of the actions set forth
above in this SUBSECTION (F); PROVIDED, HOWEVER, that to the extent any of
the foregoing relates to a Subsidiary, no Event of Default shall be deemed
to have occurred unless it is reasonably likely to cause a Material
Adverse Effect; or
(g) any judgment or order for the payment of money in excess of
$1,000,000 shall be rendered against Borrower or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
ten (10) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; PROVIDED, HOWEVER, that to the extent any judgment or order
is rendered against a Subsidiary, no Event of Default shall be deemed to
have occurred unless it also has a Material Adverse Effect; or
(h) any non-monetary judgment or order shall be rendered against
Borrower or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect, and there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
51
(i) any provision of any Loan Document after delivery thereof pursuant
to SECTION 3.01 or 3.02 shall for any reason cease to be valid and binding
on or enforceable against Borrower, or Borrower shall so state in writing;
or
(j) any Collateral Document after delivery thereof pursuant to SECTION
3.01 or 3.02 shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered thereby and
the same shall result in a Borrowing Base Deficiency (determined assuming
a zero Loan Value for the applicable Collateral) unless such Borrowing
Base Deficiency shall be cured by Borrower within five (5) Business Days
after notice of such event;
then, and in any such event, Lender may declare its obligation to make Advances
to be terminated, whereupon the same shall forthwith terminate, and (ii) may, by
written notice to Borrower, declare the Note, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower; PROVIDED, HOWEVER, that in the event of an actual or deemed
entry of an order for relief with respect to Borrower under the Federal
Bankruptcy Code, (x) the obligation of Lender to make Advances shall
automatically be terminated and (y) the Note, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by Borrower.
ARTICLE VII
SECONDARY MARKET; SERVICING
SECTION 7.01. PARTICIPATIONS. Lender may sell participations to one or
more Persons (other than its Affiliates) in or to all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of the Note held by it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) Lender shall remain the holder of any such Note for
all purposes of this Agreement.
(b) Lender may, in connection with any participation or proposed
participation pursuant to this SECTION 7.01, disclose to the participant or
proposed participant any information relating to Borrower furnished to Lender by
or on behalf of Borrower; PROVIDED, HOWEVER, that, prior to any such disclosure,
the participant or proposed participant shall agree to preserve the
confidentiality of any information received by it from Lender.
52
(c) Notwithstanding any other provision set forth in this Agreement,
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 7.02. SERVICING. On or after the Closing Date, Lender shall
have the right to transfer the servicing of the Loan and administration of the
Loan Documents to a loan servicer designated by Lender in its sole discretion
(together with any servicer appointed by Lender "LOAN SERVICER"). From and after
the engagement of the Loan Servicer (a) the Loan Servicer shall have such right
to exercise all rights of Lender and enforce all obligations of Borrower
pursuant to the provisions of this Agreement, the Note and the other Loan
Documents; (b) Borrower shall deliver to the Loan Servicer duplicate originals
of all notices and other instruments which Borrower may deliver pursuant to this
Agreement, the Note and the other Loan Documents (and no delivery of such
notices or other instruments by Borrower shall be of any force or effect unless
delivered to Lender and Loan Servicer as provided above); and (c) Lender shall
deliver to Borrower written notice of such transfer with a copy of the agreement
with the Loan Servicer at least three (3) days prior to such transfer.
ARTICLE VIII
PARTIAL RELEASE OF COLLATERAL
SECTION 8.01. PARTIAL RELEASE OF COLLATERAL. (a) Borrower shall be
entitled to a partial release of the applicable Mortgage Loan and release of
Lender's security interests and liens thereon (a "PARTIAL RELEASE") subject to
the following terms and conditions:
(i) Borrower shall have delivered to the Lender a written request for a
Partial Release in the form of EXHIBIT K which request shall include (A)
the proposed effective date of the Partial Release and (B) documents
effecting the Partial Release in form and substance satisfactory to
Lender;
(ii) No Default or Event of Default shall have occurred and be
continuing;
(iii) Lender shall have received, simultaneously with the Partial
Release, prepayment in full of the Release Price with respect to the
Mortgage Loans subject to the requested Partial Release (reduced by
application of any amounts applied pursuant to SECTION 2.04), and payment
of all reasonable costs and expenses, including, without limitation, legal
fees and disbursements, incurred by Lender in effecting the Partial
Release; and
53
(iv) Lender shall have received, simultaneously with the Partial
Release, a certificate signed by a duly authorized offficer of Borrower,
dated the date of the Partial Release, stating that (A) all of the
conditions set forth in this SECTION 8.01 have been satisfied and (B) the
Partial Release of the applicable Mortgage Loan complies with all of the
terms and provisions of this Agreement.
Provided the conditions precedent to such Partial Release set forth in this
SECTION 8.01 have been satisfied, Lender shall, simultaneously with such
payment, execute and deliver to Borrower all documents provided by Borrower and
required to effect the Partial Release and deliver to Borrower all Mortgage Loan
Documents in its possession.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS. ETC. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to Borrower, at its address at % LNR Property Corporation, 000 Xxxxxxxxx
000xx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xx. Xxxxxx Xxxxx, Chief Financial
Officer, and if to the Lender, at its address at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Mr. Xxxx Xxxxxxxx; or as to each other party, at such
other address as shall be designated by such party in a written notice to
Borrower and Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective three (3) days after deposited
in the mails, when delivered to the telegraph company, transmitted by telecopier
or confirmed by telex answerback, one day after delivered to a reputable
overnight courier or otherwise upon receipt, respectively, except that notices
and communications to Lender pursuant to ARTICLE II, III or VII shall not be
effective until received by Lender. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Note or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.
54
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of Lender to
exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 9.04. COSTS, EXPENSES. (a) The Borrower agrees to pay on demand
(i) all reasonable out-of-pocket costs and expenses of the Lender in connection
with the preparation, execution, delivery, administration, modification and
amendment of the Loan Documents (including, without limitation, (A) all
out-of-pocket due diligence, collateral review, syndication, transportation,
computer, duplication, appraisal, audit, insurance, consultant, search, filing
and recording fees and expenses and (B) the reasonable fees and expenses of
counsel for Lender with respect thereto, with respect to advising Lender as to
its rights and responsibilities, or the perfection, protection or preservation
of rights or interests, under the Loan Documents, with respect to negotiations
with Borrower or with other creditors of Borrower or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto); PROVIDED,
HOWEVER, that such reasonable fees of counsel for Lender in connection with the
establishment of the facility contemplated by this Agreement shall not exceed
$50,000.00; and (ii) all out-of-pocket costs and expenses of Lender in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Lender and with respect
thereto).
(b) Borrower agrees to indemnify and hold harmless Lender, the Loan
Servicer and each of their respective Affiliates and their officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Advances, the actual
or proposed use of the proceeds of the Advances, the Loan Documents or any of
the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition or (ii) the actual or alleged presence of
Hazardous Materials on any Mortgaged Property or any Environmental Action
relating in any way to any Mortgaged Property, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this SECTION 9.04(B)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by Borrower, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
55
Borrower also agrees not to assert any claim against Lender or any of its
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Loan, the actual or
proposed use of the proceeds of the Advances, the Loan Documents or any of the
transactions contemplated thereby.
(c) Without limitation to the provisions of SECTION 2.04(A), if any
payment of principal of any Eurodollar Rate Advance is made by the Borrower
other than on the last day of the applicable Interest Period, as a result of an
acceleration of the maturity of the Notes pursuant to SECTION 6.01 or for any
other reason, Borrower shall, upon demand by the Lender, pay to the Lender an
amount sufficient to compensate the Lender for any LIBOR Breakage with respect
to such payment.
(d) If Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Borrower by Lender, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of
Borrower hereunder or under any other Loan Document, the agreements and
obligations of Borrower contained in this SECTION 9.04 shall survive the payment
in full of principal, interest and all other amounts payable hereunder and under
any of the other Loan Documents.
SECTION 9.05. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default the Lender and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off end otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Lender or such Affiliate to or
for the credit or the account of Borrower against any and all of the Obligations
of Borrower then owing whether now or hereafter existing under this Agreement
and the Note. Lender agrees promptly to notify Borrower after any such set-off
and application; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that Lender
and its Affiliates may have.
56
SECTION 9.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by Borrower and Lender and thereafter shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender.
SECTION 9.07. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.08. JURISDICTION, ETC. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.09. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.10. WAIVER OF JURY TRIAL. To the maximum extent permitted by
law, each of Borrower and Lender irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of Lender in the negotiation, administration, performance or
enforcement thereof.
57
SECTION 9.11. CONFIDENTIALITY. Borrower and Lender acknowledge and
agree on behalf of themselves and each of their respective Affiliates,
directors, officers, members, employees and agents that the existence, terms and
conditions of the facility contemplated by this Agreement are confidential and
shall not be disclosed by either party without the prior written consent of the
other party except to the extent required (a) by applicable laws or (b) in
connection with any litigation to which the applicable Person is a party.
Without limiting the foregoing, Borrower shall not advertise, publish or promote
the existence of this facility or the identity of the Lender or any of its
Affiliates to loan customers of Borrower as a source of ultimate funding for
loans or otherwise.
SECTION 9.12. RECOURSE LIMITATION. (a) Notwithstanding anything to the
contrary contained in this Agreement or in any other Loan Document (but subject
to the provisions of this SECTIONS 9.12), Lender shall not enforce the liability
and obligation of Borrower to perform and observe the obligations contained in
this Agreement or in the Note by any action or proceeding to collect damages or
wherein a money judgment or any deficiency judgment or order or any judgment
establishing any personal obligation or liability shall be sought against
Borrower or any principal, director, officer, employee, beneficiary,
shareholder, partner, member, trustee, agent or affiliate of Borrower or any
person owning, directly or indirectly, any legal or beneficial interest in
Borrower, or any successors or assigns of any of the foregoing (collectively,
the "EXCULPATED PARTIES"). Lender may bring any appropriate action or proceeding
to enable Lender to enforce and realize upon the Collateral Documents, and the
interest in the Mortgage Loans and other Collateral given to Lender pursuant to
the Collateral Documents; PROVIDED, HOWEVER, subject to the provisions of this
SECTION 9.12, that any judgment in any action or proceeding shall be enforceable
against Borrower only to the extent of Borrower's interest in the Mortgage Loans
and in any other Collateral given to Lender in connection with the Note. Lender
agrees that it shall not, except as otherwise provided below, xxx for or demand
any deficiency judgment against Borrower or any of the Exculpated Parties in any
action or proceeding, under or by reason of or under or in connection with this
Agreement, the Note, or the other Loan Documents.
(b) The provisions of subsection (a) above shall not (i) constitute a
waiver, release or impairment of the Obligations; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for under
Collateral Documents; (c) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
the Loan Documents; (d) impair the right of Lender to obtain the appointment of
a receiver; or (e) impair the enforcement of any Assignment of Mortgage and
Rents executed in connection herewith.
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(c) Notwithstanding the provisions of subsection (a) to the contrary,
Borrower shall be personally liable to Lender for the losses Lender incurs due
to: (a) fraud or intentional misrepresentation by Borrower or any other person
or entity in connection with the execution and the delivery of this Agreement,
the Note, or the other Loan Documents; (b) Borrower's misapplication or
misappropriation of principal payments received by Borrower with respect to any
Mortgage Loan; or (c) criminal acts perpetrated by it;
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
LNR FLORIDA FUNDING, INC.
By ___________________________________
Name: Xxxx Xxxxxxxx
Title: Vice-President
LENDER:
GERMAN AMERICAN CAPITAL CORPORATION
By ___________________________________
Name:
Title:
By ___________________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
LNR FLORIDA FUNDING, INC.
By ___________________________________
Name:
Title:
LENDER:
GERMAN AMERICAN CAPITAL CORPORATION
By ___________________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
By ___________________________________
Name: Xxxxx Xxxxxx
Title:
SCHEDULE A
DOMESTIC AND
EURODOLLAR LENDING
OFFICES
Domestic Lending Office:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Eurodollar Lending Office:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE B
DISCLOSURE SCHEDULE
None.
SCHEDULE C
INTENTIONALLY OMITTED
SCHEDULE D
MORTGAGE FILE
The Mortgage File for any Mortgage Loan shall consist of the following
documents:
(i) the original Mortgage Note, endorsed by the most recent endorsee prior to
the Borrower or, if none, by the originator, without recourse, either in blank
or to the order of the Borrower;
(ii) the original or a copy of the Mortgage and, if applicable, the originals or
copies of any intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
of record thereof prior to the Borrower, if any, in each case with evidence of
recording indicated thereon;
(iii) an original assignment of the Mortgage, in recordable form, executed by
the most recent assignee of record thereof prior to the Borrower or, if none, by
the originator, either in blank or in favor of the Borrower (in such capacity);
(iv) the original or a copy of the related Assignment of Leases (if such item is
a document separate from the Mortgage) and, if applicable, the originals or
copies of any intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
of record thereof prior to the Borrower, if any, in each case with evidence of
recording thereon;
(v) an original assignment of any related Assignment of Leases (if such item is
a document separate from the Mortgage), in recordable form, executed by the most
recent assignee of record thereof prior to the Borrower or, if none, by the
originator, either in blank or in favor of the Borrower, which assignment may be
included as part of the corresponding assignment of Mortgage referred to in
clause (iii) above;
(vi) an original or copy of any related security agreement (if such item is a
document separate from the Mortgage) and, if applicable, the originals or copies
of any intervening assignments thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the most recent assignee of record
thereof prior to the Borrower, if any;
(vii) an original assignment of any related security agreement (if such item is
a document separate from the Mortgage) executed by the most recent assignee of
record thereof prior to the Borrower or, if none, by the originator, either in
blank or in favor of the Borrower (in such capacity), which assignment may be
included as part of the corresponding assignment of Mortgage referred to in
clause (iii) above;
2
(viii) originals or copies of all assumption, modification, written assurance
and substitution agreements, with evidence of recording thereon if appropriate,
in those instances where the terms or provisions of the Mortgage, Mortgage Note
or any related security document have been modified or the Mortgage Loan has
been assumed;
(ix) the original or a copy of the lender's title insurance policy issued as of
the date of the origination of the Mortgage Loan together with all endorsements
or riders (or copies thereof) that were issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a first lien
on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations of the mortgagor
under the Mortgage Loan together with (A) if applicable, the original or copies
of any intervening assignments of such guaranty showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
thereof prior to the Borrower, if any, and (B) an original assignment of such
guaranty executed by the most recent assignee thereof prior to the Borrower or,
if none, by the originator;
(xi) (A) file or certified copies of any UCC financing statements and
continuation statements which were filed in order to perfect (and maintain the
perfection of) any security interest held by the originator of the Mortgage Loan
(and each assignee of record prior to the Borrower) in and to the personally of
the mortgagor at the Mortgaged Property (in each case with evidence of filing
thereon) and (B) if any such security interest is perfected and the earlier UCC
financing statements and continuation statements were in the possession of the
Borrower, a UCC financing statement executed by the most recent assignee of
record prior to the Borrower or, if none, by the originator, evidencing the
transfer of such security interest, either in blank or in favor of the Borrower;
(xii) the original or a copy of the power of attorney (with evidence of
recording thereon, if appropriate) granted by the Mortgagor if the Mortgage,
Mortgage Note or other document or instrument referred to above was signed on
behalf of the Mortgagor; and
(xiii) if the Mortgagor has a leasehold interest in the related Mortgaged
Property, the original ground lease or a copy thereof.
SCHEDULE E
INTENTIONALLY OMITTED
EXHIBIT A
FORM OF
PROMISSORY NOTE
PROMISSORY NOTE
$150,000,000.00 Dated: May l5, 1998
FOR VALUE RECEIVED, the undersigned, LNR FLORIDA FUNDING, INC., a
Florida corporation (the "BORROWER"), HEREBY PROMISES TO PAY GERMAN AMERICAN
CAPITAL CORPORATION, a Maryland corporation (the "LENDER") for the account of
its Applicable Lending Office (as defined in the Credit Agreement referred to
below) the aggregate principal amount not to exceed One Hundred Fifty Million
and No/100 Dollars ($150,000,000.00) owing to the Lender by the Borrower
pursuant to the Credit Agreement dated as of May 15, 1998 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
terms defined therein being used herein as therein defined) among the Borrower
and the Lender on the dates and in the amounts specified in the Credit
Agreement.
The Borrower promises to pay interest on the unpaid aggregate principal
amount of the Advances from the date of each such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in SECTION 2.05 of the Credit Agreement.
The Borrower shall make each payment hereunder, irrespective of any
right of counterclaim or set-off, in lawful money of the United States of
America, not later than 3:00 p.m. (New York City time) on each Interest Payment
Date to the Lender at Lender's Account in same day funds. Payments in federal
funds immediately available at the place designated for payment received by the
Lender prior to 3:00 p.m. local time on a day on which the Lender is open for
business at said place of payment shall be credited prior to close of business,
while other payments, at the option of the Lender, may not be credited until
immediately available to the Lender in federal funds at the place designated for
payment prior to 3:00 p.m. local time on a day on which the Lender is open for
business. Each Advance owing to the Lender by the Borrower and the maturity
thereof, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto, which is part of this Promissory Note.
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This Promissory Note is referred to in, and is entitled to the benefits
of, the Credit Agreement. The Credit Agreement, among other things, (i) provides
for the making of advances (the "ADVANCES") by the Lender to the Borrower from
time to time in an aggregate amount not to exceed at any time outstanding the
U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Borrower under this Promissory Note
are secured by the Collateral as provided in the Loan Documents.
LNR FLORIDA FUNDING, INC.
By ____________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
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AMOUNT OF UNPAID
AMOUNT OF PRINCIPAL PAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
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EXHIBIT B
INTENTIONALLY OMITTED
EXHIBIT C
FORM OF BORROWING
BASE CERTIFICATE
______________,199__
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of May 15, 1998 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT") between LNR FLORIDA FUNDING, INC., a Florida corporation (the
"BORROWER"), and GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation
(the "LENDER"). Terms defined in the Credit Agreement and not otherwise defined
herein are used herein with the same meaning.
As of this the ____day of __________, 199_, Borrower hereby certifies
and represents to Lender in accordance with SECTION 3.02 that the following
statements are true and complete:
1. The aggregate principal amount of the Advances outstanding is
___________________________($___________________).
2. The aggregate Loan Value of the Eligible Mortgage Loans constituting
the Collateral is ____________________ ($________________ ).
3. The Capital Limit is equal to __________________($________________)
4. No Borrowing Base Deficiency exists.
Very truly yours,
LNR FLORIDA FUNDING, INC.
By ____________________________________
Name:
Title:
EXHIBIT D
FORM OF MORTGAGE LOAN
SCHEDULE
(a) The loan number is:
(b) The street address (including city, state and zip code) of the Mortgaged
Property is:
(c) The Block and Lot description of the Mortgaged Property is:
(d) The original principal amount of the Mortgage Loan is:
(e) The maturity date under the Mortgage is:
(f) The monthly amount due under the Mortgage is:
(g) The interest rate under the Mortgage is:
(h) The amount of principal and interest due on the applicable maturity date is:
(i) The use of the Mortgaged Property is:
(j) The appraised value of the Mortgaged Property as of _______________ __,
199__ is:
(k) The borrower's name under the related Mortgage Loan is:
(l) The Mortgaged Property is a fee simple interest in real property and
improvements described (except as otherwise noted) as follows:
(m) The Mortgage Loan is contemplated to evidence the following lien on the
Mortgaged Property (to the extent not otherwise indicated hereafter, the
lien is a first lien):
EXHIBIT E
FORM OF
MONTHLY REPORT
As reasonably agreed to by Lender and Borrower.
EXHIBIT F
FORM OF CUSTODIAL
AGREEMENT
CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT (this "AGREEMENT"), dated as of May 15,1998, by and
among GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an
address at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("GACC"), LNR FLORIDA
FUNDING, INC., a Florida corporation having an address c/o LNR Property
Corporation, 000 Xxxxxxxxx 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000 ("LNR") and
LASALLE NATIONAL BANK, a national banking association, having an address at 000
X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, as custodian
("CUSTODIAN").
RECITALS
A. From time to time, GACC and LNR will enter into credit agreements
pursuant to which GACC will make advances to LNR to permit LNR to originate or
acquire Mortgage Loans, and
B. Custodian is a national banking association chartered under the laws
of the United States of America and is regulated by the Office of the
Comptroller of the Currency and is otherwise authorized to act as Custodian
pursuant to this Agreement; and
C. LNR and GACC desire to have Custodian take possession from time to
time of Mortgage Notes for Mortgage Loans, along with certain other documents
specified in this Agreement, as the custodian for, and bailee of, GACC and LNR,
relating to such Mortgage Loans, in accordance with the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. The following terms shall have the meanings set forth
below when used in this Agreement. All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement, dated of even date herewith between GACC and LNR.
"AUTHORIZED REPRESENTATIVES" has the meaning set forth in SECTION 16.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in New York City, the City of Chicago, Illinois, or
the City of Miami, Florida, are authorized or obligated by law or executive
order to be closed.
"CERTIFICATION" means, with respect to any Mortgage Loan or group of
Mortgage Loans, the Certification delivered to GACC and LNR by Custodian in
connection with a Trust Receipt.
"CUSTODIAN'S MORTGAGE FILES" means with respect to a Mortgage Loan,
those documents listed in SECTION 2 hereof that are delivered to Custodian and
all documents subsequently delivered to Custodian pursuant to the last sentence
of SECTION 2 hereof.
"CREDIT AGREEMENT" means that certain Credit Agreement by and between
GACC and LNR dated as of May 15, 1998.
"DELIVERY DATE" means the date or dates on which LNR shall deliver
Mortgage Loans to Custodian.
"MORTGAGE" means the mortgage, deed of trust or other instrument
creating a first lien on the Mortgaged Property.
"MORTGAGE FILE CHECKLIST" means the checklist of documents delivered by
LNR to Custodian on each Delivery Date, identifying the documents being
delivered to Custodian.
"MORTGAGE LOAN" means an individual mortgage loan that is delivered to
Custodian pursuant to this Agreement.
"MORTGAGE LOAN SCHEDULE" means each schedule of Mortgage Loans
delivered by LNR to Custodian on each Delivery Date, such schedule identifying
each Mortgage Loan by the street address of the Mortgaged Property and the full
name of the Mortgagor and setting forth as to each Mortgage Loan the following
information: (a) the loan number; (b) the Block and Lot or other legal
description of the Mortgaged Property; (c) the original principal amount of the
Mortgage Loan; (d) the maturity date under the Mortgage; (e) the monthly amount
due under the Mortgage; (f) the interest rate under the Mortgage; (g) the amount
of principal and interest due on the applicable maturity date; (h) the use of
the Mortgaged Property; and (i) the appraised value of the Mortgaged Property
and the date of such appraisal.
"MORTGAGE NOTE" means the note or other evidence of the indebtedness of
a Mortgagor under a Mortgage Loan.
"MORTGAGED PROPERTY" means the related Mortgagor's real property
securing repayment of a related Mortgage Note.
"MORTGAGOR" means the borrower under any of the Mo'tgage Loans.
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"PERSON" means any association, business trust, company, limited
liability company, corporation, estate, government or agency or political
subdivision thereof, joint venture, partnership, natural person, trust or other
entity.
"REGISTRAR" means Custodian in its capacity as registrar hereunder.
"REQUEST FOR RELEASE OF CUSTODIAN'S MORTGAGE FILES" means a request for
release, appropriately completed, substantially in the form of EXHIBIT 3 to this
Agreement.
"TRUST RECEIPT" means with respect to any Mortgage Loan or group of
Mortgage Loans, the Trust Receipt and Certification delivered to GACC and LNR by
the Custodian, substantially in the form of EXHIBIT 1 hereto.
2. DELIVERY OF CUSTODIAN'S MORTGAGE FILES. LNR shall deliver on each
Delivery Date a Mortgage File Checklist with the documents identified on such
Mortgage File Checklist, pertaining to each of the Mortgage Loans identified in
the related Mortgage Loan Schedule, a copy of which Mortgage Loan Schedule will
be provided to Custodian by LNR (such information shall also be delivered to
Custodian on computer readable magnetic disk), which Mortgage File Checklist
shall include, if existing:
(a) the original Mortgage Note, endorsed by the most recent endorsee
prior to LNR or, if none, by the originator, without recourse, either in blank
or to the order of LNR together with all intervening endorsements;
(b) the original or a copy of the Mortgage and, if applicable, the
originals or copies of any intervening assignments thereof showing a complete
chain of assignment from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to LNR, if any, in each case with evidence of
recording indicated thereon;
(c) an original assignment of the Mortgage, in recordable form,
executed by the most recent assignee of record thereof prior to LNR or, if none,
by the originator, either in blank or in favor of LNR (in such capacity);
(d) the original or a copy of the related Assignment of Rents (if such
item is a document separate from the Mortgage) and, if applicable, the originals
or copies of any intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
of record thereof prior to LNR, if any, in each case with evidence of recording
thereon;
(e) an original assignment of any related Assignment of Rents (if such
item is a document separate from the Mortgage), in recordable form, executed by
the most recent assignee of record thereof prior to LNR or, if none, by the
originator, either in blank or in favor of LNR, which assignment may be included
as part of the corresponding assignment of Mortgage referred to in clause (c)
above;
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(f) an original or copy of any related security agreement (if such item
is a document separate from the Mortgage) and, if applicable, the originals or
copies of any intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
of record thereof prior to LNR, if any;
(g) an original assignment of any related security agreement (if such
item is a document separate from the Mortgage) executed by the most recent
assignee of record thereof prior to LNR or, if none, by the originator, either
in blank or in favor of LNR (in such capacity), which assignment may be included
as part of the corresponding assignment of Mortgage referred to in clause (c)
above;
(h) originals or copies of all assumption, modification, written
assurance and substitution agreements, with evidence of recording thereon if
appropriate, in those instances where the terms or provisions of the Mortgage,
Mortgage Note or any related security document have been modified or the
Mortgage Loan has been assumed;
(i) the original or a copy of the lender's title insurance policy or
binding commitment therefor issued as of the date of the origination of the
Mortgage Loan together with all endorsements or riders (or copies thereof) that
were issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien on the Mortgaged Property;
(j) the original or a copy of any guaranty of the obligations of the
mortgagor under the Mortgage Loan together with (A) if applicable, the original
or copies of any intenening assignments of such guaranty showing a complete
chain of assignment from the originator of the Mortgage Loan to the most recent
assignee thereof prior to LNR if any, and (B) an original assignment of such
guaranty executed by the most recent assignee thereof prior to LNR or, if none,
by the originator;
(k) (i) filed or certified, as true and correct by LNR or its agent,
copies of any UCC financing statements and continuation statements which were
filed in order to perfect (and maintain the perfection of) any security interest
held by the originator of the Mortgage Loan (and each assignee of record prior
to LNR) in and to the personally of the mortgagor at the Mortgaged Property (in
each case with evidence of filing thereon) and (B) if any such security interest
is perfected and the earlier UCC financing statements and continuation
statements were in the possession of LNR, a UCC financing statement executed by
the most recent assignee of record prior to LNR or, if none, by the originator,
evidencing the transfer of such security interest, either in blank or in favor
of LNR;
4
(1) the original or a copy of the power of attorney (with evidence of
recording thereon, if appropriate) granted by the Mortgagor if the Mortgage,
Mortgage Note or other document or instrument referred to above was signed on
behalf of the Mortgagor; and
(m) if the Mortgagor has a leasehold interest in the related Mortgaged
Property, the original ground lease or a copy thereof.
If LNR owns less than one hundred percent (100%) of the beneficial
interest in a Mortgage Loan, in lieu of original documents described above, LNR
may deliver copies thereof certified by LNR to be true and correct, together
with LNR's original participation certificate or other evidence of ownership.
All assignments described above, other than the assignment to Lender of LNR's
original participation certificate or other evidence of ownership, shall show a
complete chain of assignment to the current lienholder of record (which may be a
collateral agent).
From time to time, LNR shall cause to be forwarded to Custodian for
inclusion in the appropriate Custodian's Mortgage File any additional original
loan documents evidencing any assumption or modification of a Mortgage Loan
approved by LNR and GACC.
3. CERTIFICATION. (a) No later than the end of the Business Day that
Custodian receives the documentation required to be delivered by LNR pursuant to
Section 2, Custodian shall deliver to GACC and LNR a Certification, to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
attached to such Certification, (i) all documents referred to in Section 2(a)(m)
hereof are in its possession; PROVIDED, HOWEVER, that with respect to documents
other than those described in SUBSECTIONS 2(A), (B), (C) and (I), Custodian
shall only certify to its possession of those documents identified on the
Mortgage File Checklist delivered to Custodian with respect to such Mortgage
Loan, (ii) all documents in the related Custodian's Mortgage File have been
reviewed by it and appear regular on their face and relate to such Mortgage
Loan, (iii) based on its examination of the related Note, the information set
forth on the Mortgage Loan Schedule (other than items (a), (b), (h) and (i) of
said schedule) accurately reflects the information set forth in the Custodian's
Mortgage File and (iv) a schedule containing any exceptions to the matters set
forth in clauses (i) through (iii); PROVIDED, HOWEVER, that Custodian's
obligation to deliver such Certification is contingent upon (a) Custodian
receiving at least one (1) day prior to the issuance of such Certification the
Mortgage File Checklist, (b) Custodian receiving the documents of no more than
five (5) Mortgage Loans at any one (1) time and (c) Custodian receiving all
documents by 10:00 a.m. (Central Time) on the date that Custodian is to issue
the Certification.
(b) Upon the written directions of the GACC, and upon the prior tender
by GACC of all applicable Trust Receipts (including any related Certifications),
Custodian shall deliver all or any portion of the related Custodian's Mortgage
Files held by it pursuant to such Trust Receipts to GACC, or to such other party
designated by GACC in such written direction, and to the person and place
indicated in any such written direction from GACC. If such delivery is for less
than all of the Custodian's Mortgage Files held by Custodian with respect to
such Certification, Custodian shall deliver to GACC a new Certification in the
form attached hereto as EXHIBIT 1 with respect to the related Custodian's
Mortgage Files retained by Custodian.
5
4. OBLIGATIONS OF CUSTODIAN. With respect to the Mortgage Note, the
Mortgage and the Assignment of Mortgage and other documents constituting each
Custodian's Mortgage File that is delivered to Custodian or that come into the
possession of Custodian, Custodian is the custodian for GACC and LNR. Custodian
shall hold all mortgage documents received by it constituting the Custodian's
Mortgage File for the exclusive use and benefit of GACC and LNR, and shall make
disposition thereof only in accordance with this Agreement and the instructions
furnished by GACC and LNR. Custodian shall segregate and maintain continuous
custody of all documents constituting the Custodian's Mortgage File in secure
and fireproof facilities in accordance with customary standards for such
custody. Custodian shall not be responsible to verify (i) the validity,
legality, enforceability, due authorization, recordability, aufficiency or
genuineness of any document in the Custodian's Mortgage File or of any of the
Mortgage Loans or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan.
5. RELEASE OF CUSTODIAN'S MORTGAGE FILE. From time to time and as
appropriate for the foreclosure or servicing of any of the Mortgage Loans,
Custodian is hereby authorized, upon receipt of an executed Request for Release
of Documents and Receipt of Mortgage Files provided by an Authorized
Representative of LNR and acknowledged by an Authorized Representative of GACC
via facsimile signature to release to the party identified in such request
within three (3) Business Days, the related Custodian's Mortgage File or the
documents from a Custodian's Mortgage File set forth in such request and
receipt. LNR shall return or shall cause the party to which the documents were
released pursuant to such Request for Release of Documents to return to
Custodian each and every document previously requested from the Custodian's
Mortgage File when the need therefor in connection with such foreclosure or
servicing no longer exists, unless the Mortgage Loan shall be liquidated and
Custodian shall have received an additional certification to this effect from
LNR acknowledged by GACC in substantially the form annexed as EXHIBIT 3.
6. RELEASE UPON REDELIVERY OR PAYMENT. Upon the payment in full of any
Mortgage Loan or the repayment of an Advance made pursuant to the Credit
Agreement, or otherwise with the acknowledgment of GACC, LNR shall deliver to
Custodian the Request for Release of Documents and Receipt indicating such
payment in full and Custodian shall promptly release the related Custodian's
Mortgage File to the party identified in such request substantially in the form
attached as EXHIBIT 3.
7. FEES AND EXPENSES OF THE CUSTODIAN. It is understood that Custodian
shall be entitled to charge fees and receive reimbursement for expenses under
this Agreement from LNR and such fees and expenses shall be the sole obligation
of LNR. Such agreed upon fees and expenses shall be set forth on a separate fee
letter submitted by Custodian and agreed to by LNR.
8. EXAMINATION OF CUSTODIAN'S MORTGAGE FILES. Upon reasonable prior
written notice to Custodian (which shall not be less than two (2) Business Days'
notice), GACC and/or LNR and its or their authorized representatives will be
permitted during normal business hours to examine the Custodian's Mortgage
Files, documents, records and other papers in the possession or under the
control of Custodian relating to any or all of the Mortgage Loans. Any expenses
incurred by Custodian in connection with such examination shall be borne by the
party making the request.
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9. TRANSFER OF CUSTODIAN'S MORTGAGE FILES UPON TERMINATION. If
Custodian is furnished with written notice from LNR that LNR wishes to have
transferred to it or its designee any or all of the related Mortgage Loans, the
Custodian shall release to such persons designated in the notice such
Custodian's Mortgage Files relating to such Mortgage Loans upon the
acknowledgment of GACC.
10. INSURANCE OF THE CUSTODIAN. Custodian shall, at its own expense,
maintain at all times during the term of this Agreement and keep in full force
and effect (a) fidelity insurance, (b) theft of documents insurance, and (c)
forgery insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for similar insurance
typically maintained by banks that act as custodian in similar transactions.
11. COPIES OF MORTGAGE DOCUMENTS. Within three (3) Business Days after
the written request and at the expense of LNR, Custodian shall provide LNR or
its transferee with such copies of the documents in the Custodian's Mortgage
Files relating to such Mortgage Loans as such party may request.
12. RESIGNATION BY AND REMOVAL OF CUSTODIAN; SUCCESSOR CUSTODIAN. (a)
Custodian may at any time resign and terminate its obligations under this
Agreement and this Agreement shall terminate upon at least sixty (60) days'
prior written notice to LNR and GACC. Promptly after receipt of notice of
Custodian's resignation, GACC, in consultation with LNR, shall appoint, by
written instrument, a successor custodian. The payment of such successor
custodian's fees and expenses shall be solely the responsibility of LNR;
PROVIDED, HOWEVER, Custodian shall pay for all costs of shipment of the
Custodian's Mortgage Files to such successor custodian. One original counterpart
of such instrument of appointment shall be delivered to each of LNR, GACC, the
Custodian, and the successor custodian.
(b) GACC, in consultation with LNR, with or without cause, upon at
least sixty (60) days' written notice to Custodian, may remove and discharge
Custodian (or any successor custodian thereafter appointed) from the performance
of its obligations under this Agreement. Promptly after the giving of notice of
removal of Custodian, GACC, in consultation with LNR, shall appoint, by written
instrument, a successor custodian. One original counterpart of such instrument
of appointment shall be delivered to each of LNR, GACC, Custodian and the
successor custodian.
(c) In the event of any such resignation or removal, Custodian shall
promptly transfer to the successor custodian, as directed in writing by LNR and
GACC, all the Custodian's Mortgage Files being administered under this
Agreement.
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13. INDEMNITY. (a) Neither Custodian nor any of its directors,
officers, agents or employees, shall be liable for any action taken or omitted
to be taken by it or them hereunder or in connection herewith in good faith and
believed by it or them to be within the purview of this Custodial Agreement,
except for its or their own negligence, lack of good faith or willful
misconduct. In no event shall the Custodian or its directors, officers, agents
and employees be held liable for any special, indirect or consequential damages
resulting from any action taken or omitted to be taken by it or them hereunder
or in connection herewith even if advised of the possibility of such damages,
except for its or their own negligence, lack of good faith or willful
misconduct.
LNR and GACC agree to indemnify and hold Custodian and their respective
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 Custodial
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 were imposed on, incurred by or asserted
against Custodian because of the breach by Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of Custodian or any of its directors, offIcers, agents or
employees or results from actions or inactions by GACC or at GACC's request or
direction. The foregoing indemnification shall survive any termination or
permitted assignment of this Custodial Agreement.
(b) In the event that Custodian fails to produce a Mortgage Note,
Assignment of Mortgage or any other document related to a Mortgage Loan that was
in its possession pursuant to SECTION 2 within two (2) Business Days after
required or requested by GACC or LNR (a "CUSTODIAL DELIVERY FAILURE"), and
provided, that (a) Custodian previously delivered to GACC or LNR a Trust Receipt
and Certification with respect to such document; (b) such document is not
outstanding pursuant to a Request for Release of Documents and Receipt; and (c)
such document was assigned pledged to GACC, then Custodian shall (i) with
respect to any missing Mortgage Note promptly deliver to GACC or LNR, upon
request, a lost note affidavit in a form acceptable to GACC or LNR, as the case
may be, (ii) use its best efforts to obtain a certified copy of any missing
document from the applicable recording office or other entity, and (iii) with
respect to any missing document related to such Mortgage Loan including but not
limited to, a missing Mortgage Note, indemnify GACC and LNR in accordance with
the succeeding paragraph of this SECTION 13(B).
To the extent that a Custodial Delivery Failure arises out of
Custodian's negligent or wilful acts, Custodian agrees to indemnify and hold
GACC and LNR 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 such Custodial Delivery Failure. The foregoing
indemnification shall survive any termination or assignment of this Agreement.
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14. LIMITATION OF LIABILITY. (a) The obligations of Custodian shall be
determined solely by the express provisions of this Agreement. No
representation, warranty, covenant, agreement, obligation or duty of Custodian
shall be implied with respect to this Agreement or Custodian's services
hereunder.
(b) In Custodian's review of documents pursuant to SECTION 3 hereof,
Custodian shall be under no duty or obligation to inspect, review or examine the
Custodian's Mortgage Files to determine that the contents thereof are genuine,
enforceable or appropriate for the represented purpose or that they have been
actually recorded or that they are other than what they purport to be on their
face.
(c) Custodian may consult with counsel, which may include in-house
counsel, with regard to legal questions arising out of or in connection with
this Agreement, and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by Custodian in reasonable reliance, in good faith, and in accordance
therewith; PROVIDED, HOWEVER, that if GACC (i) gives instructions to Custodian
or (ii) provides an opinion of counsel selected by GACC, which in either case
conflicts with any such advice or opinion of counsel, then Custodian shall
follow such instructions of the GACC or such opinion of counselr selected by
GACC, and shall be fully protected in acting or refraining to act thereon.
(d) No provision of this Agreement shall require Custodian to expend or
risk its own funds or othervvise incur financial liability in the performance of
its duties under this Agreement if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity is not reasonably
assured to it, except that Custodian shall not be relieved of any of its express
duties hereunder by reason of this SECTION 14(D).
15. TERM OF AGREEMENT. This Agreement shall be terminated upon the
written consent of Custodian and LNR, acknowledged by GACC in writing.
16. AUTHORIZED REPRESENTATIVES. The names of the officers and employees
of LNR, GACC and Custodian who are authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Agreement on behalf of such Persons ("AUTHORIZED
REPRESENTATIVES") are set forth on EXHIBIT 2, along with the specimen signature
of each such officer or employee. From time to time, either LNR, GACC or
Custodian may, by delivering to the other parties hereto a revised exhibit,
change the information previously given, but the parties hereto shall be
entitled to rely conclusively on the last exhibit until receipt of such a
superseding exhibit. The names of Authorized Representatives of a transferee of
GACC will be provided by such transferee to LNR and Custodian from time to time.
17. RELIANCE OF CUSTODIAN. In the absence of bad faith, negligence or
willful misconduct on the part of Custodian, Custodian may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any request, instructions, certificate, opinion or other document
furnished to Custodian, reasonably believed by Custodian to
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be genuine and to have been signed or presented by the proper party or parties
and conforming to the requirements of this Agreement; but in the case of any
loan document or other request, instruction, document or certificate which by
any provision hereof is specifically required to be furnished to Custodian,
Custodian shall be under a duty to examine the same to determine whether or not
it conforms to the requirements of this Agreement.
18. TRANSMISSION OF CUSTODIAN'S MORTGAGE FILES. Written instructions as
to the method of shipment and shipper(s) Custodian is directed to utilize in
connection with transmission of mortgage files and loan documents in the
performance of Custodian's duties hereunder shall be delivered by GACC or LNR to
Custodian prior to any shipment of any mortgage files and loan documents
hereunder. In the event Custodian does not receive such written instructions as
to the method of shipment, Custodian is hereby authorized to use a nationally
recognized courier service. LNR shall directly bear all costs and expenses
associated with such shipment (or, at the Custodian's option, reimburse
Custodian for all costs and expenses incurred by Custodian consistent with such
instructions) and will maintain such insurance against loss or damage to
mortgage files and loan documents as LNR deems appropriate. Without limiting the
generality of the provisions of SECTION 5 hereof, except as expressly provided
herein, it is expressly agreed that in no event shall Custodian have any
liability for any losses or damages to any person, including without limitation,
LNR or GACC, arising out of actions of Custodian consistent with the
instructions of LNR or GACC, as applicable.
19. NOTICES. All demands, notices and communications relating to this
Agreement shall be in writing (including, without limitation, facsimile
transmissions) and shall be deemed to have been duly given when received by the
other party or parties at the address shown below, or such other address as may
hereafter be furnished to the other party or parties by like notice. Any such
demand, notice or communication hereunder shall be deemed to have been received
on the date delivered to or received at the premises of the addressee and in the
case of facsimile transmission such receipt shall be deemed to have occurred
upon receipt by the sender thereof of confirmation of such transmission from the
facsimile machine of the sending party.
If to Custodian:
LaSalle National Bank, 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
606744107; Attention: Xx. Xxxx Xxxx Xxxxxxx; Phone Number: (000) 000-0000; Fax
Number: (000)000-0000
If to GACC:
German American Capital Corporation, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000;
Attention: Xx. Xxxxxxx Xxxxxx (with a copy of any written communications
to the General Counsel's Office); Phone Number: (000) 000-0000; Fax Number:
(000) 000-0000.
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If to LNR:
LNR Florida Funding, Inc., c/o LNR Property Corporation, 000 Xxxxxxxxx 000x
Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xx. Xxxxxx Xxxxx; Phone Number: (305)
000-0000; Fax Number: (000) 000-0000.
20. GOVERNING LAW. The 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 the laws of the
State of New York without regard to conflicts of law principles. The parties
hereto hereby consent and agree that the state court or, at GACC's option, the
United States District Court for the Southern District of New York, shall have
exclusive jurisdiction to hear and determine any claims or disputes between the
parties hereto pertaining to this Agreement or to any matter arising out of or
related to this Agreement. The parties hereto expressly submit and consent in
advance to such jurisdiction in any action or suit commenced in any such court,
and hereby waive any objection which it may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens and hereby consent to the
granting for such legal or equitable relief as is deemed appropriate by such
court. Nothing in this Agreement shall be deemed or operate to affect the right
of any party to serve legal process in any other manner permitted by law, or to
preclude the enforcement by any party of any judgment or order obtained in such
forum or the taking of any action under this Agreement to enforce same in any
other appropriate forum or jurisdiction.
21. ASSIGNMENT. This Agreement shall inure to the benefit of the
successors and permitted assigns of LNR and GACC; PROVIDED, HOWEVER, that the
form of any assignment by any party of its interests hereunder shall be in a
form reasonably acceptable to the other parties hereto, GACC and Custodian.
Neither LNR nor Custodian shall assign this Agreement without the prior written
consent of GACC, such consent not to be unreasonably withheld. Such assignment
shall be executed by an authorized representative of the assignor and any
assignee shall forward a list of authorized representatives to each party to
this Agreement pursuant to SECTION 16 hereof An execution copy of any assignment
and assumption of this Agreement shall be delivered to Custodian prior to the
date it shall become effective.
22. COUNTERPARTS. For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed to be an original,
and together shall constitute and be one and the same instrument.
23. HEADINGS. The Section headings are not part of this Agreement and
shall not be used in its interpretation.
24. NO ADVERSE INTEREST OF CUSTODIAN. By execution of this Agreement,
Custodian represents and warrants that it currently holds, and during the
existence of this Agreement shall hold, no adverse interest, by way of security
or otherwise, in any Mortgage, and hereby waives and releases any such interest
which it may have in any Mortgage Loan as of the related Closing Date.
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25. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO, INCLUDING ANY
ASSIGNEES, HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY OF DISPUTES, CLAIMS OR
CONTROVERSIES BETWEEN THEMSELVES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY AGREEMENTS, INSTRUMENTS OR TRANSACTIONS RELATING TO THIS AGREEMENT, WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE.
[SIGNATURES ON NEXT PAGE]
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
LASALLE NATIONAL BANK,
as Custodian
By ____________________________________
Print Name: ________________________
Title: _____________________________
GERMAN AMERICAN CAPITAL
CORPORATION,
as GACC
By ____________________________________
Print Name: ________________________
Title: _____________________________
By ____________________________________
Print Name: ________________________
Title: _____________________________
LNR FLORIDA FUNDING, INC.,
as LNR
By ____________________________________
Print Name: ________________________
Title: _____________________________
EXHIBIT H
FORM OF COLLATERAL
ASSIGNMENT OF
MORTGAGE AND NOTE
THIS ASSIGNMENT OF MORTGAGE, dated as of ___________ __, 199_, by LNR
FLORIDA FUNDING, INC., ("ASSIGNOR") a Florida corporation, having an address c/o
LNR Property Corporation, 000 Xxxxxxxxx 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000, in
favor of GERMAN AMERICAN CAPITAL CORPORATION ("ASSIGNEE"), a Maryland
corporation having an address at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
RECITALS:
A. Assignor and Assignee entered into that certain Credit Agreement,
dated as of May 15, 1998 (as the same may be mod)fied, amended or supplemented
from time to time, the "CREDIT AGREEMENT"; any capitalized terms not otherwise
defined herein shall have the meanings ascribed to such term in the Credit
Agreement), pursuant to which Assignee agreed, subject to the conditions and
provisions set forth therein, to make Advances to Borrower, from time to time,
in an aggregate amount outstanding at any time of not more than One Hundred
Fifty Million and 00/100 Dollars ($150,000,000).
B. Assignor intends to use a portion of the proceeds from the Advances
to purchase or originate Mortgage Loans.
C. Assignor is the holder of those mortgages, deeds of trust, open-end
mortgages, purchase money mortgages, and other instruments (collectively, the
"MORTGAGES") and those certain promissory notes (collectively, the "NOTES") more
particularly described on EXHIBIT A attached hereto.
D. The properties securing the Mortgages are more particularly
described on EXHIBIT B attached hereto.
E. Assignor, as borrower under the Credit Agreement, now wishes to
assign all of its right, title and interest in, to and under the Mortgages and
the Notes to Assignee as additional security for the payment and performance of
its obligations under the Credit Agreement.
NOW, THEREFORE, for value received and in order to induce Assignee to
make Advances under the Credit Agreement, Assignor hereby grants, assigns and
transfers to Assignee all of Assignor's right, title and interest in, to and
under the Mortgages and in the Notes.
2
This Assignment is made without recourse to, and without covenant or
warranty (express or implied) by, Assignor, except that Assignor represents and
warrants to Assignee as follows:
1. Assignor has the right, power and authority, and has taken all
action necessary, to assign the Mortgages and Notes to Assignee pursuant
to this Assignment;
2. Neither the Mortgages nor the Notes have, to Assignor's knowledge,
been supplemented, amended, modIfied, terminated, released or cancelled
(except as set forth on EXHIBIT A) nor has Assignor waived any of its
rights under the Mortgages or Notes; and
3. Assignee owns the entire interest as the collateral assignee of
Borrower in, to and under the Mortgages and Notes free and clear of any
claim or interest of any kind whatsoever (whether present or contingent,
conditional or unconditional, xxxxxx or inchoate) by any other party,
whether by encumbrance, pledge, assignment, participation, option or
otherwise.
This Assignment (i) shall be binding on Assignor and its successors and
assigns and shall inure to the benefit of Assignee and its successors and
assigns, (ii) shall be governed by the law of the State of [state where
Mortgaged Property is located], and (iii) may not be modified orally, but only
by a writing executed by Assignor and Assignee.
LNR FLORIDA FUNDING, INC.
By ____________________________________
Name:
Title:
EXHIBIT A OF THE ASSIGNMENT OF MORTGAGE AND NOTE
------------------------------------------------
EXHIBIT B OF THE ASSIGNMENT OF MORTGAGE AND NOTE
------------------------------------------------
RECORD AND RETURN TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this _ day of _______, 1998 before me personally came ___________ , to me
personally known, who, being by me duly sworn, did depose and say that he is a
______________of LNR FLORIDA FUNDING, INC., the Assignor described in and which
executed the above instrument; and that he signed his name thereto by authority
of the Board of Directors of such company.
_______________________________________
Notary Public
State of New York
Print or Type Name: ____________________
My commission expires:
ALLONGE TO NOTE
---------------
Mortgaged Property:
Date of Note:
Original Principal Amount:
Pay to the order of GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation having an address at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
its successors and assigns, without recourse, representations and warranties,
except as provided in the Assignment of Mortgage and Note, dated as of
________________ ___, 199__.
Dated as of ___________ __, 199__.
LNR FLORIDA FUNDING, INC.
By: ____________________________________
Name:
Title:
