1
EXHIBIT 10.36
LOAN AGREEMENT
Dated as of November 26, 1997
Between
RAMCO PROPERTIES ASSOCIATES LIMITED PARTNERSHIP,
as Borrower
and
XXXXXX FINANCIAL CORPORATION
as Lender
2
TABLE OF CONTENTS
Page
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions..................................................................................1
Section 1.2 Principles of Construction..................................................................15
II. THE LOAN
Section 2.1 The Loan....................................................................................15
2.1.1 Agreement to Lend and Borrow................................................................15
2.1.2 Single Disbursement to Borrower.............................................................15
2.1.3 The Note....................................................................................15
2.1.4 Use of Proceeds.............................................................................15
2.1.5 Loan Application Fee and Loan Origination Fee...............................................15
Section 2.2 Interest Rate...............................................................................16
2.2.1 Initial Interest Rate.......................................................................16
2.2.2 Adjusted Interest Rate......................................................................16
2.2.3 Default Rate................................................................................16
2.2.4 Interest Calculation........................................................................16
2.2.5 Usury Savings...............................................................................16
Section 2.3 Loan Payments...............................................................................17
2.3.1 Payment Before Anticipated Repayment Date...................................................17
2.3.2 Payments After Anticipated Repayment Date...................................................17
2.3.3 Payment on Maturity Date....................................................................17
2.3.4 Late Payment Charge.........................................................................17
2.3.5 Method and Place of Payment.................................................................17
Section 2.4 Prepayments.................................................................................18
2.4.1 Voluntary Prepayments.......................................................................18
2.4.2 Mandatory Prepayments.......................................................................18
2.4.3 Prepayments After Default...................................................................18
Section 2.5 Defeasance..................................................................................18
2.5.1 Total Defeasance............................................................................18
2.5.2 Partial Defeasance..........................................................................20
2.5.3 Defeasance Collateral Account...............................................................22
2.5.4 Successor Borrower..........................................................................23
Section 2.6 Property Substitutions......................................................................23
III. REPRESENTATIONS AND WARRANTIES................................................................................30
Section 3.1 Borrower Representations....................................................................30
3.1.1 Organization................................................................................30
3.1.2 Proceedings.................................................................................31
3.1.3 No Conflicts................................................................................31
3.1.4 Litigation..................................................................................31
3.1.5 Agreements..................................................................................31
3.1.6 Title.......................................................................................32
-i-
3
3.1.7 No Bankruptcy Filing..................................................................32
3.1.8 Full and Accurate Disclosure..........................................................32
3.1.9 No Plan Assets........................................................................32
3.1.10 Compliance............................................................................33
3.1.11 Financial Information.................................................................33
3.1.12 Condemnation..........................................................................33
3.1.13 Federal Reserve Regulations...........................................................33
3.1.14 Utilities and Public Access...........................................................34
3.1.15 Not a Foreign Person..................................................................34
3.1.16 Separate Lots.........................................................................34
3.1.17 Assessments...........................................................................34
3.1.18 Enforceability........................................................................34
3.1.19 No Prior Assignment...................................................................34
3.1.20 Insurance.............................................................................34
3.1.21 Use of Properties.....................................................................35
3.1.22 Certificate of Occupancy Licenses.....................................................35
3.1.23 Flood Zone............................................................................35
3.1.24 Physical Condition....................................................................35
3.1.25 Boundaries............................................................................35
3.1.26 Leases................................................................................35
3.1.27 Survey................................................................................36
3.1.28 Loan to Value.........................................................................36
3.1.29 Filing and Recording Taxes............................................................36
3.1.30 Single Purpose........................................................................37
3.1.31 No Change in Facts or Circumstances; Disclosure.......................................39
3.1.32 Illegal Activity......................................................................40
Section 3.2 Survival of Representations...........................................................40
IV. BORROWER COVENANTS..........................................................................................40
Section 4.1 Borrower Affirmative Covenants.........................................................40
4.1.1 Existence; Compliance with Legal Requirements; Insurance...............................40
4.1.2 Taxes and Other Charges................................................................41
4.1.3 Litigation.............................................................................41
4.1.4 Access to Premises.....................................................................42
4.1.5 Notice of Default......................................................................42
4.1.6 Cooperate in Legal Proceedings.........................................................42
4.1.7 Perform Loan Documents.................................................................42
4.1.8 Insurance Benefits.....................................................................42
4.1.9 Further Assurances; Supplemental Mortgage Affidavits...................................42
4.1.10 Financial Reporting...................................................................43
4.1.11 Business and Operations...............................................................46
4.1.12 Title to the Properties...............................................................46
4.1.13 Costs of Enforcement..................................................................46
4.1.14 Estoppel Statement....................................................................46
4.1.15 Loan Proceeds.........................................................................47
-ii-
4
4.1.16 Performance by Borrower...............................................................47
4.1.17 Confirmation of Representations.......................................................47
4.1.18 No Joint Assessment...................................................................47
4.1.19 Leasing Matters.......................................................................47
4.1.20 Alterations...........................................................................48
4.1.21 Subordination Agreements and Other Post-Closing Obligations...........................49
Section 4.2 Borrower Negative Covenants..............................................................50
4.2.1 Operation of Properties................................................................50
4.2.2 Liens..................................................................................50
4.2.3 Dissolution............................................................................50
4.2.4 Change in Business.....................................................................51
4.2.5 Debt Cancellation......................................................................51
4.2.6 Affiliate Transactions.................................................................51
4.2.7 Zoning.................................................................................51
4.2.8 Assets.................................................................................51
4.2.9 Debt...................................................................................51
4.2.10 No Joint Assessment...................................................................51
4.2.11 Principal Place of Business...........................................................52
4.2.12 ERISA.................................................................................52
4.2.13 Transfers, Indebtedness and Subordinate Liens.........................................52
V. INSURANCE, CASUALTY AND CONDEMNATION.........................................................................57
Section 5.1 Insurance................................................................................57
5.1.1 Insurance Policies.....................................................................57
5.1.2 Insurance Company......................................................................61
Section 5.2 Casualty and Condemnation................................................................61
5.2.1 Casualty...............................................................................61
5.2.2 Condemnation...........................................................................61
Section 5.3 Restoration..............................................................................62
5.3.1 Minor Casualty or Condemnation.........................................................62
5.3.2 Major Casualty or Condemnation.........................................................62
VI. RESERVE FUNDS...............................................................................................65
Section 6.1 Required Repairs; Required Repair Funds..................................................65
6.1.1 Required Repairs; Deposits.............................................................65
6.1.2 Release of Required Repair Funds.......................................................65
6.1.3 Failure to Perform Required Repairs; Application of Required
Repair Funds........................................................................66
Section 6.2 Tax Funds................................................................................67
6.2.1 Tax Funds..............................................................................67
6.2.2 Release of Tax Funds...................................................................67
6.2.3 Application of Tax Funds...............................................................67
Section 6.3 Insurance Premium Funds..................................................................67
6.3.1 Insurance Premium Funds................................................................67
6.3.2 Release of Insurance Premium Funds.....................................................68
6.3.3 Application of Insurance Premium Funds.................................................68
-iii-
5
Section 6.4 Capital Expenditures Funds..............................................................68
6.4.1 Capital Expenditures....................................................................68
6.4.2 Release of Capital Expenditure Funds....................................................69
6.4.3 Application of Capital Expenditure Funds................................................70
Section 6.5 Intentionally Deleted...................................................................71
Section 6.6 Security Interest in Funds..............................................................71
6.6.1 Grant of Security Interest..............................................................71
6.6.2 Income Taxes............................................................................71
6.6.3 Prohibition Against Further Encumbrance.................................................71
Section 6.7 Cash Management.........................................................................71
6.7.1 Lockbox Account.........................................................................71
6.7.2 Deposits into Lockbox Account...........................................................71
Section 6.8 Servicer................................................................................72
VII. DEFAULTS...................................................................................................72
Section 7.1 Event of Default........................................................................72
7.2 Remedies .. ............................................................................74
7.3 Remedies Cumulative.....................................................................75
VIII. SALE AND SECURITIZATION OF MORTGAGES......................................................................76
Section 8.1 Sale of Mortgages and Securitization....................................................76
8.2 Securitization Indemnification..........................................................77
8.3 Rating Surveillance.....................................................................80
IX. MISCELLANEOUS...............................................................................................80
Section 9.1 Survival................................................................................80
9.2 Lender's Discretion.....................................................................80
9.3 Governing Law .........................................................................80
9.4 Modification, Waiver in Writing.........................................................82
9.5 Delay Not a Waiver......................................................................82
9.6 Notices .............................................................................82
9.7 Trial by Jury .........................................................................83
9.8 Headings .............................................................................84
9.9 Severability ...........................................................................80
9.10 Preferences ...........................................................................84
9.11 Waiver of Notice........................................................................84
9.12 Remedies of Borrower....................................................................84
9.13 Expenses; Indemnity.....................................................................85
9.14 Schedules Incorporated..................................................................86
9.15 Offsets, Counterclaims and Defenses.....................................................86
9.16 No Joint Venture or Partnership; No Third Party Beneficiaries...........................86
9.17 Publicity .............................................................................87
9.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets.................87
9.19 Waiver of Counterclaim..................................................................88
9.20 Conflict; Construction of Documents; Reliance...........................................88
9.21 Brokers and Financial Advisors..........................................................88
-iv-
6
9.22 Management of the Property; Termination of Manager................................................89
9.23 Exculpation ....................................................................................91
9.24 Prior Agreements..................................................................................92
SCHEDULES
Schedule I - Allocated Loan Amounts
Schedule II - Required Repairs
Schedule III - Rent Roll
Schedule IV - Post-Closing SNDA Tenants
Schedule V - Letter of Instruction
Schedule VI - CPA Certificate
Schedule VII - Form of Financial Statement
Schedule VIII - Form of Subordination, Non-Disturbance and Attornment
Agreement
Schedule IX - Trade Payable Limits
Schedule X - West Allis Environmental Matter
-v-
7
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of November 26, 1997 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "AGREEMENT"), between XXXXXX FINANCIAL CORPORATION, having an address
at 0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 ("LENDER") and
RAMCO PROPERTIES ASSOCIATES LIMITED PARTNERSHIP, having an address at 00000
Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 ("BORROWER").
All capitalized terms used herein shall have the respective
meanings set forth in Article I hereof.
W I T N E S S E T H :
WHEREAS, Borrower desires to obtain the Loan from Lender;
WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the terms of this Agreement and the other Loan
Documents;
NOW, THEREFORE, in consideration of the agreements and
covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree, represent and warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
"ACCOUNTS" shall mean collectively the Lockbox
Accounts, the Cash Management Account, the Required Repair Account, the Tax
Account, the Insurance Premium Account, the Debt Service Account and the
Capital Expenditures Account.
"ACCRUED INTEREST" shall have the meaning set forth in
Section 2.3.2 hereof.
"ADJUSTED INTEREST RATE" shall mean a rate per annum equal
to the greater of (i) the Initial Interest Rate plus two percentage points
(2.0%) or (ii) the Treasury Rate plus two percentage points (2.0%).
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or
of an Affiliate of such Person.
-1-
8
"AGENT" shall mean NBD Bank, a Michigan banking corporation,
its permitted successors and assigns.
"ALLOCATED LOAN AMOUNT" shall mean the portion of the Loan
allocated to each Individual Property as set forth on Schedule I hereto.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for all the Properties prepared by Borrower for
the applicable Fiscal Year or other period.
"ANTICIPATED REPAYMENT DATE" shall mean December 1, 2007.
"APPLICABLE INTEREST RATE" shall mean (i) prior to the
Anticipated Repayment Date, the Initial Interest Rate and (ii) on and after the
Anticipated Repayment Date, the Adjusted Interest Rate.
"APPROVED ANNUAL BUDGET" shall have the meaning set forth in
Section 4.1.10(d).
"ASSIGNMENT AND SUBORDINATION OF MANAGEMENT AGREEMENT" shall
mean, with respect to each Individual Property, that certain Assignment of
Management Agreement and Subordination of Management Agreement dated the date
hereof between Manager and Lender.
"ASSIGNMENT OF LEASES" shall mean, with respect to each
Individual Property, that certain first priority Assignment of Leases and Rents,
dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of an
Individual Property.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors' rights.
"BASIC CARRYING COSTS" shall mean, with respect to an
Individual Property, the sum of the following costs associated with such
Individual Property for the relevant Fiscal Year or payment period: (i) real
property taxes with respect to such Individual Property and (ii) insurance
premiums with respect to such Individual Property.
"BORROWER" shall mean Ramco Properties Associates Limited
Partnership, a Michigan limited partnership, together with its permitted
successors and permitted assigns.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or day on
-2-
9
which national banks in New York, New York are not open for business.
"CAPITAL EXPENDITURE FUNDS" shall have the meaning set forth
in Section 6.4.1.
"CAPITAL EXPENDITURES" for any period shall mean amounts
expended for replacements and alterations to the Properties and required to be
capitalized according to GAAP. Amounts paid for items set forth on the Capital
Expenditures Budget meeting the foregoing definition of Capital Expenditures
shall be deemed Capital Expenditures.
"CAPITAL EXPENDITURES ACCOUNT" shall have the meaning set
forth in the Cash Management Agreement.
"CAPITAL EXPENDITURES BUDGET" shall mean the budget annexed
hereto as Schedule III, as amended from time to time in accordance with Section
6.4.1.
"CAPITAL EXPENDITURES WORK" shall mean any labor performed or
materials installed in connection with any item of work described on the Capital
Expenditures Budget which is a Capital Expenditure.
"CASH" shall mean coin or currency of the government of the
United States of America.
"CASH AND CASH EQUIVALENTS" shall mean any or a combination of
the following:
(i) Cash, and (ii) U.S. Obligations.
"CASH MANAGEMENT ACCOUNT" shall have the meaning set forth in
Section 6.7.2.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash
Management Agreement among Lender, Borrower and Agent relating to funds
deposited in the Lockbox Account.
"CASUALTY" shall mean the occurrence of any casualty, damage
or injury, by fire or otherwise, to any of the Individual Properties or any part
thereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in
Section 5.3.2(c).
"CASUALTY RETAINAGE" shall have the meaning set forth in
Section 5.3.2(d)
"CLOSING DATE" shall mean the later to occur of (i) the date
hereof or (ii) the date of funding the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent taking by
any Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of
-3-
10
condemnation or eminent domain, of all or any part of the Premises, or any
interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Premises or any part thereof.
"DEBT" shall mean the outstanding principal amount of the Loan
together with all interest accrued and unpaid thereon and all other sums
(including the Yield Maintenance Premium) due to Lender in respect of the Loan
under the Note, this Agreement, the Mortgages, the Environmental Indemnities or
any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and interest payments under the Note.
"DEBT SERVICE ACCOUNT" shall have the meaning set forth in the
Cash Management Agreement.
"DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (a) Net
Operating Income for the immediately preceding 12 calendar month period adjusted
downward (or downward or upward, as the case may be, with respect to
straightlining of rents only) for (i) a management fee of 4% of Gross Income,
(ii) any non-recurring revenues, and (iii) straightlining of rents to (b) the
product of the greater of (i) 9.66% or (ii) the Initial Interest Rate and the
original principal amount of the Loan.
"DEFAULT" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (a) the maximum rate permitted by applicable
law, or (b) five percent (5%) above the Applicable Interest Rate.
"DEFEASANCE COLLATERAL ACCOUNT" shall have the meaning set
forth in Section 2.5.1(iii).
"DEFEASANCE DATE" shall have the meaning set forth in Section
2.5.1(i).
"DEFEASED NOTE" shall have the meaning set forth in Section
2.5.2(iv) hereof.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 8.2(a).
"ELIGIBLE ACCOUNT" shall mean a separate and identifiable
account from all other funds held by the holding institution that is either (i)
an account or accounts maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a state chartered depository
institution or trust company is subject to regulations substantially similar to
12 C.F.R. ss.9.10(b), having in either case a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal and
-4-
11
state authority. An Eligible Account will not be evidenced by a certificate
of deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by Standard & Poor's Ratings Group, P-1 by Xxxxx'x Investors Service, Inc.,
D-1 by Duff & Xxxxxx Credit Rating Co. and F-1+ by Fitch Investors Service, L.P.
in the case of accounts in which funds are held for 30 days, or less (or, in the
case of accounts in which funds are held for more than 30 days, or Letters of
Credit, the long term unsecured debt obligations of which are rated at least
"AA" by Fitch, Duff and S&P and "Aa2" by Moody's). NBD Bank, a Michigan banking
corporation, shall be deemed an Eligible Institution so long as its long term
unsecured debt obligations are at all times rated at least A or better by
Standard & Poor's Ratings Group and A2 by Xxxxx'x Investors Service, Inc.
"ENVIRONMENTAL INDEMNITY" shall mean, with respect to each
Individual Property, that certain Environmental Indemnification Agreement dated
as of the date hereof executed by Borrower in connection with the Loan for the
benefit of Lender.
"EQUIPMENT" shall have the meaning set forth in the granting
clause of the Mortgage with respect to each Individual Property.
"ERISA" shall have the meaning set forth in Section 4.2.12.
"EVENT OF DEFAULT" shall have the meaning set forth in
Section 7.1.
"EXCHANGE ACT" shall have the meaning set forth in Section
8.2(a).
"EXTRAORDINARY EXPENSE" shall have the meaning set
forth in Section 4.1.10(d).
"FISCAL YEAR" shall mean each twelve month period commencing
on January 1 and ending on December 31 during each year of the term of the Loan.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession, to the extent such
principles apply to partnerships and are applicable to the facts and
circumstances on the date of determination.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any governmental
xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether
now or hereafter in existence.
"GROSS INCOME" shall mean all revenue, computed in accordance
with GAAP, derived from the ownership and operation of the Properties from
whatever source, including,
-5-
12
but not limited to, Rents, utility charges, escalations, forfeited security
deposits, interest on credit accounts, service fees or charges, license fees,
parking fees, rent concessions or credits, and other required pass-throughs but
excluding sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Government Authority, refunds and uncollectible
accounts, proceeds of casualty insurance and Awards (other than business
interruption or other loss of income insurance), and any disbursements to the
Borrower of Required Repair Funds, Tax Funds, Insurance Premium Funds, Capital
Expenditure Funds or any other fund established by the Loan Documents.
"IMPROVEMENTS" shall have the meaning set forth in the
granting clause of the related Mortgage with respect to each Individual
Property.
"INDEBTEDNESS" of a Person, at a particular date, means the
sum (without duplication) at such date of (a) indebtedness or liability for
borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other
similar instruments; (c) obligations for the deferred purchase price of property
or services (including trade obligations); (d) obligations under letters of
credit; (e) obligations under acceptance facilities; (f) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or entity, or otherwise to
assure a creditor against loss; and (g) obligations secured by any Liens,
whether or not the obligations have been assumed.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 3.1.30(p).
"INDIVIDUAL PROPERTY" shall mean each parcel of real property,
the improvements thereon and all personal property owned by Borrower and
encumbered by a Mortgage, together with all rights pertaining to such property
and improvements, as more particularly described in the Granting Clauses of such
Mortgages.
"INITIAL INTEREST RATE" shall mean a rate per annum equal to
six and eighty-three hundredths percent (6.83%).
"INSOLVENCY OPINION" shall have the meaning set forth in
Section 3.1.30(r).
"INSURANCE PREMIUM FUND" shall have the meaning set forth in
Section 6.3.1.
"INSURANCE PREMIUM ACCOUNT" shall have the meaning set forth
in the Cash Management Agreement.
"INSURANCE PREMIUM FUNDS" shall have the meaning set forth in
Section 6.3.1.
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section 5.1.1.
"LEASE" shall mean any lease, sublease or subsublease,
letting, license, concession or other agreement (whether written or oral and
whether now or hereafter in effect) pursuant to which any person is granted a
possessory interest in, or right to use or occupy all or any portion of any
space in any Individual Property of Borrower, and every modification, amendment
or
-6-
13
other agreement relating to such lease, sublease, subsublease, or other
agreement entered into in connection with such lease, sublease, subsublease, or
other agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.
"LEGAL REQUIREMENTS" shall mean, with respect to each
Individual Property, all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting such Individual
Property or any part thereof or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting such Individual Property or any part thereof, including, without
limitation, any which may (i) require repairs, modifications or alterations in
or to such Individual Property or any part thereof, or (ii) in any way limit the
use and enjoyment thereof.
"LENDER" shall mean Xxxxxx Financial Corporation, together
with its successors and assigns, including, without limitation, Xxxxxx Xxxxxxx
Mortgage Capital Inc.
"LETTER OF CREDIT" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a domestic
Eligible Institution or the U.S. agency or branch of a foreign Eligible
Institution, or if there are no domestic U.S. agencies or branches of a foreign
Eligible Institution then issuing letters of credit, then such letter of credit
may be issued by a domestic bank, the long term unsecured debt rating of which
is the highest such rating then given by the Rating Agencies to a domestic
commercial bank. If at any time the bank issuing any such Letter of Credit shall
cease to be an Eligible Institution, Lender shall have the right immediately to
draw down the same in full and hold the proceeds of such draw in accordance with
the applicable provisions hereof, unless Borrower shall deliver a replacement
Letter of Credit within thirty (30) days after Lender delivers written notice to
Borrower that such bank shall have ceased to be an Eligible Institution.
"LIABILITIES" shall have the meaning set forth in Section
8.2 (b).
"LICENSES" shall have the meaning set forth in Section 3.1.22.
"LIEN" shall mean, with respect to each Individual Property,
any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer of, on or affecting the
related Individual Property or any portion thereof or Borrower, or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and
mechanic's, materialmen's and other similar liens and encumbrances.
"LOAN" shall mean the loan made by Lender to Borrower
pursuant to this
-7-
14
Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the Mortgages, the Assignments of Leases, the Assignments and
Subordinations of Management Agreement, the Environmental Indemnities, the Cash
Management Agreement and any other document pertaining to the Individual
Properties as well as all other documents executed and/or delivered in
connection with the Loan.
"LOCKBOX ACCOUNTS" shall have the meaning set forth in
Section 6.7.1.
"MANAGEMENT AGREEMENT" shall mean, with respect to each
Individual Property, the management agreement entered into by and between
Borrower and the Manager, pursuant to which the Manager is to provide management
and other services with respect to such Individual Property.
"MANAGER" shall mean Ramco-Xxxxxxxxxx, Inc., a Michigan
corporation.
"MANAGER TERMINATION RATIO" shall have the meaning set forth
in Section 9.22.
"MATURITY DATE" shall mean December 1, 2027, or such other
date on which the final payment of principal of the Note becomes due and payable
as therein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws of
such state or states whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.
"MONTHLY CAPITAL EXPENDITURES DEPOSIT" shall have the meaning
set forth in Section 6.4.1.
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a constant
monthly payment of $326,962.39.
"MONTHLY INSURANCE PREMIUM DEPOSIT" shall have the meaning set
forth in Section 6.3.1.
"MONTHLY PAYMENT DATE" shall mean the first day of every
calendar month occurring during the term of the Loan.
"MONTHLY TAX DEPOSIT" shall have the meaning set forth in
Section 6.2.1.
"XXXXXX XXXXXXX " shall have the meaning set forth in
Section 8.2(b).
"XXXXXX XXXXXXX GROUP" shall have the meaning set forth in
Section 8.2(b).
-8-
15
"MORTGAGE" shall mean, with respect to each Individual
Property, that certain first priority Mortgage (or Deed of Trust or Deed to
Secure Debt), and Security Agreement, dated the date hereof, executed and
delivered by Borrower as security for the Loan made to Borrower and encumbering
such Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"NET CASH FLOW" for any period shall mean the amount obtained
by subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income for such period.
"NET CASH FLOW SCHEDULE" shall have the meaning set forth in
Section 4.1.10(b).
"NET OPERATING INCOME" means the amount obtained by
subtracting Operating Expenses from Gross Income.
"NET PROCEEDS" shall mean: (i) the net amount of all insurance
proceeds payable as a result of a Casualty to an Individual Property, after
deduction of reasonable costs and expenses (including, but not limited to,
reasonable attorneys' fees), if any, in collecting such insurance proceeds, or
(ii) the net amount of the Award, after deduction of reasonable costs and
expenses (including, but not limited to, reasonable attorneys' fees), if any, in
collecting such Award.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 5.3.2(f).
"NOTE" shall have the meaning set forth in Section 2.1.3.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized senior officer of the
managing member of the general partner of Borrower.
"OPERATING EXPENSES" shall mean the total of all expenditures,
computed in accordance with GAAP, relating to the operation, maintenance and
management of the Properties, including without limitation, utilities, repairs
and maintenance, insurance, license fees, property taxes and assessments,
advertising expenses, management fees, payroll and related taxes, computer
processing charges, and equipment lease payments, but excluding depreciation,
Debt Service, Extraordinary Expenses, and Capital Expenditures.
"OTHER CHARGES" shall mean all ground rents, maintenance
charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Properties, now or hereafter levied or assessed or
imposed against the Properties or any part thereof.
"PARTIAL DEFEASANCE DATE" shall have the meaning set forth in
Section 2.5.2(a)(i).
"PARTIAL DEFEASANCE COLLATERAL" shall mean U.S. Obligations
which provide payments (i) on or prior to, but as close as possible to, all
Monthly Payment Dates and other scheduled payment dates, if any, under the
Defeased Note after the Defeasance Date and up to
-9-
16
and including the Anticipated Repayment Date, and (ii) in amounts equal to or
greater than 125% of the Scheduled Defeasance Payments.
"PERMITTED ENCUMBRANCES" shall mean, with respect to an
Individual Property, collectively, (a) the Liens and security interests created
by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed
in the Title Insurance Policies relating to such Individual Property or any part
thereof, (c) Liens, if any, for Taxes imposed by any Governmental Authority not
yet due or delinquent, and (d) such other title and survey exceptions as Lender
has approved or may approve in writing in Lender's sole discretion, which in the
aggregate do not materially adversely affect the value or use of such Individual
Property or Borrower's ability to repay the Loan.
"PERMITTED INVESTMENTS" shall have the meaning specified in
the Cash Management Agreement.
"PERSON" shall mean any individual, corporation, partnership,
joint venture, estate, trust, unincorporated association, any other entity, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PHYSICAL CONDITIONS REPORT" shall mean a report prepared by a
company satisfactory to Lender regarding the physical condition of such
Individual Property, satisfactory in form and substance to Lender in its sole
discretion, which report shall, among other things, (i) confirm that such
Individual Property and its use complies, in all material respects, with all
applicable Legal Requirements (including, without limitation, zoning,
subdivision and building laws) and (ii) include a copy of a final certificate of
occupancy with respect to all Improvements on such Individual Property.
"POLICIES" shall have the meaning specified in Section 5.1.1.
"PREMISES" shall have the meaning set forth in the granting
clause of the related Mortgage with respect to each Individual Property.
"PRO-RATA ALLOCATED LOAN AMOUNT" shall mean for an Individual
Property the product of (a) the quotient obtained by dividing the Allocated Loan
Amount for such Individual Property as adjusted in accordance with the
provisions of Section 2.4.2, by the sum of the original Allocated Loan Amount
for all Properties as adjusted in accordance with the provisions of Section
2.4.2 and (b) the outstanding principal balance of the Loan.
"PRO-RATA SUBSTITUTE ALLOCATED LOAN AMOUNT" shall mean for a
Substitute Property the product of (a) the quotient obtained by dividing the
Substitute Allocated Loan Amount for such Individual Property as adjusted in
accordance with the provisions of Section 2.4.2 by the sum of the original
Allocated Loan Amount for all Properties, as adjusted in accordance with the
provisions of Section 2.4.2, and (b) the outstanding principal balance of the
Loan.
"PROPERTIES" shall mean, collectively, all of the Individual
Properties which are
-10-
17
"PROVIDED INFORMATION" shall have the meaning set forth in
Section 8.1(b).
"QUALIFYING MANAGER" shall mean any property manager
acceptable to Lender.
"RATING AGENCIES" shall mean each of Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc., Xxxxx'x Investors Service, Inc., Duff &
Xxxxxx Credit Rating Co. and Fitch Investors Service, L.P., or any other
nationally-recognized statistical rating agency which has been approved by
Lender.
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section 8.2(b).
"RELEASE DATE" shall mean the date that is the earlier of
(a) three years from the Closing Date or (b) two years from the date of a
Securitization of the Loan.
"REMIC TRUST" shall mean a "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code that holds the Note.
"RENTABLE SPACE PERCENTAGE" shall have the meaning set forth
in Section 5.3.2(iii).
"RENTS" shall mean, with respect to each Individual
Property, all rents, rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation,
all oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or
paid to or for the account of or benefit of Borrower or its agents or employees
from any and all sources arising from or attributable to the Individual
Property.
"REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in
the Cash Management Agreement.
"REQUIRED REPAIR FUNDS" shall have the meaning set forth in
Section 6.1.1.
"REQUIRED REPAIRS" shall have the meaning set forth in Section
6.1.1.
"RESTORATION" shall have the meaning set forth in
Section 5.2.1.
"SCHEDULED DEFEASANCE PAYMENTS" shall mean scheduled payments
of interest and principal under the Note or Defeased Note, as applicable
(including, in the case of a total defeasance, the outstanding principal balance
on the Note as of the Anticipated Repayment Date and, in the case of a partial
defeasance, the outstanding principal balance on the Defeased Note as of the
Anticipated Repayment Date), and payments required, if any, under the Loan
Documents for servicing fees, Rating Agency Surveillance Charges and other
similar charges.
-11-
18
"SECONDARY MARKET TRANSACTION" shall have the meaning set
forth in Section 8.1(a).
"SECURITIES" shall have the meaning set forth in Section
8.1 (a).
"SECURITIES ACT" shall have the meaning set forth in Section
8.2(a).
"SECURITIZATION" shall have the meaning set forth in
Section 8.1.
"SECURITY AGREEMENT" shall mean a security agreement in form
and substance satisfactory to Lender pursuant to which Borrower grants
Lender a perfected, first priority security interest in the Defeasance
Collateral Account, the Total Defeasance Collateral and the Partial Defeasance
Collateral, as applicable.
"SERVICER" shall have the meaning set forth in Section 6.8.
"SERVICING AGREEMENT" shall have the meaning set forth in
Section 6.8.
"SEVERED LOAN DOCUMENTS" shall have the meaning set
forth in Section 7.2(c).
"SPC MANAGING MEMBER shall have the meaning set forth in
Section 3.1.30(o).
"SPE GENERAL PARTNER" shall have the meaning set
forth in Section 3.1.30(o).
"STATE" shall mean, with respect to an Individual Property,
the State or Commonwealth in which such Individual Property or any part thereof
is located.
"SUBSTITUTE PROPERTY" shall have the meaning set forth in
Section 2.6(a).
"SUBSTITUTE ALLOCATED LOAN AMOUNT" shall have the
meaning set forth in Section 2.6(viii).
"SUBSTITUTED PROPERTY" shall have the meaning set forth in
Section 2.6.
"SUCCESSOR BORROWER" shall have the meaning set forth in
Section 2.5.4.
"SURVEY" shall mean a survey of the Individual Property
in question prepared by a surveyor licensed in the State and satisfactory to
Lender and the company or companies issuing the Title Insurance Policies,
and containing a certification of such surveyor satisfactory to Lender.
"TAX ACCOUNT" shall have the meaning set forth in the
Cash Management Agreement.
"TAX FUNDS" shall have the meaning set forth in Section 6.2.1.
"TAXES" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents, now or hereafter levied or
assessed or imposed against any of the
-12-
19
Properties or part thereof.
"TENANT" shall mean any Person obligated under any Lease now
or hereafter affecting all or any part of any Individual Property.
"THRESHOLD AMOUNT" shall have the meaning set forth in
Section 4.1.20.
"TITLE INSURANCE POLICIES" shall mean, with respect to each
Individual Property, ALTA mortgagee title insurance policies in the form
(acceptable to Lender) issued with respect to such Individual Property and
insuring the lien of the Mortgage encumbering such Individual Property.
"TOTAL DEFEASANCE COLLATERAL" shall mean U.S. Obligations,
which provide payments (i) on or prior to, but as close as possible to, all
Monthly Payment Dates and other scheduled payment dates, if any, under the Note
after the Defeasance Date and up to and including the Anticipated Repayment
Date, and (ii) in amounts equal to or greater than the Scheduled Defeasance
Payments.
"TRADE PAYABLES" shall have the meaning set forth in Section
4.2.13.
"TRANSFER" shall mean sell, assign, convey, transfer,
mortgage, grant a security interest in, pledge or otherwise dispose of, or where
used as a noun, a sale, assignment, conveyance, mortgage, grant of a security
interest in, transfer, pledge or other disposition.
"TRANSFEREE" shall have the meaning set forth in Section
4.2.13.
"TREASURY RATE" shall mean, as of the Anticipated Repayment
Date, the yield, calculated by linear interpolation (rounded to the nearest
one-thousandth of one percent (i.e., 0.001%) of the yields of noncallable United
States Treasury obligations with terms (one longer and one shorter) most nearly
approximately the period from such date of determination to the Maturity Date,
as determined by Lender on the basis of Federal Reserve Statistical Release
H.15-Selected Interest Rates under the heading U.S. Governmental
Security/Treasury Constant Maturities, or other recognized source of financial
market information selected by Lender.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect in the applicable State or Commonwealth in which an
Individual Property is located.
"UNDEFEASED NOTE" shall have the meaning set forth in Section
2.5.2(iv) hereof.
"UNDERWRITER GROUP" shall have the meaning set forth in
Section 8.2(b).
"U.S. OBLIGATIONS" shall mean direct non-callable obligations
of the United States of America.
"YIELD MAINTENANCE PREMIUM" shall mean an amount equal to the
greater of: (i) one (1%) percent of the principal amount of the Loan being
prepaid or (ii) the present value
-13-
20
as of the Prepayment Date of the Calculated Payments from the Prepayment Date
through the Anticipated Repayment Date determined by discounting such payments
at the Discount Rate. As used in this definition, the term "PREPAYMENT DATE"
shall mean the date on which prepayment is made. As used in this definition, the
term "CALCULATED PAYMENTS" shall mean the monthly payments of interest only
which would be due based on the principal amount of the Loan being prepaid on
the Prepayment Date and assuming an interest rate per annum equal to the
difference (if such difference is greater than zero) between (y) the Initial
Interest Rate and (z) the Yield Maintenance Treasury Rate. As used in this
definition, the term "DISCOUNT RATE" shall mean the rate which when compounded
monthly, is equivalent to the Yield Maintenance Treasury Rate when compounded
semi-annually. As used in this definition, the term "YIELD MAINTENANCE TREASURY
RATE" shall mean the yield calculated by the linear interpolation of the yields,
as reported in the Federal Reserve Statistical Release H.15-Selected Interest
Rates under the heading U.S. Government Securities/Treasury constant maturities
for the week ending prior to the Prepayment Date, of U.S. Treasury constant
maturities with maturity dates (one longer or one shorter) most nearly
approximating the Anticipated Repayment Date. In the event Release H.15 is no
longer published, Lender shall select a comparable publication to determine the
Yield Maintenance Treasury Rate. In no event, however, shall Lender be required
to reinvest any prepayment proceeds in U.S. Treasury obligations or otherwise.
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. Unless otherwise
specified, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.
II. THE LOAN
SECTION 2.1 THE LOAN.
2.1.1 AGREEMENT TO LEND AND BORROW. Subject to and upon the
terms and conditions set forth herein, Lender shall make the Loan to Borrower
and Borrower shall accept the Loan from Lender on the Closing Date, in the
original principal amount of $50,000,000.00.
2.1.2 SINGLE DISBURSEMENT TO BORROWER. Borrower shall receive
only one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.
2.1.3 THE NOTE. The Loan shall be evidenced by a note made by
Borrower to Lender in the original principal amount of $50,000,000.00 (as the
same may be amended, supplemented, restated, increased, extended and
consolidated, together with any Defeased Note and Undefeased Note that may exist
from time to time, the "NOTE").
2.1.4 USE OF PROCEEDS. Borrower shall use proceeds of the
Loan to (i) pay and
-14-
21
discharge any existing loans relating to the Properties, (ii) pay all past-due
Basic Carrying Costs, if any, in respect of the Properties, (iii) make deposits
of the Required Repair Funds and Tax Funds, Insurance Premium Funds and Capital
Expenditure Funds, (iv) pay costs and expenses incurred in connection with the
closing of the Loan, as approved by Lender, (v) fund any working capital
requirements of the Properties, approved by Lender and (vi) distribute the
balance, if any, to the Borrower.
2.1.5 LOAN APPLICATION FEE AND LOAN ORIGINATION FEE .
Borrower shall pay on the date hereof, a non-refundable loan origination fee
(the "LOAN ORIGINATION FEE") in the amount of $312,500.
SECTION 2.2 INTEREST RATE.
2.2.1 INITIAL INTEREST RATE. Interest on the outstanding
principal balance of the Loan shall accrue from the Closing Date up to but
excluding the Anticipated Repayment Date at the Initial Interest Rate.
2.2.2 ADJUSTED INTEREST RATE. Interest on the outstanding
principal balance of the Loan shall accrue from and including the Anticipated
Repayment Date to and including the Maturity Date at the Adjusted Interest Rate.
2.2.3 DEFAULT RATE. In the event that, and for so long as, any
Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan and, to the extent permitted by law, overdue
interest in respect of the Loan, shall accrue interest at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein.
2.2.4 INTEREST CALCULATION. Interest on the outstanding
principal balance of the Loan shall be calculated by multiplying (a) the actual
number of days elapsed in the period for which the calculation is being made by
(b) a daily rate based on a three hundred sixty (360) day year.
2.2.5 USURY SAVINGS. This Agreement and the Note are subject
to the express condition that at no time shall Borrower be obligated or required
to pay interest on the principal balance of the Loan at a rate which could
subject Lender to either civil or criminal liability as a result of being in
excess of the Maximum Legal Rate. If by the terms of this Agreement or the other
Loan Documents, Borrower is at any time required or obligated to pay interest on
the principal balance due hereunder at a rate in excess of the Maximum Legal
Rate, the interest rate or the Default Rate, as the case may be, shall be deemed
to be immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate of interest from time
to time in effect and applicable to the Loan for so long as the
-15-
22
Loan is outstanding.
SECTION 2.3 LOAN PAYMENTS.
2.3.1 PAYMENT BEFORE ANTICIPATED REPAYMENT DATE. Borrower
shall make a payment to Lender of interest only on the Closing Date. Borrower
shall make a payment to Lender of principal and interest in the amount of
$326,962.39 on the Monthly Payment Date occurring in January, 1998 and on each
Monthly Payment Date thereafter to and including the Anticipated Repayment Date.
Each payment shall be applied first to accrued and unpaid interest and the
balance to principal.
2.3.2 PAYMENTS AFTER ANTICIPATED REPAYMENT DATE. On each
Monthly Payment Date occurring after the Anticipated Repayment Date Borrower
shall (a) make a payment to Lender of principal and interest in the amount of
$326,962.39, such payment to be applied to interest in an amount equal to
interest that would have accrued on the outstanding principal balance of the
Loan (without adjustment for Accrued Interest) at the Initial Interest Rate and
the balance applied to principal and (b) pay to Lender amounts to be applied to
principal as set forth in Section 3.3(b) of the Cash Management Agreement.
Interest accrued at the Adjusted Interest Rate and not paid pursuant to the
preceding sentence ("ACCRUED INTEREST"), shall be added to the Debt and shall
earn interest at the Adjusted Interest Rate, to the extent permitted by law.
2.3.3 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender
on the Maturity Date the outstanding principal balance, all accrued and unpaid
interest (including without limitation the Accrued Interest) and all other
amounts due hereunder and under the Note, the Mortgages and other the Loan
Documents.
2.3.4 LATE PAYMENT CHARGE. If any principal, interest or any
other sum due under the Loan Documents is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray the expense incurred by Lender in handling
and processing such delinquent payment and to compensate Lender for the loss of
the use of such delinquent payment. Any such amount shall be secured by the
Mortgages and the other Loan Documents.
2.3.5 METHOD AND PLACE OF PAYMENT. (a) Except as otherwise
specifically provided herein all payments and prepayments under this Agreement
and the Note shall be made to Lender not later than 5:00 P.M., New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Lender's office, and any
funds received by Lender after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day.
(b) Whenever any payment to be made hereunder, under the Note
or other Loan Documents shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
-16-
23
(c) All payments made by Borrower hereunder or under the Note
or the other Loan Documents shall be made irrespective of, and without any
deduction for, any setoff or counterclaims.
SECTION 2.4 PREPAYMENTS.
2.4.1 VOLUNTARY PREPAYMENTS. Except as otherwise provided
herein, Borrower shall not have the right to prepay the Loan in whole or in
part. On September 1, 2007, or on any Monthly Payment Date thereafter, Borrower
may, at its option and upon thirty (30) days prior written notice to Lender,
prepay the Debt in whole or in part without payment of the Yield Maintenance
Premium. Any partial prepayment shall be applied to the last payments of
principal due under the Loan.
2.4.2 MANDATORY PREPAYMENTS. On each date on which Borrower
actually receives a distribution of the proceeds of any insurance payment or
Award in respect of any Individual Property, and if Lender does not make such
proceeds available to Borrower for the restoration of such Individual Property,
Borrower shall prepay the outstanding principal balance of the Note in an amount
equal to one hundred percent (100%) of such proceeds. No Yield Maintenance
Premium shall be due in connection with any prepayment made pursuant to this
Section 2.4.2. The Allocated Loan Amount with respect to such Individual
Property will be reduced in an amount equal to such prepayment.
2.4.3 PREPAYMENTS AFTER DEFAULT. If after an Event of Default,
payment of all or any part of the principal of the Loan is tendered by Borrower,
a purchaser at foreclosure or any other Person, such tender shall be deemed an
attempt to circumvent the prohibition against prepayment set forth in Section
2.4.1 and Borrower, such purchaser at foreclosure or other Person shall pay, in
addition to the outstanding principal balance, all accrued and unpaid interest
and other amounts payable under the Loan Document, and the Yield Maintenance
Premium.
SECTION 2.5 DEFEASANCE.
2.5.1 TOTAL DEFEASANCE. (a) Provided no Event of Default shall
have occurred and remain uncured, Borrower shall have the right at any time
after the Release Date and prior to the Anticipated Repayment Date to obtain a
release of the Lien of the Mortgages encumbering all Properties upon
satisfaction of the following conditions:
(i) Borrower shall provide Lender thirty (30) days prior
written notice specifying a Monthly Payment Date (the "DEFEASANCE DATE") on
which the Borrower shall have satisfied the conditions in this Section 2.5.1 and
on which it shall effect the defeasance;
(ii) Borrower shall pay to Lender (A) all accrued and unpaid
interest on the principal balance of the Note to and including the Defeasance
Date and (B) all other sums, then due under the Note, this Agreement, the
Mortgages and the other Loan Documents;
(iii) Borrower shall deposit the Total Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the provisions
of Sections 2.5.3 and 2.5.4 hereof;
-17-
24
(iv) Borrower shall execute and deliver a Security Agreement
in respect of the Defeasance Collateral Account and the Total Defeasance
Collateral;
(v) Borrower shall deliver to Lender an opinion of counsel for
Borrower satisfactory to Lender in its sole discretion opining, among other
things, that (A) Lender has a legal and valid perfected first priority security
interest in the Defeasance Collateral Account and the Total Defeasance
Collateral, (B) if a Securitization has occurred, the REMIC Trust formed
pursuant to such Securitization will not fail to maintain its status as a "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code as a result of the defeasance pursuant to this Section 2.5.1, (C) a
defeasance pursuant to this Section 2.5.1 will not result in a deemed exchange
for purposes of the Code and will not adversely effect the status of the Note as
indebtedness for federal income tax purposes, (D) delivery of the Total
Defeasance Collateral and the grant of a security interest therein to Lender
shall not constitute an avoidable preference under Section 547 of the Bankruptcy
Code or applicable state law and (E) if required by the applicable Rating
Agencies, a non-consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender evidence in writing from
the applicable Rating Agencies to the effect that the release of the Properties
from the Lien of the Mortgage as contemplated by this Section 2.5.1 and the
substitution of the Total Defeasance Collateral will not result in a
downgrading, withdrawal or qualification of the respective ratings in effect
immediately prior to such defeasance for the Securities issued in connection
with the Securitization which are then outstanding;
(vii) Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in this Section 2.5.1(a) have been
satisfied;
(viii) Borrower shall deliver a certificate of Borrower's
independent certified public accountant certifying that the Total Defeasance
Collateral will generate monthly amounts equal to or greater than the Scheduled
Defeasance Payments in the form annexed hereto as Schedule VI;
(ix) Borrower shall deliver such other certificates, documents
or instruments as Lender may reasonably request; and
(x) Borrower shall pay all costs and expenses of Lender
incurred in connection with the defeasance, including Lender's reasonable
attorneys' fees and expenses.
(b) If the Borrower has elected to defease the entire Note and
the requirements of this Section 2.5 have been satisfied, all of the Properties
shall be released from the Liens of their respective Mortgages and the Total
Defeasance Collateral, pledged pursuant to the Security Agreement, shall be the
sole source of collateral securing the Note. In connection with the release of
the Liens, the Borrower shall submit to Lender, not less than thirty (30) days
prior to the Defeasance Date, a release of Lien (and related Loan Documents) for
execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which an Individual Property is located and satisfactory to
Lender in its sole discretion. In addition, Borrower shall
-18-
25
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release, together with an Officer's Certificate
certifying that such documentation (i) is in compliance with all legal
requirements, and (ii) will effect such releases in accordance with the terms of
this Agreement. Borrower shall pay all costs, taxes and expenses associated with
the release of the Lien of the Mortgages, including Lender's reasonable
attorneys' fees. Except as set forth in this Section 2.5, no repayment,
prepayment or defeasance of all or any portion of the Note shall cause, give
rise to a right to require, or otherwise result in, the release of any Lien of
any Mortgage on any of the Properties.
2.5.2 PARTIAL DEFEASANCE (a) Provided no Event of Default
shall have occurred and remain uncured, Borrower shall have the right at any
time after the Release Date and prior to the Anticipated Repayment Date to
obtain a release of the Lien of the Mortgages encumbering one or more Individual
Properties upon a Partial Defeasance of the Note in an amount equal to 125% of
the Pro-Rata Allocated Loan Amount with respect to the Individual Property or
Properties to be released from the Lien and the satisfaction of the following
conditions:
(i) Borrower shall provide Lender thirty (30) days prior
written notice specifying a Monthly Payment Date (the "PARTIAL DEFEASANCE DATE")
on which the Borrower shall have satisfied the conditions in this Section 2.5.2
and shall effect the defeasance;
(ii) Borrower shall pay to Lender (A) all accrued and unpaid
interest on the principal balance of the Note to and including the Partial
Defeasance Date and (B) all other sums, then due under the Note, this Agreement,
the Mortgages and the other Loan Documents;
(iii) Borrower shall deposit the Partial Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the provisions
of Sections 2.5.3 and 2.5.4 hereof;
(iv) Borrower shall prepare all necessary documents to modify
this Agreement and to amend and restate the Note and issue two substitute notes,
one note having a principal balance equal to the defeased portion of the
original Note (the "DEFEASED NOTE") and the other note having a principal
balance equal to the undefeased portion of the Note (the "UNDEFEASED NOTE"). The
Defeased Note and Undefeased Note shall have identical terms as the Note except
for the principal balance. A Defeased Note may not be the subject of any further
defeasance;
(v) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the Partial
Defeasance Collateral;
(vi) After giving effect to the release of the Lien of the
Mortgages encumbering the Individual Property or Properties proposed by Borrower
to be released, the Debt Service Coverage Ratio with respect to the remaining
Properties is not less than the greater of (A) the Debt Service Coverage Ratio
of all Properties encumbered by the Mortgages prior to the release and (B) 1.60
to 1;
(vii) Borrower shall have delivered to Lender and the Rating
Agencies shall have received from Borrower with respect to the matters referred
to in clause (vi), (A)
-19-
26
statements of the Net Operating Income and Debt Service (both on a consolidated
basis and separately for the applicable Individual Property or Properties to be
released) for the applicable measuring period and (B) based on the foregoing
statements of Net Operating Income and Debt Service, calculations of the Debt
Service Coverage Ratio both with and without giving effect to the proposed
release, and (C) calculations of the ratios referred to in such clause (vi),
accompanied by an Officer's Certificate stating that such statements,
calculations and information are true, correct and complete in all material
respects;
(viii) Borrower shall deliver to Lender an opinion of counsel
for Borrower satisfactory to Lender in its sole discretion opining, among other
things, that (A) Lender has a legal and valid perfected first priority security
interest in the Defeasance Collateral Account and the Partial Defeasance
Collateral, (B) if a Securitization has occurred, the REMIC Trust formed
pursuant to such Securitization will not fail to maintain its status as a "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code as a result of the defeasance pursuant to this Section 2.5.2, (C) a
defeasance pursuant to this Section 2.5.2 will not result in a deemed exchange
for purposes of the Code and will not adversely affect the status of the
Defeased Note and the Undefeased Note as indebtedness for federal income tax
purposes, (D) delivery of the Partial Defeasance Collateral and the grant of a
security interest therein to Lender shall not constitute an avoidable preference
under Section 547 of the Bankruptcy Code or applicable state law and (E) if
required by the applicable Rating Agencies, a non-consolidation opinion with
respect to the Successor Borrower;
(ix) Borrower shall deliver to Lender evidence in writing from
the applicable Rating Agencies to the effect that the release of the Individual
Property or Properties from the Lien of the Mortgage as contemplated by this
Section 2.5.2 and the substitution of the Partial Defeasance Collateral will not
result in a downgrading, withdrawal or qualification of the respective ratings
in effect immediately prior to such defeasance for the Securities issued in
connection with the Securitization which are then outstanding;
(x) Borrower shall deliver to Lender a certificate of
Borrower's independent certified public accountant certifying that the Partial
Defeasance Collateral will generate monthly amounts equal to or greater than
125% of the Scheduled Defeasance Payments in the form annexed hereto as Schedule
VI;
(xi) Borrower shall deliver to Lender an Officer's Certificate
certifying that the requirements set forth in this Section 2.5.2(a) have been
satisfied;
(xii) Borrower shall deliver to Lender such other
certificates, documents or instruments as Lender may reasonably request; and
(xiii) Borrower shall pay all costs and expenses of Lender
incurred in connection with the defeasance, including Lender's reasonable
attorneys' fees and expenses.
(b) If the Borrower has elected to make a partial defeasance
and the requirements of this Section 2.5 have been satisfied, the Individual
Property or Properties identified by Borrower shall be released from the Lien of
their Mortgage and the Partial
-20-
27
Defeasance Collateral, pledged pursuant to the Security Agreement, shall be the
sole source of collateral securing the Defeased Note. In connection with the
release of the Lien, the Borrower shall submit to Lender, not less than thirty
(30) days prior to the Partial Defeasance Date, a release of Lien for execution
by Lender. Such release shall be in a form appropriate in the jurisdiction in
which such Individual Property is located and satisfactory to Lender in its sole
discretion. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release,
together with an Officer's Certificate certifying that such documentation (i) is
in compliance with all legal requirements, and (ii) will effect such releases in
accordance with the terms of this Agreement. Borrower shall pay all costs, taxes
and expenses associated with the release of the Lien of the Mortgages, including
Lender's reasonable attorneys' fees. Except as set forth in this Section 2.5, no
repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
any Lien of any Mortgage on any of the Properties.
2.5.3 DEFEASANCE COLLATERAL ACCOUNT. On or before the date on
which Borrower delivers the Total Defeasance Collateral or Partial Defeasance
Collateral, Borrower shall open at any Eligible Institution the defeasance
collateral account (the "DEFEASANCE COLLATERAL ACCOUNT") which shall at all
times be an Eligible Account. The Defeasance Collateral Account shall contain
only (i) Total Defeasance Collateral and Partial Defeasance Collateral, and (ii)
cash from interest and principal paid on the Total Defeasance Collateral or
Partial Defeasance Collateral. All cash from interest and principal payments
paid on the Total Defeasance Collateral or Partial Defeasance Collateral shall
be paid over to Lender on each Monthly Payment Date and applied first to accrued
and unpaid interest and then to principal then due and owing. Any interest or
other investment income earned on any Partial Defeasance Collateral, which
interest or other income was not included in the determination of the Partial
Defeasance Collateral requirement, shall be paid monthly by Lender, provided no
Event of Default has occurred and is continuing, into the Cash Management
Account to be held in accordance with the Cash Management Agreement. Any amounts
not paid over to Lender shall be retained in the Defeasance Collateral Account
as additional collateral for the Loan. Borrower shall cause the Eligible
Institution at which the Total Defeasance Collateral and Partial Defeasance
Collateral are deposited to enter an agreement with Borrower and Lender,
satisfactory to Lender in its sole discretion, pursuant to which such Eligible
Institution shall agree to hold and distribute the Total Defeasance Collateral
and Partial Defeasance Collateral in accordance with this Agreement. Borrower
shall be the owner of the Defeasance Collateral Account and shall report all
income accrued on Total Defeasance Collateral and Partial Defeasance Collateral
for federal, state and local income tax purposes in its income tax return.
Borrower shall prepay all cost and expenses associated with opening and
maintaining the Defeasance Collateral Account. Lender shall not in any way be
liable by reason of any insufficiency in the Defeasance Collateral Account.
2.5.4 SUCCESSOR BORROWER. In connection with a total or
partial defeasance under this Section 2.5, Borrower may, and at the request of
Lender shall, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a single purpose bankruptcy remote entity approved by
Lender. Borrower shall transfer and assign all obligations, rights and duties
under and to the Note or the Defeased Note, as applicable, together with the
Total Defeasance Collateral or the Partial Defeasance Collateral, as applicable,
to such Successor
-21-
28
Borrower. Such Successor Borrower shall assume the obligations under the Note or
the Defeased Note, as applicable, and the Security Agreement and Borrower shall
be relieved of its obligations under such documents. The Borrower shall pay
$1,000 to any such Successor Borrower as consideration for assuming the
obligations under the Note or the Defeased Note, as applicable, and the Security
Agreement. Borrower shall pay all costs and expenses incurred by Lender,
including Lender's attorney's fees and expenses, incurred in connection
therewith.
SECTION 2.6 PROPERTY SUBSTITUTIONS.
(a) Provided no Event of Default shall have occurred and
remain uncured, Borrower shall have the right at any time after the date hereof
and before the Anticipated Repayment Date (but only on a Monthly Payment Date)
to obtain a release of the Lien of a Mortgage encumbering an Individual Property
(a "SUBSTITUTED PROPERTY") by substituting therefor another retail property to
be acquired by Borrower (individually, a "SUBSTITUTE PROPERTY" and collectively,
the "SUBSTITUTE PROPERTIES"), provided that (a) not more than two (2) Individual
Properties may be substituted during the term of the Loan, (b) no such
substitution may occur if there has been one or more prior substitution(s) and
the total appraised value as of the date hereof of all Substituted Properties in
such prior substitutions together with the current proposed substitution equals
or exceeds 20% of the appraised value as of the date hereof of all the
Properties, and (c) such substitution shall be subject, in each case, to the
satisfaction of the following conditions precedent:
(i) Lender shall have received a copy of a deed conveying all
of Borrower's right, title and interest in and to the Substituted Property to an
entity other than Borrower and a letter from Borrower countersigned by a title
insurance company acknowledging receipt of such deed or assignment and
assumption, as applicable, and agreeing to record such deed or assignment and
assumption, as applicable, in the real estate records for the county in which
the Substituted Property is located;
(ii) Lender shall have received an appraisal of the Substitute
Property dated no more than sixty (60) days prior to the substitution by an
appraiser acceptable to the Rating Agencies, indicating an appraised value of
the Substitute Property that is not less than the greater of (A) the value of
the Substituted Property determined by Lender as of the Closing Date and (B) the
value of the Substituted Property determined by Lender as of the date
immediately preceding the substitution;
(iii) After giving effect to the substitution, the Debt
Service Coverage Ratio for all of the Properties is not less than the greater of
(A) the Debt Service Coverage Ratio for the Loan for all of the Properties as of
the Closing Date and (B) the Debt Service Coverage Ratio for all of the
Properties as of the date immediately preceding the substitution;
(iv) The Net Operating Income for the Substitute Property does
not show a downward trend over the three (3) years immediately prior to the date
of substitution or, with respect to a Substitute Property for which information
regarding the Net Operating Income of such Substitute Property for the three (3)
years immediately prior to the date of substitution cannot be obtained by
Borrower after Borrower's exercise of diligent efforts, the Net Operating
-22-
29
Income shall not show a downward trend for such period of time immediately prior
to the date of substitution as may be determined from the information regarding
such Net Operating Income available or if the Net Operating Income for the
Substitute Property does show such downward trend, Lender shall have received
written evidence from Borrower acceptable to the Rating Agencies that the Net
Operating Income for the Substitute Property will show on a pro-forma basis an
upward trend over the 24-month period immediately following the date of
substitution as a result of the execution and delivery of new, significant
tenant leases at the Substitute Property;
(v) Lender shall have received evidence in writing from the
Rating Agencies to the effect that such substitution will not result in a
withdrawal, qualification or downgrade of the respective ratings in effect
immediately prior to such substitution for the Securities issued in connection
with the Securitization that are then outstanding;
(vi) Lender shall have received a certificate from Borrower
stating that the representations and warranties of Borrower contained in this
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date of the substitution with respect to Borrower, the
Properties and the Substitute Property and containing any other representations
and warranties with respect to Borrower, the Properties, the Substitute Property
or the Loan as the Rating Agencies may require, such certificate to be in form
and substance satisfactory to the Rating Agencies;
(vii) Borrower shall have executed, acknowledged and delivered
to Lender (A) a Mortgage, an Assignment of Leases and two UCC Financing
Statements with respect to the Substitute Property, together with a letter from
Borrower countersigned by a title insurance company acknowledging receipt of
such Mortgage, Assignment of Leases and UCC-1 Financing Statements and agreeing
to record or file, as applicable, such Mortgage, Assignment of Leases and Rents
and one of the UCC-1 Financing Statements in the real estate records for the
county in which the Substitute Property is located and to file one of the UCC-1
Financing Statement in the office of the Secretary of State of the state in
which the Substitute Property is located, so as to effectively create upon such
recording and filing valid and enforceable Liens upon the Substitute Property,
of the requisite priority, in favor of Lender (or such other trustee as may be
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents, (B) an Assignment
and Subordination of Management Agreement and an Environmental Indemnity with
respect to the Substitute Property and (C) any other modifications to the Loan
Documents reasonably required by the Rating Agencies as a result of such
substitution. The Mortgage, Assignment of Leases, UCC-1 Financing Statements,
Assignment and Subordination of Management Agreement and Environmental Indemnity
shall be the same in form and substance as the counterparts of such documents
executed and delivered with respect to the related Substituted Property subject
to modifications reflecting the Substitute Property as the Individual Property
that is the subject of such documents and such modifications reflecting the laws
of the state in which the Substitute Property is located as shall be recommended
by the counsel admitted to practice in such state and delivering the opinion as
to the enforceability of such documents required pursuant to clause (xv) below.
The Mortgage encumbering the Substitute Property shall secure all amounts
evidenced by the Note, provided that in the event that the jurisdiction in which
the Substitute
-23-
30
Property is located imposes a mortgage recording, intangibles or similar tax and
does not permit the allocation of indebtedness for the purpose of determining
the amount of such tax payable, the principal amount secured by such Mortgage
shall be equal to one hundred fifty percent (150%) of the amount of the Loan
allocated to the Substitute Property. The amount of the Loan allocated to the
Substitute Property (such amount being hereinafter referred to as the
"SUBSTITUTE ALLOCATED LOAN AMOUNT") shall equal the Allocated Loan Amount of the
related Substituted Property;
(viii) Lender shall have received (A) any "tie-in" or similar
endorsement to each Title Insurance Policy insuring the Lien of an existing
Mortgage as of the date of the substitution available with respect to the Title
Insurance Policy insuring the Lien of the Mortgage with respect to the
Substitute Property and (B) a Title Insurance Policy (or a marked, signed and
redated commitment to issue such Title Insurance Policy) insuring the Lien of
the Mortgage encumbering the Substitute Property, issued by the title company
that issued the Title Insurance Policies insuring the Lien of the existing
Mortgages and dated as of the date of the substitution, with reinsurance and
direct access agreements that replace such agreements issued in connection with
the Title Insurance Policy insuring the Lien of the Mortgage encumbering the
Substituted Property. The Title Insurance Policy issued with respect to the
Substitute Property shall (1) provide coverage in the amount of the Substitute
Allocated Loan Amount if the "tie-in" or similar endorsement described above is
available or, if such endorsement is not available, in an amount equal to one
hundred fifty percent (150%) of the Substitute Allocated Loan Amount, (2) insure
Lender that the relevant Mortgage creates a valid first lien on the Substitute
Property encumbered thereby, free and clear of all exceptions from coverage
other than Permitted Encumbrances and standard exceptions and exclusions from
coverage (as modified by the terms of any endorsements), (3) contain such
endorsements and affirmative coverages as are contained in the Title Insurance
Policies insuring the Liens of the existing Mortgages, and (4) name Lender as
the insured. Lender also shall have received copies of paid receipts showing
that all premiums in respect of such endorsements and Title Insurance Policies
have been paid;
(ix) Lender shall have received a current title survey for
each Substitute Property, certified to the title company and Lender and their
successors and assigns, in the same form and having the same content as the
certification of the Survey of the Substituted Property prepared by a
professional land surveyor licensed in the state in which the Substitute
Property is located and acceptable to the Rating Agencies in accordance with the
1992 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys. Such
survey shall reflect the same legal description contained in the Title Insurance
Policy relating to such Substitute Property and shall include, among other
things, a metes and bounds description of the real property comprising part of
such Substitute Property. The surveyor's seal shall be affixed to each survey
and each survey shall certify that the surveyed property is not located in a
"one-hundred-year flood hazard area;"
(x) Lender shall have received valid certificates of insurance
indicating that the requirements for the policies of insurance required for an
Individual Property hereunder have been satisfied with respect to the Substitute
Property and evidence of the payment of all premiums payable for the existing
policy period;
-24-
31
(xi) Lender shall have received a Phase I environmental report
and, if recommended under the Phase I environmental report, a Phase II
environmental report, which conclude that the Substitute Property does not
contain any Hazardous Substance (as defined in the Mortgage) and is not subject
to any risk of contamination from any off-site Hazardous Substance. If any such
report discloses the presence of any Hazardous Substance or the risk of
contamination from any off-site Hazardous Substance, such report shall include
an estimate of the cost of any related remediation and Borrower shall deposit
with Lender an amount equal to one hundred fifty percent (150%) of such
estimated cost, which deposit shall constitute additional security for the Loan
and Lender shall release on a monthly basis (a) to Borrower an amount equal to
the costs of such remediation work that have been paid for in the prior month as
evidenced by paid receipts delivered by Borrower to Lender and satisfaction by
Borrower of the same conditions for disbursement as are set forth in Sections
6.1 and 6.4 hereof or (b) directly to the contractor, subcontractor or supplier
performing such remediation work for such work completed in the prior month as
evidenced by bills or invoices for such work delivered to Lender together with
such other documentation as Lender may reasonably require, including, without
limitation, conditional lien waivers which shall be conditioned only upon the
payment of the amount of the bills or invoices submitted by such contractor,
subcontractor or supplier, and satisfaction by Borrower of the same conditions
to disbursement as are set forth in Sections 6.1 and 6.4 hereof,; the balance of
which will be released upon delivery of (A) an update to such report indicating
that there is no longer any Hazardous Substance on the Substitute Property or
any danger of contamination from any off-site Hazardous Substance that has not
been fully remediated and (B) paid receipts indicating that the costs of all
such remediation work have been paid;
(xii) Borrower shall deliver or cause to be delivered to
Lender (A) updates certified by Borrower of all organizational documentation
related to Borrower and/or the formation, structure, existence, good standing
and/or qualification to do business delivered to Lender in connection with the
initial closing of the Loan; (B) good standing certificates, certificates of
qualification to do business in the jurisdiction in which the Substitute
Property is located (if required in such jurisdiction) and (C) resolutions of
the general partner of Borrower authorizing the substitution and any actions
taken in connection with such substitution;
(xiii) Lender shall have received the following opinions of
Borrower's counsel: (A) an opinion or opinions of counsel admitted to practice
under the laws of the state in which the Substitute Property is located stating
that the Loan Documents delivered with respect to the Substitute Property
pursuant to clause (vii) above are valid and enforceable in accordance with
their terms, subject to the laws applicable to creditors' rights and equitable
principles, and that Borrower is qualified to do business and in good standing
under the laws of the jurisdiction where the Substitute Property is located or
that Borrower is not required by applicable law to qualify to do business in
such jurisdiction; (B) an opinion of counsel acceptable to the Rating Agencies
stating that the Loan Documents delivered with respect to the Substitute
Property pursuant to clause (vii) above were duly authorized, executed and
delivered by Borrower and that the execution and delivery of such Loan Documents
and the performance by Borrower of its obligations thereunder will not cause a
breach of, or a default under, any agreement, document or instrument to which
Borrower is a party or to which it or its properties are bound; (C) an opinion
of counsel acceptable to the Rating Agencies stating that subjecting the
Substitute
-25-
32
Property to the Lien of the related Mortgage and the execution and delivery of
the related Loan Documents does not and will not affect or impair the ability of
Lender to enforce its remedies under all of the Loan Documents or to realize the
benefits of the cross-collateralization provided for thereunder; (D) an update
of the Insolvency Opinion indicating that the substitution does not affect the
opinions set forth therein; (E) an opinion of counsel acceptable to the Rating
Agencies stating that the substitution and the related transactions do not
constitute a fraudulent conveyance or avoidable preference under the Bankruptcy
Code or applicable state laws and (F) an opinion of counsel acceptable to the
Rating Agencies that the substitution does not constitute a "significant
modification" of the Loan under Section 1001 of the Code or otherwise cause a
tax to be imposed on a "prohibited transaction" by any REMIC Trust;
(xiv) Borrower shall have paid all Basic Carrying Costs
relating to each of the Properties and the Substitute Property, including
without limitation, (i) accrued but unpaid insurance premiums relating to each
of the Properties and the Substitute Property, (ii) currently due Taxes
(including any in arrears) relating to each of the Properties and the Substitute
Property and (iii) currently due Other Charges relating to each of the
Properties and Substitute Property;
(xv) Borrower shall have paid or reimbursed Lender for all
costs and expenses incurred by Lender (including, without limitation, reasonable
attorneys fees and disbursements) in connection with the substitution and
Borrower shall have paid all recording charges, filing fees, taxes or other
expenses (including, without limitation, mortgage and intangibles taxes and
documentary stamp taxes) payable in connection with the substitution. Borrower
shall have paid all costs and expenses of the Rating Agencies incurred in
connection with the substitution;
(xvi) Lender shall have received annual operating statements
and occupancy statements for the Substitute Property for the most current
completed fiscal year and a current operating statement for the Substituted
Property, each certified to Lender as being true and correct and a certificate
from Borrower certifying that there has been no adverse change in the financial
condition of the Substitute Property since the date of such operating
statements;
(xvii) Borrower shall have delivered to Lender estoppel
certificates from any existing tenants who (A) constitute anchor tenants at the
Substitute Property, (B) who are obligated under their Lease to pay rent equal
to or exceeding 5% of the gross rent from the Substitute Property and/or (C)
lease no less than seventy-five percent (75%) of the excess of the gross
leasable area at the Substitute Property over the gross leasable area covered by
the leases described in clauses (A) and (B). All such estoppel certificates
shall indicate that (1) the subject lease is a valid and binding obligation of
the tenant thereunder and the amount of rent payable thereunder, (2) there are
no defaults under such lease on the part of the landlord or tenant thereunder,
(3) the tenant thereunder has no defense or offset to the payment of rent under
such leases, (4) no rent under such lease has been paid more than one (1) month
in advance, (5) the tenant thereunder has no option or right of first refusal
under such lease to purchase all or any portion of the Substitute Property and
(6) all tenant improvement work required under such lease has been completed and
the tenant under such lease is in actual occupancy of its leased premises. If an
estoppel certificate indicates that all tenant improvement work required under
the subject lease has not yet been completed, Borrower shall, if required by the
Rating Agencies, deliver
-26-
33
to Lender financial statements indicating that Borrower has adequate funds to
pay all costs related to such tenant improvement work as required under such
lease;
(xviii) Lender shall have received copies of all tenant leases
and any ground leases affecting the Substitute Property certified by Borrower as
being true and correct. Lender shall have received a current rent roll of the
Substitute Property certified by Borrower as being true and correct;
(xix) Lender shall have received subordination, nondisturbance
and attornment agreements in the form acceptable to the Rating Agencies with
respect to all of the Leases affecting the Substitute Property other than such
Leases that are, by their terms, subordinate to the Mortgage with respect to the
Substitute Property (provided, however, that such agreements shall not be
required to the extent that such tenants are not required under the terms of
such Lease(s) to deliver such agreements);
(xx) Lender shall have received (A) an endorsement to the
Title Insurance Policy insuring the Lien of the Mortgage encumbering the
Substitute Property insuring that the Substitute Property constitutes a separate
tax lot or, if such an endorsement is not available in the state in which the
Substitute Property is located, a letter from the title insurance company
issuing such Title Insurance Policy stating that the Substitute Policy
constitutes a separate tax lot or (B) a letter from the appropriate taxing
authority stating that the Substitute Property constitutes a separate tax lot;
(xxi) Lender shall have received a Physical Conditions Report
with respect to the Substitute Property stating that the Substitute Property and
its use comply in all material respects with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and that
the Substitute Property is in good condition and repair and free of damage or
waste. If compliance with any Legal Requirements are not addressed by the
Physical Conditions Report, such compliance shall be confirmed by delivery to
Lender of a certificate of an architect licensed in the state in which the
Substitute Property is located, a letter from the municipality in which such
Property is located, a certificate of a surveyor that is licensed in the state
in which the Substitute Property is located (with respect to zoning and
subdivision laws), or a subdivision endorsement to the Title Insurance Policy
delivered pursuant to clause (viii) above (with respect to subdivision laws). In
addition, an ALTA 3.1 zoning endorsement to the Title Insurance Policy delivered
pursuant to clause (viii) above (with respect to zoning laws) if available in
the state of such Substitute Property, shall be delivered to Lender. If the
Physical Conditions Report recommends that any repairs be made with respect to
the Substitute Property, such Physical Conditions Report shall include an
estimate of the cost of such recommended repairs and Borrower shall deposit with
Lender an amount equal to one hundred fifty percent (150%) of such estimated
cost, which deposit shall constitute additional security for the Loan and shall
be released on a monthly basis (a) to Borrower in an amount equal to the costs
of such work that have been paid for in the prior month upon delivery to Lender
of paid receipts for the costs of such repairs for which Borrower is requesting
payment and satisfaction by Borrower of the same conditions to disbursement as
are set forth in Sections 6.1 and 6.4 hereof, or (b) directly to the contractor,
subcontractor or supplier performing such work for such work completed in the
prior month as evidenced by bills or invoices for such work delivered to
-27-
34
Lender together with such other documentation as Lender may reasonably require,
including, without limitation, conditional lien waivers which shall be
conditioned only upon the payment of the amount of the bills or invoices
submitted by such contractor, subcontractor or supplier, and satisfaction by
Borrower of the same conditions to disbursement as are set forth in Sections 6.1
and 6.4 hereof, and the balance to be released upon the delivery to Lender of
(A) an update to such Physical Conditions Report or a letter from the engineer
that prepared such Physical Conditions Report indicating that the recommended
repairs were completed in good and workmanlike manner and (B) paid receipts
indicating that the costs of all such repairs have been paid;
(xxii) Lender shall have received a certified copy of the
termination of the Management Agreement for the Substituted Property and the new
Management Agreement for the Substitute Property (such new Management Agreement
to be in form and substance as the Management Agent so terminated) and Manager
shall have executed and delivered to Lender a new Assignment and Subordination
of Management Agreement reflecting such new Management Agreement;
(xxiii) Lender shall have received copies of all contracts and
agreements relating to the leasing and operation of the Substitute Property
(other than the Management Agreement) together with a certification of Borrower
attached to each such contract or agreement certifying that the attached copy is
a true and correct copy of such contract or agreement and all amendments
thereto;
(xxiv) Borrower shall submit to Lender, not less than thirty
(30) days prior to the date of such substitution, a release of Lien (and related
Loan Documents) for the Substituted Property for execution by Lender. Such
release shall be in a form appropriate for the jurisdiction in which the
Substituted Property is located and satisfactory to Lender in its sole
discretion. Borrower shall deliver an Officer's Certificate certifying that the
requirements set forth in this Section 2.6 have been satisfied; and
(xxv) Lender shall have received such other and further
approvals, opinions, documents and information in connection with the
substitution as the Rating Agencies may have requested.
(b) Upon the satisfaction of the foregoing conditions
precedent, Lender will release its Lien from the Substituted Property to be
released and the Substitute Property shall be deemed to be an Individual
Property for purposes of this Agreement and the Substitute Allocated Loan Amount
with respect to such Substitute Property shall be deemed to be the Allocated
Loan Amount with respect to such Substitute Property for all purposes hereunder.
III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1 BORROWER REPRESENTATIONS.
Borrower represents and warrants as of the date hereof and as
of the Closing Date that:
-28-
35
3.1.1 ORGANIZATION. Borrower has been duly organized and is
validly existing and in good standing with requisite power and authority to own
its properties and to transact the businesses in which it is now engaged.
Borrower is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
properties, businesses and operations. Borrower possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own its properties and to transact the businesses in which it is now engaged,
and the sole business of Borrower is the ownership, management and operation of
the Properties.
3.1.2 PROCEEDINGS. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
3.1.3 NO CONFLICTS. The execution, delivery and performance of
this Agreement and the other Loan Documents by Borrower will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement or other agreement or instrument to
which Borrower is a party or by which any of Borrower's property or assets is
subject, nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this Agreement or any other Loan Documents has been obtained and
is in full force and effect.
3.1.4 LITIGATION. There are no actions, suits or proceedings
at law or in equity by or before any Governmental Authority or other agency now
pending or threatened against or affecting Borrower or any of the Properties,
which actions, suits or proceedings, if determined against Borrower or any of
the Properties, might materially adversely affect the condition (financial or
otherwise) or business of Borrower or the condition or ownership of any of the
Properties.
3.1.5 AGREEMENTS. Borrower is not a party to any agreement or
instrument or subject to any restriction which might materially and adversely
affect Borrower or any of the Properties, or Borrower's business, properties or
assets, operations or condition, financial or otherwise. Borrower is not in
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which Borrower or any of its Properties
are bound. Borrower has no material financial obligation under any indenture,
mortgage, deed of trust, loan
-29-
36
agreement or other agreement or instrument to which the Borrower is a party or
by which the Borrower or any of the Properties is otherwise bound, other than
obligations incurred in the ordinary course of the operation of the Properties
and other than obligations under the Loan Documents.
3.1.6 TITLE. Borrower has good, marketable and insurable title
in fee simple to the real property comprising part of the Properties and good
title to the balance of such Properties, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. Each Mortgage
intended to encumber any of the Properties, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (i) a
valid, perfected lien on the applicable Individual Property, subject only to
Permitted Encumbrances and the Liens created by the Loan Documents and (ii)
perfected security interests in and to, and perfected collateral assignments of,
all personalty (including the Leases), all in accordance with the terms thereof,
in each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. There are no claims for payment for work, labor or materials
affecting any of Borrower's Properties which are or may become a lien prior to,
or of equal priority with, the Liens created by the Loan Documents.
3.1.7 NO BANKRUPTCY FILING. Borrower is not contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of Borrower's
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any such petition against it.
3.1.8 FULL AND ACCURATE DISCLOSURE. No statement of fact made
by Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, any of the Properties or the business, operations or condition
(financial or otherwise) of Borrower.
3.1.9 NO PLAN ASSETS. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (i) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (ii) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans.
3.1.10 COMPLIANCE. To the best of Borrower's knowledge,
Borrower and each of the Properties and the use thereof comply in all material
respects with all applicable Legal Requirements, including, without limitation,
building and zoning ordinances and codes. To the best of Borrower's knowledge,
Borrower is not in default or violation of any order, writ,
-30-
37
injunction, decree or demand of any Governmental Authority, the violation of
which might materially adversely affect the condition (financial or otherwise)
or business of Borrower. To the best of Borrower's knowledge, there has not been
and shall never be committed by Borrower or any other person in occupancy of or
involved with the operation or use of the Properties any act or omission
affording the federal government or any state or local government the right of
forfeiture as against any of the Properties or any part thereof or any monies
paid in performance of Borrower's obligations under any of the Loan Documents.
Borrower hereby covenants and agrees not to commit, permit or suffer to exist
any act or omission affording such right of forfeiture.
3.1.11 FINANCIAL INFORMATION. To the best of Borrower's
knowledge, all financial data, including, without limitation, the statements of
cash flow and income and operating expense, that have been delivered to Lender
in respect of the Properties (i) are true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the Properties as
of the date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. Borrower
does not have any contingent liabilities, liabilities for taxes, unusual forward
or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments that are known to Borrower and reasonably likely to have
a materially adverse effect on the Properties or the operation thereof as retail
shopping centers, except as referred to or reflected in said financial
statements. Since the date of such financial statements, there has been no
materially adverse change in the financial condition, operations or business of
Borrower from that set forth in said financial statements.
3.1.12 CONDEMNATION. No Condemnation or other proceeding has
been commenced or, to Borrower's best knowledge, is contemplated with respect to
all or any portion of any of the Properties or for the relocation of roadways
providing access to any of the Properties.
3.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, or for
any purposes prohibited by legal requirements or by the terms and conditions of
this Agreement or the other Loan Documents.
3.1.14 UTILITIES AND PUBLIC ACCESS. Each of the Properties has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Property for its respective
intended uses. All public utilities necessary or convenient to the full use and
enjoyment of each of the Properties are located either in the public
right-of-way abutting such Properties (which are connected so as to serve the
Properties without passing over other property) or in recorded easements serving
such Properties and such easements are set forth in the Title Insurance
Policies. All roads necessary for the use of each of the Properties for their
current respective purposes have been completed and dedicated to public use and
accepted by all Governmental Authorities.
-31-
38
3.1.15 NOT A FOREIGN PERSON. Borrower is not a "foreign
person" within the meaning of ss. 1445(f)(3) of the Code.
3.1.16 SEPARATE LOTS. Each Individual Property is comprised of
one (1) or more parcels which constitutes a separate tax lot and does not
constitute a portion of any other tax lot not a part of such Individual
Property.
3.1.17 ASSESSMENTS. There are no pending or proposed special
or other assessments for public improvements or otherwise affecting any of the
Properties, except as set forth in the title insurance policies delivered to
Lender in connection with the Loan, nor are there any contemplated improvements
to any of the Properties that may result in such special or other assessments.
3.1.18 ENFORCEABILITY. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.
3.1.19 NO PRIOR ASSIGNMENT. There are no prior assignments of
the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding.
3.1.20 INSURANCE. Borrower has obtained and has delivered to
Lender certified copies of all insurance policies reflecting the insurance
coverages, amounts and other requirements set forth in this Agreement. No claims
have been made under any such policy, and no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such
policy.
3.1.21 USE OF PROPERTIES. Each of the Properties is used
exclusively for RETAIL purposes and other appurtenant and related uses.
3.1.22 CERTIFICATE OF OCCUPANCY LICENSES. To the best of
Borrower's knowledge, all certifications, permits, licenses and approvals,
including without limitation, certificates of completion and occupancy permits
required for the legal use, occupancy and operation of each of the Properties as
a retail shopping center (collectively, the "LICENSES"), have been obtained and
are in full force and effect. Borrower shall keep and maintain all licenses
necessary for the operation of each of the Properties as a retail shopping
center. To the best of Borrower's knowledge, the use being made of each
Individual Property is in conformity with the certificate of occupancy issued
for such Individual Property.
3.1.23 FLOOD ZONE. None of the Improvements on any of the
Properties are located in an area as identified by the Federal Emergency
Management Agency as an area having special flood hazards.
3.1.24 PHYSICAL CONDITION. To the best of Borrower's
knowledge, each of the Properties, including, without limitation, all
buildings, improvements, parking facilities,
-32-
39
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, are in
good condition, order and repair in all material respects; there exists no
structural or other material defects or damages in any of the Properties,
whether latent or otherwise, and Borrower has not received notice from any
insurance company or bonding company of any defects or inadequacies in any of
the Properties, or any part thereof, which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond.
3.1.25 BOUNDARIES. Except as shown of the surveys delivered by
Borrower to Lender in connection with the Loan, all of the improvements which
were included in determining the appraised value of each Individual Property lie
wholly within the boundaries and building restriction lines of such Individual
Property, and no improvements on adjoining properties encroach upon such
Individual Property, and no easements or other encumbrances upon the applicable
Individual Property encroach upon any of the improvements, so as to affect the
value or marketability of the applicable Individual Property except those which
are insured against by title insurance.
3.1.26 LEASES. The Properties are not subject to any Leases
other than the Leases described in Schedule III attached hereto and made a part
hereof. No person has any possessory interest in any of the Properties or right
to occupy the same except under and pursuant to the provisions of the Leases.
The current Leases identified on Schedule III are in full force and effect and
there are no defaults thereunder by either party and there are no conditions
that, with the passage of time or the giving of notice, or both, would
constitute defaults thereunder (the foregoing representation as to defaults
being to the best of Borrower's knowledge as to defaults by tenants). No Rent
(including security deposits) has been paid more than one (1) month in advance
of its due date. All work to be performed by Borrower under each Lease has been
performed as required and has been accepted by the applicable tenant, and any
payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by Borrower to any tenant has
already been received by such tenant. Other than hypothecations which are no
longer in effect, there has been no prior sale, transfer or assignment,
hypothecation or pledge of any Lease or of the Rents received therein. Except as
set forth in Schedule III, no tenant listed on Schedule III has assigned its
Lease or sublet all or any portion of the premises demised thereby, no such
tenant holds its leased premises under assignment or sublease, and all tenants
are occupying their spaces. No tenant under any Lease has an option pursuant to
such Lease or otherwise to purchase all or any part of the leased premises or
the building of which the leased premises are a part. No tenant under any Lease
has any right or option for additional space in the Improvements. To the best of
Borrower's knowledge, other than normal and customary tenant inventory, cleaning
supplies and building materials used in tenant's business and in compliance with
law, no hazardous wastes or toxic substances, as defined by applicable federal,
state or local statutes, rules and regulations, have been disposed, stored or
treated by any tenant under any Lease on or about the leased premises nor does
Borrower have any knowledge of any tenant's intention to use its leased premises
for any activity which, directly or indirectly, involves the use, generation,
treatment, storage, disposal or transportation of any petroleum product or any
toxic or hazardous
-33-
40
chemical, material, substance or waste.
3.1.27 SURVEY. The Survey for each of the Properties delivered
to Lender in connection with this Agreement has been prepared in accordance with
the provisions of Section 3.1(c)(iii) hereof, and does not fail to reflect any
material matter affecting any of the Properties or the title thereto.
3.1.28 LOAN TO VALUE. The Loan is secured by interest in real
property having a fair market value as of the date hereof at least equal to
eighty percent (80%) of the original principal balance of the Loan.
3.1.29 FILING AND RECORDING TAXES. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Properties to Borrower have
been paid. All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgages encumbering the Properties have
been paid, and, under current Legal Requirements, the Mortgages encumbering the
Properties are enforceable in accordance with their respective terms by Lender
(or any subsequent holder thereof).
3.1.30 SINGLE PURPOSE. Borrower hereby represents and warrants
to, and covenants with, Lender that as of the date hereof and until such time as
the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or
property other than (A) the Properties, and (B) incidental personal property
necessary for the ownership or operation of the Properties.
(b) Borrower will not engage in any business other than the
ownership, management and operation of the Properties and Borrower will conduct
and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement
with any affiliate of the Borrower, any constituent party of Borrower or any
affiliate of any constituent party, except in any such case upon terms and
conditions that are intrinsically fair and substantially similar to those that
would be available on an arms-length basis with third parties other than any
such party.
(d) Borrower has not incurred and will not incur any
Indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation) other than the Debt. No Indebtedness
other than the Debt may be secured (subordinate or pari passu) by the
Properties.
(e) Borrower has not made and will not make any loans or
advances to any third party (including any affiliate or constituent party), and
shall not acquire obligations or
-34-
41
securities of its affiliate, provided, however, that Borrower may make loans to
Tenants under Leases for tenant improvement work pursuant to such Leases which
loans are made in the ordinary course of Borrower's business and which loans
shall not exceed at any time $1,000,000 in the aggregate for all Properties.
(f) Borrower is and will remain solvent and Borrower will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all
things necessary to observe partnership formalities and preserve its existence,
and Borrower will not, nor will Borrower permit any constituent party to amend,
modify or otherwise change the partnership certificate, partnership agreement,
articles of incorporation and bylaws, trust or other organizational documents of
Borrower or such constituent party without the prior written consent of Lender.
(h) Borrower will maintain all of its books, records,
financial statements and bank accounts separate from those of its affiliates and
any constituent party and Borrower will file its own tax returns, provided,
however, that Borrower's assets may be included in a consolidated financial
statement of its parent companies if such a consolidated statement is required
to comply with the requirements of GAAP, provided that such consolidated
financial statement shall contain a footnote to the effect that Borrower's
assets are owned by Borrower and that they are being included on the financial
statement of its parent solely to comply with the requirements of GAAP, and
further provided that such assets shall be listed on Borrower's own separate
balance sheet. Borrower shall maintain its books, records, resolutions and
agreements as official records.
(i) Borrower will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Borrower or any constituent party of Borrower),
shall correct any known misunderstanding regarding its status as a separate
entity, shall conduct business in its own name, shall not identify itself or any
of its affiliates as a division or part of the other and shall maintain and
utilize a separate telephone number and separate stationery, invoices and
checks.
(j) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(k) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, liquidation, consolidation or
merger, in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of
Borrower with those of any affiliate or constituent party or any other Person.
(m) Borrower has and will maintain its assets in such a
manner that it will not
-35-
42
be costly or difficult to segregate, ascertain or identify its individual assets
from those of any affiliate or constituent party or any other Person.
(n) Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.
(o) If Borrower is a limited partnership, each general partner
is a corporation or a limited liability company whose sole asset is its interest
in Borrower (the "SPE GENERAL PARTNER"), and if any such SPE General Partner (or
managing member) is a limited liability company, each managing member of such
limited liability company is a corporation whose sole asset is its interest in
such limited liability company (the "SPE MANAGING MEMBER"), and each SPE General
Partner and each SPC Managing Member will at all times comply, and will cause
Borrower to comply, with each of the representations, warranties, and covenants
contained in this Section 3.1.30 as if such representation, warranty or covenant
was made directly by such general partner.
(p) Borrower shall at all times cause there to be at least one
duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of
the SPC Managing Member of the SPE General Partner of Borrower reasonably
satisfactory to Lender who shall not have been at the time of such individual's
appointment, and may not have been at any time during the preceding five years
(i) a stockholder, director, officer, employee, partner, attorney or counsel of
such corporation, Borrower or any affiliate of either of them, (ii) a customer,
supplier or other person who derives more than 10% of its purchases or revenues
from its activities with such corporation, Borrower or any affiliate of either
of them, (iii) a person or other entity controlling or under common control with
any such stockholder, partner, customer, supplier or other person, or (iv) a
member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other person. As used in this
definition, the term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management, policies or
activities of a person or entity, whether through ownership of voting
securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors
of the SPC Managing Member of the SPE General Partner to take any action which,
under the terms of any certificate of incorporation, by-laws or any voting trust
agreement with respect to any common stock, requires a vote of the board of
directors of such SPC Managing Member unless at the time of such action there
shall be at least one member who is an Independent Director.
(r) Borrower shall conduct its business so that the
assumptions made with respect to Borrower in that certain opinion letter dated
the date hereof (the "INSOLVENCY OPINION") delivered by Xxxxxxxx Xxxxxx Xxxxxxxx
and Xxxx in connection with the Loan shall be true and correct in all respects.
(s) Borrower will not permit any Affiliate or constituent
party independent access to its bank accounts.
(t) Borrower shall maintain a sufficient number of employees,
if any, in light
-36-
43
of its contemplated business operations and shall pay the salaries of its own
employees, if any.
(u) Borrower shall compensate each of its consultants and
agents from its funds for services provided to it and pay from its own assets
all obligations of any kind incurred. Upon the withdrawal or the disassociation
of the SPE General Partner from Borrower or the SPC Managing Member from the SPE
General Partner, Borrower shall immediately appoint a new member whose operating
agreement or articles of incorporation, as the case may be, are substantially
similar to those of the SPE General Partner or SPC Managing Member, as
applicable, and deliver a new non-consolidation opinion to the Rating Agency or
Rating Agencies, as applicable, with respect to the new special purpose partner
or member, as the case may be, and its equity owners.
3.1.31 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All
information submitted by Borrower to Lender and in all financial statements,
rent rolls, reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms thereof and all statements of fact
made by Borrower in this Agreement or in any other Loan Document, are accurate,
complete and correct in all material respects. There has been no material
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or might materially
and adversely affect the Property or the business operations or the financial
condition of Borrower. Borrower has disclosed to Lender all material facts and
has not failed to disclose any material fact that could cause any representation
or warranty made herein to be materially misleading.
3.1.32 ILLEGAL ACTIVITY. No portion of the Property has been
or will be purchased with proceeds of any illegal activity.
SECTION 3.2 SURVIVAL OF REPRESENTATIONS.
Borrower agrees that all of the representations and warranties
of Borrower set forth in Section 4.1 and elsewhere in this Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
Lender under this Agreement or any of the other Loan Documents by Borrower. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf.
IV. BORROWER COVENANTS
SECTION 4.1 BORROWER AFFIRMATIVE COVENANTS.
From the date hereof and until payment and performance in full
of all obligations of Borrower under the Loan Documents or the earlier release
of the Liens of all Mortgages encumbering the Properties (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
-37-
44
4.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS;
INSURANCE. Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements
applicable to it and its Properties. Borrower shall at all times maintain,
preserve and protect all franchises and trade names and preserve all the
remainder of its property used or useful in the conduct of its business and
shall keep all of the Properties in good working order and repair, and from time
to time make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgages encumbering such Properties. Borrower shall keep each of the
Properties insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and maintain liability and such other
insurance, as is more fully provided in this Agreement.
4.1.2 TAXES AND OTHER CHARGES. Borrower shall pay all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Properties or any part thereof as the same become due and payable; provided,
however, Borrower's obligation to directly pay Taxes shall be suspended for so
long as Borrower complies with the terms and provisions of Section 6.3.2 hereof.
Borrower will deliver to Lender receipts for payment or other evidence
satisfactory to Lender that the Taxes and Other Charges have been so paid or are
not then delinquent no later than two (2) Business Days prior to the date on
which the Taxes and/or Other Charges would otherwise be delinquent or penalties
or interest would accrue if not paid. Borrower shall furnish to Lender receipts
for the payment of the Taxes and the Other Charges prior to the date the same
shall become delinquent (provided, however, that Borrower is not required to
furnish such receipts for payment of Taxes in the event that such Taxes have
been paid by Lender pursuant to Section 6.2 hereof). Borrower shall not suffer
and shall promptly cause to be paid and discharged any lien or charge whatsoever
which may be or become a lien or charge against the Properties, and shall
promptly pay for all utility services provided to the Properties. After prior
written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of
any Taxes or Other Charges, provided that (i) no Default or Event of Default has
occurred and remains uncured; (ii) Borrower is permitted to do so under the
provisions of any mortgage or deed of trust superior in lien to the applicable
Mortgage; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iv) no Individual Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, canceled or lost; (v) Borrower
shall promptly upon final determination thereof pay the amount of any such Taxes
or Other Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (vi) such proceeding shall suspend the
collection of Taxes or Other Charges from the applicable Individual Property;
and (vii) Borrower shall furnish such security as may be required in the
proceeding, or as may be requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon. Lender
may pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the judgment of Lender, the
entitlement of such claimant is established.
-38-
45
4.1.3 LITIGATION. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened
against Borrower which might materially adversely affect Borrower's condition
(financial or otherwise) or business or any of the Properties.
4.1.4 ACCESS TO PREMISES. Borrower shall permit agents,
representatives and employees of Lender to inspect any of its Properties or any
part thereof at reasonable hours upon reasonable advance notice.
4.1.5 NOTICE OF DEFAULT. Borrower shall promptly advise Lender
of any material adverse change in Borrower's condition, financial or otherwise,
or of the occurrence of any Default or Event of Default of which Borrower has
knowledge.
4.1.6 COOPERATE IN LEGAL PROCEEDINGS. Borrower shall cooperate
fully with Lender with respect to any proceedings before any court, board or
other Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings.
4.1.7 PERFORM LOAN DOCUMENTS. Borrower shall observe, perform
and satisfy all the terms, provisions, covenants and conditions of, and shall
pay when due all costs, fees and expenses to the extent required under the Loan
Documents executed and delivered by, or applicable to, Borrower.
4.1.8 INSURANCE BENEFITS. Borrower shall cooperate with Lender
in obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable in connection with any of the Properties, and Lender shall be
reimbursed for any expenses incurred in connection therewith (including
attorneys' fees and disbursements, and the payment by Borrower of the expense of
an appraisal on behalf of Lender in case of a Casualty) out of such Insurance
Proceeds.
4.1.9 FURTHER ASSURANCES; SUPPLEMENTAL MORTGAGE AFFIDAVITS.
Borrower shall, at Borrower's sole cost and expense:
(a) furnish to Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by Borrower pursuant to the terms of the Loan Documents or reasonably requested
by Lender in connection therewith;
(b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
(c) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and
-39-
46
purposes of this Agreement and the other Loan Documents, as Lender shall
reasonably require from time to time.
As of the date hereof, Borrower represents that it has paid
all state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgages encumbering each of the Properties.
If at any time Lender determines, based on applicable law, that Lender is not
being afforded the maximum amount of security available from any one or more of
the Properties as a direct or indirect result of applicable taxes not having
been paid with respect to any such Properties, Borrower agrees that Borrower
will execute, acknowledge and deliver to Lender, immediately upon Lender's
request, supplemental affidavits increasing the amount of the Debt attributable
to any such Individual Property (as set forth on Schedule I annexed hereto) for
which all applicable taxes have not been paid to an amount determined by Lender
to be equal to the lesser of (a) the greater of the fair market value of the
applicable Individual Property (i) as of the date hereof and (ii) as of the date
such supplemental affidavits are to be delivered to Lender, and (b) the amount
of the Debt attributable to any such Individual Property (as set forth on
Schedule I annexed hereto), and Borrower shall, on demand, pay any additional
taxes.
4.1.10 FINANCIAL REPORTING.
(a) Borrower will keep and maintain or will cause to be kept
and maintained on a Fiscal Year basis, in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender), proper and accurate books,
records and accounts reflecting all of the financial affairs of Borrower and all
items of income and expense in connection with the operation on an individual
basis of each of the Properties. Lender shall have the right from time to time
at all times during normal business hours upon reasonable notice to examine such
books, records and accounts at the office of Borrower or other Person
maintaining such books, records and accounts and to make such copies or extracts
thereof as Lender shall desire. After the occurrence of an Event of Default,
Borrower shall pay any costs and expenses incurred by Lender to examine
Borrower's accounting records with respect to the Properties, as Lender shall
determine to be necessary or appropriate in the protection of Lender's interest.
(b) Borrower will furnish to Lender annually, within one
hundred (100) days following the end of each Fiscal Year of Borrower, audited
special purpose financial statements on a combined basis prepared in accordance
with GAAP (or such other accounting basis acceptable to Lender) audited by a
"Big Six" accounting firm or other independent certified public accountant
acceptable to Lender in the form annexed as Schedule VII. Such financial
statements shall include an audit of all operating revenues and expenses of the
Properties. The special purpose financial statements will include a supplemental
schedule which details the operating revenues and expenses for each Individual
Property. Audited balance sheets shall not be required but Borrower shall
deliver a balance sheet certified by Borrower covering the Properties on a
combined basis as well as each Individual Property for such Fiscal Year and
containing statements of profit and loss for the Borrower and the Properties; as
well as a complete copy of Borrower's quarterly and annual financial statements
certified by Borrower to be provided within fifty (50) days and one hundred
(100) days following the end of such respective Fiscal quarter or Fiscal Year,
as the case may be (provided Borrower shall have 100
-40-
47
days to deliver said statements with respect to the fourth quarter of any such
Fiscal Year). Such statements shall set forth the financial condition and the
results of operations for the Properties for such Fiscal Year, and shall
include, but not be limited to, amounts representing annual Net Cash Flow, Net
Operating Income, Gross Income and Operating Expenses. Borrower's annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (ii) a certificate executed by the chief financial officer of Borrower or
the general partner of Borrower, as applicable, stating that each such annual
financial statement presents fairly the financial condition and the results of
operations of the Borrower and the Properties being reported upon and has been
prepared in accordance with GAAP, (iii) an unqualified opinion of a "Big Six"
accounting firm or other independent certified public accountant reasonably
acceptable to Lender with respect to such firm's review of such financial
statements in accordance with GAAP, (iv) a list of tenants, if any, occupying
more than twenty (20%) percent of the total floor area of the Improvements, (v)
a breakdown showing the year in which each Lease then in effect expires and the
percentage of total floor area of the Improvements and the percentage of base
rent with respect to which Leases shall expire in each such year, each such
percentage to be expressed on both a per year and cumulative basis, (vi) a
schedule reviewed by such independent certified public accountant in accordance
with GAAP reconciling Net Operating Income to Net Cash Flow (the "NET CASH FLOW
SCHEDULE"), which shall itemize all adjustments made to Net Operating Income to
arrive at Net Cash Flow deemed material by such independent certified public
accountant, (vii) sales reports for each tenant at the Properties for the prior
Fiscal Year, and (viii) a report of all Capital Expenditures made with respect
to the Properties for the prior Fiscal Year. Together with Borrower's annual
financial statements, Borrower shall furnish to Lender an Officer's Certificate
certifying as of the date thereof whether there exists an event or circumstance
which constitutes a Default or Event of Default under the Loan Documents
executed and delivered by, or applicable to, Borrower, and if such Default or
Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same.
(c) Borrower will furnish, or cause to be furnished, to Lender
on or before fifty (50) days after the end of each of the first three calendar
quarters and on or before 100 days after the end of the fourth calendar quarter
commencing with the quarter ending March 31, 1998 the following items,
accompanied by an Officer's Certificate stating that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Properties on a combined basis as
well as each Individual Property (subject to normal year-end adjustments) as
applicable: (i) a rent roll for the subject quarter accompanied by an Officer's
Certificate with respect thereto; (ii) quarterly and year-to-date operating
statements prepared for each calendar quarter, noting Net Operating Income,
Gross Income, and Operating Expenses (not including any contributions to the
Capital Expenditure Funds), and other information necessary and sufficient to
fairly represent the financial position and results of operation of the
Properties during such calendar quarter containing a comparison of budgeted
income and expenses and the actual income and expenses together with a detailed
explanation of any variances of five percent (5%) or more on an aggregate basis
between budgeted and actual amounts for such periods, all in form satisfactory
to Lender; (iii) a calculation reflecting the annual Debt Service Coverage Ratio
for the
-41-
48
immediately preceding twelve (12) month period as of the last day of such
quarter accompanied by an Officer's Certificate with respect thereto; and (iv) a
Net Cash Flow Schedule. In addition, such certificate shall also be accompanied
by an Officer's Certificate stating that the representations and warranties of
Borrower set forth in Section 4.1.30(d) are true and correct as of the date of
such certificate and that there are no trade payables outstanding for more than
sixty (60) days.
(d) (i) For the partial year period commencing on the Closing
Date, and for each Fiscal Year thereafter until the Fiscal Year in which the
Anticipated Repayment Date shall occur, Borrower shall submit to Lender for
review the Annual Budget not later than sixty (60) days prior to the
commencement of such Fiscal Year. Such Annual Budget shall set forth in
reasonable detail budgeted monthly operating income and monthly operating
capital and monthly operating and other expenses for the Properties, including
all planned capital expenditures in respect of the Properties for such period or
Fiscal Year.
(ii) For the Fiscal year in which the Anticipated
Repayment Date shall occur and for each Fiscal Year thereafter, the
Borrower shall submit to Lender, for Lender's written approval, the Annual
Budget not later than sixty (60) days prior to the commencement of such Fiscal
Year. Each such Annual Budget approved by Lender shall hereinafter be referred
to as an "APPROVED ANNUAL BUDGET". Until such time that Lender approves a
proposed Annual Budget, the most recently Approved Annual Budget shall
apply; provided that such Approved Annual Budget shall be adjusted to reflect
actual increases in real estate taxes, insurance premiums and utilities
expenses. In the event that, after the Anticipated Repayment Date, the
Borrower must incur an extraordinary operating expense or capital
expenditure not set forth in the Annual Budget (each an "EXTRAORDINARY
EXPENSE"), then the Borrower shall promptly deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense for
the Lender's approval.
(e) Borrower shall furnish to Lender, within ten (10) Business
Days after request (or as soon thereafter as may be reasonably possible), such
further detailed information with respect to the operation of any of the
Properties and the financial affairs of Borrower as may be reasonably requested
by Lender.
(f) Borrower will, promptly after written request by Lender or
the Rating Agencies, but in no event later than 10 Business Days after such
request, also furnish or cause to be furnished any information required pursuant
to Rule 144A, or in connection with a public offering, or in accordance with any
other applicable securities regulation (including, without limitation, with
respect to the applicable fiscal year or years of Borrower, "summarized
financial information" (as defined in Section 210.1-02 (bb) of Regulation S-X
promulgated under the Securities Act of 1933, as amended) of Borrower, which
information shall be accompanied by an Officer's Certificate certifying that to
the best of the signer's knowledge, such statements fairly present the
information required to be stated therein in accordance with GAAP.
4.1.11 BUSINESS AND OPERATIONS. Borrower will continue to
engage in the businesses presently conducted by it as and to the extent the same
are necessary for the ownership, maintenance, management and operation of each
of the Properties. Borrower will
-42-
49
qualify to do business and will remain in good standing under the laws of each
jurisdiction as and to the extent the same are required for the ownership,
maintenance, management and operation of each of the Properties.
4.1.12 TITLE TO THE PROPERTIES. Borrower will warrant and
defend (i) the title to each of the Properties and every part thereof, subject
only to Liens permitted hereunder (including Permitted Encumbrances), and (ii)
the validity and priority of the Liens of the Mortgages and the Assignments of
Leases on the Properties, subject only to Liens permitted hereunder (including
Permitted Encumbrances), in each case against the claims of all Persons
whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or
expenses (including reasonable attorneys' fees and court costs) incurred by
Lender if an interest in any of the Properties, other than as permitted
hereunder, is claimed by another Person.
4.1.13 COSTS OF ENFORCEMENT. In the event (i) that any
Mortgage encumbering any of the Properties is foreclosed in whole or in part or
that any such Mortgage is put into the hands of an attorney for collection,
suit, action or foreclosure, (ii) of the foreclosure of any mortgage prior to or
subsequent to any Mortgage encumbering any of the Properties in which proceeding
Lender is made a party, or (iii) of the bankruptcy, insolvency, rehabilitation
or other similar proceeding in respect of Borrower or an assignment by Borrower
for the benefit of its creditors, Borrower, its successors or assigns, shall be
chargeable with and agrees to pay all costs of collection and defense, including
attorneys' fees in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, which shall be due and
payable together with all required service or use taxes.
4.1.14 ESTOPPEL STATEMENT. (a) After request by Lender,
Borrower shall within ten (10) days furnish Lender with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the Applicable Interest Rate of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgages and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
(b) Borrower shall use its best efforts to deliver to Lender
upon request, tenant estoppel certificates from each commercial tenant leasing
space at the Properties in form and substance reasonably satisfactory to Lender
provided that Borrower shall not be required to deliver such certificates more
frequently than one (1) time in any calendar year.
4.1.15 LOAN PROCEEDS. Borrower shall use the proceeds of
the Loan received by it on the Closing Date only for the purposes set forth in
Section 2.1.4.
4.1.16 PERFORMANCE BY BORROWER. Borrower shall in a timely
manner observe, perform and fulfill each and every covenant, term and provision
of each Loan Document executed and delivered by, or applicable to, Borrower, and
shall not enter into or otherwise suffer or permit any amendment, waiver,
supplement, termination or other modification of any Loan Document executed and
delivered by, or applicable to, Borrower without the prior written
-43-
50
consent of Lender.
4.1.17 CONFIRMATION OF REPRESENTATIONS. In addition to and not
in limitation of the covenants and agreements of Borrower contained in Section
8.1, Borrower shall deliver, in connection with any Securitization, (i) one or
more Officer's Certificates certifying that as of the date of the closing of
such Secondary Market Transaction all representations made by Borrower in the
Loan Documents remain true and correct as of the date such representations were
made, and (ii) certificates of the relevant Governmental Authorities in all
relevant jurisdictions indicating the good standing and qualification of
Borrower and its general partner as of the date of the Secondary Market
Transaction.
4.1.18 NO JOINT ASSESSMENT. Borrower shall not suffer, permit
or initiate the joint assessment of any Individual Property (i) with any other
real property constituting a tax lot separate from such Individual Property, and
(ii) with any portion of such Individual Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to such Individual Property.
4.1.19 LEASING MATTERS. Any Leases with respect to an
Individual Property written after the date hereof and prior to the Anticipated
Repayment Date, for more than 15,000 square feet shall be approved by Lender,
which approval shall not be unreasonably withheld, conditioned or delayed,
provided, however, that if Lender has failed to approve or disapprove any such
Lease within seven (7) Business Days of receipt thereof together with any
supplementary materials reasonably necessary to make such determinations,
Borrower shall provide notice of such failure to Lender, and in the event that
Lender does not approve or disapprove such Lease within five (5) Business Days
of Lender's receipt of such notice, the Lease shall be deemed approved. After
the Anticipated Repayment Date, all Leases shall be approved by Lender, which
approval may be withheld in Lender's sole discretion. Upon request, Borrower
shall furnish Lender with executed copies of all Leases. Without in any way
limiting Lender's foregoing rights, (i) all renewals of Leases and all proposed
Leases shall provide for rental rates comparable to existing local market rates,
(ii) all renewals of Leases and all proposed Leases shall be on commercially
reasonable terms and shall not contain any terms which would materially affect
Lender's rights under the Loan Documents, and (iii) all renewals of Leases and
all proposed Leases executed after the date hereof shall provide that they are
subordinate to the Mortgage encumbering the applicable Individual Property and
that the lessee agrees to attorn to Lender. Borrower (i) shall observe and
perform the obligations imposed upon the lessor under the Leases in a
commercially reasonable manner; (ii) shall enforce and may amend or terminate
the terms, covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed in a commercially reasonable
manner; (iii) shall not collect any of the rents more than one (1) month in
advance (other than security deposits); (iv) shall not execute any other
assignment of lessor's interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (v) shall not alter, modify or change the
terms of the Leases in a manner inconsistent with the provisions of the Loan
Documents; and (vi) shall execute and deliver at the request of Lender all such
further assurances, confirmations and assignments in connection with the Leases
as Lender shall from time to time reasonably require.
-44-
51
4.1.20 ALTERATIONS. Prior to the Anticipated Repayment Date,
Borrower shall obtain Lender's prior written consent, which consent shall not be
unreasonably withheld or delayed, to any alterations to any Improvements on any
Individual Property that may have a material adverse effect on Borrower's
financial condition, the value of such Individual Property or the Net Operating
Income with respect to such Individual Property, other than (i) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof, (ii) tenant improvement work performed pursuant to the
terms and provisions of a Lease and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements, provided that the cost of such alteration, under clause (i) or
(ii) above, does not exceed five percent (5%) of the Allocated Loan Amount for
such Individual Property and that the total of all such alterations, under
clause (i) or (ii) above, shall not exceed five percent (5%) of the original
amount of the Loan at any one time, or (iii) alterations performed in connection
with the restoration of the Property after the occurrence of a Casualty in
accordance with the terms and provisions of this Agreement. After the
Anticipated Repayment Date, Borrower shall obtain Lender's prior written consent
to all alterations, which consent may be withheld at Lender's sole discretion.
If the total unpaid amounts due and payable with respect to alterations to the
Improvements (other than such amounts to be paid or reimbursed by tenants under
the Leases) shall at any time equal or exceed either (i) five percent (5%) of
the Allocated Loan Amount with respect to the Individual Property on which the
alterations have been or are being performed or (ii) five percent (5%) of the
original principal amount of the Loan with respect to all alterations at all of
the Properties which have been or are being performed (the "THRESHOLD AMOUNT"),
Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower's obligations under the Loan
Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other
securities having a rating acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization, or (D) a
completion bond or letter of credit issued by a financial institution having a
rating by Standard & Poor's Ratings Group of not less than A-1+ if the term of
such bond or letter of credit is no longer than three (3) months or, if such
term is in excess of three (3) months, issued by a financial institution having
a rating that is acceptable to Lender and that the applicable Rating Agencies
have confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization. Such security shall be in an
amount equal to the excess of the total unpaid amounts with respect to
alterations to the Improvements on the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) over the Threshold Amount and
may be reduced from time to time by the cost estimated by Lender to terminate
any of the alterations and restore the Property to the extent necessary to
prevent any material adverse effect on the value of the Property.
Provided no Event of Default shall have occurred and provided
that Lender has received from Borrower paid receipts indicating that such
alteration(s) have been paid for up to the Threshold Amount, then Borrower may
request the release of portions of such security that is being held in cash on a
monthly basis to reimburse Borrower for further work on such alteration
performed for the prior month (a) to Borrower provided that Borrower has
delivered
-45-
52
paid receipts for such work and has complied with the conditions for
disbursement as are set forth in Sections 6.1 and 6.4 hereof, or (b) directly to
the contractor, subcontractor or supplier performing such work for such work
completed in the prior month as evidenced by bills or invoices for such work
delivered to Lender together with such other documentation as Lender may
reasonably require, including, without limitation, conditional lien waivers
which shall be conditioned only upon the payment of the amount of the bills or
invoices submitted by such contractor, subcontractor or supplier, and
satisfaction by Borrower of the same conditions to disbursement as are set forth
in Sections 6.1 and 6.4 hereof.
4.1.21 SUBORDINATION AGREEMENTS AND OTHER POST-CLOSING
OBLIGATIONS . Borrower shall use its best efforts to obtain Subordination,
Non-Disturbance and Attornment Agreements substantially in the form annexed as
Schedule VIII ("SNDA") from all of the tenants of the Properties listed on
Schedule IV within 60 days after the date hereof. In addition, Borrower shall
use its best efforts to obtain and deliver to Lender within 60 days of the date
hereof Tenant Estoppel Certificates addressed to Lender in form reasonably
satisfactory to Lender from all Tenants at the Properties from which Lender did
not receive Tenant Estoppel Certificates at the closing of the Loan, including
without limitation, an acceptable Tenant Estoppel Certificate from Sears
Hardware. Furthermore, with respect to the West Allis Individual Property,
Borrower shall use its best efforts to deliver to Lender within 60 days of the
date hereof, a so-called "closure" letter from the Wisconsin Department of
Natural Resources (the "DNR") indicating that either (i) the environmental
matters referenced in the summary attached hereto as Schedule X present no issue
or concern to the DNR or (ii) DNR does not maintain a file with respect to such
environmental matters and that therefore, such matters present no issue or
concern to the DNR. With respect to the Property known as Taylors Square, South
Carolina, Borrower shall use its best efforts to deliver to Lender evidence
satisfactory to Lender that the Property complies with the parking requirements
under the zoning law and an updated survey for the reflecting such compliance
with the Parking requirements. Such best efforts shall include commencing legal
proceedings against any tenants that are required to execute and deliver SNDA's
or Tenant Estoppels to Lender in accordance with the terms of their Leases. In
addition, within 60 days from the date hereof, Borrower shall deliver to Lender
(i) revisions to the appraisals and environmental reports received by Lender
such that the reports are addressed to Lender, (ii) copies of all Leases at the
Properties known as Fraser, West Allis and Xxxx certified by Borrower, (iii) a
letter from Dames and Xxxxx confirming that there is no groundwater
contamination at the Xxxxxx Square Property, and (iv) certificates of occupancy
for all of the space at the Northwest Crossing, Tennessee Property. Borrower and
Lender agree that the initial deposit of Insurance Premium Funds and the hedging
costs will be reviewed following the Closing and adjusted, if appropriate, based
upon further analysis by Lender and Borrower.
-46-
53
SECTION 4.2 BORROWER NEGATIVE COVENANTS
From the date hereof until payment and performance in full of
all obligations of Borrower under the Loan Documents or the earlier release of
the Liens of all Mortgages encumbering each of the Properties in accordance with
the terms of this Agreement and the other Loan Documents, Borrower covenants and
agrees with Lender that it will not do, directly or indirectly, any of the
following:
4.2.1 OPERATION OF PROPERTIES. Borrower shall not, without the
prior consent of Lender (which consent shall not be unreasonably withheld),
terminate the Management Agreement or otherwise replace the Manager or enter
into any other management agreement with respect to any of the Properties.
4.2.2 LIENS. Borrower shall not, without the prior written
consent of Lender, create, incur, assume or suffer to exist any Lien on any
portion of any of the Properties or permit any such action to be taken, except:
(a) Permitted Encumbrances;
(b) Liens created by or permitted pursuant to the Loan
Documents;
(c) Liens for Taxes or Other Charges not yet due.
4.2.3 DISSOLUTION. Borrower shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) engage in any business activity not related to the
ownership and operation of the Property, (iii) transfer, lease or sell, in one
transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of the Borrower except to the
extent permitted by the Loan Documents, or (iv) cause the SPE General Partner or
the SPC Managing Member to (A) dissolve, wind up or liquidate or take any
action, or omit to take an action, as a result of which the SPE General Partner
or the SPC Managing Member, as the case may be, would be dissolved, wound up or
liquidated in whole or in part, or (B) amend, modify, waive or terminate the
operating agreement of the SPE General Partner or the certificate of
incorporation or bylaws of the SPC Managing Member, as the case may be, in each
case, without obtaining the prior written consent of Lender or Lender's
designee.
4.2.4 CHANGE IN BUSINESS. Borrower shall not enter into any
line of business other than the ownership and operation of the Properties, or
make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
4.2.5 DEBT CANCELLATION. Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.
4.2.6 AFFILIATE TRANSACTIONS. Borrower shall not enter
into, or be a party to,
-47-
54
any transaction with an Affiliate of Borrower or any of the partners of Borrower
except in the ordinary course of business and on terms which are fully disclosed
to Lender in advance and are no less favorable to Borrower or such Affiliate
than would be obtained in a comparable arm's-length transaction with an
unrelated third party.
4.2.7 ZONING. Borrower shall not initiate or consent to any
zoning reclassification of any portion of any of the Properties or seek any
variance under any existing zoning ordinance or use or permit the use of any
portion of any of the Properties in any manner that could result in such use
becoming a non-conforming use under any zoning ordinance or any other applicable
land use law, rule or regulation, without the prior consent of Lender, which
consent shall not be unreasonably withheld as to any such non-conforming use.
4.2.8 ASSETS. Borrower shall not purchase or own any
properties other than the Properties.
4.2.9 DEBT. Borrower shall not create, incur or assume any
debt other than the Debt.
4.2.10 NO JOINT ASSESSMENT. Borrower shall not suffer, permit
or initiate the joint assessment of the Property (i) with any other real
property constituting a tax lot separate from the Property, and (ii) with any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
4.2.11 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change
its principal place of business set forth on the first page of this Agreement
without first giving Lender thirty (30) days prior written notice.
4.2.12 ERISA. (a) Borrower shall not engage in any transaction
which would cause any obligation, or action taken or to be taken, hereunder (or
the exercise by Lender of any of its rights under the Note, this Agreement or
the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term of
the Loan, as requested by Lender in its sole discretion, that (A) 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(3) of ERISA; (B) Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(C) one or more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R.
-48-
55
Section 2510.3-101(f)(2); or
(iii) 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.
4.2.13 TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS. Unless
such action is permitted by the provisions of this Section 4.2.13, Borrower
will not (i) Transfer all or any part of any of the Properties, (ii) incur
indebtedness for borrowed money, (iii) permit or suffer any direct or indirect
Transfer of any interest in Borrower or in any partner of Borrower, or (iv)
file a declaration of condominium with respect to the Property. Borrower shall
deliver to Lender written notice pursuant to the provisions of Section 9.6
hereof of any such Transfer permitted pursuant to the provisions of this
Section 4.2.13 hereof. Borrower shall provide Lender and the Rating Agencies
with copies of executed deeds, assignments of interests in Borrower or its SPE
General Partner or SPC Managing Member, mortgages or other similar closing
documents within ten (10) days after any closing on any transaction which is
subject to the provisions of this Section 4.2.13.
Notwithstanding anything to the contrary contained in this
Section 4.2.13, holders of share interests in Ramco Xxxxxxxxxx Properties
Trust, a Massachusetts real estate investment trust (the "REIT"), the general
partner of the limited partner of Borrower, shall have the right to transfer
their share interests in the REIT without Lender's consent; provided that (i)
after taking into account any prior transfers pursuant to this Section, whether
to the proposed transferee or otherwise, no such transfer (or series of
transfers) shall result in the proposed transferee, together with all members
of his/her immediate family or any Affiliates thereof, owning in the aggregate
(directly, indirectly or beneficially) 49% or more of the ownership and/or
voting interests in the REIT, and (ii) no such transfer of interests shall
result in a change of control of the REIT, Limited Partner or Borrower or the
day-to-day operation of the Properties.
Notwithstanding anything to the contrary contained in this
Section 4.2.13, holders of partnership interests in Ramco Xxxxxxxxxx
Properties, L.P., a Delaware limited partnership, the limited partner of
Borrower ("Limited Partner"), shall have the right to transfer their
partnership interests in Limited Partner without Lender's consent; provided,
that (i) after taking into account any prior transfers pursuant to this
Section, whether to the proposed transferee or otherwise, no such transfer (or
series of transfers) shall result in the proposed transferee, together with all
members of his/her immediate family or any Affiliates thereof, owning in the
aggregate (directly, indirectly or beneficially) 49% or more of the ownership
and/or voting interests in Borrower (or any entity directly or indirectly
holding an interest in Borrower), (ii) no such transfer of interests shall
result in a change of control of Borrower or Limited Partner or the day to day
operations of the Properties, and (iii) no such transfer shall result in the
REIT holding less than a 51% partnership and voting interest in Borrower and in
Limited Partner (directly or indirectly). To the extent the REIT at any time
owns a 49% or more ownership and voting interest (directly or indirectly) in
Limited Partner, then a transfer of a partnership interest in Limited Partner
pursuant to this Paragraph resulting in the REIT owning (directly or
indirectly) additional partnership interests in Limited Partner shall not
-49-
56
require the consent of Lender hereunder provided that the conditions set forth
in clauses (ii) and (iii) of this Paragraph remain satisfied.
Notwithstanding anything to the contrary contained in this
Section 4.2.13, either (a) a one-time only sale or transfer of 49% or more of
the share interests in the REIT to one Person or an affiliated group of Persons
or (b) a one time only sale or transfer to one Person or an affiliated group of
Persons of less than 49% of the share interests in the REIT which results in a
change of control of the REIT, the Limited Partner, the Borrower and/or the day
to day operation of the Properties, shall be permitted hereunder after
consideration and approval by Lender and the Rating Agencies, in their sole
discretion, of all relevant factors, provided that:
(A) no Event of Default shall have occurred and remain
uncured;
(B) the transferee shall be a reputable entity or person of
good character, creditworthy, with sufficient financial worth considering the
obligations assumed and undertaken, as evidenced by financial statements and
other information reasonably requested by Lender, Borrower and its constituent
entities shall comply in all respects with the provisions set forth in the
definition of Single Purpose Entity and Borrower, its constituent entities and
such transferee shall comply with all other applicable criteria of the Rating
Agencies;
(C) Lender shall have received evidence satisfactory to Lender
that all required approvals, if any, to such sale or transfer shall have been
obtained;
(D) Lender shall have receive evidence satisfactory to Lender
and the Rating Agencies to the effect that the legal and financial structure of
Borrower and its shareholders, partners or members, as the case may be, after
such transfer and the single purpose and bankruptcy remote nature of Borrower
and such shareholders, partners or members satisfies Lender's then current
applicable underwriting criteria and requirements including, without limitation,
the requirement that the single purpose and bankruptcy remote nature of Borrower
and such shareholders, partners or members following such transfer is in
accordance with the standards of two of the Rating Agencies or, if a
Securitization has occurred, the Rating Agencies rating the securities in the
Securitization;
(E) Lender shall have received evidence in writing from the
Rating Agencies to the effect that such transfer will not result in a
re-qualification, reduction or withdrawal of any rating initially or then
currently assigned or to be assigned in a Securitization;
(F) Lender shall have received such opinion of counsel as may
be reasonably requested by Lender (including a so called "non-consolidation"
opinion of counsel to the transferee with respect to Borrower, its SPE General
Partner and their constituent entities) or as may be requested by any Rating
Agency in connection with such sale or transfer;
(G) Lender shall have received payment of all costs and
expenses incurred by Lender in connection with such assumption (including
reasonable attorneys' fees and costs), together with a transfer fee equal to one
quarter of one percent (0.25%) of the outstanding
-50-
57
principal balance of the Loan at the time of such transfer; and
(H) Lender shall have received from Borrower at least 30 days'
prior written notice of the date of such transfer.
For the purposes of this Section, a proposed transferee
shall be deemed to own that interest in the Borrower, Limited Partner, REIT
and/or a constituent entity of Borrower owned by an immediate family member. For
purposes of this Section, (1) an "immediate family member" shall mean an
individual's spouse, brothers and sisters (whether by the whole or half blood),
ancestors or lineal descendants by birth or adoption, trusts for the exclusive
benefit of any of the foregoing individuals, and/or any limited partnership in
which the immediate family member is a general partner; and (2) a change of
control of Borrower, Limited Partner or the REIT shall be deemed to have
occurred if, as a result of such transfer, the transferee, its Affiliates and/or
its nominees have the right, directly or indirectly, by virtue of the limited
partnership agreement, articles of organization, the operating agreement or any
other agreement, or through any board of directors or trustees, with or without
taking any formative action, to make substantially all of the operating
decisions with respect to the Properties, Borrower, Limited Partner and/or the
REIT, as the case may be, and to make substantially all policy decisions with
respect to the Properties, Borrower, Limited Partner and/or the REIT, as the
case may be.
(i) Sale of the Mortgaged Properties. Borrower may transfer or
dispose of Building Equipment which is being replaced or which is no longer
necessary in connection with the operation of the Property free from the Lien of
the Mortgage provided that such transfer or disposal will not materially
adversely affect the value of a Mortgaged Property taken as a whole, will not
materially impair the utility of the Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
any Lease, in either case as a result thereof, and provided that any new
Building Equipment acquired by Borrower (and not so disposed of) shall be
subject to the Lien of the Mortgage. Lender shall, from time to time, upon
receipt of an Officer's Certificate requesting the same and confirming
satisfaction of the conditions set forth above, execute a written instrument in
form reasonably satisfactory to Lender to confirm that such Building Equipment
which is to be, or has been, sold or disposed of is free from the Lien of the
Mortgage.
(ii) Transfer of Interests in Borrower. In any instance where
Lender shall be asked to consent to any Transfer of any interest in Borrower or
its SPE General Partner, without limiting any conditions which Lender may
require in connection with such consent, (a) if 12.5% or more of direct or
indirect beneficial interests in Borrower are sold or transferred, (b) if any
sale or transfer shall result in a Person or a group of Affiliates or family
members, as applicable, acquiring more than a 49% direct or indirect interest in
Borrower or its SPE General Partner, or (c) if there is any sale or transfer of
any direct interest in Borrower held by any SPE General Partner of Borrower,
Borrower shall deliver or cause to be delivered to the Rating Agencies and
Lender (x) an Opinion of Counsel addressed to the Rating Agencies and Lender and
dated as of the date of the sale or transfer to the effect that in a properly
presented case, a bankruptcy court in a case involving such transferee, or any
Affiliate thereof, would not disregard the corporate, company or partnership
forms of Borrower or its SPE General Partner,
-51-
58
as the case may be, so as to consolidate the assets and liabilities of such
transferee or any Affiliate thereof with those of Borrower or its SPE General
Partner, and (y) an Officer's Certificate certifying that such sale or transfer
is not an Event of Default.
(iii) Indebtedness. Borrower shall not incur, create or assume
any Debt or incur any liabilities without the consent of Lender; provided,
however, that if no Event of Default shall have occurred and be continuing,
Borrower may, without the consent of Lender, incur, create or assume any or all
of the following indebtedness (collectively, "PERMITTED DEBT"):
(A) the Note and the other obligations, indebtedness and
liabilities specifically provided for in this Agreement or in any other Loan
Document and secured by the Mortgage and the other Loan Documents; and
(B) Liabilities created in the ordinary course of business for
or on respect of the operation of the Property consistent with the Annual Budget
submitted to Lender (or, after Anticipated Repayment Date, approved by Lender)
("TRADE PAYABLES"), not secured by liens on the Property, not to exceed at any
time for each Individual Property, the Trade Payable Limits for such Individual
Property set forth on Schedule IX hereto or $351,000 in the aggregate for all
Properties, payable by or on behalf of Borrower, provided that (but subject to
the terms of the next sentence) each such amount shall be paid within sixty (60)
days following the date on which each such amount was due. For purposes of this
definition, Trade Payable shall include payables to an Affiliate of Borrower
authorized to pay a Trade Payable on behalf of Borrower. Nothing contained
herein shall be deemed to require Borrower to pay any amount, so long as
Borrower is in good faith, and by proper legal proceedings, diligently
contesting the validity, amount or application thereof, provided that in each
case, at the time of the commencement of any such action or proceeding, and
during the pendency of such action or proceeding (1) no Event of Default shall
exist and be continuing hereunder, (2) adequate reserves with respect thereto
are maintained on the books of Borrower in accordance with GAAP, (3) unless
waived in writing by Lender in its sole discretion, in the event that any Trade
Payables are not paid within 60 days, Borrower shall deposit with Lender
additional collateral in the form of Cash or Cash Equivalents or Letters of
Credit equal to 125% of the such unpaid amount to be held pursuant the Cash
Management Agreement, and (4) such contest operates to suspend collection or
enforcement, as the case may be, of the contested amount and such contest is
maintained and prosecuted continuously and with diligence. Notwithstanding
anything set forth herein, in no event shall Borrower be permitted under this
provision to enter into a note or other instrument for borrowed money.
(iv) One-Time Transfer. Borrower shall have the right to a
one-time only sale or transfer of all of the Properties after consideration and
approval by Lender and the Rating Agencies, in their sole discretion, of all
relevant factors, provided that:
(A) no Event of Default shall have occurred and remain
uncured;
(B) the proposed transferee ("TRANSFEREE") shall be a
reputable entity or person of good character, creditworthy, with sufficient
financial worth considering the
-52-
59
obligations assumed and undertaken, as evidenced by financial statements and
other information reasonably requested by Lender and shall comply in all
respects with the provisions set forth in the definition of Single Purpose
Entity and all other applicable criteria of the Rating Agencies;
(C) Lender shall have received evidence satisfactory to Lender
that all required approvals, if any, to such sale or transfer shall have been
obtained;
(D) Lender shall have received evidence in writing from the
Rating Agencies to the effect that such transfer will not result in a
re-qualification, reduction or withdrawal of any rating initially or then
currently assigned or to be assigned in a Securitization;
(E) Lender shall have received such opinion of counsel as may
be reasonably requested by Lender (including an opinion of counsel to the
Transferee, addressed to the Rating Agencies and Lender and dated as of the date
of the sale or transfer, to the effect that, in a properly presented case, a
bankruptcy court in a case involving the Transferee would not disregard the
corporate, company or partnership form of the Borrower or its SPC General
Partner so as to consolidate the assets and liabilities of such Transferee with
those of Borrower or its SPC General Partner, as applicable) or as may be
requested by any Rating Agency in connection with such sale or transfer;
(F) the Transferee shall have executed and delivered to Lender
an assumption agreement in form and substance reasonably acceptable to Lender,
evidencing such Transferee's agreement to abide and be bound by the terms of the
Note, this Agreement, the Mortgage and the other Loan Documents, together with
such title insurance endorsements as may be reasonably requested by Lender, and
upon such assumption, Borrower shall be released from its obligations under this
Agreement and the other Loan Documents first arising or accruing from and after
the date of such assumption;
(G) Lender shall have received payment of all costs and
expenses incurred by Lender in connection with such assumption (including
reasonable attorneys' fees and costs), together with an assumption fee equal to
one half of one percent (0.50%) of the outstanding principal balance of the Loan
at the time that the Loan is transferred;
(H) Adequate provision by reserve or otherwise, satisfactory
in all respects to Lender in its sole discretion, is made for the payment by
Borrower of increased real estate taxes due to a reappraisal or reassessment
caused by or related to any transfer or conveyance of the Property; and
(I) Lender shall have received from Borrower at least 30 days'
prior written notice of the date of such Transfer.
-53-
60
V. INSURANCE, CASUALTY AND CONDEMNATION
SECTION 5.1 INSURANCE.
5.1.1 INSURANCE POLICIES. (a) Borrower shall obtain and
maintain, or cause to be maintained, insurance for Borrower and each of the
Properties providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and
the personal property at the Properties, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent (100%)
of the "FULL REPLACEMENT COST," which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation, but the
amount shall in no event be less than the outstanding principal balance of the
Loan; (B) containing an agreed amount endorsement with respect to the
Improvements and personal property at the Properties waiving all co-insurance
provisions; (C) providing for no deductible in excess of Fifty Thousand and
No/100 Dollars ($50,000) for flood and windstorm insurance and Ten Thousand and
No/100 Dollars ($10,000) for all such other insurance coverage; and (D)
containing an "Ordinance or Law Coverage" or "Enforcement" endorsement if any of
the Improvements or the use of the Individual Property shall at any time
constitute legal non-conforming structures or uses. In addition, Borrower shall
obtain: (y) if any portion of the Improvements is currently or at any time in
the future located in a federally designated "special flood hazard area", flood
hazard insurance in an amount equal to the lesser of (1) the outstanding
principal balance of the Note or (2) the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as
each may be amended or such greater amount as Lender shall require; and (z)
earthquake insurance in amounts and in form and substance satisfactory to Lender
in the event the Individual Property is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses (y) and (z)
hereof shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Individual Property, such insurance (A) to be on the so-called
"occurrence" form with a combined limit, including umbrella coverage, of not
less than Five Million and No/100 Dollars ($5,000,000) or, if any of the
Improvements contain elevators, Five Million and No/100 Dollars ($5,000,000);
(B) to continue at not less than the aforesaid limit until required to be
changed by Lender in writing by reason of changed economic conditions making
such protection inadequate; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an "if any"
basis; (3) independent contractors; (4) blanket contractual liability for all
legal contracts; and (5) contractual liability covering the indemnities
contained in Article 9 of the Mortgages to the extent the same is available;
(iii) business income insurance (A) with loss payable to
Lender; (B) covering
-54-
61
all risks required to be covered by the insurance provided for in subsection (i)
above; (C) containing an extended period of indemnity endorsement which provides
that after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of
eighteen (18) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; and (D) in an amount equal to
one hundred percent (100%) of the projected rental income from the Individual
Property for a period of eighteen (18) months from the date that the Individual
Property is repaired or replaced and operations are resumed. The amount of such
business income insurance shall be determined prior to the date hereof and at
least once each year thereafter based on Borrower's reasonable estimate of the
rental income from the Property for the succeeding eighteen (18) month period.
All proceeds payable to Lender pursuant to this subsection shall be held by
Lender and shall be applied to the obligations secured by the Loan Documents
from time to time due and payable hereunder and under the Note in accordance
with the terms of the Cash Management Agreement; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to pay
the obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements, and only
if the Individual Property coverage form does not otherwise apply, (A) owner's
contingent or protective liability insurance covering claims not covered by or
under the terms or provisions of the above mentioned commercial general
liability insurance policy; and (B) the insurance provided for in subsection (i)
above written in a so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above, (3) including permission to occupy the Individual
Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions;
(v) workers' compensation, subject to the statutory limits of
the state in which the Individual Property is located, and employer's liability
insurance with statutory limits per accident and per disease per employee, and
statutory limits for disease aggregate in respect of any work or operations on
or about the Individual Property, or in connection with the Individual Property
or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the commercial property insurance policy required under
subsection (i) above;
(vii) umbrella liability insurance in an amount not less than
Five Million and No/100 Dollars ($5,000,000) per occurrence on terms consistent
with the commercial general liability insurance policy required under subsection
(ii) above;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing minimum
limits per occurrence, including
-55-
62
umbrella coverage, of One Million and No/100 Dollars ($1,000,000); and
(ix) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time to time
may reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Individual Property
located in or around the region in which the Individual Property is located.
(b) All insurance provided for in Section 6.1.1(a) shall be
obtained under valid and enforceable policies (collectively, the "POLICIES" or
in the singular, the "POLICY"), and shall be subject to the approval of Lender
as to deductibles, loss payees and insureds. Not less than ten (10) days prior
to the expiration dates of the Policies theretofore furnished to Lender,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the "INSURANCE
PREMIUMS"), shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate
to the Individual Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate
Policy insuring only the Property in compliance with the provisions of Section
5.1.1(a).
(d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v), shall
name Borrower as the insured and Lender as the additional insured, as its
interests may appear, and in the case of property damage, boiler and machinery,
flood and earthquake insurance, shall contain a so-called New York standard
non-contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender.
(e) All Policies of insurance provided for in Section
5.1.1(a)(v) shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days' written notice to Lender and any other party named therein as an
additional insured; and
(iii) each Policy shall provide that the issuers thereof shall
give written notice to Lender if the Policy has not been renewed fifteen (15)
days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance
-56-
63
required hereunder is in full force and effect, Lender shall have the right,
without notice to Borrower, to take such action as Lender deems necessary to
protect its interest in the Property, including, without limitation, the
obtaining of such insurance coverage as Lender in its sole discretion deems
appropriate and all premiums incurred by Lender in connection with such action
or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and until paid shall be secured by the Mortgages
and shall bear interest at the Default Rate.
(g) In the event of foreclosure of the Mortgage with respect
to the Individual Property, or other transfer of title to the Individual
Property in extinguishment in whole or in part of the Debt all right, title and
interest of Borrower in and to the Policies that are not blanket Policies then
in force concerning the Individual Property and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.
5.1.2 INSURANCE COMPANY. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the state in which each Individual Property is located and having a claims
paying ability rating of "AA" or better by at least two (2) of the Rating
Agencies.
SECTION 5.2 CASUALTY AND CONDEMNATION.
5.2.1 CASUALTY. If an Individual Property shall sustain a
Casualty, Borrower shall give prompt notice of such Casualty to Lender and shall
promptly commence and diligently prosecute to completion of the repair and
restoration of the Individual Property as nearly as possible to the condition
the Individual Property was in immediately prior to such Casualty (a
"RESTORATION") and otherwise in accordance with Section 5.3. Borrower shall pay
all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower.
5.2.2 CONDEMNATION. Borrower shall give Lender prompt notice
of any actual or threatened Condemnation by any Governmental Authority of all or
any part of any Individual Property and shall deliver to Lender a copy of any
and all papers served in connection with such proceedings. Lender may
participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by Lender to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any Condemnation, Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement. Lender shall not be limited to the interest paid on the Award by any
Governmental Authority but shall be entitled to receive out of the Award
interest at the rate or rates provided herein or in the Note. If an Individual
Property or any portion thereof is taken by any Governmental Authority, Borrower
shall promptly commence and diligently prosecute the Restoration of the Property
and otherwise comply with the provisions of Section 5.3. If the Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of the
Award, Lender shall have the right, whether or not a deficiency judgment on the
Note shall have been sought, recovered
-57-
64
or denied, to receive the Award, or a portion thereof sufficient to pay the
Debt.
SECTION 5.3 RESTORATION.
5.3.1 MINOR CASUALTY OR CONDEMNATION. If a Casualty or
Condemnation has occurred to an Individual Property and the Net Proceeds shall
be less than the greater of $250,000 or five percent (5%) of the Allocated Loan
Amount with respect to such Individual Property, and the costs of completing the
Restoration shall be less than the greater of $250,000 or five percent (5%) of
the Allocated Loan Amount with respect to such Individual Property, and provided
no Event of Default shall have occurred and remain uncured, the Net Proceeds
will be disbursed by Lender to Borrower. Promptly after receipt of the Net
Proceeds, Borrower shall commence and satisfactorily complete with due diligence
the Restoration in accordance with the terms of this Agreement.
5.3.2 MAJOR CASUALTY OR CONDEMNATION. (a) If a Casualty or
Condemnation has occurred to an Individual Property and the Net Proceeds are
equal to or greater than the greater of $250,000 or five percent (5%) of the
Allocated Loan Amount with respect to such Individual Property or the costs of
completing the Restoration is equal to or greater than the greater of $250,000
or five percent (5%) of the Allocated Loan Amount with respect to such
Individual Property, Lender shall make the Net Proceeds available for the
Restoration, provided that each of the following conditions are met:
(i) no Event of Default shall have occurred and be
continuing;
(ii) (A) in the event the Net Proceeds are insurance proceeds,
less than forty percent (40%) of the total floor area of the Improvements at the
Individual Property has been damaged, destroyed or rendered unusable as a result
of such Casualty or (B) in the event the Net Proceeds are an Award, less than
ten percent (10%) of the land constituting the Individual Property is taken, and
such land is located along the perimeter or periphery of the Individual
Property, and no portion of the Improvements is the subject of the Condemnation;
(iii) Leases demising more than the Rentable Space Percentage
shall remain in full force and effect during and after the completion of the
Restoration without abatement of rent beyond the time required for Restoration,
notwithstanding the occurrence of such Casualty or Condemnation. The term
"RENTABLE SPACE PERCENTAGE" shall mean (A) in the event the Net Proceeds are
insurance proceeds, seventy percent (70%) and (B) in the event the Net Proceeds
are an Award seventy percent (70%);
(iv) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days after such
Casualty or Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion;
(v) Lender shall be satisfied that any operating deficits and
all payments of principal and interest under the Note, will be paid, during the
period required for Restoration, from (A) the Net Proceeds, or (B) by other
funds of Borrower;
(vi) Lender shall be satisfied that the Restoration will
be completed on or
-58-
65
before the earliest to occur of (A) six months prior to the Anticipated
Repayment Date, (B) the earliest date required for such completion under the
terms of any Lease remaining in full force and effect pursuant to the
calculation of the applicable Rentable Space Percentage in accordance with the
provisions of subsection (iii) above, (C) such time as may be required under
applicable zoning law, ordinance, rule or regulation in order to repair and
restore the Property to the condition it was in immediately prior to such
Casualty or to as nearly as possible the condition it was in immediately prior
to such Condemnation, as applicable or (D) the expiration of the insurance
coverage referred to in Section 5.1.1(iii);
(vii) the Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable zoning
laws, ordinances, rules and regulations;
(viii) the Restoration shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all applicable
governmental laws, rules and regulations (including, without limitation, all
applicable environmental laws); and
(ix) such Casualty or Condemnation, as applicable, does not
result in the loss of access to the Individual Property or the related
Improvements.
(b) The Net Proceeds shall be paid directly to Lender and held
by Lender in an interest-bearing account and, until disbursed in accordance with
the provisions of this Section 5.3.2, shall constitute additional security for
the Debt. The Net Proceeds shall be disbursed by Lender to, or as directed by,
Borrower from time to time during the course of the Restoration, upon receipt of
evidence satisfactory to Lender that (A) all materials installed and work and
labor performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the Restoration have been paid for in
full, and (B) there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other liens or
encumbrances of any nature whatsoever on the Individual Property arising out of
the Restoration which have not either been fully bonded to the satisfaction of
Lender and discharged of record or in the alternative fully insured to the
satisfaction of Lender by the title company issuing the Title Insurance Policy.
(c) All plans and specifications required in connection with
the Restoration shall be subject to prior approval by Lender and by an
independent architect selected by Borrower and approved by Lender (the "CASUALTY
CONSULTANT"). The identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts of the contractors, but not
subcontractors or materialmen, under which they have been engaged, shall be
subject to approval by Lender and the Casualty Consultant. All costs and
expenses incurred by Lender in connection with holding and advancing the Net
Proceeds for the Restoration including, without limitation, reasonable
attorneys' fees and disbursements and the Casualty Consultant's fees and
disbursements, shall be paid by Borrower.
(d) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, less the Casualty
-59-
66
Retainage. The term "CASUALTY RETAINAGE" shall mean an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until fifty percent (50%)
of the Restoration has been completed, and five (5%) of the costs actually
incurred for work in place thereafter as part of the Restoration, as certified
by the Casualty Consultant, until the Restoration has been completed. The
Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 5.3.2(d), be less than the amount
actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Casualty Retainage shall not be released until
the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 5.3.2(d) and that
all approvals necessary for the re-occupancy and use of the Individual Property
have been obtained from all appropriate Governmental Authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the Title Insurance Policy, and Lender
receives an endorsement to the Title Insurance Policy insuring the continued
priority of the lien of the related Mortgage and evidence of payment of any
premium payable for such endorsement. If required by Lender, the release of any
such portion of the Casualty Retainage shall be approved by the surety company,
if any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(e) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the "NET
PROCEEDS DEFICIENCY") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.3.2 shall constitute additional security for the Debt.
(g) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 5.3.2, and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under any
-60-
67
of the Loan Documents.
(h) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 5.3.2(g) may be retained and applied by Lender toward the
payment of the Debt without payment of any Yield Maintenance Premium whether or
not then due and payable in such order, priority and proportions as Lender in
its sole discretion shall deem proper, or, at the discretion of Lender, the same
may be paid, either in whole or in part, to Borrower for such purposes as Lender
shall designate.
VI. RESERVE FUNDS
SECTION 6.1 REQUIRED REPAIRS; REQUIRED REPAIR FUNDS
6.1.1 REQUIRED REPAIRS; DEPOSITS. Borrower shall perform the
repairs at the Properties as set forth on Schedule II hereto (such repairs
hereinafter referred to as "REQUIRED REPAIRS"). Borrower shall complete each of
the Required Repairs on or before the 18 month anniversary of the date hereof,
provided, however, so long as no Event of Default has occurred and is
continuing, if Lender, in its sole discretion, determines, based on evidence
delivered by Borrower satisfactory to Lender, including, without limitation,
revisions to the engineering reports delivered at closing satisfactory to
Lender, that any particular Required Repair is of a nature that it is not
necessary in Lender's judgment to perform such Required Repair within such
18-month period, then Lender shall release to Borrower Required Repair Funds
relating to such particular Required Repair. On the Closing Date, Borrower shall
deposit with Lender the amount for each Individual Property set forth on such
Schedule II hereto to perform the Required Repairs for such Individual Property
such amount so deposited shall hereinafter be referred to as the "REQUIRED
REPAIR FUNDS").
6.1.2 RELEASE OF REQUIRED REPAIR FUNDS. Lender shall disburse
to Borrower the Required Repair Funds upon satisfaction by Borrower of each of
the following conditions: (a) Borrower shall submit a written request for
payment to Lender at least fifteen(15) days prior to the date on which Borrower
requests such payment be made and specifies the Required Repairs to be paid, (b)
on the date such request is received by Lender and on the date such payment is
to be made, no Event of Default shall exist and remain uncured, (c) Lender shall
have received a certificate from Borrower (i) stating that all Required Repairs
at the applicable Individual Property to be funded by the requested disbursement
have been completed in good and workmanlike manner and in accordance with all
applicable federal, state and local laws, rules and regulations, such
certificate to be accompanied by a copy of any license, permit or other approval
by any Governmental Authority required in connection with the Required Repairs,
(ii) identifying each Person that supplied materials or labor in connection with
the Required Repairs performed at such Individual Property to be funded by the
requested disbursement, and (iii) stating that each such Person has been paid in
full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender,
(d) at Lender's option, a title search for such Individual Property indicating
that such Individual Property is free from all liens, claims and other
encumbrances not previously approved by Lender, (e) Lender shall have received
such other evidence as
-61-
68
Lender shall reasonably request that the Required Repairs at such Individual
Property to be funded by the requested disbursement have been completed and are
paid for or will be paid upon such disbursement to the Borrower, and (f) if the
Required Repairs are in excess of $50,000, Lender may require that an engineer
satisfactory to Lender in Lender's sole discretion inspect the work before
releasing any Required Repairs Funds. Lender shall not be required to disburse
Required Repair Funds more frequently than once each calendar month, or with
respect to any Individual Property unless such requested disbursement is in an
amount greater than $25,000 (or a lesser amount if the total Required Repair
Funds is less than $25,000, in which case only one disbursement of the amount
remaining in the account shall be made). Lender shall make reasonable good faith
efforts to disburse Required Repair Funds within fifteen (15) days of receipt of
request from Borrower provided all conditions to disbursement have been
satisfied by Borrower. In the event Required Repair Funds are held by Agent in
accordance with Section 6.7 hereof, and provided the conditions set forth in
this Section 6.1.2 have been satisfied, Lender shall consent in writing to
Agent's disbursement of Required Repair Funds in accordance with the certificate
approved by Lender pursuant to this Section 6.1.2.
6.1.3 FAILURE TO PERFORM REQUIRED REPAIRS; APPLICATION OF
REQUIRED REPAIR FUNDS. It shall be an Event of Default under this Agreement if
Borrower does not complete the Required Repairs at each Individual Property by
the deadline for each repair as set forth on Schedule II. Upon the occurrence of
an Event of Default, Lender, at its option, may withdraw all Required Repair
Funds from the Required Repair Account and Lender may apply the Required Repair
funds either to completion of the Required Repairs at one or more of the
Properties or to payment of the Debt in such order, proportion and priority as
Lender may determine in its sole discretion. Lender's right to withdraw and
apply Required Repair Funds shall be in addition to all other rights and
remedies provided to Lender under the Loan Documents.
SECTION 6.2 TAX FUNDS
6.2.1 TAX FUNDS. Borrower shall deposit with Lender on the
Monthly Payment Date an amount (the "MONTHLY TAX DEPOSIT") equal to one-twelfth
of the Taxes that Lender estimates will be payable during the next ensuing
twelve (12) months in order to accumulate with Lender sufficient funds to pay
all such Taxes at least ten (10) days prior to their respective due dates (such
amounts so deposited shall hereinafter be referred to as the "TAX FUNDS")
provided, however, that Borrower shall not be required to make a Monthly Tax
Deposit with respect to Taxes that are paid directly to the taxing authority by
anchor tenants at an Individual Property or with respect to Taxes that are paid
by such anchor tenants to Borrower on other than a monthly basis (in which event
Borrower shall make deposits to the Tax Account of such Taxes paid by such
anchor tenants to Borrower, as and when such anchor tenants are required to pay
such Taxes to Borrower).
6.2.2 RELEASE OF TAX FUNDS. Lender shall have the right to
apply the Tax Funds to payments of Taxes. In making any payment relating to
Taxes, Lender may do so according to any xxxx, statement or estimate procured
from the appropriate public office (with respect to Taxes) without inquiry into
the accuracy of such xxxx, statement or estimate or into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If the
amount of the
-62-
69
Tax Funds shall exceed the amounts due for Taxes, Lender shall return any excess
to Borrower. Any Tax Funds remaining after the Debt has been paid in full shall
be returned to Borrower. If at any time Lender reasonably determines that the
Tax Funds will not be sufficient to pay the Taxes, Lender shall notify Borrower
of such determination and Borrower shall increase its monthly payments to Lender
by the amount that Lender estimates is sufficient to make up the deficiency at
least ten (10) days prior to the respective due dates for the Taxes.
6.2.3 APPLICATION OF TAX FUNDS. Upon the occurrence of an
Event of Default, Lender, at its option, may withdraw all the Tax Funds from the
Tax Account and may apply the Tax Funds either to the payment of Taxes or to
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender's right to withdraw and apply the Tax
Funds shall be in addition to all other rights and remedies provided to Lender
under the Loan Documents.
SECTION 6.3 INSURANCE PREMIUM FUNDS
6.3.1 INSURANCE PREMIUM FUNDS. Borrower shall deposit with
Lender on each Monthly Payment Date an amount (the "MONTHLY INSURANCE PREMIUM
DEPOSIT") equal to one-twelfth of the Insurance Premiums that Lender estimates
will be payable for the renewal of the coverage afforded by the Policies upon
the expiration thereof in order to accumulate with Lender sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (such amounts so deposited shall hereinafter be
referred to as the "INSURANCE PREMIUM FUNDS").
6.3.2 RELEASE OF INSURANCE PREMIUM FUNDS . Lender shall have
the right to apply the Insurance Premium Funds to payment of Insurance Premiums.
To the extent anchor tenants at Individual Properties are self-insuring any
risks to be covered under the Agreement or carry their own third-party insurance
to cover such risks (and directly pay the costs thereof), and provided that
Lender is satisfied that such insurance meets the requirements of this Agreement
and that Lender is named as additional insured and loss payee on such
self-insurance or third-party insurance, then Lender shall not require the
application of the Insurance Premium Funds to pay any such anchor insurance
policies. In making any payment relating to Insurance Premiums, Lender may do so
according to any xxxx, statement or estimate procured from the insurer or its
agent, without inquiry into the accuracy of such xxxx, statement or estimate. If
the amount of the Insurance Premium Funds shall exceed the amounts due for
Insurance Premiums, Lender shall return any excess to Borrower. Any Insurance
Premium Funds remaining after the Debt has been paid in full shall be returned
to Borrower. If at any time Lender reasonably determines that the Insurance
Premium Funds will not be sufficient to pay the Insurance Premiums, Lender shall
notify Borrower of such determination and Borrower shall increase its monthly
payments to Lender by the amount that Lender estimates is sufficient to make up
the deficiency at least thirty (30) days prior to expiration of the Policies.
6.3.3 APPLICATION OF INSURANCE PREMIUM FUNDS. Upon the
occurrence of an Event of Default, Lender at its option may withdraw the
Insurance Premium Funds from the Insurance Premium Account and may apply the
Insurance Premium Funds to the payment of Insurance Premiums or to the payment
of the Debt in such order, proportion and priority as
-63-
70
Lender shall determine in its sole discretion. Lender's right to withdraw and
apply the Insurance Premium Funds shall be in addition to all other rights and
remedies provided to Lender under the Loan Documents.
SECTION 6.4 CAPITAL EXPENDITURES FUNDS .
6.4.1 CAPITAL EXPENDITURES FUNDS . Borrower shall deposit with
Lender on each Monthly Payment Date an amount (the "MONTHLY CAPITAL EXPENDITURES
DEPOSIT") equal to one-twelfth of $212,624.00, based on $.15 per square foot of
gross leasable area of the Properties per year, such amounts so deposited shall
hereinafter be referred to as the "CAPITAL EXPENDITURES FUNDS"). Notwithstanding
the foregoing, the amounts in the Capital Expenditure Account shall not exceed
$425,248.00, based upon $0.30 per square foot of gross leasable area of the
Properties at any one time.
6.4.2 RELEASE OF CAPITAL EXPENDITURE FUNDS . (a) Lender shall
disburse Capital Expenditure Funds only for the costs of those items which are
Capital Expenditures, provided no more than 50% of the annual amount escrowed
each year may be used for Capital Expenditures associated with leasing.
(b) Lender shall disburse to Borrower the Capital Expenditures
Funds upon satisfaction by Borrower of each of the following conditions: (i)
Borrower shall submit a written request for payment to Lender at least fifteen
(15) days prior to the date on which Borrower requests such payment be made and
specifies the Capital Expenditures to be paid, (ii) on the date such request is
received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, (iii) Lender shall have received a
certificate from Borrower (A) stating that the items to be funded by the
requested disbursement are Capital Expenditures in accordance with this
Agreement, (B) stating that all Capital Expenditures at the applicable
Individual Property to be funded by the requested disbursement have been
completed in good and workmanlike manner and in accordance with all applicable
federal, state and local laws, rules and regulations, such certificate to be
accompanied by a copy of any license, permit or other approval by any
Governmental Authority required in connection with the Capital Expenditures, (C)
identifying each Person that supplied materials or labor in connection with the
Capital Expenditures performed at such Individual Property to be funded by the
requested disbursement, and (D) stating that each such Person has been paid in
full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender,
(iv) at Lender's option, a title search for such Individual Property indicating
that such Individual Property is free from all liens, claims and other
encumbrances not previously approved by Lender, (v) Lender shall have received
such other evidence as Lender shall reasonably request that the Capital
Expenditures at such Individual Property to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to the Borrower, and (vi) if the Capital Expenditure is in excess
of $50,000, Lender may require that an Engineer satisfactory to Lender in
Lender's sole discretion inspect the work before releasing any Capital
Expenditure Funds. Lender shall not be required to disburse Capital Expenditure
Funds more frequently than once each calendar month or with respect to any
Individual Property unless such requested disbursement is in an amount greater
than $25,000 (or a lesser amount if the total amount of Capital Expenditure
-64-
71
Funds is less than $25,000, in which case only one disbursement of the amount
remaining in the account shall be made). Lender shall make reasonable good faith
efforts to disburse Capital Expenditure Funds within fifteen (15) days of
receipt of request from Borrower provided all conditions to disbursement have
been satisfied by Borrower. In the event Capital Expenditures Funds are held by
Agent in accordance with Section 6.7 hereof and provided the conditions set
forth in this Section 6.4.2 have been satisfied, Lender shall consent in writing
to Agent's disbursement of Capital Expenditures Funds in accordance with the
certificate approved by Lender pursuant to this Section 6.4.2.
(c) Lender reserves the right, at its option, to approve all
contracts or work orders with the general contractor in connection with the
Capital Expenditures Work. Upon Lender's request, Borrower shall assign any
contract or subcontract to Lender.
(d) In the event Lender determines in its reasonable
discretion that any Capital Expenditures Work is not being performed in a
workmanlike or timely manner or that any Capital Expenditures Work has not been
completed in a workmanlike or timely manner, Lender shall have the option to
withhold disbursement for such unsatisfactory Capital Expenditures Work and to
proceed under existing contracts or to contract with third parties to complete
such Capital Expenditures Work and to apply the Capital Expenditures Funds
toward the labor and materials necessary to complete such Capital Expenditures
Work.
(e) In order to facilitate Lender's completion of the Capital
Expenditures Work pursuant to Section 6.4.3(d) above, Borrower grants Lender the
right to enter onto any Individual Property and perform any and all work and
labor necessary to complete the Capital Expenditures Work and/or employ watchmen
to protect such Individual Property from damage. All sums so expended by Lender
shall be deemed to have been advanced under the Loan to Borrower and secured by
the Mortgages. For this purpose Borrower constitutes and appoints Lender its
true and lawful attorney-in-fact with full power of substitution to complete or
undertake the Capital Expenditures Work in the name of Borrower. Such power of
attorney shall be deemed to be a power coupled with an interest and cannot be
revoked.
(f) Nothing in this Section 6.4.3 shall (i) make Lender
responsible for making or completing the Capital Expenditures Work; (ii) require
Lender to expend funds in addition to the Capital Expenditures Funds to complete
any Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Capital Expenditures Work.
(g) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties to enter onto each Individual Property during normal
business hours (subject to the rights of tenants under their Leases) to inspect
the progress of any Capital Expenditures Work and all materials being used in
connection therewith and to examine all plans and shop drawings relating to such
Capital Expenditures Work. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's representatives or such
other persons described above in connection with inspections described in this
Section 6.4.3(g).
-65-
72
(h) In addition to any insurance required under the Loan
Documents, Borrower shall provide or cause to be provided workmen's compensation
insurance, builder's risk, and public liability insurance and other insurance to
the extent required under applicable law in connection with Capital Expenditures
Work. All such policies shall be in form and amount reasonably satisfactory to
Lender.
6.4.3 APPLICATION OF CAPITAL EXPENDITURE FUNDS . Upon the
occurrence of an Event of Default, Lender, at its option, may withdraw the
Capital Expenditure Funds form the Capital Expenditures Account and apply the
Capital Expenditure Funds to completion of the Capital Expenditures Work or to
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender's right to withdraw and apply the
Capital Expenditure Funds shall be in addition to all other rights and remedies
provided to Lender under the Loan Documents.
SECTION 6.5 INTENTIONALLY DELETED.
6.6 SECURITY INTEREST IN FUNDS.
6.6.1 GRANT OF SECURITY INTEREST . Borrower shall be the owner
of the Required Repair Funds, the Tax Funds, the Insurance Premium Funds and the
Capital Expenditures Funds. Borrower hereby pledges, assigns and grants a
security interest to Lender, as security for payment of the Debt and the
performance of all other terms, conditions and covenants of the Loan Documents
on Borrower's part to be paid and performed, in all of Borrower's right, title
and interest in and to the Required Repair Funds, the Tax Funds, the Insurance
Premium Funds and the Capital Expenditures Funds. The Required Repair Funds, the
Tax Funds, the Insurance Premium Funds and the Capital Expenditure Funds shall
be under the sole dominion and control of Lender.
6.6.2 INCOME TAXES . Borrower shall report on its federal,
state and local income tax returns all interest or income accrued on the
Required Reserve Funds, Tax Funds, Insurance Premium Funds and Capital
Expenditure Funds.
6.6.3 PROHIBITION AGAINST FURTHER ENCUMBRANCE . Borrower shall
not, without the prior consent of Lender, further pledge, assign or grant any
security interest in the Required Repair Funds, the Tax Funds, the Insurance
Premium Funds and the Capital Expenditures Funds or permit any lien or
encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Lender as the secured party, to be
filed with respect thereto.
SECTION 6.7 CASH MANAGEMENT.
6.7.1 LOCKBOX ACCOUNT. On or before the Closing Date, Borrower
shall open an account for each of the Individual Properties (the "LOCKBOX
ACCOUNTS") with Agent. The Lockbox Accounts shall be in Lender's name, or at
Lender's option, in the Servicer's name. The Lockbox Accounts shall be under the
sole dominion and control of Lender. The Lockbox Accounts will be opened and
maintained as an Eligible Account.
-66-
73
6.7.2 DEPOSITS INTO LOCKBOX ACCOUNT. Borrower shall cause all
Tenants at all Properties to pay Rent directly into the Lockbox Account for
their respective Individual Property on or before the date such Rent is due
under the terms of the applicable Lease. On the Closing Date, Borrower shall
send a notice, substantially in the form of Schedule VI hereto, to all Tenants
at all Properties directing them to pay all Rent into the respective Lockbox
Account. All sums deposited into the Lockbox Accounts shall be swept daily into
an account (the "Cash Management Account") established by Borrower with Agent on
or before the Closing Date (the Cash Management Account to be held and
administered in accordance with the Cash Management Agreement). The Cash
Management Account shall be in Lender's name, or at Lender's option, in the
Servicer's name. The Cash Management Account shall be under the sole dominion
and control of Lender. The Cash Management Account will be opened and maintained
as an Eligible Account. Neither the Lockbox Accounts, the Cash Management
Account nor the Cash Management Agreement shall alter or diminish in any way
Borrower's obligation to make timely payment and deposits of all sums required
to be paid or deposited under any Loan Document.
SECTION 6.8 SERVICER.
At the option of Lender, the Loan may be serviced by a
servicer (the "SERVICER") selected by Lender and Lender may delegate all or any
portion of its responsibilities under this Agreement and the other Loan
Documents to the Servicer pursuant to a servicing agreement (the "SERVICING
AGREEMENT") between Lender and Servicer. Lender shall be responsible for any
set-up fees or any other initial costs relating to or arising under the
Servicing Agreement and for payment of the monthly servicing fee due to the
Servicer under the Servicing Agreement.
VII. DEFAULTS
SECTION 7.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of
default hereunder (an "EVENT OF DEFAULT"):
(i) if any portion of the Debt is not paid when due;
(ii) if any of the Taxes or Other Charges are not paid
when the same are due and payable;
(iii) if the Policies are not kept in full force and effect,
or if certified copies of the Policies are not delivered to Lender upon request;
(iv) if Borrower transfers or encumbers any portion of the
Properties without Lender's prior written consent;
(v) if any representation or warranty made by Borrower herein
or in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material respect as
-67-
74
of the date the representation or warranty was made, and, provided such default
is not related to the bankruptcy or insolvency of Borrower or any constituent
member of Borrower, such default is not cured within 5 days after notice;
(vi) if Borrower shall make an assignment for the benefit
of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed
for Borrower or if Borrower shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower, or if any proceeding for
the dissolution or liquidation of Borrower shall be instituted; provided,
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower, upon the same not being
discharged, stayed or dismissed within thirty (30) days;
(viii) if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or therein
in contravention of the Loan Documents;
(ix) if Borrower breaches any covenant contained in
Section 3.1.30 hereof;
(x) with respect to any term, covenant or provision set
forth herein which specifically contains a notice requirement or grace period,
if Borrower shall be in default under such term, covenant or condition after the
giving of such notice or the expiration of such grace period;
(xi) if any of the assumptions contained in the Insolvency
Opinion, or in any other "non-consolidation" opinion delivered to Lender in
connection with the Loan, or in any other "non-consolidation" delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect;
(xii) if Borrower shall continue to be in Default under any
of the other terms, covenants or conditions of this Agreement not specified in
subsections (i) to (xi) above, for ten (10) days after notice to Borrower from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have commenced to cure such Default within such
30-day period and thereafter diligently and expeditiously proceeds to cure the
same, such 30-day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days; or
(xiii) if there shall be a default under any of the other Loan
Documents beyond any applicable cure periods contained in such documents,
whether as to Borrower or any of the Properties, or if any other such event
shall occur or condition shall exist, if the effect of such event or condition
is to accelerate the maturity of any portion of the Debt or to permit Lender to
accelerate the maturity of all or any portion of the Debt;
-68-
75
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vi), (vii) or (viii) above) and at any
time thereafter the Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, Lender may take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower and in
and to all or any of the Properties, including, without limitation, declaring
the Debt to be immediately due and payable, and Lender may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower and any or all of the Properties, including, without limitation, all
rights or remedies available at law or in equity; and upon any Event of Default
described in clauses (vi), (vii) or (viii) above, the Debt and all other
obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
SECTION 7.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to all or any of the Properties. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing (i) Lender is not subject to any "one
action" or "election of remedies" law or rule, and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted all of its remedies against the Properties and
each Mortgage has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.
(b) With respect to Borrower and the Properties, nothing
contained herein or in any other Loan Document shall be construed as requiring
Lender to resort to any Individual Property for the satisfaction of any of the
Debt in preference or priority to any other Individual Property, and Lender may
seek satisfaction out of all of the Properties or any part thereof, in its
absolute discretion in respect of the Debt. In addition, Lender shall have the
right from time to time to partially foreclose the Mortgages in any manner and
for any amounts secured by the Mortgages then due and payable as determined by
Lender in its sole discretion including, without limitation, the following
circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal and
interest, Lender may foreclose one or more of the Mortgages to recover such
delinquent
-69-
76
payments, or (ii) in the event Lender elects to accelerate less than the entire
outstanding principal balance of the Loan, Lender may foreclose one or more of
the Mortgages to recover so much of the principal balance of the Loan as Lender
may accelerate and such other sums secured by one or more of the Mortgages as
Lender may elect. Notwithstanding one or more partial foreclosures, the
Properties shall remain subject to the Mortgages to secure payment of sums
secured by the Mortgages and not previously recovered.
(c) Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "SEVERED LOAN DOCUMENTS") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender's intent to exercise its
rights under such power. Except as may be required in connection with a
securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents, and
(ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.
SECTION 7.3 REMEDIES CUMULATIVE.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.
-70-
77
VIII. SALE AND SECURITIZATION OF MORTGAGES
SECTION 8.1 SALE OF MORTGAGES AND SECURITIZATION.
(a) Lender shall have the right, at Lender's option, (i) to
sell or otherwise transfer the Loan and the Loan Documents as a whole loan, (ii)
to sell a participation interest in the Loan and the Loan Documents or (iii) to
securitize the Loan in a single asset securitization or a pooled loan
securitization. (The transaction referred to in clauses (i), (ii) and (iii)
shall hereinafter be referred to collectively as "SECONDARY MARKET TRANSACTIONS"
and the transaction referred to in clause (iii) shall hereinafter be referred to
as a "SECURITIZATION". Any certificates or other securities issued in connection
with a Securitization are hereinafter referred to as "SECURITIES").
(b) At the request of Lender, Borrower shall use reasonable
efforts to satisfy the market standards to which Lender customarily adheres or
which may be reasonably required in the marketplace or by the Rating Agencies in
connection with any Secondary Market Transactions, including, without
limitation, to:
(i)(A) provide such financial and other information with
respect to the Properties, the Borrower and the Manager, (B) provide
budgets relating to the Properties and (C) to perform or permit or cause to be
performed or permitted such site inspection, appraisals, market studies,
environmental reviews and reports (Phase I's and, if appropriate, Phase II's),
engineering reports and other due diligence investigations of the Properties, as
may be reasonably requested by Lender or the Rating Agencies or as may be
necessary or appropriate in connection with any Secondary Market Transactions
(the "PROVIDED INFORMATION"), together, if customary, with appropriate
verification of the Provided Information through letters of auditors or opinions
of counsel acceptable to the Lender and the Rating Agencies;
(ii) opinions of counsel, which may be relied upon by
Lender, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation, fraudulent conveyance, and true sale
or any other opinion customary in Secondary Market Transactions with respect to
the Properties and Borrower and its affiliates, which counsel and opinions shall
be reasonably satisfactory to Lender and the Rating Agencies;
(iii) make such representations and warranties as of the
closing date of the Secondary Market Transaction with respect to the
Properties, Borrower, and the Loan Documents as are customarily provided in
Secondary Market Transactions and as may be reasonably requested by the Lender
or the Rating Agencies and consistent with the representations and warranties
made in the Loan Documents; and
(iv) execute such amendments to the Loan Documents and
Borrower's organizational documents, enter into a lockbox or similar
arrangement with respect to the Rents and establish and fund such reserve funds
as may be requested by Lender or the Rating Agencies or otherwise to effect the
Secondary Market Transaction; provided, however, that the Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate, the stated maturity or the amortization of
principal
-71-
78
as set forth herein or in the Note, or (ii) modify or amend any other material
economic term of the Loan.
(c) All third party costs and expenses incurred by Lender in
connection with the Securitization or other sale or transfer of the Loan for
which Borrower would not otherwise be responsible under the Loan Documents
absent the Securitization and all additional reasonable third party costs and
expenses incurred by Borrower in connection with the Securitization or other
sale or transfer of the Loan for which Borrower would not otherwise be
responsible under the Loan Documents absent the Securitization shall be paid by
Lender.
SECTION 8.2 SECURITIZATION INDEMNIFICATION.
(a) Borrower understands that certain of the Provided
Information may be included in disclosure documents in connection with the
Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a "DISCLOSURE DOCUMENT") and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "SECURITIES ACT"), or
the Securities and Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, the Borrower will cooperate with
Lender in updating the Disclosure Document by providing all current information
necessary to keep the Disclosure Document accurate and complete in all material
respects.
(b) Borrower agrees to provide in connection with each of (i)
a preliminary and a final private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an indemnification
certificate (A) certifying that Borrower has carefully examined such memorandum
or prospectus, as applicable, including without limitation, the sections
entitled "Special Considerations," "Description of the Mortgages," "Description
of the Mortgage Loans and Mortgaged Properties," "The Manager," "The Borrower"
and "Certain Legal Aspects of the Mortgage Loan," and that such sections (and
any other sections reasonably requested) as such sections relate to the
Properties, the Loan Documents, Borrower, Manager and/or this Loan, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 8.2, Lender hereunder shall include its
officers and directors), the affiliate of Xxxxxx Xxxxxxx, Xxxx Xxxxxx Discover &
Co. ("XXXXXX XXXXXXX"), that has filed the registration statement relating to
the Securitization (the "REGISTRATION STATEMENT"), each of its directors, each
of its officers who have signed the Registration Statement and each person or
entity who controls the affiliate within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the "XXXXXX
XXXXXXX GROUP"), and Xxxxxx Xxxxxxx, each of its directors and each person who
controls Xxxxxx Xxxxxxx within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act (collectively, the "UNDERWRITER GROUP") for
any losses, claims, damages or liabilities (collectively, the "LIABILITIES") to
which Lender, the Xxxxxx Xxxxxxx Group or the Underwriter Group may become
subject insofar as the Liabilities arise out of or are based upon any untrue
-72-
79
statement or alleged untrue statement of any material fact contained in such
sections (as such sections relate to the Properties, the Loan Documents,
Borrower, Manager and/or this Loan) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated in such sections (as such sections relate to the Properties, the Loan
Documents, Borrower, Manager and/or this Loan) or necessary in order to make the
statements in such sections (as such sections relate to the Properties, the Loan
Documents, Borrower, Manager and/or this Loan) or in light of the circumstances
under which they were made, not misleading and (C) agreeing to reimburse Lender,
the Xxxxxx Xxxxxxx Group and the Underwriter Group for any legal or other
expenses reasonably incurred by Lender and Xxxxxx Xxxxxxx in connection with
investigating or defending the Liabilities; provided, however, that Borrower
will be liable in any such case under clauses (B) or (C) above only to the
extent that any such loss claim, damage or liability arises out of or is based
upon any such untrue statement or omission made therein in reliance upon and in
conformity with information furnished to Lender by or on behalf of Borrower in
connection with the preparation of the memorandum or prospectus or in connection
with the underwriting of the debt, including, without limitation, financial
statements of Borrower, operating statements, rent rolls, environmental site
assessment reports and property condition reports with respect to the
Properties. This indemnity agreement will be in addition to any liability which
Borrower may otherwise have.
(c) In connection with filings under the Exchange Act,
Borrower agrees to indemnify (i) Lender, the Xxxxxx Xxxxxxx Group and the
Underwriter Group for Liabilities to which Lender, the Xxxxxx Xxxxxxx Group or
the Underwriter Group may become subject insofar as the Liabilities arise out of
or are based upon the omission or alleged omission to state in the Provided
Information a material fact required to be stated in the Provided Information in
order to make the statements in the Provided Information, in light of the
circumstances under which they were made not misleading and (ii) reimburse
Lender, the Xxxxxx Xxxxxxx Group or the Underwriter Group for any legal or other
expenses reasonably incurred by Lender, the Xxxxxx Xxxxxxx Group or the
Underwriter Group in connection with defending or investigating the Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 8.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and its notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party under this Section 8.2 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified
-73-
80
party shall have reasonably concluded that there are any legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party to parties. The indemnifying party shall not be liable
for the expenses of more than one separate counsel unless an indemnified party
shall have reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to another indemnified
party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8.2(b) or
(c) is for any reason held to be unenforceable by an indemnified party in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 8.2(b) or (c), the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages or liabilities (or action in respect thereof); provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) Xxxxxx Xxxxxxx'x and Borrower's
relative knowledge and access to information concerning the matter with respect
to which claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f) The liabilities and obligations of both Borrower and
Lender under this Section 8.2 shall survive the termination of this Agreement
and the satisfaction and discharge of the Debt.
SECTION 8.3 RATING SURVEILLANCE.
The Borrower will retain the Rating Agencies to provide rating
surveillance services on any certificates issued in a Securitization. Such
rating surveillance will be at the expense of Lender.
-74-
81
IX. MISCELLANEOUS
SECTION 9.1 SURVIVAL.
This Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
SECTION 9.2 LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
-75-
82
SECTION 9.3 GOVERNING LAW.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT XXXXXX XXXXXXXXX, ESQ., X/X XXXX, XXXXXX XXX XXXXXX, 00XX XXXXX, 000
XXXXX XXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE
-76-
83
MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF
NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS
OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS
FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF
ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.
SECTION 9.4 MODIFICATION, WAIVER IN WRITING.
All notices, demands, waivers, consents or other
communications required or permitted hereunder shall be in writing. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
SECTION 9.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the Note
or under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
-77-
84
SECTION 9.6 NOTICES.
All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed as follows (or at such other address and person as
shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section):
If to Lender: Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile No. (000) 000-0000
with a copy to: Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxxxxxxx Xxxxx,
Esq. Facsimile No. (000) 000-0000
If to Borrower: Ramco Properties Associates Limited
Partnership 00000 Xxxxxxxxxxxx
Xxxxxxx, Xxxxx 000 Xxxxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Facsimile No. (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile No. (000) 000-0000
A notice shall be deemed to have been given: in the case of
hand delivery, at the time of delivery; in the case of registered or certified
mail, when delivered or the first attempted delivery on a Business Day; or in
the case of expedited prepaid delivery and telecopy, upon the first attempted
delivery on a Business Day.
-78-
85
SECTION 9.7 TRIAL BY JURY.
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
SECTION 9.8 HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 9.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
SECTION 9.10 PREFERENCES.
Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
-79-
86
SECTION 9.11 WAIVER OF NOTICE.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
SECTION 9.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where by law or under this Agreement or the other Loan Documents, Lender or such
agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages, and Borrower's sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
-80-
87
SECTION 9.13 EXPENSES; INDEMNITY.
(a) Borrower covenants and agrees to pay, or if Borrower fails
to pay to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions requested by Lender as to any legal
matters arising under this Agreement or the other Loan Documents with respect to
the Properties); (ii) Borrower's ongoing performance of and compliance with
Borrower's respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) Lender's ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Lender; (v) securing Borrower's compliance with any requests made
pursuant to Section 10.1 hereof; (vi) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Properties, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Properties or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any
cost and expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account.
(b) Borrower shall indemnify, defend and hold harmless Lender
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for Lender in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not Lender shall be designated a party thereto), that may be imposed
on, incurred by, or asserted against Lender in any manner relating to or arising
out of (i) any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "INDEMNIFIED LIABILITIES"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise
-81-
88
from the gross negligence, illegal acts, fraud or willful misconduct of Lender.
To the extent that the undertaking to indemnify, defend and hold harmless set
forth in the preceding sentence may be unenforceable because it violates any law
or public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Lender.
SECTION 9.14 SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as
a part of this Agreement with the same effect as if set forth in the body
hereof.
SECTION 9.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement,
the Note and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to such documents which
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
SECTION 9.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Properties other than that of
mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and the Borrower and nothing contained in this Agreement
or the other Loan Documents shall be deemed to confer upon anyone other than the
Lender and the Borrower any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein or therein. All
conditions to the obligations of Lender to make the Loan hereunder are imposed
solely and exclusively for the benefit of Lender and no other Person shall have
standing to require satisfaction of such conditions in accordance with their
terms or be entitled to assume that Lender will refuse to make the Loan in the
absence of strict compliance with any or all thereof and no other Person shall
under any circumstances be deemed to be a beneficiary of such conditions, any or
all of which may be freely waived in whole or in part by Lender if, in Lender's
sole discretion, Lender deems it advisable or desirable to do so.
-82-
89
SECTION 9.17 PUBLICITY.
All news releases, publicity or advertising by Borrower or
their Affiliates through any media intended to reach the general public which
refers to the Loan Documents or the financing evidenced by the Loan Documents,
to the Lender, Xxxxxx Xxxxxxx Mortgage Capital, Inc., or any of their Affiliates
shall be subject to the prior written approval of Lender.
SECTION 9.18 CROSS-DEFAULT; CROSS-COLLATERALIZATION; WAIVER OF
MARSHALLING OF ASSETS.
(a) The Borrower acknowledges that Lender has made the Loan to
the Borrower upon the security of its collective interest in the Properties and
in reliance upon the aggregate of the Properties taken together being of greater
value as collateral security than the sum of the Properties taken separately.
The Borrower agrees that the Mortgages are and will be cross-collateralized and
cross-defaulted with each other so that (i) an Event of Default under any of the
Mortgages shall constitute an Event of Default under each of the other Mortgages
which secure the Note; (ii) an Event of Default under the Note or this Loan
Agreement shall constitute an Event of Default under each Mortgage; and (iii)
each Mortgage shall constitute security for the Note as if a single blanket lien
were placed on all of the Properties as security for the Note.
(b) To the fullest extent permitted by law, Borrower, for
itself and its successors and assigns, waives all rights to a marshalling of the
assets of Borrower, Borrower's partners and others with interests in Borrower,
and of the Properties, or to a sale in inverse order of alienation in the event
of foreclosure of all or any of the Mortgages, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Properties for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Properties in preference to every other claimant whatsoever. In addition,
Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of any or all of the Mortgages, any equitable right otherwise
available to the Borrower which would require the separate sale of the
Properties or require Lender to exhaust its remedies against any Individual
Property or any combination of the Properties before proceeding against any
other Individual Property or combination of Properties; and further in the event
of such foreclosure the Borrower does hereby expressly consents to and
authorizes, at the option of the Lender, the foreclosure and sale either
separately or together of any combination of the Properties.
SECTION 9.19 WAIVER OF COUNTERCLAIM.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.
-83-
90
SECTION 9.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this
Loan Agreement and any of the other Loan Documents, the provisions of this Loan
Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower acknowledges that, with respect to the Loan, Borrower
shall rely solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender's exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of the Borrower or its affiliates.
SECTION 9.21 BROKERS AND FINANCIAL ADVISORS.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower hereby
agrees to indemnify, defend and hold Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind (including Lender's
attorneys' fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in connection
with the transactions contemplated herein. The provisions of this Section 10.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.
-84-
91
SECTION 9.22 MANAGEMENT OF THE PROPERTY; TERMINATION OF MANAGER.
(a) The Properties are operated under the terms and conditions
of the Management Agreements. Lender hereby acknowledges that Manager is a
Qualifying Manager and the terms of the Management Agreements are acceptable to
Lender. Borrower shall (i) diligently perform and observe all of the terms,
covenants and conditions of the Management Agreements on the part of Borrower to
be performed and observed to the end that all things shall be done which are
necessary to keep unimpaired the rights of Borrower under the Management
Agreements and (ii) promptly notify Lender of the giving of any notice to
Borrower of any default by Borrower in the performance or observance of any of
the terms, covenants or conditions of the Management Agreements on the part of
Borrower to be performed and observed and deliver to Lender a true copy of each
such notice. If Borrower shall default in the performance or observance of any
material term, covenant or condition of the Management Agreements on the part of
Borrower to be performed or observed, then, without limiting the generality of
the other provisions of this Agreements or the other Loan Documents, and without
waiving or releasing Borrower from any of its obligations hereunder, Lender
shall have the right, but shall be under no obligation, to pay any sums and to
perform any act or take any reasonable action as may be appropriate to cause all
the material terms, covenants and conditions of the Management Agreements on the
part of Borrower to be performed or observed to be promptly performed or
observed in all material respects on behalf of Borrower, to the end that the
rights of Borrower in, to and under the Management Agreements shall be kept
unimpaired and free from default. Lender and any Person designated by Lender
shall have, and are hereby granted, the right to enter upon the Property at any
time and from time to time for the purpose of taking any such action. If the
Manager under any Management Agreement shall deliver to Lender a copy of any
notice sent to Borrower of default under such Management Agreement, such notice
shall constitute full protection to Lender for any action taken or omitted to be
taken by Lender in good faith, in reliance thereon. Borrower shall from time to
time, obtain from the Manager under the Management Agreements such certificates
of estoppel with respect to compliance by Borrower with the terms of the
Management Agreements as may be requested by Lender. Borrower shall exercise
each individual option, if any, to extend or renew the term of any Management
Agreement upon demand by Lender made at any time within one (1) year of the last
day upon which any such option may be exercised, and Borrower hereby expressly
authorizes and appoints Lender its attorney-in-fact to exercise any such option
in the name of and upon behalf of Borrower, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest. Any sums
expended by Lender pursuant to this Section shall bear interest at the Default
Rate from the date such cost is incurred to the date of payment to Lender, shall
be deemed to constitute a portion of the Debt, shall be secured by the lien of
this Security Instrument and the other Loan Documents and shall be immediately
due and payable upon demand by Lender therefor.
(b) Borrower shall not surrender the Management Agreements,
consent to the assignment by the Manager of its interest under the Management
Agreements, or terminate or cancel the Management Agreements, modify, change,
supplement, alter or amend the Management Agreements, in any respect, either
orally or in writing or change, replace or terminate the Manager or enter into
new management agreements with the existing or any proposed Qualifying Managers
without Lender's consent. Borrower shall notify Lender and the
-85-
92
Rating Agencies in writing (and shall deliver a copy of the proposed management
agreement) of any entity proposed to be designated as a Qualifying Manager of
any Property no less than thirty (30) days before such Qualifying Manager begins
to manage such Property and shall obtain prior to any appointment of a
Qualifying Manager Lender's approval of such Qualifying Manager and a written
confirmation from the Rating Agencies that retention of such other Person as a
Qualifying Manager shall not result in a downgrade, withdrawal or qualification
of the then current ratings of any securities backed in part by the Mortgage.
Upon the retention of a Qualifying Manager, Lender shall have the right to
approve any new management agreement with such Qualifying Manager.
(c) Lender shall have the right to require Borrower to replace
any existing Qualifying Manager with a firm chosen by Borrower and approved by
Lender upon the occurrence of any one or more of the following events: (i) six
months after the Anticipated Repayment Date if Lender determines, in its sole
discretion, that the Properties are not being managed in a manner similar to
comparable properties managed by other professional property managers engaged in
a similar business, (ii) at any time following the occurrence of an Event of
Default, (iii) if at any time the Debt Service Coverage Ratio falls below 1.20
to 1.0 (the "MANAGER TERMINATION RATIO"), as determined by Lender in its sole
discretion on a quarterly basis and/or (iv) at any time that the Qualifying
Manager has engaged in (x) gross negligence, (y) fraud or (z) willful misconduct
arising out of or in connection with its management agreement with Borrower,
unless any such gross negligence or willful misconduct (but not fraud) is
remedied by the Qualifying Manager within ten (10) days following receipt of
notice from Lender. Notwithstanding the provisions of clause (c)(iii) above,
Borrower shall nevertheless have the right to retain such existing Qualifying
Manager if, prior to the replacement of such existing Qualifying Manager by
Lender, Borrower shall provide additional collateral in the form of Cash and
Cash Equivalents and/or Letters of Credit for a portion of the Loan,
satisfactory to Lender, such that the Manager Termination Ratio can be
maintained on the Loan Amount net of such additional collateral. Lender, in its
discretion, may require Borrower to increase the additional collateral to the
extent such Debt Service Coverage Ratio continues to decline in subsequent
quarters. Such additional collateral will only be released to Borrower when the
Debt Service Coverage Ratio equals or exceeds the Manager Termination Ratio for
three consecutive months and provided no Event of Default has occurred. All
additional collateral provided under this section shall be additional security
for the repayment of the Indebtedness and may be withdrawn by Lender upon the
occurrence of an Event of Default and applied by Lender in such order and
priority as Lender may determine. All calculations of Debt Service Coverage
Ratio shall be made by Lender in its reasonable discretion. Borrower shall
provide Lender with all necessary information required to make such
determination.
-86-
93
SECTION 9.23 EXCULPATION.
Subject to the qualifications below, Lender shall not enforce
the liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Mortgages or the other Loan Documents
by any action or proceeding wherein a money judgment shall be sought against
Borrower, except that Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest under the Note, this Agreement,
the Mortgages and the other Loan Documents, or in the Properties, the Rents, or
any other collateral given to Lender pursuant to the Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Properties, in the Rents and in any other collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the
Mortgages and the other Loan Documents, agrees that it shall not xxx for, seek
or demand any deficiency judgment against Borrower in any such action or
proceeding under or by reason of or under or in connection with the Note, this
Agreement, the Mortgages or the other Loan Documents. The provisions of this
Section shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under any of the Mortgages; (c) affect the validity or
enforceability of or any guaranty made in connection with the Loan or any of the
rights and remedies of the Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of any of the
Assignments of Leases; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by each of the Mortgages or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against all of the
Properties; or (g) constitute a waiver of the right of Lender to enforce the
liability and obligation of Borrower, by money judgment or otherwise, to the
extent of any loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including attorneys' fees and costs reasonably incurred)
arising out of or in connection with the following:
(i) fraud or intentional misrepresentation by Borrower
or any guarantor in connection with the Loan;
(ii) the willful misconduct of Borrower;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgages
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;
(iv) the removal or disposal of any portion of the
Properties after an Event of Default;
(v) the misapplication or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Properties, (B) any Awards
-87-
94
or other amounts received in connection with the Condemnation of all or a
portion of the Properties, or (C) any Rents following an Event of Default;
(vi) failure by Borrower to pay charges for labor or materials
or other charges contracted for by Borrower or on behalf of Borrower that can
create liens on any portion of the Properties; and
(vii) any security deposits, advance deposits or any other
deposits collected with respect to the Properties which are not delivered to
Lender upon a foreclosure of the Properties or action in lieu thereof, except to
the extent any such security deposits were applied in accordance with the terms
and conditions of any of the Leases prior to the occurrence of the Event of
Default that gave rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in this Agreement,
the Note or any of the Loan Documents, (A) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt secured by the Mortgages or to require that all collateral
shall continue to secure all of the Debt owing to Lender in accordance with the
Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the
event that: (i) the first full monthly payment of principal and interest under
the Note is not paid when due; (ii) Borrower fails to permit on-site inspections
of the Properties, fails to provide financial information, fails to maintain its
status as a single purpose entity or fails to appoint a new property manager
upon the request of Lender after an Event of Default, each as required by, and
in accordance with the terms and provisions of, this Loan Agreement and the
Mortgages; (iii) Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Properties; or
(iv) Borrower fails to obtain Lender's prior written consent to any assignment,
transfer, or conveyance of the Properties or any interest therein as required by
the Mortgage.
SECTION 9.24 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the Commitment
Letter dated October 13, 1997 (as amended) between Borrower and Lender are
superseded by the terms of this Agreement and the other Loan Documents.
-88-
95
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
RAMCO PROPERTIES ASSOCIATES LIMITED
PARTNERSHIP,
a Michigan limited partnership
By: Ramco Properties GP, L.L.C.,
a Michigan limited liability company
By: Ramco SPC, Inc.,
a Michigan corporation, managing member
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxxxx, President
XXXXXX FINANCIAL CORPORATION
By: /s/ Authorized Officer
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
96
SCHEDULE I
ALLOCATED LOAN AMOUNTS
Allocated
Property Name State Loan Amount
------------- ----- -----------
Fraser Shopping Center Fraser, Michigan $ 2,654,000
Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx $ 3,622,000
Xxxx Xxxxx Center Troy, Ohio $ 7,350,000
Northwest Crossing Knoxville, Tennessee $ 8,552,000
Ridgeview Crossing Elken, North Carolina $ 6,146,000
Xxxxxxx Xxxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx $ 8,517,000
Xxxx Xxxxx Xxxxx Xxxxxx Xxxx Xxxxx, Xxxxxxxxx $13,159,000
-----------
TOTAL $50,000,000
===========
I-1
97
SCHEDULE II
-----------
REQUIRED REPAIRS
DESCRIPTION COST DEPOSIT AMOUNT
------------------------------------------------------------------------------------------------------------------------
RIDGEVIEW CROSSING SHOPPING CENTER
ELKIN, NORTH CAROLINA
------------------------------------------------------------------------------------------------------------------------
Repair section of asphalt $ 20,000 $ 25,000
pavement
Remove broken concrete curbing, $ 7,000 $ 8,750
repair and seal new curbing
Remove roof and replace $ 12,000 $ 16,000
covering, repair walls, flashings
and eliminate leaks
Repair leaks and seal joints at $ 5,000 $ 6,250
parapet wall areas to eliminate
moisture penetration
Repair roof parapet walls at $ 3,000 $ 3,750
smaller units to eliminate moisture
penetration
Re-stripe and convert two spaces $ 3,000 $ 3,750
---------- ----------
to van accessible handicap spaces
for a total of three spaces with
signs
TOTAL $ 50,000 $ 62,500
========== ==========
------------------------------------------------------------------------------------------------------------------------
XXXXX XXXXX XXXXXXXX XXXXXX
XXXXXXXXX, XX
------------------------------------------------------------------------------------------------------------------------
Repair walls, flashing and seal $ 30,000 $ 37,500
roof and equipment opening of the
larger (Wal-Mart) anchor unit
Modify 2 spaces into van- $ 3,000 $ 3,750
---------- ----------
accessible handicap spaces
TOTAL $ 33,000 $ 41,250
========== ==========
------------------------------------------------------------------------------------------------------------------------
TAYLORS SQUARE SHOPPING CENTER
TAYLORS, SOUTH CAROLINA
------------------------------------------------------------------------------------------------------------------------
Fill base areas, regrade and $ 5,000 $ 6,250
reseed where needed along slope
Repair rear masonry wall from $ 13,500 $ 16,875
moisture at select locations and
repaint
Reseal BUR roof and perform $ 44,000 $ 55,000
repairs on EPDM roof where
required
Restrip van accessible spaces in $ 3,500 $ 4,375
---------- ----------
the parking lot and place handicap
parking signs and posts
TOTAL $ 66,000 $ 82,500
========== ==========
II-1
98
------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXXXX XXXXXXXX XXXXXX
XXXXXXXXX, XX
------------------------------------------------------------------------------------------------------------------------
Reseal the asphalt pavement in $ 7,500 $ 7,375
selected areas where repairs were
made. Estimated 30% of
pavement and seal longitudinal
joints.
Repair roof bridging at Good's. $ 25,400 $ 31,750
Repair damages at canopy soffit at $ 80,000 $ 100,000
---------- ---------
select locations.
TOTAL $ 112,900 $ 141,125
========== ==========
------------------------------------------------------------------------------------------------------------------------
FRASER SHIPPING CENTER
FRASER, MI
------------------------------------------------------------------------------------------------------------------------
Repair concrete surfaces, replace $ 4,000 $ 5,000
sealangs
Asphalt pavement rehabilitation $ 70,000 $ 87,500
Repair coal tar built-up roof $ 8,000 $ 10,000
membrane, flashings & sheet
metal
Replace modified bitumen roofing $ 9,000 $ 11,250
on canopies
Replace shingle roof on Unit #1 $ 4,000 $ 5,000
Replace metal coping on Unit #1 $ 10,000 $ 12,500
---------- ---------
TOTAL $ 105 000 $ 131,250
========== ==========
------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxx Xxxxxx
Xxxx, XX
------------------------------------------------------------------------------------------------------------------------
Routine maintenance of Asphalt $ 5,000 $ 6,250
---------- ---------
surfaces
TOTAL $ 5,000 $ 6,250
========== =========
------------------------------------------------------------------------------------------------------------------------
West Allis Town Center
West Allis, WI
------------------------------------------------------------------------------------------------------------------------
Brick masonry tuck pointing $ 4,000 $ 5,000
Concrete base repair program $ 5,000 $ 6,250
Clean and repaint ornamental $ 8,000 $ 10,000
steel, covered walkway
Sealant repairs, Kohl's entrance $ 3,000 $ 3,750
---------- ---------
TOTAL $ 20,000 $ 25,000
========== =========
$ 396,900 $ 496,125
II-2
99
SCHEDULE III
RENT ROLL
III-1
100
SCHEDULE IV
POST-CLOSING SNDA TENANTS
IV-1
101
SCHEDULE V
LETTER OF INSTRUCTION
____________ ___, 199__
[TENANTS UNDER LEASES]
Re: Lease dated ________ between _______________,
as Landlord, and _______________, as Tenant,
concerning premises known as ________________
Gentlemen:
This letter shall constitute notice to you that the
undersigned has granted a security interest in the captioned lease and all
rents, additional rent and all other monetary obligations to landlord thereunder
(collectively, "RENT") in favor of Xxxxxx Xxxxxxx Mortgage Capital Inc., as
lender ("LENDER"), to secure certain of the undersigned's obligations to Lender.
The undersigned hereby irrevocably instructs and authorizes you to disregard any
and all previous notices sent to you in connection with Rent and hereafter to
deliver by wire transfer of immediately available funds all Rent as follows:
Account No. ______________
[BANK WITH OPERATING ACCOUNT]
[BANK'S ADDRESS]
Attention: _________________
ABA# ____________________,
or at such other address and/or account as
shall be designated by Lender by written
notice to you.
IV-2
102
The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that Xxxxxx Xxxxxxx Mortgage
Capital Inc., under certain [DEEDS OF TRUST, MORTGAGES AND DEEDS TO SECURE DEBT
WITH ASSIGNMENT OF LEASES, SECURITY AGREEMENT AND FIXTURE FILING,] dated as of
the date hereof, from the undersigned in favor of Lender, or any successor
lender so identified by Lender, may by written notice to you rescind the
instructions contained herein.
Sincerely,
[BORROWER]
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges notice of the security interest of Lender and the
requirement to pay the Rent directly to Lender.
[TENANT]
By:
Name:
Its:
Dated as of: __________ ___, 199__
IV-3
103
SCHEDULE VI
CPA CERTIFICATION
INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING
-------------------------------------------
AGREED-UPON PROCEDURES
----------------------
[Lender]
We have performed the procedures enumerated below, which were agreed to by
Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Lender"), solely to assist the Lender
in evaluating the Defeasance of the notes described on Exhibit A annexed hereto
(the "Notes"). This agreed-upon procedures engagement was performed in
accordance with standards established by the American Institute of Certified
Public Accountants. The sufficiency of the procedures is solely the
responsibility of the specified users of the report. Consequently, we make no
representation regarding the sufficiency of the procedures described below,
either for the purpose for which this report has been requested or for any other
purpose.
The procedures we performed are as follows:
We have read the definition of Defeasance Eligible Investments in the Loan
Agreement between ________________________ and Xxxxxx Financial Corporation as
assigned to Lender, dated _____________, 1997 (the "Loan Agreement"), which
indicates that [type of collateral] constitutes Defeasance Eligible
Investments, as defined in the Loan Agreement.
We recalculated the interest due on the Notes, and found it to be in
agreement with the defeasance calculation ("Schedule") submitted to us by
____________ (Schedule attached).
We recalculated the total payment due on [date] in connection with all of the
Notes, by adding the amounts on the Schedule, and found it to be mathematically
correct.
We have examined trade confirmations dated _____________ indicating the
purchase by ___________________ totaling ____________________ face value of
[type of collateral] which mature on [date], and such is sufficient to cover
the total payment due on [date].
We were not engaged to, and did not, perform an examination, the objective of
which is the expression of an opinion on the aforementioned records.
Accordingly, we do not express such an opinion. Had we performed additional
procedures, other matters might have come to our attention that would have been
reported to you.
IV-4
104
This report is intended solely for the use of the Lender, and should not be used
by those who have not agreed to the procedures and taken responsibility for the
sufficiency of the procedures for their purposes.
[Name of CPA]
[Date]
IV-5
105
SCHEDULE VII
EXAMPLE OF AUDIT
IV-6
106
SCHEDULE VIII
================================================================================
----------------------------
(Lender)
- and -
----------------------------
(Tenant)
--------------------------------------------------------------------------------
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
--------------------------------------------------------------------------------
Dated:
Location:
Section:
Block:
Lot:
County:
PREPARED BY AND UPON
RECORDATION RETURN TO:
Messrs. Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
File No.:
Title No.:
================================================================================
IV-7
107
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement") is made as of the ____ day of _______________, 199__ by and
between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., having an address at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender") and
___________________________________________________, having an address at
_________________________________________________________________ ("Tenant").
RECITALS:
A. Lender has made a loan in the approximate amount of
$_______ to Landlord (defined below), which Loan is given pursuant to the terms
and conditions of that certain loan agreement dated ________________, 19__,
between Lender and Landlord (the "Loan Agreement"). The Loan is evidenced by a
certain Promissory Note dated ________________, 19__, given by Landlord to
Lender (the "Note") and secured by a certain mortgage and security agreement
(the "Mortgage"), dated ______________, 19__, given by Landlord to Lender which
encumbers the fee estate of Landlord in certain premises described in Exhibit A
attached hereto (the "Property");
B. Tenant occupies a portion of the Property under and
pursuant to the provisions of a certain lease dated _________________, 19__
between _________________, as landlord ("Landlord") and Tenant, as tenant (the
"Lease"); and
C. Tenant has agreed to subordinate the Lease to the Mortgage
and to the lien thereof and Lender has agreed to grant non-disturbance to Tenant
under the Lease on the terms and conditions hereinafter set forth.
AGREEMENT:
For good and valuable consideration, Tenant and Lender agree
as follows:
Subordination. Tenant agrees that the Lease and all of the
terms, covenants and provisions thereof and all rights, remedies and options of
Tenant thereunder are and shall at all times continue to be subject and
subordinate in all respects to the Mortgage and to the lien thereof and all
terms, covenants and conditions set forth in the Mortgage and the Loan Agreement
including without limitation all renewals, increases, modifications, spreaders,
consolidations, replacements and extensions thereof and to all sums secured
thereby with the same force and effect as if the Mortgage and Loan Agreement had
been executed, delivered and (in the case of the Mortgage) recorded prior to the
execution and delivery of the Lease.
Non-Disturbance. Lender agrees that if any action or
proceeding is commenced by Lender for the foreclosure of the Mortgage or the
sale of the Property, Tenant shall not be named as a party therein unless such
joinder shall be required by law, provided, however, such joinder shall not
result in the termination of the Lease or disturb the Tenant's possession or use
of the premises demised thereunder, and the sale of the Property in any such
action or proceeding and the exercise by Lender of any of its other rights under
the Note, the Mortgage and the Loan Agreement shall be made subject to all
rights of Tenant under the Lease, provided that at the time of the commencement
of any such action or proceeding or at the time of any such sale or exercise of
any such other rights (a) the term of the Lease shall have commenced
108
pursuant to the provisions thereof, (b) Tenant shall be in possession of the
premises demised under the Lease, (c) the Lease shall be in full force and
effect and (d) Tenant shall not be in default under any of the terms, covenants
or conditions of the Lease or of this Agreement on Tenant's part to be observed
or performed.
Attornment. Lender and Tenant agree that if Lender shall
become the owner of the Property by reason of the foreclosure of the Mortgage or
the acceptance of a deed or assignment in lieu of foreclosure or otherwise, and
the conditions set forth in Section 2 above have been met at the time Lender
becomes owner of the Property, the Lease shall not be terminated or affected
thereby but shall continue in full force and effect as a direct lease between
Lender and Tenant upon all of the terms, covenants and conditions set forth in
the Lease and in that event, Tenant agrees to attorn to Lender and Lender agrees
to accept such attornment, provided, however, that the provisions of the
Mortgage and the Loan Agreement shall govern with respect to the disposition of
any casualty insurance proceeds or condemnation awards and Lender shall not be
(a) obligated to complete any construction work required to be done by Landlord
pursuant to the provisions of the Lease or to reimburse Tenant for any
construction work done by Tenant, (b) liable (i) for Landlord's failure to
perform any of its obligations under the Lease which have accrued prior to the
date on which Lender shall become the owner of the Property, or (ii) for any act
or omission of Landlord, whether prior to or after such foreclosure or sale, (c)
required to make any repairs to the Property or to the premises demised under
the Lease required as a result of fire, or other casualty or by reason of
condemnation unless Lender shall be obligated under the Lease to make such
repairs and shall have received sufficient casualty insurance proceeds or
condemnation awards to finance the completion of such repairs, (d) required to
make any capital improvements to the Property or to the premises demised under
the Lease which Landlord may have agreed to make, but had not completed, or to
perform or provide any services not related to possession or quiet enjoyment of
the premises demised under the Lease, (e) subject to any offsets, defenses,
abatements or counterclaims which shall have accrued to Tenant against Landlord
prior to the date upon which Lender shall become the owner of the Property, (f)
liable for the return of rental security deposits, if any, paid by Tenant to
Landlord in accordance with the Lease unless such sums are actually received by
Lender, (g) bound by any payment of rents, additional rents or other sums which
Tenant may have paid more than one (1) month in advance to any prior Landlord
unless (i) such sums are actually received by Lender or (ii) such prepayment
shall have been expressly approved of by Lender, (h) bound to make any payment
to Tenant which was required under the Lease, or otherwise, to be made prior to
the time Lender succeeded to Landlord's interest, (i) bound by any agreement
amending, modifying or terminating the Lease made without Lender's prior written
consent prior to the time Lender succeeded to Landlord's interest or (j) bound
by any assignment of the Lease or sublease of the Property, or any portion
thereof, made prior to the time Lender succeeded to Landlord's interest other
than if pursuant to the provisions of the Lease.
Notice to Tenant. After notice is given to Tenant by Lender
that the Landlord is in default under the Note and the Mortgage and that the
rentals under the Lease should be paid to Lender pursuant to the terms of the
assignment of leases and rents executed and delivered by Landlord to Lender in
connection therewith, Tenant shall thereafter pay to Lender or as directed by
the Lender, all rentals and all other monies due or to become due to Landlord
under the Lease and Landlord hereby expressly authorizes Tenant to make such
payments to Lender and
-2-
109
hereby releases and discharges Tenant from any liability to Landlord on account
of any such payments.
Lender's Consent. Tenant shall not, without obtaining the
prior written consent of Lender, (a) enter into any agreement amending,
modifying or terminating the Lease, (b) prepay any of the rents, additional
rents or other sums due under the Lease for more than one (1) month in advance
of the due dates thereof, (c) voluntarily surrender the premises demised under
the Lease or terminate the Lease without cause or shorten the term thereof, or
(d) assign the Lease or sublet the premises demised under the Lease or any part
thereof other than pursuant to the provisions of the Lease; and any such
amendment, modification, termination, prepayment, voluntary surrender,
assignment or subletting, without Lender's prior consent, shall not be binding
upon Lender.
Lender to Receive Notices. Tenant shall provide Lender with
copies of all written notices sent to Landlord pursuant to the Lease
simultaneously with the transmission of such notices to the Landlord. Tenant
shall notify Lender of any default by Landlord under the Lease which would
entitle Tenant to cancel the Lease or to an abatement of the rents, additional
rents or other sums payable thereunder, and agrees that, notwithstanding any
provisions of the Lease to the contrary, no notice of cancellation thereof or of
such an abatement shall be effective unless Lender shall have received notice of
default giving rise to such cancellation or abatement and shall have failed
within sixty (60) days after receipt of such notice to cure such default, or if
such default cannot be cured within sixty (60) days, shall have failed within
sixty (60) days after receipt of such notice to commence and thereafter
diligently pursue any action necessary to cure such default.
Notices. All notices or other written communications hereunder
shall be deemed to have been properly given (i) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof and confirmed by telephone by sender, (ii) one (1) Business Day
(hereinafter defined) after having been deposited for overnight delivery with
any reputable overnight courier service, or (iii) three (3) Business Days after
having been deposited in any post office or mail depository regularly maintained
by the U.S. Postal Service and sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to Tenant: __________________________
__________________________
__________________________
Attention: _________________
Facsimile No. _____________
If to Lender: Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ___________________
Facsimile No. (212) ___________
-3-
110
With a copy to: Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxxxxxxx Xxxxx
Facsimile No. (000) 000-0000
or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section , the term "Business Day" shall
mean a day on which commercial banks are not authorized or required by law to
close in New York, New York.
Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Joint and Several Liability. If Tenant consists of more than
one person, the obligations and liabilities of each such person hereunder shall
be joint and several. This Agreement shall be binding upon and inure to the
benefit of Lender and Tenant and their respective successors and assigns.
Definitions. The term "Lender" as used herein shall include
the successors and assigns of Lender and any person, party or entity which shall
become the owner of the Property by reason of a foreclosure of the Mortgage or
the acceptance of a deed or assignment in lieu of foreclosure or otherwise. The
term "Landlord" as used herein shall mean and include the present landlord under
the Lease and such landlord's predecessors and successors in interest under the
Lease, but shall not mean or include Lender. The term "Property" as used herein
shall mean the Property, the improvements now or hereafter located thereon and
the estates therein encumbered by the Mortgage.
No Oral Modifications. This Agreement may not be modified in
any manner orterminated except by an instrument in writing executed by the
parties hereto.
Governing Law. This Agreement shall be deemed to be a contract
entered into pursuant to the laws of the State where the Property is located and
shall in all respects be governed, construed, applied and enforced in accordance
with the laws of the State where the Property is located.
Inapplicable Provisions. If any term, covenant or condition of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such provision.
Duplicate Originals; Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
Number and Gender. Whenever the context may require, any
pronouns used
-4-
111
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
Transfer of Loan. Lender may sell, transfer and deliver the
Note and assign the Mortgage, this Agreement and the other documents executed in
connection therewith to one or more Investors (as defined in the Mortgage) in
the secondary mortgage market. In connection with such sale, Lender may retain
or assign responsibility for servicing the loan, including the Note, the
Mortgage, this Agreement and the other documents executed in connection
therewith, or may delegate some or all of such responsibility and/or obligations
to a servicer including, but not limited to, any subservicer or master servicer,
on behalf of the Investors. All references to Lender herein shall refer to and
include any such servicer to the extent applicable.
Further Acts. Tenant will, at the cost of Tenant, and without
expense to Lender, do, execute, acknowledge and deliver all and every such
further acts and assurances as Lender shall, from time to time, require, for the
better assuring and confirming unto Lender the property and rights hereby
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing,
registering or recording this Agreement, or for complying with all applicable
laws.
Limitations on Lender's Liability. Tenant acknowledges that
Lender is obligated only to Landlord to make the Loan upon the terms and subject
to the conditions set forth in the Loan Agreement. In no event shall Lender or
any purchaser of the Property at foreclosure sale or any grantee of the Property
named in a deed-in-lieu of foreclosure, nor any heir, legal representative,
successor, or assignee of Lender or any such purchaser or grantee (collectively
the Lender, such purchaser, grantee, heir, legal representative, successor or
assignee, the "Subsequent Landlord") have any personal liability for the
obligations of Landlord under the Lease and should the Subsequent Landlord
succeed to the interests of the Landlord under the Lease, Tenant shall look only
to the estate and property of any such Subsequent Landlord in the Property for
the satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by
any Subsequent Landlord as landlord under the Lease, and no other property or
assets of any Subsequent Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies under or with
respect to the Lease; provided, however, that the Tenant may exercise any other
right or remedy provided thereby or by law in the event of any failure by
Landlord to perform any such material obligation.
-5-
112
IN WITNESS WHEREOF, Lender and Tenant have duly executed this
Agreement as of the date first above written.
LENDER:
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
a Delaware Corporation
By:____________________________
Name:
Title:
TENANT:
________________________________
a _________________
By:_____________________________
Name:
Title:
The undersigned accepts and agrees to the provisions of Section 4 hereof:
LANDLORD:
______________________, a
______________________
By:___________________
Name:
Title:
-6-
000
XXXXXXXXXXXXXXX
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On the ___ day of November, 1997, before me, the undersigned,
appeared ____________________________, ______________ of
______________________________, the company described herein, and acknowledged
to me that [she/he] executed the same in [her/his] authorized capacity, on
behalf of ________________________________.
Witness my hand and official seal
________________________________
Notary Public
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the ___ day of November, 1997, before me, the undersigned,
appeared ____________________________, ______________ of
______________________________, the company described herein, and acknowledged
to me that [she/he] executed the same in [her/his] authorized capacity, on
behalf of ________________________________.
Witness my hand and official seal
_________________________________
Notary Public
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the ___ day of November, 1997, before me, the undersigned,
appeared ____________________________, ______________ of
______________________________, the company described herein, and acknowledged
to me that [she/he] executed the same in [her/his] authorized capacity, on
behalf of ________________________________.
Witness my hand and official seal
__________________________________
Notary Public
114
EXHIBIT A
(DESCRIPTION OF PROPERTY)
A-1
115
SCHEDULE IX
TRADE PAYABLES LIMIT
PROPERTY AMOUNT
Fraser Shopping Center $ 63,000
Northwest Crossing $ 36,000
Ridgeview Crossing $ 28,000
Stonegate Plaza $ 25,000
Taylors Square $ 10,000
Xxxx Xxxxx Center $ 31,000
West Allis Towne Center $128,000
--------
TOTAL $351,000
========
IX-1
116
SCHEDULE X
WEST ALLIS ENVIRONMENTAL MATTER
IX-1
