EXHIBIT 10.13
CREDIT AGREEMENT
DATED AS OF APRIL 25, 1997
among
PARK AVENUE FINANCING COMPANY, LLC,
PAMC CO-MANAGER INC.,
PAFC MANAGEMENT, INC.,
XXXXXXX XXXXX,
and
THE FIRST NATIONAL BANK OF BOSTON,
WELLSFORD REAL PROPERTIES, INC.,
and
OTHER BANKS THAT MAY BECOME
PARTIES TO THIS AGREEMENT
and
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
TABLE OF CONTENTS
Section 1. DEFINITIONS AND RULES OF INTERPRETATION. -1-
Section 1.1 Definitions. -1-
Section 1.2 Rules of Interpretation. -12-
Section 2. THE CREDIT FACILITY. -13-
Section 2.1 Commitment to Lend. -13-
Section 2.2 Notes. -13-
Section 2.3 Interest on Loans -13-
Section 3. REPAYMENT OF THE LOANS. -15-
Section 3.1 Stated Maturity. -15-
Section 3.2 Mandatory Prepayments. -15-
Section 3.3 Optional Prepayments. -15-
Section 3.4 Effect of Prepayments. -17-
Section 4. CERTAIN GENERAL PROVISIONS. -17-
Section 4.1 Conversion Options. -17-
Section 4.2 Funds for Payments. -18-
Section 4.3 Computations. -19-
Section 4.4 Additional Costs, Etc. -19-
Section 4.5 Capital Adequacy. -20-
Section 4.6 Inability to Determine LIBOR Rate. -20-
Section 4.7 Illegality. -21-
Section 4.8 Additional Interest. -21-
-21-
Section 4.9 Indemnity of Borrower. -21-
Section 4.10 Interest on Overdue Amounts; Late Charge. -21-
Section 4.11 Certificate. -22-
Section 4.12 Limitation on Interest. -22-
Section 4.13 Additional Cost Resulting from Syndication. -22-
Section 5. COLLATERAL SECURITY. -23-
Section 5.1 Collateral. -23-
Section 5.2 Appraisals. -23-
Section 6. REPRESENTATIONS AND WARRANTIES. -23-
Section 6.1 Authority, Etc. -24-
Section 6.2 Approvals. -25-
Section 6.3 Title to Properties. -25-
Section 6.4 Financial Statements. -25-
Section 6.5 No Material Changes. -25-
Section 6.6 Franchises, Patents, Copyrights, Etc. -26-
Section 6.7 Litigation; Judgments. -26-
Section 6.8 No Materially Adverse Contracts, Etc. -26-
Section 6.9 Compliance with Other Instruments, Laws, Etc. -26-
Section 6.10 Tax Status. -27-
Section 6.11 No Event of Default. -27-
Section 6.12 Holding Company and Investment Company Acts. -27-
Section 6.13 Absence of U.C.C. Financing Statements, Etc. -27-
Section 6.14 Setoff, Etc. -27-
Section 6.15 Certain Transactions. -27-
Section 6.16 Employee Benefit Plans. -28-
Section 6.17 ERISA Taxes. -28-
Section 6.18 Plan Payments. -28-
Section 6.19 Regulations U and X. -28-
Section 6.20 Environmental Compliance. -29-
Section 6.21 Loan Documents. -29-
Section 6.22 Brokers. -29-
Section 6.23 Ownership -29-
Section 6.24 Other Debt. -30-
Section 6.25 Solvency. -30-
Section 6.26 Mortgaged Property; Property Owner. -30-
Section 6.27 Leases. -32-
Section 6.28 Use of Proceeds. -33-
Section 6.29 Taxation as Partnership. -33-
Section 6.30 Management Agreements. -33-
Section 6.31 Managing Member. -33-
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER. -34-
Section 7.1 Punctual Payment. -34-
Section 7.2 Maintenance of Office. -34-
Section 7.3 Records and Accounts. -34-
Section 7.4 Financial Statements, Certificates and Information. -34-
Section 7.5 Notices. -36-
Section 7.6 Existence. -37-
Section 7.7 Insurance. -38-
Section 7.8 Condemnation. -38-
Section 7.9 Taxes; Liens. -39-
Section 7.10 Inspection of Properties and Books. -40-
Section 7.11 Compliance with Laws, Contracts, Licenses, and Permits.-40-
Section 7.12 Further Assurances. -41-
Section 7.13 Management. -41-
Section 7.14 Leases of the Property. -42-
Section 7.15 Budgets -43-
Section 7.16 Preservation and Maintenance -44-
Section 7.17 Use of Mortgaged Property -45-
Section 7.18 Curing of Misrepresentation. -45-
Section 7.19 Property Owner to Remain a Single-Purpose Entity. -46-
Section 7.20 Condominium. -46-
Section 7.21 ERISA Compliances. -48-
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. -48-
Section 8.1 Covenants with Respect to Indebtedness, Operations,
Fundamental Changes of the Borrower -48-
Section 8.2 Restrictions on Liens, Etc. -50-
Section 8.3 Sale and Leaseback; Ground Lease. -50-
Section 8.4 Compliance with Environmental Laws. -50-
Section 8.5 Distributions. -52-
Section 8.6 Restriction on Leases -52-
Section 8.7 Additional Restrictions Concerning the
Mortgaged Property -53-
Section 8.8 Mortgage Loan Documents. -54-
Section 8.9 Permitted Transfer. -54-
Section 8.10 Managing Member. -55-
Section 9. CLOSING CONDITIONS. -55-
Section 9.1 Loan Documents. -55-
Section 9.2 Certified Copies of Organizational Documents. -55-
Section 9.3 Bylaws; Resolutions. -56-
Section 9.4 Incumbency Certificate; Authorized Signers. -56-
Section 9.5 Opinion of Counsel. -56-
Section 9.6 Appraisal. -56-
Section 9.7 Environmental Reports. -56-
Section 9.8 Insurance. -56-
Section 9.9 Performance; No Default. -56-
Section 9.10 Representations and Warranties. -57-
Section 9.11 Proceedings and Documents. -57-
Section 9.12 Mortgage Loan -57-
Section 9.13 Due Diligence. -57-
Section 9.14 Other Documents. -57-
Section 9.15 No Condemnation/Taking. -57-
Section 9.16 Other. -57-
Section 10. EVENTS OF DEFAULT; ACCELERATION; ETC. -58-
Section 10.1 Events of Default and Acceleration. -58-
Section 00.xX. Limitation of Cure Periods. -62-
Section 10.2 Remedies. -63-
Section 10.3 Default under Mortgage Loan Documents. -64-
Section 10.4 Distribution of Collateral Proceeds. -64-
Section 11. BANKRUPTCY. -65-
Section 11.1 Material Inducement. -65-
Section 11.2 No Fraudulent Intent. -65-
Section 11.3 No Bankruptcy Intent. -65-
Section 11.4 Agreement in Best Interests of Parties; Consideration -66-
Section 11.5 Subsequent Bankruptcy; Waiver of Automatic Stay. -66-
Section 11.6 Waiver of Automatic and Supplemental Stays. -67-
Section 11.7 Approval Rights Regarding Bankruptcy Proceeding -68-
Section 11.8 Miscellaneous Representations. -68-
Section 11.9 Covenant of Noninterference and Cooperation -69-
Section 12. SETOFF. -69-
Section 13. THE AGENT. -70-
Section 13.1 Authorization. -70-
Section 13.2 Employees and Agents. -70-
Section 13.3 No Liability. -70-
Section 13.4 No Representations. -70-
Section 13.5 Payments. -71-
Section 13.6 Holders of Notes. -72-
Section 13.7 Indemnity. -72-
Section 13.8 Agent as Bank. -72-
Section 13.9 Resignation. -72-
Section 13.10 Duties in the Case of Enforcement. -73-
Section 13.11 Notification of Banks. -73-
Section 14. EXPENSES. -73-
Section 15. INDEMNIFICATION. -74-
Section 16. SURVIVAL OF COVENANTS, ETC. -75-
Section 17. ASSIGNMENT AND PARTICIPATION. -76-
Section 17.1 Conditions to Assignment by Banks. -76-
Section 17.2 Register. -77-
Section 17.3 New Notes. -77-
Section 17.4 Participations. -78-
Section 17.5 Pledge by Bank. -78-
Section 17.6 No Assignment by Borrower. -78-
Section 17.7 Disclosure. -78-
Section 17.8 Amendments to Loan Documents. -79-
Section 18. NOTICES. -79-
Section 19. RELATIONSHIP. -80-
Section 20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. -80-
Section 21. HEADINGS. -80-
Section 22. COUNTERPARTS. -81-
Section 23. ENTIRE AGREEMENT, ETC. -81-
Section 24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. -81-
Section 25. DEALINGS WITH THE BORROWER. -81-
Section 26. CONSENTS, AMENDMENTS, WAIVERS, ETC. -82-
Section 27. RIGHTS OF THIRD PARTIES -82-
Section 28. SEVERABILITY. -83-
Section 29. TIME OF THE ESSENCE. -83-
Section 30. NO UNWRITTEN AGREEMENTS. -83-
Section 31. JOINT AND SEVERAL LIABILITY. -83-
Section 32. NONRECOURSE OBLIGATIONS. -83-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made as of the 25th day of
April, 1997, by and among PARK AVENUE FINANCING COMPANY LLC, a Delaware limited
liability company ("Holding Company"), PAMC CO-MANAGER INC., a Delaware
corporation ("Co-Managing Member"; Holding Company and Co-Managing Member are
hereinafter referred to collectively as "Borrower"), PAFC MANAGEMENT, INC., a
Delaware corporation ("Holding Company Managing Member"), and XXXXXXX XXXXX, a
resident of the State of New York ("Guarantor"), each having its principal
place of business at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
THE FIRST NATIONAL BANK OF BOSTON, WELLSFORD REAL PROPERTIES, INC. and the
other parties that may become parties hereto pursuant to Section 17
(collectively the "Banks"), and THE FIRST NATIONAL BANK OF BOSTON, as Agent for
the Banks (the "Agent").
RECITALS
WHEREAS, Borrower has requested that the Banks provide an $80,000,000.00
loan to the Borrower; and
WHEREAS, Agent and the Banks are willing to provide such loan to the
Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby covenant and agree as
follows:
Section I. DEFINITIONS AND RULES OF INTERPRETATION.
Section A. Definitions. The following terms shall have the meanings set
forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:
Additional Pledgors. Guarantor and Holding Company Managing Member.
Agent. The First National Bank of Boston acting as agent for the Banks,
its successors and assigns.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks.
Agent's Special Counsel. Long Xxxxxxxx Xxxxxx L.L.P. or such other
counsel as may be approved by the Agent.
Agreement. This Credit Agreement, including the Schedules and Exhibits
hereto.
Alteration. See Section 7.16(b).
Approved Budget. The annual Budgets as approved by the Agent in
accordance with the terms of this Agreement.
Assignments of Member's Interest. The Assignments of Member's Interest
from (a) Borrower and (b) Holding Company Managing Member and Guarantor,
respectively, to the Agent, as the same may be modified or amended, pursuant to
which there shall be assigned to the Agent for the benefit of the Banks a
security interest in the interest of the Borrower in the Property Owner and of
Holding Company Managing Member and Guarantor in the Holding Company.
Balance Sheet Date. April 25, 1997.
Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.
Banks. FNBB, Wellsford and any other Person who becomes an assignee of
any rights of a Bank pursuant to Section 17 (but not including any participant
as described in Section 17).
Base Rate. The greater of (a) the annual rate of interest announced from
time to time by Agent at Agent's Head Office as its "base rate" or (b) one-half
of one percent (0.5%) above the Federal Funds Effective Rate (rounded upwards,
if necessary, to the next one-eighth of one percent). Any change in the rate
of interest payable hereunder resulting from a change in the Base Rate shall
become effective as of the opening of business on the day on which such change
in the Base Rate becomes effective.
Base Rate Loans. The Loans when bearing interest calculated by reference
to the Base Rate.
Board of Managers. The Board of Managers of the Condominium.
Borrower. As defined in the preamble hereto.
Budget. The annual budget of the Property Owner with respect to the
Mortgaged Property, as approved by the Agent (which approval shall not be
unreasonably withheld, conditioned or delayed), which Budget shall be an
estimate of the monthly income and expenditures for the management, leasing,
maintenance, supervision, direction and operation of the Mortgaged Property for
the calendar year in question, including a schedule of anticipated receipts and
a schedule of any routine and non-routine repairs or maintenance and preventive
maintenance projects to be carried out during such calendar year. Each Budget
shall be a complete and reasonable estimate of the income and expenditures for
the Mortgaged Property for the period covered thereby, and shall be prepared in
good faith and consistent with prior years (taking into account reasonably
anticipated changes from prior years), and in accordance with sound real estate
accounting standards applied on a consistent basis. The Budget shall include
the Capital Budget for the applicable year. Notwithstanding anything herein to
the contrary, any fees or expenses to be paid to the Property Owner, the
Borrower, any Additional Pledgor, Managing Member or any affiliate of any of
such Persons shall not exceed an amount which would be paid to an unaffiliated
entity in any arms-length transaction; provided, however, that the management
and leasing fee payable to Xxxxx Real Estate Co. shall not exceed the fee
payable pursuant to the Management Agreement between Property Owner and Xxxxx
Real Estate Co. dated April 25, 1997. The Agent shall not be permitted to
withhold its consent as to any line item or sum set forth in a Budget that is
required to be deposited with the Mortgagee pursuant to the Mortgage Cash
Collateral Agreement.
Building. With respect to the Mortgaged Property, all of the buildings,
structures and improvements now or hereafter located thereon.
Business Day. Any day on which banking institutions located in the same
city and State as the Agent's Head Office are located and are open for the
transaction of banking business, and in the case of the LIBOR Rate Loans, which
is also a LIBOR Business Day.
Bylaws. The bylaws of the Condominium, as the same may be amended from
time to time pursuant to the terms thereof.
Capital Budget. The budget of capital improvements, repairs,
replacements, tenant improvements and leasing commissions and other similar
tenant-related expenses with respect to the Mortgaged Property for the calendar
year in question, which shall be a complete and reasonable estimate of the
capital expenditures, and expenditures for tenant improvements and leasing
commissions and other similar tenant-related expenses, for the Mortgaged
Property for the period covered thereby, and shall be prepared in good faith
and consistent with prior years (taking into account reasonably anticipated
changes from prior years), and in accordance with sound real estate accounting
standards applied on a consistent basis.
Capitalization Date. See Section 2.3.
Capitalized Interest. See Section 2.3.
Capitalized Lease. A lease under which a Person is the lessee or obligor,
the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
Cash Collateral Agreement. The Cash Collateral Account Security, Pledge
and Assignment Agreement dated of even date herewith among the Borrower, the
Property Owner, the Managing Member, Guarantor and the Agent, as the same may
be modified or amended, such agreement to be in form and substance satisfactory
to the Majority Banks.
Closing Date. The first date on which all of the conditions set forth in
Section 9 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower and
the Additional Pledgors which are or are intended to be subject to the security
interests, security title and liens created by the Security Documents.
Co-Managing Member. As defined in the preamble hereto.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's Commitment Percentage of the aggregate
principal amount of the Loans from time to time outstanding.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Condominium. The 000 Xxxx Xxxxxx Condominium created pursuant to the
Condominium Declaration.
Condominium Act. Article 9-B of the New York Real Property Law and
successor statutes.
Condominium Declaration. The Declaration of 000 Xxxx Xxxxxx Condominium,
dated as of December 1, 1994 and recorded in the Office of the City Register,
New York County, on August 24, 1995 in Reel 2237, Page 494, as amended by First
Amendment to Declaration of Condominium dated as of December 1, 1995, and
recorded in the Office of the City Register, New York County, on January 4,
1996 in Reel 2278, Page 2097, as the same may be hereafter amended in accor-
dance with the provisions of the Mortgage Loan Documents and this Agreement.
Condominium Documents. The Condominium Declaration, the Bylaws, the rules
and regulations and other constituent documents of the Condominium, as the same
may be amended from time to time pursuant to the terms of the Mortgage Loan
Documents and this Agreement.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.
Default. See Section 10.1.
Distribution. With respect to any Person, the declaration or payment of
any cash, cash flow, dividend or distribution on or in respect of any member's
interest, shares of any class of capital stock or other beneficial interest of
such Person; the purchase, redemption, exchange or other retirement of any
member's interest, shares of any class of capital stock or other beneficial
interest of such Person, directly or indirectly; the return of capital by such
Person to its members, shareholders or partners as such; or any other
distribution on or in respect of any member's interest, shares of any class of
capital stock or other beneficial interest of such Person.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which the Loans are initially funded to the
Borrower.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by either of the Borrower or
any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Engineer. IVI Environmental, Inc., or another firm of
independent professional engineers or other scientists generally recognized as
expert in the detection, analysis and remediation of Hazardous Substances,
compliance with Environmental Laws and related environmental matters and
reasonably acceptable to the Agent.
Environmental Laws. Such term shall have the meaning as set forth in the
Mortgage.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. See Section 10.1.
Excess Cash Flow. Such term shall have the meaning set forth in the
Mortgage Cash Collateral Agreement. For the purposes of the Agreement, Excess
Cash Flow shall also include any and all amounts that pursuant to the terms of
the Mortgage Cash Collateral Agreement are to be deposited with the Agent.
Federal Funds Effective Rate. For any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by the Agent.
FNBB. The First National Bank of Boston.
generally accepted accounting principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Person
adopting the same principles; provided that a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Guarantor. Xxxxxxx Xxxxx, an individual resident of the State of New
York, having an address in care of Xxxxx Real Estate Co., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and a residence at 000 Xxxxx Xxxxxx, Xxx. #00X, Xxx Xxxx,
Xxx Xxxx 00000.
Guaranty. The Conditional Guaranty of Payment and Performance dated of
even date herewith made by Guarantor in favor of Agent and the Banks, as the
same may be modified or amended.
Hazardous Substance. Such term shall have the meaning set forth in the
Mortgage.
Holding Company. As defined in the preamble hereto.
Holding Company Managing Member. As defined in the preamble hereto.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, any obligations evidenced by bonds,
debentures, notes or similar debt instruments and all subordinated debt);
(b) all liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(c) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest directly or indirectly
in a Person, to purchase indebtedness, or to assure the owner of indebtedness
against loss through an agreement to purchase goods, supplies or services for
the purpose of enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, and the obligation to reimburse the issuer in respect
of any letter of credit; and (d) any obligation as a lessee or obligor under a
Capitalized Lease.
Indemnity Agreement. The Indemnity Agreement Regarding Hazardous
Materials made by the Borrower in favor of the Agent and the Banks, as the
same may be modified or amended, pursuant to which the Borrower agrees to
indemnify the Agent and the Banks with respect to Hazardous Substances and
Environmental Laws.
Interest Payment Date. The first day of each calendar month during the
term of the Loan, commencing May 1, 1997.
Interest Period. With respect to each LIBOR Rate Loan (a) initially, the
period commencing on the first day of the applicable Interest Period and ending
one, two or three months thereafter, and (b) thereafter, each period commencing
on the day following the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the periods set
forth above, as selected by the Borrower in a Conversion Request; provided that
all of the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall end and the next Interest Period shall commence on the next
preceding or succeeding LIBOR Business Day as determined conclusively by
the Reference Bank in accordance with the then current bank practice in
the applicable LIBOR interbank market;
(ii) if the Borrower shall fail to give notice as provided in Section
4.1, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then
current Interest Period with respect thereto; and
(iii) no Interest Period relating to any LIBOR Rate Loan shall
extend beyond the Maturity Date.
Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities or other ownership interests
issued by any other Person, all loans, advances, or extensions of credit to, or
contributions to the capital of, any other Person, all purchases of the
securities or other ownership interests or business or integral part of the
business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms.
Leases. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in or on the Building or on the Mortgaged
Property.
LIBOR Bid Rate. For any Interest Period with respect to a LIBOR Rate
Loan, the rate per annum as determined by the Reference Bank's LIBOR Lending
Office to be the rate (rounded upwards to the nearest 1/16 of one percent) at
which Dollar deposits are offered to prime banks by such banks in the London
Interbank Market as are selected in good faith by the Reference Bank at
approximately 11:00 a.m. London time two LIBOR Business Days prior to the
beginning of such Interest Period for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Rate Loan to which such Interest Period
applies.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in the London
interbank market.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
interest rate per annum determined by the Agent pursuant to the following
formula:
LIBOR Rate = LIBOR Bid Rate
1.00 - Reserve Rate
LIBOR Rate Loans. The Loans when bearing interest calculated by reference
to a LIBOR Rate.
Loan Documents. This Agreement, the Notes, the Security Documents and all
other documents, instruments or agreements now or hereafter executed or
delivered by or on behalf of the Borrower, the Guarantor or the Additional
Pledgors in connection with the Loans.
Loans. The aggregate Loans to be made by the Banks hereunder.
Lockout Expiration Date. April 30, 2002.
Majority Banks. As of any date, the Bank or Banks whose aggregate
Commitment Percentage is equal to or greater than the required percentage, as
determined by the Banks, required to approve such matter, as disclosed by the
Agent to the Borrower from time to time.
Management Agreement. The agreement or agreements, whether written or
oral, providing for the management and/or leasing of the Mortgaged Property.
Managing Member. Park Avenue Management Corporation, a Delaware
corporation.
Maturity Date. May 1, 2007 or such earlier date on which the Loans shall
become due and payable pursuant to the terms hereof.
Mortgage. The Consolidated, Amended and Restated Mortgage, Security
Agreement and Assignment of Leases and Rents dated of even date herewith by the
Property Owner in favor of Mortgagee, which relates to the Real Estate.
Mortgage Cash Collateral Agreement. The Cash Management and Collateral
Account Security, Pledge and Assignment Agreement dated of even date herewith
between the Property Owner and the Mortgagee.
Mortgagee. Initially, Column Financial, Inc., and its successors and
assigns as the holder or holders of the Mortgage Loan Documents, and any
servicer or trustee acting on behalf of the holder or holders of interests in
the note secured thereby, as the case may be.
Mortgage Loan. The $345,000,000.00 first mortgage loan to the Property
Owner that is evidenced and secured by the Mortgage Loan Documents.
Mortgage Loan Documents. Collectively, the Mortgage, that certain
Consolidated, Amended and Restated Promissory Note dated of even date herewith
made by the Property Owner to the order of the Mortgagee in the principal face
amount of $345,000,000.00, that certain Assignment of Leases and Rents dated of
even date herewith by the Property Owner to the Mortgagee, the Mortgage Cash
Collateral Agreement, and all other documents, instruments or agreements now or
hereafter executed or delivered by or on behalf of the Property Owner in
connection with the Mortgage Loan.
Mortgaged Property. The Mortgaged Property, as defined in the Mortgage.
Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Notes. See Section 2.2.
Notice. See Section 18.
Obligations. All indebtedness, obligations and liabilities of the
Borrower and the Additional Pledgors to any of the Banks and the Agent,
individually or collectively, under this Agreement or any of the other Loan
Documents or in respect of any of the Loans or the Notes, or other instruments
at any time evidencing any of the foregoing, whether existing on the date of
this Agreement or arising or incurred hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Those liens and encumbrances described in Exhibit B
attached to and made a part of the Mortgage.
Permitted Transfer. See Section 8.9.
Person. Any individual, corporation, limited liability company,
partnership, trust, unincorporated association, business, or other legal
entity, and any government or any governmental agency or political subdivision
thereof.
Pledge Agreement. Collectively, the Stock Pledge Agreements dated of even
date herewith made by the Guarantor pledging its ownership interest in the
Managing Member, Co- Managing Member and the Holding Company Managing Member,
respectively, in favor of the Agent for the benefit of the Banks, as the same
may be modified and amended.
Property Owner. 000 Xxxx Xxxxxx, XXX, a Delaware limited liability
company.
Rating Agency. As defined in the Mortgage.
Real Estate. The real property more particularly described in Exhibit A
attached hereto and made a part hereof.
Record. The record, including computer records, maintained by the Agent
with respect to the Loans referred to in the Notes.
Reference Bank. The Agent.
Refinance Commitment. The "Commitment", as such term is defined in the
Mortgage Cash Collateral Agreement.
Register. See Section 17.2.
Release. Any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing, or dumping (other than
the storing of materials in reasonable quantities to the extent necessary for
the operation of an office building in the ordinary course of business, and in
any event in compliance with all the Environmental Laws) of Hazardous
Substances.
Rent Roll. A report prepared by the Borrower showing for the Mortgaged
Property its occupancy, lease expiration dates, lease rent and other
information in substantially the form presented to the Banks prior to the date
hereof or in such other form as may have been approved by the Agent, such
approval not to be unreasonably withheld.
Reportable Event. Any of the events set forth in Section 4043(b) of ERISA
or the regulations thereunder.
Reserve Account. The "Notes Reserve Fund Sub-Account" established by the
Borrower with the Agent as described in the Cash Collateral Agreement.
Reserve Rate. For any day with respect to a LIBOR Rate Loan, the maximum
rate (expressed as a decimal) at which any lender subject thereto would be
required to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor or similar regulations relating to
such reserve requirements) against "Eurocurrency Liabilities" (as that term is
used in Regulation D or such other regulations) if such liabilities were
outstanding. The Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Rate.
Security Documents. The Assignments of Member's Interest, the Pledge
Agreement, the Cash Collateral Agreement, the Indemnity Agreement, the
Guaranty, any further collateral assignment for the benefit of the Banks,
including, without limitation, UCC-1 financing statements executed and
delivered in connection therewith.
State. A state of the United States of America.
Subsidiary. Any corporation, limited liability company, association,
partnership, trust, or other business which the designated parent shall at any
time own directly or indirectly through a Subsidiary or Subsidiaries at least
five percent (5%) of the outstanding Voting Interests or other economic
interest.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate
Loan.
Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, limited liability company, trust or other business entity
involved, or (b) to control, manage, or conduct the business of the
corporation, partnership, association, limited liability company, trust or
other business entity involved.
Wellsford. Wellsford Real Properties, Inc.
Yield Maintenance Expiration Date. April 30, 2006.
Section B. Rules of Interpretation.
1. A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
2. The singular includes the plural and the plural includes the
singular.
3. A reference to any law includes any amendment or modification to
such law.
4. A reference to any Person includes its permitted successors and
permitted assigns.
5. Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
6. The words "include", "includes" and "including" are not
limiting.
7. The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
8. All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the meanings
assigned to them therein.
9. Reference to a particular "Section ", refers to that section of
this Agreement unless otherwise indicated.
10. The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
Section II. THE CREDIT FACILITY.
Section A. Commitment to Lend. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrower on the Closing Date the amount of its Commitment, which Commitments in
the aggregate total $80,000,000.00.
Section B. Notes. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit B hereto
(collectively, the "Notes"), dated as of the Closing Date and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in
the principal amount equal to such Bank's Commitment or, if less, the
outstanding amount of all Loans made by such Bank, plus interest accrued
thereon, as set forth below. The Borrower irrevocably authorizes the Agent to
make or cause to be made, at or about the time of receipt of any payment of
principal thereof, an appropriate notation on the Agent's Record reflecting the
receipt of such payment. The outstanding amount of the Loans set forth on the
Agent's Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to each Bank, but the failure to record, or any error in so
recording, any such amount on the Agent's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due.
Section C. Interest on Loans.
1. The Loans shall bear interest as follows:
a. For the period commencing with the Drawdown Date thereof
through and including the Yield Maintenance Expiration Date at the rate of
twelve percent (12.0%) per annum.
b. From and after the Yield Maintenance Expiration Date, each
Base Rate Loan shall bear interest for the period commencing with the date
the election for the Loans to be Base Rate Loans shall commence or be
deemed to have commenced and ending on the date on which such Base Rate
Loan is repaid or converted to a LIBOR Rate Loan at the rate per annum
equal to the sum of the Base Rate plus five and 15/100 percent (5.15%).
c. From and after the Yield Maintenance Expiration Date, each
LIBOR Rate Loan shall bear interest for the period commencing with the
date the election for the Loans to bear interest or be continued as LIBOR
Rate Loans shall have commenced or be deemed to have commenced and ending
on the last day of the Interest Period with respect thereto at the rate
per annum equal to the sum of the LIBOR Rate determined for such Interest
Period plus five and 15/100 percent (5.15%).
d. Base Rate Loans and LIBOR Rate Loans may be converted to
Loans of the other Type as provided in Section 4.1.
2. The Borrower promises to pay interest on the Loans in arrears as
follows:
a. From and after the Drawdown Date through and including the
Yield Maintenance Expiration Date, interest on the outstanding principal
balance of the Loans shall be due and payable on each Interest Payment
Date (which for the purposes hereof shall include the Interest Payment
Date on May 1, 2006) at an interest rate equal to ten percent (10%) per
annum; and
b. In addition, from and after the Drawdown Date through and
including the Yield Maintenance Expiration Date, interest on the
outstanding principal balance of the Loans shall be due and payable on
each Interest Payment Date (which for the purposes hereof shall include
the Interest Payment Date on May 1, 2006) at a rate equal to two percent
(2.0%) per annum first from funds available for such purpose pursuant to
the Cash Collateral Agreement or, in the event that the funds available
for such purpose pursuant to the Cash Collateral Agreement are
insufficient to fully pay such interest, then from the Reserve Account to
the extent funds are available in the Reserve Account for the payment of
such interest; and
c. From and after the Yield Maintenance Expiration Date until
the repayment in full of the Loans, the Borrower promises to pay interest
on each Loan in arrears on each Interest Payment Date thereafter
(commencing June 1, 2006) with respect thereto.
3. On the first day of each calendar month through and including
May 1, 2006, all accrued but unpaid interest due under each Note pursuant to
Section 2.3(b)(ii) shall be added to the outstanding principal balance of such
Note (each such date is hereinafter referred to as a "Capitalization Date", and
the amount of interest from time to time so added to the outstanding principal
balance of the Notes is hereinafter referred to as the "Capitalized Interest"),
and from and after each Capitalization Date, such amount shall bear interest as
provided herein and shall otherwise constitute a portion of the principal
indebtedness evidenced by such Note for all purposes. The Agent shall maintain
a separate record of the Capitalized Interest, and such record shall be prima
facie evidence of the amount thereof, but the failure to record, or any error
in so recording, any such amount shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Note. Notwithstanding the
foregoing, any amount of Capitalized Interest that has not previously been
repaid shall be paid without penalty or premium from funds available for such
purpose pursuant to the Cash Collateral Agreement, and shall reduce the
outstanding principal balance of such Note.
4. On the Maturity Date, all accrued but unpaid interest
(including, without limitation, any interest accrued pursuant to Section
2.3(b)(ii) which has not been paid) shall be due and payable.
Section III. REPAYMENT OF THE LOANS.
Section A. Stated Maturity. The Borrower promises to pay on the
Maturity Date and there shall become absolutely due and payable on the Maturity
Date all of the Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon.
Section B. Mandatory Prepayments.
1. If at any time the outstanding principal amount of the Mortgage
Loan is prepaid in full, whether voluntarily, involuntarily or as the result of
an acceleration of the maturity date thereof, all of the Loans outstanding on
such date, together with any and all accrued but unpaid interest thereon and
prepayment fees (except as otherwise provided in Section 2.3(c) and Section
3.3(b), as applicable) shall become absolutely due and payable. For the
purposes hereof, and without limiting the generality of the foregoing, the
Mortgage Loan shall be deemed to have been prepaid in the event that (i) the
Mortgage is assigned by the holder thereof to a new holder for the purpose of
facilitating a refinance of the indebtedness secured thereby, or (ii) the
Property Owner defenses the Mortgage Loan as permitted by Section 44 of the
Mortgage.
2. If at any time there shall occur, whether voluntarily,
involuntarily or by operation of law, a sale, transfer, assignment, conveyance,
option or other disposition of, or any mortgage, hypothecation, encumbrance,
financing or refinancing of (i) any assets or properties of the Property Owner,
except as provided in Section 7.16(a) with respect to the replacement of
fixtures, equipment, machinery and other personal property and the leasing of
equipment by the Property Owner in connection with the operation of the
Mortgaged Property in the ordinary course of business, (ii) any of the
Collateral, (iii) any other assets or properties of the Borrower, Managing
Member or the Holding Company Managing Member, (iv) any direct or indirect
interest of the Borrower or Managing Member in the Property Owner, (v) any
direct or indirect interest of Guarantor or Holding Company Managing Member in
Holding Company, or (vi) any direct or indirect interest of Guarantor in the
Managing Member, Co-Managing Member or Holding Company Managing Member (unless
such event is a Permitted Transfer), all of the Loans outstanding on such date,
together with any and all accrued but unpaid interest thereon and prepayment
fees shall become absolutely due and payable.
Section C. Optional Prepayments.
1. The Borrower shall have the right, at its election, to prepay
the outstanding amount of the Loans, as a whole but not in part (except as
otherwise specifically provided herein), at any time after the Lockout
Expiration Date, provided (i) written notice of such prepayment specifying the
date of prepayment is received by Agent not more than sixty (60) days and not
less than twenty (20) days prior to the date of such prepayment, (ii) such
prepayment is accompanied by all interest accrued hereunder (including without
limitation all interest due under Section 2.3(b)(ii)) and all other sums due
hereunder or under the other Loan Documents as of the date of such prepayment,
and (iii) if such prepayment occurs on or prior to the Yield Maintenance
Expiration Date, Agent is paid for the account of the Banks a prepayment fee in
an amount equal to the positive excess of (A) the present value ("PV") of all
future installments of principal and interest due under the Notes including the
principal amount due at maturity, assuming for the purposes hereof that the
Notes were due and payable in full on the Yield Maintenance Expiration Date
(collectively, "All Future Payments"), determined by discounting the same at an
interest rate per annum equal to the sum of (1) the Treasury Constant Maturity
Yield Index published during the second full week preceding the date on which
such premium is payable for instruments having a maturity coterminous with the
Yield Maintenance Expiration Date, and (2) two hundred (200) basis points for
any period through and including May 1, 2003 and three hundred (300) basis
points for any period thereafter over (B) the principal amount of the Notes
outstanding immediately before such prepayment [(PV of All Future Payments) -
(principal balance at time of prepayment) = prepayment fee]. "Treasury
Constant Maturity Yield Index" shall mean the average yield for "This Week" as
reported by the Federal Reserve Board in Federal Reserve Statistical Release
H.15 (519). If there is no Treasury Constant Maturity Yield Index for
instruments having a maturity coterminous with the Yield Maintenance Expiration
Date, then the index shall be equal to the weighted average yield to maturity
of the Treasury Constant Maturity Yield Indices with maturities next longer and
shorter than such remaining average life to the Yield Maintenance Expiration
Date, calculated by averaging (and rounding upward to the nearest whole
multiple of 1/100 of 1% per annum, if the average is not such a multiple) the
yields of the relevant Treasury Constant Maturity Yield indices (rounded, if
necessary, to the nearest 1/100 of 1% with any figure of 1/200 of 1% or above
rounded upward). In the event that any prepayment fee is due hereunder, Agent
shall deliver to Borrower a statement not less than five (5) days prior to the
proposed date of prepayment setting forth the amount and determination of the
prepayment fee, and, provided that Agent shall have in good faith applied the
formula described above, Borrower shall not have the right to challenge the
calculation or the method of calculation set forth in any such statement in the
absence of manifest error, which calculation may be made by Agent on any day
preceding the date of such prepayment and prior to the delivery of such notice
by Agent to the Borrower. Neither Agent nor any Bank shall be obligated or
required to have actually reinvested the prepaid principal balance at the
Treasury Constant Maturity Yield or otherwise as a condition to receiving the
prepayment fee. No prepayment fee or premium shall be due or payable in
connection with any prepayment of the indebtedness evidenced by the Notes made
after the Yield Maintenance Expiration Date (provided that after the Yield
Maintenance Expiration Date the Borrower shall be required to pay any amounts
due pursuant to Section 3.3(d)), or except as otherwise provided below, upon
prepayment resulting from application of insurance or condemnation proceeds as
provided in this Agreement at any time during the loan term.
2. Partial prepayments of this Note shall not be permitted, except
partial prepayments resulting from Agent applying excess insurance or
condemnation proceeds to reduce the outstanding principal balance of the Notes
as provided in this Agreement, in which event, so long as no Event of Default
has occurred, no prepayment fee or premium shall be due. No notice of
prepayment shall be required under the circumstance specified in the preceding
sentence.
3. Except as otherwise expressly provided in Section 2.3(c) and
Section 3.3(b), the prepayment fees provided above shall be due, to the extent
permitted by applicable law, under any and all circumstances where all or any
portion of the Notes is paid prior to the Yield Maintenance Expiration Date,
whether such prepayment is voluntary or involuntary, even if such prepayment
results from Agent's exercise of its rights upon the occurrence of an Event of
Default and acceleration of the Maturity Date of the Notes (irrespective of
whether foreclosure proceedings have been commenced), and shall be in addition
to any other sums due hereunder or under any of the other Loan Documents. No
tender of a prepayment of the Notes with respect to which a prepayment fee is
due shall be effective unless such prepayment is accompanied by the prepayment
fee. If the Obligations shall have been declared due and payable by Agent due
to an Event of Default, then any tender of payment of such indebtedness made
prior to the Lockout Expiration Date must include a prepayment fee computed as
provided in Section 3.3(a) above (provided that the reference to two hundred
(200) basis points and three hundred (300) basis points in Section 3.3(a)
(iii)(A)(2) shall for the purposes of this Section 3.3(c) be modified to five
hundred (500) basis points).
4. Any optional prepayment of the outstanding amount of the LIBOR
Rate Loans may be made only on the last day of the Interest Period relating
thereto except as otherwise required pursuant to Section 4.7, unless payment is
made of the amounts due pursuant to Section 4.8.
Section D. Effect of Prepayments. Amounts of the Loans prepaid may not
be reborrowed. Except as otherwise provided herein, all payments shall first be
applied to accrued but unpaid interest and then to principal.
Section IV. CERTAIN GENERAL PROVISIONS.
Section A. Conversion Options.
1. Not less than four (4) Business Days prior to May 1, 2006, the
Borrower shall deliver a written notice to the Agent specifying whether the
Borrower is requesting that the entire principal balance of the Loans be a Base
Rate Loan or a LIBOR Rate Loan and, if the Borrower is requesting a LIBOR Rate
Loan, specifying the Interest Period requested in connection therewith. Such
notice shall be irrevocable and binding on the Borrower. If no such notice is
given by the Borrower to the Agent, the Borrower shall be deemed to have
elected a Base Rate Loan to commence on May 1, 2006. Promptly upon receipt of
any such notice, the Agent shall notify the other Banks. The entire principal
balance of the Loans shall either be a Base Rate Loan or a LIBOR Rate Loan.
2. Thereafter the Borrower may elect from time to time to convert
all of the Loans to another Type and thereafter the entire principal balance of
the Notes shall bear interest as a Base Rate Loan or a LIBOR Rate Loan, as
applicable; provided that (i) with respect to any such conversion of a LIBOR
Rate Loan to a Base Rate Loan, the Borrower shall give the Agent at least three
Business Days' prior written notice of such election, and such conversion shall
only be made on the last day of the Interest Period with respect to such LIBOR
Rate Loan; (ii) with respect to any such conversion of a Base Rate Loan to a
LIBOR Rate Loan, the Borrower shall give the Agent at least four LIBOR Business
Days' prior written notice of such election and the Interest Period requested
for all of the Loans; and (iii) no Loan may be converted into a LIBOR Rate Loan
when any Default or Event of Default has occurred and is continuing. Promptly
upon receipt of any such Conversion Request, the Agent shall notify each of the
Banks thereof. Each Conversion Request relating to the conversion of a Base
Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrower.
3. Any Loan may be continued as such Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
terms of Section 4.1; provided that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but shall
be automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Default or Event
of Default.
4. In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Loan, such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.
Section B. Funds for Payments.
1. All payments of principal, interest, loan fees, closing fees and
any other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the Agent,
as the case may be, at the Agent's Head Office, not later than 12:00 p.m.
(Boston time) on the day when due, in each case in immediately available funds.
The Agent is hereby authorized to charge the accounts of the Borrower with
Agent, on the dates when the amount thereof shall become due and payable, with
the amounts of the principal of and interest on the Loans and all fees,
charges, expenses and other amounts owing to the Agent and/or the Banks under
the Loan Documents.
2. All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without set off or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrower with respect to any amount payable
by it hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the Agent,
on the date on which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall be necessary to
enable the Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation been
imposed upon the Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by the Borrower hereunder or under
such other Loan Document.
Section C. Computations. All computations of interest on the Loans and
of other fees to the extent applicable shall be based on a 360-day year and
paid for the actual number of days elapsed. Whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the records of the Agent from
time to time shall be considered prima facie evidence of such amount.
Section D. Additional Costs, Etc. Notwithstanding anything herein to
the contrary, if any present or future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any
Bank or the Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
1. subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment or the Loans (other
than taxes based upon or measured by the income or profits of such Bank or the
Agent or its franchise tax), or
2. materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or the
interest on any Loans or any other amounts payable to any Bank under this
Agreement or the other Loan Documents, or
3. impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law and which are not already reflected in
any amounts payable by Borrower hereunder) against assets held by, or deposits
in or for the account of, or loans by, or commitments of an office of any Bank,
or
4. impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment, or any class of loans or commitments of which
any of the Loans or such Bank's Commitment forms a part; and the result of any
of the foregoing is
a. to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Bank's Commitment, or
b. to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans, or
c. to require such Bank or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received by
such Bank or the Agent from the Borrower hereunder, then, and in each such
case, the Borrower will, within fifteen (15) days of demand made by such
Bank or (as the case may be) the Agent at any time and from time to time
and as often as the occasion therefor may arise, pay to such Bank or the
Agent such additional amounts as such Bank or the Agent shall determine in
good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.
Each Bank and the Agent in determining such amounts may use any reasonable
averaging and attribution methods, generally applied by such Bank or the
Agent.
Section E. Capital Adequacy. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (b) compliance by such
Bank or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Bank's or such
holding company's capital as a consequence of such Bank's commitment to make
Loans hereunder to a level below that which such Bank or holding company could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or such holding company's then existing policies with
respect to capital adequacy and assuming the full utilization of such entity's
capital) by any amount deemed by such Bank to be material, then such Bank may
notify the Borrower thereof. The Borrower agrees to pay to such Bank the
amount of such reduction in the return on capital as and when such reduction is
determined, upon presentation by such Bank of a statement of the amount setting
forth the Bank's calculation thereof. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
Section F. Inability to Determine LIBOR Rate. In the event that, prior
to the commencement of any Interest Period relating to any LIBOR Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate for such Interest Period, the Agent shall forthwith
give notice of such determination (which shall be conclusive and binding on the
Borrower and the Banks) to the Borrower and the Banks. In such event (a) any
Loan Request with respect to LIBOR Rate Loans shall be automatically withdrawn
and shall be deemed a request for Base Rate Loans, and (b) each LIBOR Rate Loan
will automatically, on the last day of the then current Interest Period
thereof, become a Base Rate Loan, and the obligations of the Banks to make
LIBOR Rate Loans shall be suspended until the Agent determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
Section G. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over a Bank or its
LIBOR Lending Office shall assert that it is unlawful, for any Bank to make or
maintain LIBOR Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Agent and the Borrower and thereupon (a) the commitment of
the Banks to make LIBOR Rate Loans or convert Loans of another type to LIBOR
Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then
outstanding shall be converted automatically to Base Rate Loans on the last day
of each Interest Period applicable to such LIBOR Rate Loans or within such
earlier period as may be required by law.
Section H. Additional Interest. If any LIBOR Rate Loan or any portion
thereof is repaid or is converted to a Base Rate Loan for any reason on a date
which is prior to the last day of the Interest Period applicable to such LIBOR
Rate Loan, the Borrower will pay to the Agent upon demand for the account of
the Banks in accordance with their respective Commitment Percentages, in
addition to any amounts of interest otherwise payable hereunder, any amounts
required to compensate the Banks for any losses, costs or expenses which may
reasonably be incurred as a result of such payment or conversion, including,
without limitation, an amount equal to daily interest for the unexpired portion
of such Interest Period on the LIBOR Rate Loan or portion thereof so repaid or
converted at a per annum rate equal to the excess, if any, of (a) the interest
rate calculated on the basis of the LIBOR Rate (including any spread over such
rate pursuant to Section 2.3(a)(iii)) applicable to such LIBOR Rate Loan minus
(b) the yield obtainable by the Agent upon the purchase of debt securities
customarily issued by the Treasury of the United States of America which have a
maturity date most closely approximating the last day of such Interest Period
(it being understood that the purchase of such securities shall not be required
in order for such amounts to be payable and that a Bank shall not be obligated
or required to have actually obtained funds at the LIBOR Rate or to have
actually reinvested such amount as described above).
Section I. Indemnity of Borrower. The Borrower agrees to indemnify each
Bank and to hold each Bank harmless from and against any loss, cost or expense
that such Bank may sustain or incur as a consequence of (a) default by the
Borrower in payment of the principal amount of or any interest on any LIBOR
Rate Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its LIBOR Rate Loans, or (b) default by the Borrower
in making a conversion after the Borrower has given (or is deemed to have
given) a Conversion Request.
Section J. Interest on Overdue Amounts; Late Charge. Overdue principal
and (to the extent permitted by applicable law) interest on the Loans and all
other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest payable on demand at a rate per annum equal to
four percent (4.0%) plus the interest rate which would be in effect hereunder
until such amount shall be paid in full (after as well as before judgment). In
addition, the Borrower shall pay a late charge equal to three percent (3%) of
any amount of interest and/or principal payable on the Loans or any other
amounts payable hereunder or under the Loan Documents, which is not paid by the
Borrower within ten days of the date when due.
Section K. Certificate. A certificate setting forth any amounts payable
pursuant to Section 4.4, Section 4.5, Section 4.8, Section 4.9 or Section 4.10
and a brief explanation of such amounts which are due, submitted by any Bank or
the Agent to the Borrower, shall be considered prima facie evidence of such
amount. Any such certificate shall be delivered to the Borrower promptly
following the occurrence of the event causing the Borrower to incur such
additional payment obligations; provided, however, that any delay in delivering
such notice shall not relieve the Borrower of its obligation to pay such
amounts. Before giving any such certificate, the applicable Bank shall take
such actions as may be reasonably available to such Bank to minimize such costs
provided such actions shall not in the judgment of such Bank be otherwise
materially disadvantageous to such Bank.
Section L. Limitation on Interest. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Banks
and the Agent, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Obligations or otherwise, shall the
interest contracted for, charged or received by the Banks exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to the Banks in excess of the maximum
lawful amount, the interest payable to the Banks shall be reduced to the
maximum amount permitted under applicable law; and if from any circumstance the
Banks shall ever receive anything of value deemed interest by applicable law in
excess of the maximum lawful amount, an amount equal to any excessive interest
shall be applied to the reduction of the principal balance of the Obligations
of the Borrower and to the payment of interest or, if such excessive interest
exceeds the unpaid balance of principal of the Obligations of the Borrower,
such excess shall be refunded to the Borrower. All interest paid or agreed to
be paid to the Banks shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations of the Borrower (including
the period of any renewal or extension thereof) so that the interest thereon
for such full period shall not exceed the maximum amount permitted by
applicable law. This section shall control all agreements between the Borrower
and the Banks and the Agent.
Section M. Additional Cost Resulting from Syndication. Notwithstanding
the terms of Section s4.2(b), 4.4, 4.5, 14(a) and 14(b), the Borrower shall not
be required to pay to any Bank (other than FNBB and Wellsford) any additional
amounts pursuant to Section 4.2(b) as a result of the imposition of any
withholding requirement, the incurrence of any additional cost pursuant to
Section 4.4 and Section 4.5, costs pursuant to 14(a), or any taxes pursuant to
Section 14(b) unless such withholding requirement pursuant to Section 4.2(b),
the obligation to pay any additional costs pursuant to Section 4.4, Section
4.5, or Section 14(a), or the obligation to pay such taxes pursuant to Section
14(b) as a result of the same circumstances shall also exist with respect to
FNBB or Wellsford.
Section V. COLLATERAL SECURITY.
Section A. Collateral. The Obligations of the Borrower shall be secured
by (i) a perfected first priority security title to be held by the Agent for
the benefit of the Banks in the Collateral, and (ii) such additional collateral
from the Borrower or other Persons, if any, as the Agent for the benefit of the
Banks from time to time may accept as security for the Obligations of the
Borrower, with the consent of the Majority Banks, which consent may be given or
withheld in the sole and absolute discretion of the Majority Banks. Certain of
the Obligations shall also be guaranteed pursuant to and subject to the terms
of the Guaranty.
Section B. Appraisals.
1. The Agent on behalf of the Banks may require an appraisal or
appraisal updating or revising a prior appraisal of the Mortgaged Property, in
order to determine the current appraised value of the Mortgaged Property, and
the Borrower shall pay to the Agent on demand all reasonable costs of all such
appraisals relating to the Mortgaged Property; provided, however, that so long
as no Event of Default shall have occurred and be continuing and regulatory
requirements of any Bank generally applicable to loans of the category made
under this Agreement as reasonably interpreted by such Bank shall not require
more frequent appraisals, the Borrower shall not be required to pay for
appraisals for the Mortgaged Property more often than once in any 60-month
period. The foregoing shall not limit the right of the Agent to obtain an
appraisal of the Mortgaged Property for the purposes of determining the net
worth of the Guarantor pursuant to the Guaranty.
(b) The Borrower acknowledges that the Majority Banks are not bound
by the value set forth in any appraisal performed pursuant to this Agreement
and do not make any representations or warranties with respect to any such
appraisal. The Borrower further agrees that the Banks shall have no liability
as a result of or in connection with any such appraisal for statements
contained in such appraisal, including without limitation, the accuracy and
completeness of information, estimates, conclusions and opinions contained in
such appraisal, or variance of such appraisal from the fair value of the
Mortgaged Property that is the subject of such appraisal given by the local tax
assessor's office, or the Borrower's idea of the value of the Mortgaged
Property.
Section VI. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as
follows.
Section A. Authority, Etc.
1. Organization; Good Standing. Holding Company is a Delaware
limited liability company duly organized pursuant to a Certificate of Formation
filed December 9, 1996 with the Delaware Secretary of State and is validly
existing and in good standing under the laws of Delaware. Managing Member is a
Delaware corporation duly organized pursuant to its Articles of Incorporation
filed April 11, 1997 with the Delaware Secretary of State and is validly
existing and in good standing under the laws of Delaware. Co-Managing Member is
a Delaware corporation duly organized pursuant to its Articles of Incorporation
filed April 14, 1997 with the Delaware Secretary of State and is validly
existing and in good standing under the laws of Delaware. Holding Company
Managing Member is a corporation duly organized pursuant to its Articles of
Incorporation filed April 11, 1997 with the Secretary of State of Delaware and
is validly existing and in good standing under the laws of Delaware. Property
Owner is a Delaware limited liability company duly organized pursuant to a
Certificate of Formation filed December 9, 1996 with the Delaware Secretary of
State and is validly existing and in good standing under the laws of Delaware.
Each of the Borrower, Managing Member, Co-Managing Member, Holding Company
Managing Member and Property Owner (i) has all requisite power to own its
respective property and conduct its respective business as now conducted and as
presently contemplated, and (ii) is, to the extent necessary or required by
law, in good standing and is duly authorized to do business in the jurisdiction
where the Mortgaged Property is located and in each other jurisdiction where a
failure to be so qualified in such other jurisdiction could have a materially
adverse effect on the business, assets or financial condition of such Person.
2. Subsidiaries. Neither the Property Owner, the Borrower,
Managing Member nor Holding Company Managing Member has any Subsidiaries, other
than those which own their respective interests in the Property Owner.
3. Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which any of the Borrower, Guarantor
or any other Additional Pledgor is or is to become a party and the transactions
contemplated hereby and thereby (i) are within the authority of such Person,
(ii) have been duly authorized by all necessary proceedings on the part of such
Person, (iii) do not and will not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
such Person is subject or any judgment, order, writ, injunction, license or
permit applicable to such Person, (iv) do not and will not conflict with or
constitute a default (whether with the passage of time or the giving of notice,
or both) under any provision of the certificate of formation, operating
agreement, articles of incorporation or other charter documents or bylaws of,
or any mortgage, indenture, agreement, contract or other instrument binding
upon, such Person or any of its properties or to which such Person is subject,
and (v) do not and will not result in or require the imposition of any lien or
other encumbrance on any of the properties, assets or rights of such Person,
other than the liens and encumbrances created by the Loan Documents.
4. Enforceability. The execution and delivery of this Agreement
and the other Loan Documents to which any of the Borrower, Guarantor or any
other Additional Pledgor is to is to become a party are valid and legally
binding obligations of such Person enforceable in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and the
effect of general principles of equity.
Section B. Approvals. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower, the Guarantor or
any other Additional Pledgor is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of or
approval of any Person or the authorization, consent, approval of or any
license or permit issued by, or any filing or registration with, or the giving
of any notice to, any court, department, board, commission or other
governmental agency or authority other than those already obtained and the
filing of the Security Documents in the appropriate records office with respect
thereto.
Section C. Title to Properties. The Borrower owns all of the assets
reflected in the pro forma balance sheet of the Borrower as at the Balance
Sheet Date, subject to no rights of others, including any mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances.
Section D. Financial Statements. The Borrower has furnished or caused
to be furnished to each of the Banks: (a) the pro forma balance sheet of the
Borrower as of the Balance Sheet Date, (b) the pro forma balance sheet of the
Property Owner as of the Balance Sheet Date, (c) the unaudited statement of
operating income for the Mortgaged Property for calendar year 1996, reasonably
satisfactory in form to the Agent and certified by the chief financial or
accounting officer of the Borrower as fairly presenting the operating income
for the Mortgaged Property for such period, and (d) certain other financial
information relating to the Borrower, the Property Owner, the Guarantor and the
Mortgaged Property. Such balance sheet and statements have been prepared in
accordance with tax basis accounting principles and fairly present the
financial condition of the Borrower and the Property Owner as of such date and
the results of the operations of the Borrower, the Property Owner and the Mort-
gaged Property for such periods. There are no liabilities, contingent or
otherwise, of the Borrower involving material amounts not disclosed in said
financial statements and the related notes thereto other than the Property
Owner's obligations under the Mortgage Loan Documents and the Borrower's, the
Guarantors and the other Additional Pledgors' obligations under the Loan
Documents.
Section E. No Material Changes. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition or business of
the Borrower or the Property Owner taken as a whole as shown on or reflected in
the balance sheet of the Borrower and the Property Owner, respectively, as of
the Balance Sheet Date, or their respective statement of income or cash flows
for the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of such Person.
Section F. Franchises, Patents, Copyrights, Etc. The Borrower possesses
all franchises, patents, copyrights, trademarks, trade names, servicemarks,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others.
Section G. Litigation; Judgments. Except as stated on Schedule 6.7,
there are no actions, suits, proceedings or investigations of any kind pending
or to the actual knowledge of the Borrower threatened against or affecting the
Borrower, Managing Member, the Property Owner, the Guarantor, any of the other
Additional Pledgors, the Collateral or the Mortgaged Property before any court,
tribunal, administrative agency or board, mediator or arbitrator that, if
adversely determined, might, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of
such Person or materially impair the right of such Person to carry on business
substantially as now conducted by it, or result in any liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
balance sheet of such Person, or which question the validity of this Agreement,
any of the other Loan Documents or any of the Mortgage Loan Documents, any
action taken or to be taken pursuant hereto or thereto or any lien, security
title or security interest created or intended to be created pursuant hereto or
thereto, or which will adversely affect the ability of the Borrower to pay and
perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents. There are no judgments outstanding against or affecting
the Borrower, Managing Member, the Property Owner, the Guarantor, any of the
other Additional Pledgors, the Collateral or the Mortgaged Property.
Section H. No Materially Adverse Contracts, Etc. None of the Borrower,
Managing Member, the Property Owner, the Guarantor or any of the other
Additional Pledgors is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of such Person. None of the Borrower, Managing
Member, the Property Owner, the Guarantor or any of the other Additional
Pledgors is a party to any mortgage, indenture, contract, agreement or other
instrument that has or is expected, in the judgment of the members or officers
of such Person, to have any materially adverse effect on the business, assets
or financial condition of any of them.
Section I. Compliance with Other Instruments, Laws, Etc. None of the
Borrower, Managing Member, the Property Owner, the Guarantor or any of the
other Additional Pledgors is in violation of any provision of its charter or
other organizational documents, bylaws, or any agreement or instrument to which
it may be subject or by which it or any of its properties may be bound or any
decree, order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that could materially and adversely affect the
financial condition, properties or business of such Person.
Section J. Tax Status. Each of the Borrower, Managing Member, the
Property Owner, the Guarantor and the other Additional Pledgors (a) has made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, as the filing
periods may have been extended, (b) has paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. Except as provided in the
foregoing sentence, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of such
Person know of no basis for any such claim.
Section K. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Section L. Holding Company and Investment Company Acts. None of the
Borrower, Managing Member, the Property Owner, the Guarantor or any of the
Additional Pledgors is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is any of them
an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
Section M. Absence of U.C.C. Financing Statements, Etc. Except with
respect to Permitted Liens, the Mortgage Loan Documents and the Loan Documents,
there is no financing statement, security agreement, chattel mortgage, real
estate mortgage or other document filed or recorded with any filing records,
registry, or other public office, that purports to cover, affect or give notice
of any present or possible future lien on, or security interest or security
title in, any property of the Borrower, Managing Member, the Property Owner,
the Guarantor (as to its interest in the Mortgaged Property and the Collateral)
or any of the other Additional Pledgors.
Section N. Setoff, Etc. The Collateral and the rights of the Agent and
the Banks with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses.
Section O. Certain Transactions. Except as disclosed in writing to the
Agent (including, without limitation, the Management Agreement between Property
Owner and Xxxxx Real Estate Co.), none of the members, partners, officers,
trustees, directors, or employees of the Borrower, Managing Member, the
Property Owner, the Guarantor or any of the other Additional Pledgors is a
party to any transaction with each other (other than for services as members,
partners, employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any member, partner, officer, trustee, director
or such employee or, to the knowledge of the Borrower, any limited liability
company, corporation, partnership, trust or other entity in which any member,
partner, officer, trustee, director, or any such employee has a substantial
interest or is a member, officer, director, trustee or partner.
Section P. Employee Benefit Plans. The Borrower and the Property Owner
are in compliance in all material respects with ERISA. There has been no
Reportable Event with respect to any Employee Benefit Plan, Multiemployer Plan
or Guaranteed Pension Plan. There has been no institution of proceedings or
any other action by PBGC, the Borrower, the Property Owner or any ERISA
Affiliate to terminate or withdraw or partially withdraw from any such Plan
under any circumstances which could lead to material liabilities to PBGC or,
with respect to a Multiemployer Plan, the "Reorganization" or "Insolvency" (as
each such term is defined in ERISA) of any such Plan. No "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) has occurred with respect to any such Plan, and neither the consummation
of the transactions provided for in this Agreement and compliance by the
Borrower with the provisions hereof and the other Loan Documents, nor the
consummation of the transactions provided for in the Mortgage Loan Documents
and compliance by the Property Owner with the provisions thereof, will involve
any prohibited transaction.
Section Q. ERISA Taxes. Neither the Borrower, the Property Owner nor
any ERISA Affiliate thereof is currently and the Borrower has no reason to
believe that the Borrower, the Property Owner or any ERISA Affiliate thereof
will become subject to any liability (other than routine expenses or
contributions relating to the Plans set forth on Schedule 6.17, if timely
paid), tax or penalty whatsoever to any person whomsoever, which liability, tax
or penalty is directly or indirectly related to any Plans set forth on Schedule
6.17 including, but not limited to, any penalty or liability arising under
Title I or Title IV of ERISA, any tax or penalty resulting from a loss of
deduction under Section s 404 and 419 of the Code, or any tax or penalty under
Chapter 43 of the Code, except such liabilities, taxes or penalties (when taken
as a whole) as will not have a material adverse effect on the Borrower, the
Property Owner or upon their respective financial condition, assets, business,
operations, liabilities or prospects.
Section R. Plan Payments. The Borrower, the Property Owner and each
ERISA Affiliate has made full and timely payment of all amounts (i) required to
be contributed under the terms of each Plan set forth on Schedule 6.17 and
applicable law and (ii) required to be paid as expenses of each Plan set forth
on Schedule 6.17. No Plan set forth on Schedule 6.17 would have an "amount of
unfunded benefit liabilities" (as defined in Section 4001(a)(18) of ERISA) if
such Plan were terminated as of the date on which this representation and
warranty is made.
Section S. Regulations U and X. No portion of any Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224. The Borrower is
not engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
Section T. Environmental Compliance. Neither the Borrower, the
Additional Pledgors nor the Mortgaged Property is subject to any applicable Law
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement, in each case by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to the
recording of the Security Documents or to the effectiveness of any other
transactions contemplated hereby.
Section U. Loan Documents. All of the representations and warranties
made by or on behalf of the Borrower, Managing Member, the Property Owner, the
Guarantor and the other Additional Pledgors in this Agreement and the other
Loan Documents or any document or instrument delivered to the Agent or the
Banks pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects as of the date hereof, and, neither the
Borrower, Managing Member, the Guarantor nor any other Additional Pledgor has
failed to disclose such information as is necessary to make such
representations and warranties not misleading in any material respect.
Section V. Brokers. Neither the Borrower, Managing Member, the Property
Owner, the Guarantor nor any of the other Additional Pledgors has engaged or
otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder, other than Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, the fees of which, if any, shall be
paid by the Borrower.
Section W. Ownership. Holding Company, Managing Member and Co-Managing
Member are the sole members of the Property Owner, and no other Person owns any
legal, equitable or beneficial interest in the Property Owner. Managing Member
and Co-Managing member are the sole co-managing members of the Property Owner.
Holding Company Managing Member and Guarantor are the sole members of Holding
Company, and no other Person owns any legal, equitable or beneficial interest
in Holding Company. Holding Company Managing Member is the sole Managing
Member of the Holding Company. Guarantor is the sole shareholder of Managing
Member, Co-Managing Member and Holding Company Managing Member, and no other
Person directly owns any legal, equitable or beneficial interest in the
Managing Member, Co-Managing Member or the Holding Company Managing Member.
Property Owner owns no assets other than the Mortgaged Property, and no other
Person owns any legal, equitable or beneficial interest in the Mortgaged
Property, other than the interests as tenants only of the tenants listed on the
Rent Roll delivered to the Agent pursuant to Section 6.27 and the rights in and
to the Mortgaged Property pursuant to the Permitted Exceptions. Holding
Company, Managing Member and Co-Managing Member own no assets other than their
respective interest in the Property Owner. Holding Company Managing Member owns
no assets other than its interest in Holding Company.
Section X. Other Debt. Neither the Borrower, Managing Member, the
Property Owner nor Holding Company Managing Member is in default of the payment
of any Indebtedness or under any other agreement, mortgage, deed of trust,
security agreement, financing agreement, indenture or lease to which any of
them is a party. The Guarantor is not in default of the payment of any
Indebtedness or under any other agreement, mortgage, deed of trust, security
agreement, financing agreement, indenture or lease to which it is a party
involving obligations individually or in the aggregate in excess of
$1,000,000.00. Neither the Borrower nor the Guarantor is a party to or bound
by any agreement, instrument or indenture that may require the subordination
in right or time of payment of any of the Obligations to any other indebtedness
or obligation of the Borrower or the Guarantor. The Borrower has provided to
the Agent copies of all agreements, mortgages, deeds of trust, financing
agreements or other material agreements binding upon the Borrower, Managing
Member, the Property Owner and Holding Company Managing Member or their
respective properties and entered into by the Borrower, Managing Member, the
Property Owner or Holding Company Managing Member as of the date of this
Agreement with respect to any Indebtedness of the Borrower and the Property
Owner. Attached hereto as Schedule 6.24 is a true, accurate and complete list
of all of the Mortgage Loan Documents. The Borrower has delivered to the Agent
true, correct and complete copies of the Mortgage Loan Documents, and none of
the Mortgage Loan Documents has been modified or amended in any respect except
as set forth in Schedule 6.24. As of the date hereof, the outstanding
principal balance secured by the Mortgage is $345,000,000.00.
Section Y. Solvency. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement, the other Loan Documents and
the Mortgage Loan Documents, including all Loans made or to be made hereunder
or thereunder, neither the Borrower, the Property Owner, the Guarantor nor any
of the other Additional Pledgors is insolvent on a balance sheet basis such
that the sum of such Person's assets exceeds the sum of the such Person's
liabilities, each such Person is able to pay its debts as they become due, and
each such Person has sufficient capital to carry on its business.
Section Z. Mortgaged Property; Property Owner.
1. The Borrower hereby restates and reaffirms each of the
representations and warranties made by the Property Owner set forth in Section
s 2, 4, 35 and 46 of the Mortgage as if the same were more fully set forth
herein and were made to the Agent and the Banks herein.
2. The Borrower makes the following additional representations and
warranties concerning the Mortgaged Property:
(i) The Building is fully independent in all respects
including, without limitation, in respect of structural integrity,
heating, ventilating and air conditioning, plumbing, mechanical and other
operating and mechanical systems, and electrical, sanitation and water
systems. The Building is located on lots which are separately assessed
for purposes of real estate tax assessment and payment; provided, however,
that no part of the Mortgaged Property is assessed with any other property
that is not included within the Mortgaged Property. The Building, all
equipment serving the Building and all paved or landscaped areas related
to or used in connection with the Building are located wholly within the
perimeter lines of the lot or lots on which the Mortgaged Property is
located, except as may be specifically shown on the Survey for such
Mortgaged Property.
(ii) The Building is structurally sound, in good repair and free
of material defects in materials and workmanship. All major building
systems located within the Building, including without limitation heating,
ventilating and air conditioning, electrical, sprinkler, plumbing or other
mechanical systems, are in good working order and condition. No asbestos
is located in or on the Building, except for nonfriable asbestos or
contained friable asbestos which is being monitored and/or remediated in
accordance with the recommendations of an Environmental Engineer.
(iii) The Building as presently constructed, used, occupied
and operated does not violate in any material respect any applicable
federal or state law or governmental regulation, or any local ordinance,
order or regulation, including but not limited to laws, regulations, or
ordinances relating to zoning, building use and occupancy, subdivision
control, fire protection, health, sanitation, safety, handicapped access,
historic preservation and protection, tidelands, wetlands, flood control
and Environmental Laws. The Building complies with applicable zoning laws
and regulations and is not a so-called non-conforming use. The zoning
laws permit use of the Building for its current use. There is such number
of parking spaces on the lot or lots on which the Mortgaged Property is
located as is adequate under the zoning laws and regulations to permit use
of the Building for its current use.
(iv) Neither of the Borrower nor the Property Owner has received
any notice of, and has no knowledge of, any approvals, consents, licenses,
permits, utility installations and connections (including, without
limitation, drainage facilities), curb cuts and street openings, required
by applicable laws, rules, ordinances or regulations or any agreement
affecting the Mortgaged Property for the maintenance, operation, servicing
and use of the Mortgaged Property or the Building for its current use
which have not been granted, effected, or performed and completed (as the
case may be) (other than the issuance of a temporary certificate of
occupancy for the lobby area of the Building), or any fees or charges
therefor which have not been fully paid, or which are no longer in full
force and effect. To the best knowledge of the Borrower, there are no
outstanding notices, suits, orders, decrees or judgments relating to
zoning, building use and occupancy, fire, health, sanitation or other
violations affecting, against, or with respect to, the Mortgaged Property
or any part thereof, other than (A) notices with respect to potential
building code violations, none of which would have any material adverse
affect on the Mortgaged Property or the operation thereof or materially
affect the Property Owner's ability to comply with the Leases, and (B)
judgments relating to potential building code violations with respect to
which the aggregate amount involved does not exceed $100,000.00.
(v) Neither the Borrower nor the Property Owner has received
any notice from any insurer or its agent requiring performance of any work
with respect to the Mortgaged Property or canceling or threatening to
cancel any policy of insurance, and the Mortgaged Property complies with
the requirements of all of the Property Owner's insurance carriers.
(vi) There are no unpaid or outstanding real estate or other
taxes or assessments on or against the Mortgaged Property or any part
thereof which are currently payable by the Property Owner (except only
real estate or other taxes or assessments, that are not yet due and
payable).
Section AA. Leases. An accurate and complete Rent Roll for the
Mortgaged Property as of the date hereof has been certified on behalf of the
Borrower and provided to the Agent. The Borrower has delivered to the Agent
true, correct and complete copies of the Leases and any amendments or
supplements thereto relating to the Mortgaged Property. The Leases reflected
on such Rent Roll constitute as of the date thereof the sole agreements and
understandings relating to leasing or licensing of space at such Mortgaged
Property and in the Building. There are no tenants in possession or Persons
having rights to occupy the Mortgaged Property or portion thereof as a tenant
other than pursuant to the Leases reflected in such Rent Roll. Except as set
forth in Schedule 6.27 attached hereto, the Leases reflected therein are in
full force and effect in accordance with their respective terms, without any
payment default or any other material default thereunder, nor are there any
defenses, counterclaims, offsets, free rent, partial rent, credit or deduction
in rent, lease support payments, lease buy-outs, concessions or rebates
available to any tenant thereunder (other than such free rent, lease support
payments or other concessions available to such tenants as expressly provided
in the applicable Lease). Except as set forth in Schedule 6.27 attached
hereto, neither the Property Owner nor any Person acting on its behalf has
given or made any notice of any non-payment or other material default or any
claim which remains uncured or unsatisfied with respect to any of the Leases.
The Rent Roll furnished to the Agent accurately and completely sets forth all
rents payable by tenants, no tenant having paid more than one month's base rent
in advance (excluding security deposits). Schedule 6.27 attached hereto
accurately and completely sets forth all security, if any, deposited by
tenants. Neither the Property Owner nor anyone acting on its behalf has
received any notice from any tenant claiming the existence of any default by
the landlord under any of the Leases or any defense, counterclaim or right of
offset or other credit, and to the best of the Borrower's knowledge there is no
basis for any such claim or notice of default by any tenant. The Borrower has
reviewed the estoppel certificates delivered by the tenants or subtenants of
the Mortgaged Property to the Agent on or prior to the date hereof and, except
as set forth on Schedule 6.27 attached hereto, such estoppel certificates are
true and correct in all material respects. Except as set forth in Schedule
6.27 attached hereto, all tenant improvements or work to be done, furnished or
paid for by the Property Owner, or credited or allowed to a tenant, for, or in
connection with, the Building as of the date hereof pursuant to any Lease has
been completed and paid for. Except as set forth in Schedule 6.27 attached
hereto, no material leasing, brokerage or like commissions, fees or payments
are due from the Property Owner in respect of the Leases.
Section AB. Use of Proceeds. The proceeds of the Loan shall be used,
together with the proceeds of the Mortgage Loan, to satisfy the Indebtedness
encumbering the Mortgaged Property as of the date hereof and the payment of
other fees and expenses in connection with the closing of the transactions
contemplated by the Mortgage Loan Documents and the Loan Documents. No portion
of the proceeds of the Loans shall be used for personal, family or household
purposes; provided, however, that the foregoing shall not prohibit the
distribution of any proceeds of the Loans to the members of the Borrower
following the payment of the foregoing items.
Section AC. Taxation as Partnership. The Property Owner and the Holding
Company have elected to be taxed as partnerships under federal income tax law.
Section AD. Management Agreements. The Mortgaged Property is managed by
Xxxxx Real Estate Co. pursuant to a Management Agreement between the Property
Owner and Xxxxx Real Estate Co. dated April 25, 1997. Xxxxx Real Estate Co.
has an exclusive agreement with Colliers ABR Inc. to provide leasing and
management services to the Mortgaged Property. The Borrower has delivered to
the Agent true, correct and complete copies of such Management Agreements for
the Mortgaged Property. Each of the Management Agreements for the Mortgaged
Property is terminable upon thirty (30) days notice. There are no claims or
any basis for any claim in respect of the Mortgaged Property or its operation
by any party to any Management Agreement.
Section AE. Managing Member.
1. All duties, obligations and responsibilities required to be
performed by Managing Member as of the date hereof under the organizational
agreements for the Property Owner have been performed, and no default or
condition which with the passage of time or the giving of notice, or both,
would constitute a default exists under such organizational agreements.
2. Except for the Loan Documents and the Mortgage Loan Documents,
Managing Member is not a party to and is not bound by any indenture, contract
or other agreement which purports to prohibit, restrict, limit, or control the
transfer or pledge of Managing Member's interest in the Property Owner, the
exercise of voting rights with respect to the Property Owner or the management
of the Property Owner.
3. Managing Member is and shall remain the sole, lawful, beneficial
and record owner of its interest in the Property Owner, free and clear of all
liens, restrictions, claims, pledges, encumbrances, charges, claims of third
parties and rights of set-off or recoupment whatsoever.
Section VII. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, until all of the Obligations have
been paid and performed in full:
Section A. Punctual Payment. The Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Loans and all interest,
fees and premiums provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes as well as all other sums owing pursuant
to the Loan Documents.
Section B. Maintenance of Office. The Borrower will maintain its chief
executive office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other place in the United States of America as the Borrower shall
designate upon prior written notice to the Agent and the Banks, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents may be given or made.
Section C. Records and Accounts. The Borrower will (a) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with tax basis accounting principles and (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation and amortization of its properties, contingencies and other
reserves. The Borrower shall not, without the prior written consent of the
Majority Banks, (x) make any material change to the accounting procedures used
by the Borrower in preparing the financial statements and other information
described in Section 6.4 or Section 7.4, or (y) change its fiscal year.
Section D. Financial Statements, Certificates and Information. The
Borrower will deliver or cause to be delivered to the Agent:
1. a copy of each statement, report, Rent Roll, tax return or other
matter required to be delivered to the Mortgagee pursuant to Section 15 of the
Mortgage as and when the same is required to be delivered to the Mortgagee
pursuant to the terms thereof;
2. as soon as practicable, but in any event not later than 45 days
after the end of the first three calendar quarters of each year, copies of the
unaudited balance sheet of each Borrower as at the end of such quarter, and the
related unaudited statement of income, changes in capital and cash flows for
the portion of such Borrower's fiscal year then elapsed, all in reasonable
detail prepared in accordance with the terms of this Agreement, together with a
certification by the financial or accounting officer of each Borrower that the
information contained in such financial statements fairly presents the
financial position of each Borrower on the date thereof (subject to year-end
adjustments);
3. as soon as practicable, but in any event not later than 90 days
after the end of each calendar year, the unaudited balance sheet of each
Borrower at the end of such year, and the related unaudited statements of
income, changes in capital and cash flow for such year, all in reasonable
detail prepared according to the terms of this Agreement, together with the
certification by the principal financial or accounting officer of each Borrower
that the information contained in such financial statements fairly presents the
financial position of each Borrower on the date thereof;
4. not later than 45 days after the end of each calendar quarter
(including the fourth quarter), a statement showing the aging of the
receivables for the Mortgaged Property, and a statement of the amount of
deposits to, and disbursements from, each account and sub-account established
pursuant to the Mortgage Cash Collateral Agreement for such quarter and showing
any variations for such quarter and the year-to-date of actual operations from
the Approved Budget, all in a form reasonably satisfactory to Agent together
with a certification by the principal financial or accounting officer of each
Borrower that the information contained in such statements fairly presents the
information therein for such periods;
5. not later than 45 days after the end of each calendar quarter
(including the fourth quarter), a certification by the principal financial or
accounting officer of each Borrower to the effect that such Person has read the
Loan Documents and the Mortgage Loan Documents, and that to such Person's
knowledge no Default or Event of Default exists, or if such Person shall obtain
knowledge of any then existing Default of Event of Default, they shall disclose
in such statement such Defaults or Event of Defaults;
6. not later than 45 days after the end of each calendar quarter
(including the fourth quarter), (i) a statement listing each Lease within the
Mortgaged Property covering 85,000 square feet or more that has expired
(without renewal) or terminated during the preceding quarter, stating the name
of the tenant, (ii) a statement listing the name of each tenant that has taken
occupancy of the Mortgaged Property during the preceding quarter, the date of
occupancy, and the area so occupied, and (iii) a copy of each Lease entered
into by or on behalf of the Property Owner during such quarter;
7. promptly upon receipt or issuance of the same by Property Owner,
either Borrower, Managing Member, Holding Company Managing Member or Guarantor,
duplicate copies of any and all notices of any proposed sale or other
disposition, or financing or refinancing, of any interest of Borrower or
Managing Member in the Property Owner or of the Mortgaged Property, or any
interest of Guarantor or Holding Company Managing Member in Holding Company, or
any interest of Guarantor in the Borrower or Managing Member, or of the
Collateral, together with all material documents related thereto and a
description of the material terms thereof;
8. duplicate copies of any and all notices of default by Borrower
under the organizational agreements of Property Owner or of any failure by
Borrower to perform any obligation under such agreements;
9. duplicate copies of any and all notices sent by the Property
Owner to any rating agency which has now or may hereafter have issued a rating
with respect to any portion of the indebtedness secured by the Mortgage, or
sent by such rating agency to the Property Owner;
10. not later than 45 days after the end of each calendar year,
evidence that the Borrower, Managing Member and Holding Company Managing Member
and Property Owner have taken all actions required by New York, as applicable
and Delaware law to remain in good standing;
11. duplicate copies of any and all appraisals or updates thereof
that are required to be delivered by the Property Owner to the Mortgagee
pursuant to the Mortgage as and when the same are required to be delivered to
the Mortgagee; and
12. from time to time such other financial data and information in
the possession of or reasonably obtainable by the Borrower or the Property
Owner relating to the Borrower, Managing Member, the Additional Pledgors, the
Property Owner or the Mortgaged Property (including without limitation
auditors' management letters, property inspection and environmental reports and
information as to zoning and other legal and regulatory changes affecting the
Borrower) as the Agent may reasonably request.
Section E. Notices.
1. Defaults. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default of which Borrower
has knowledge. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of Default)
under this Agreement or under any note, evidence of indebtedness, indenture or
other obligation to which or with respect to which any of the Borrower,
Managing Member, the Property Owner or Holding Company Managing Member is a
party or obligor, whether as principal or surety, involving individually or in
the aggregate an amount in excess of $500,000.00, or with respect to which the
Guarantor is a party or obligor, whether as principal or surety, involving
individually or in the aggregate an amount in excess of $80,000,000.00 which is
recourse to Guarantor, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity
thereof, the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature of the
claimed default.
2. Environmental Events. The Borrower will promptly give notice to
the Agent (i) upon the Borrower obtaining knowledge of any potential or known
Release, or threat of Release, of any Hazardous Substances in any material
respect at or from the Mortgaged Property; (ii) of any violation of any
Environmental Law that the Property Owner reports in writing or is reportable
by such Person in writing (or for which any written report supplemental to any
oral report is made) to any federal, state or local environmental agency and
(iii) upon becoming aware thereof, of any inquiry, proceeding, investigation,
or other action, including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or board, that
in either case involves the Mortgaged Property or has the potential to
materially adversely affect the assets, liabilities, financial conditions or
operations of the Borrower or the Property Owner or the Agent's liens or
security title on the Collateral pursuant to the Security Documents.
3. Notification of Claims. The Borrower will, immediately upon
becoming aware thereof, notify the Agent in writing of any set off, claims
(including, with respect to the Mortgaged Property, environmental claims)
withholdings that individually or in the aggregate involve amounts in excess of
$100,000.00 (or $10,000,000.00 as to Guarantor) or other defenses to which the
Mortgaged Property or the rights of the Borrower, Managing Member, the Holding
Company Managing Member, the Guarantor, the Agent or the Banks with respect to
the Mortgaged Property or any of the Collateral, or the rights of the Agent or
the Banks with respect to the Collateral, are subject. In addition, the
Borrower will, immediately upon becoming aware thereof, notify the Agent in
writing of the occurrence of any material default under any Lease, the
intention of any tenant under a Lease to withhold any fixed or base rent or the
actual withholding thereof, or any bankruptcy, insolvency or cessation of
operations by any tenant under a Lease.
4. Notice of Litigation and Judgments. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower, Managing Member, the Property Owner, the
Guarantor or any other Additional Pledgor or to which any of such Persons is or
is to become a party involving an uninsured claim against any of such Persons
in an amount in excess of $500,000 (or $10,000,000.00 as to Guarantor) and
stating the nature and status of such litigation or proceedings. The Borrower
will give notice to the Agent, in writing, in form and detail satisfactory to
the Agent and each of the Banks, within ten days of any judgment in excess of
$500,000 (or $10,000,000.00 as to Guarantor) not covered by insurance, whether
final or otherwise, against any of the Borrower, Managing Member, the Property
Owner, the Guarantor or any other Additional Pledgor.
Section F. Existence. Holding Company will do or cause to be done all
things necessary to preserve and keep in full force and effect and in good
standing its existence and the existence of the Property Owner as a Delaware
limited liability company. The Borrower will cause each of the Property Owner,
the Managing Member, Co-Managing Member and any Additional Pledgor to do or
cause to be done all things necessary to preserve and keep in full force and
effect and in good standing their legal existence. Without limiting the
foregoing, Property Owner and Holding Company shall take all actions as are
necessary to maintain all protections afforded to limited liability companies
by the States of New York, as applicable, and Delaware. The Borrower will do
or cause to be done all things necessary to preserve and keep in full force all
of its rights and franchises and those of the Property Owner, the Managing
Member and any Additional Pledgor. The Borrower will, and will cause each of
the Property Owner, the Managing Member and any Additional Pledgor to, continue
to engage primarily in the businesses now conducted by them.
Section G. Insurance.
1. The Borrower will cause the Property Owner, at its expense, to
procure and maintain the insurance policies required by the Mortgage Loan
Documents. Each commercial general liability or umbrella liability policy with
respect to the Mortgaged Property shall name the Agent and each Bank as an
additional insured and shall contain a cross liability/severability
endorsement. The Borrower shall deliver duplicate originals or certified
copies of all such policies to the Agent, and the Borrower shall promptly
furnish to the Agent all renewal notices and evidence that all premiums or
portions thereof then due and payable have been paid. At least 30 days prior
to the expiration date of all such policies, the Borrower shall deliver to the
Agent evidence of continued coverage, including a certificate of insurance, as
may be reasonably satisfactory to the Agent.
2. In the event of any loss or damage to the Mortgaged Property,
the Borrower shall give prompt written notice to the insurance carrier and the
Agent, and the Agent shall furnish a copy of such notice promptly to each of
the Banks. The Agent and the Banks acknowledge that the Property Owner's
rights to any insurance proceeds are subject to the terms of the Mortgage. The
Borrower may not and shall not permit the Property Owner to settle, adjust or
compromise any claim under such insurance policies without the prior written
consent of the Agent; provided, further, that the Property Owner may make proof
of loss and adjust and compromise any claim under casualty insurance policies
which is of an amount less than $10,000,000.00 so long as no Default or Event
of Default has occurred. Any proceeds of such claim which are not used to
reconstruct or repair the Mortgaged Property, or applied to the balance of the
loan evidenced by the Mortgage Loan Documents, shall be deposited into the
accounts established pursuant to the Mortgage Cash Collateral Agreement to the
extent required thereby, or if such deposit is not required thereunder, then
such proceeds shall be paid to the Agent and applied to the payment of the
Obligations whether or not then due.
3. In the event that the Property Owner is permitted pursuant to
the terms of the Mortgage to reconstruct, restore or repair the Mortgaged
Property following a casualty to any portion of the Mortgaged Property, the
Borrower shall cause the Property Owner to promptly and diligently repair and
restore the Mortgaged Property in the manner and within the time periods
required by the Mortgage, the Leases and any other agreements affecting the
Mortgaged Property. In the event that Property Owner is permitted pursuant to
terms of the Mortgage to elect to not reconstruct, restore or repair the
Mortgaged Property following a casualty to any portion of the Mortgaged
Property, the Borrower shall not permit the Property Owner to elect not to
reconstruct, restore or repair the Mortgaged Property without the prior written
consent of the Agent.
Section H. Condemnation. In the event that all or any portion of the
Mortgaged Property shall be damaged or taken through condemnation (which term
shall include any damage or taking by any governmental authority, quasi-
governmental authority, any party having the power of condemnation, or any
transfer by private sale in lieu thereof), or any such condemnation shall be
threatened, the Borrower shall give prompt written notice to the Agent, and the
Agent shall furnish a copy of such notice promptly to each of the Banks. The
Agent and the Banks acknowledge that the Property Owner's rights to any
condemnation award is subject to the terms of the Mortgage. The Borrower may
not and shall not permit the Property Owner to settle or compromise any claim,
action or proceeding relating to such damage or condemnation without the prior
written consent of the Agent; provided, further, that the Property Owner may
settle, adjust and compromise any such claim, action or proceeding which is of
an amount less than $10,000,000.00 so long as no Default or Event of Default
has occurred. Any proceeds, award or damages from such damage or condemnation
which are not used to reconstruct or repair the Mortgaged Property, or applied
to the balance of the loan evidenced by the Mortgage Loan Documents, shall be
paid to the Agent and applied to the payment of the Obligations whether or not
then due. In the event that the Property Owner is permitted pursuant to the
terms of the Mortgage to reconstruct, restore or repair the Mortgaged Property
following a condemnation of any portion of the Mortgaged Property, the Borrower
shall cause the Property Owner to promptly and diligently repair and restore
the Mortgaged Property in the manner and within the time periods required by
the Mortgage, the Leases and any other agreements affecting the Mortgaged
Property. In the event that the Property Owner is permitted pursuant to the
terms of the Mortgage to elect not to reconstruct, restore or repair the
Mortgaged Property following a condemnation of any portion of the Mortgaged
Property, the Borrower shall not permit the Property Owner to elect not to
reconstruct, restore or repair the Mortgaged Property without the prior written
consent of the Agent.
Section I. Taxes; Liens.
1. The Borrower will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue (taking into account
extensions thereto), all taxes, assessments and other governmental or private
charges imposed upon the Borrower, Managing Member, the Guarantor, the other
Additional Pledgors and upon the Collateral and such Person's sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid or unbonded
might by law become a lien or charge upon any of its property, and shall in any
event cause the prompt, full and unconditional discharge of all liens imposed
on or against the Collateral or any portion thereof within thirty (30) Business
Days after receiving written notice (whether from Mortgagee, the Agent, the
lienholder or any other Person) of the filing thereof; provided that so long as
no Event of Default has occurred, any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings which shall suspend the
collection thereof with respect to such property, neither such property nor any
portion thereof or interest therein would be in any danger of sale, forfeiture
or loss by reason of such proceeding and the Borrower or such Person shall have
set aside adequate reserves with respect thereto as the Agent may reasonably
require; and provided, further, that forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor,
the Borrower either (i) will provide a bond issued by a surety reasonably
acceptable to the Agent and sufficient to stay all such proceedings or (ii) if
no such bond is provided, will pay or cause to be paid each such tax,
assessment, charge, levy or claim. Notwithstanding anything in this Section
7.9(a) to the contrary, the Borrower shall not be required to cause the
Guarantor to pay any income taxes of the Guarantor in an amount not to exceed
$10,000,000.00 before the same shall become overdue; provided, however, that
the Borrower shall cause the Guarantor to immediately pay any and all such
taxes in the event that any lien or charge arises upon any of its property as a
result of such non-payment.
2. The Borrower shall cause the Property Owner to pay all
"Impositions" (as defined in the Mortgage), to pay all claims for labor,
material or supplies that if unpaid or unbonded might by law become a lien or
charge upon any of its property (including the Mortgaged Property), and to keep
the Mortgaged Property free from all "Liens" (as such term is defined in the
Mortgage) (other than the lien of the Mortgage and the Permitted Exceptions),
and shall in any event cause the prompt, full and unconditional discharge of
all Liens imposed upon the Mortgaged Property or any portion thereof within
thirty (30) Business Days after receiving written notice (whether from
Mortgagee, the Agent, the lienholder or any other Person) of the filing
thereof; subject in each case to the Property Owner's right to contest the same
as permitted in but subject to the conditions set forth in the Mortgage so long
as no Event of Default has occurred. In the event that the Property Owner
elects to commence any contest or similar proceeding with respect to any such
Impositions, Liens or other claims described herein, the Borrower shall provide
prompt written notice thereof to the Agent together with such evidence as the
Agent may reasonably require showing the Property Owner's satisfaction of the
requirements set forth in Section 8 of the Mortgage to the Property Owner
conducting such contest. Notwithstanding the foregoing, the Borrower shall
cause the Property Owner promptly to pay any contested Imposition, Lien or
claim and the payment thereof shall not be deferred, if Mortgagee or the
Property Owner may be subject to civil or criminal damages as a result thereof.
If such action or proceeding is terminated or discontinued adversely to the
Property Owner, then the Property Owner shall deliver to the Agent reasonable
evidence of payment of such contested Imposition or Lien.
Section J. Inspection of Properties and Books. The Borrower shall
permit the Banks, through the Agent or any representative designated by the
Agent, at the Borrower's expense to visit and inspect the Mortgaged Property
during normal business hours at any time after reasonable advance notice, to
examine the books of account of the Borrower and the Property Owner (and to
make copies thereof and extracts therefrom) and to discuss the affairs,
finances and accounts of the Borrower and the Property Owner with, and to be
advised as to the same by, its members and officers, all at such reasonable
times and intervals as the Agent or any Bank may reasonably request. The Banks
shall use good faith efforts to coordinate such visits and inspections so as to
minimize the interference with and disruption to the Borrower's and the
Property Owner's normal business operations.
Section K. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will comply with, and will cause the Property Owner and Managing
Member to comply with, (i) all applicable laws, ordinances, regulations and
requirements now or hereafter in effect wherever its business is conducted,
including all Environmental Laws in all material respects, (ii) the provisions
of its certificate of formation, operating agreement, corporate charter,
partnership agreement or declaration of trust, as the case may be, and other
charter documents and bylaws, (iii) the Mortgage Loan Documents, the Loan
Documents, the Leases and in all material respects all other mortgages,
indentures, contracts, agreements and instruments to which it is a party or by
which it or any of its properties may be bound, (iv) all applicable decrees,
orders, and judgments, and (v) all material licenses and permits required by
applicable laws and regulations for the conduct of its business or the
ownership, use or operation of its properties. Borrower covenants and agrees
to give the Agent prompt notice of any non-compliance with such laws,
ordinances, regulations or requirements and of any notice of non-compliance
therewith which it, Managing Member or Property Owner receives or any
threatened or pending proceedings in respect thereto or with respect to the
Mortgaged Property (including, without limitation, changes in zoning) of which
the Property Owner, Managing Member or the Borrower receives notice. If at any
time while any Loan or Note is outstanding, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower,
Managing Member or the Property Owner may fulfill any of its obligations
hereunder, the Borrower, Managing Member or the Property Owner will immediately
take or cause to be taken all steps necessary to obtain such authorization,
consent, approval, permit or license and furnish the Agent and the Banks with
evidence thereof. Notwithstanding the foregoing, the Property Owner shall have
the right to contest the applicability of any legal requirement subject to the
terms and conditions of Section 8(c) of the Mortgage so long as Property Owner
is in good faith, and by proper legal proceedings, diligently contesting the
application thereof, provided no Event of Default shall exist and be continuing
hereunder, and the Borrower provides evidence to the Agent that the Property
Owner is otherwise fully complying with each of the conditions set forth in
Section 8(c) of the Mortgage applicable to such contest. The Borrower shall
promptly notify the Agent of the commencement of any contest or similar
proceeding hereunder. Notwithstanding the foregoing, the Borrower shall cause
the Property Owner promptly to comply with any contested legal requirement, and
compliance therewith shall not be deferred, if the Property Owner or the
Mortgagee may be subject to civil or criminal charges or damages a result
thereof. If such action or proceeding is terminated or discontinued adversely
to the Property Owner, then, the Borrower shall, upon written demand, deliver
to the Agent reasonable evidence of compliance by the Property Owner with such
contested legal requirement.
Section L. Further Assurances. The Borrower will cooperate with the
Agent and the Banks and execute such further instruments and documents as the
Banks or the Agent shall reasonably request to carry out to their reasonable
satisfaction the transactions contemplated by this Agreement and the other Loan
Documents (provided that the foregoing shall not expand the obligations or
reduce the rights of Borrower under the Loan Documents).
Section M. Management. Without the prior written consent of the Agent,
such consent not to be unreasonably withheld or delayed, the Management
Agreements shall not be modified or amended in any manner. The Borrower shall
not permit the Property Owner to enter into any other Management Agreement for
or otherwise manage the Mortgaged Property itself without the prior written
consent of the Agent, such consent not to be unreasonably withheld. Any
Management Agreement shall be in form and substance reasonably satisfactory to
the Agent. Notwithstanding the foregoing, any manager of the Mortgaged Property
shall satisfy any conditions or requirements contained in the Mortgage to such
entity acting as the manager of the Mortgaged Property. In no event shall any
management fee be paid to any manager that is affiliated with the Property
Owner, the Borrower, the Guarantor or any other Additional Pledgor (including
without limitation, Xxxxx Real Estate Co.) until any and all amounts then due
and payable to the Agent or the Banks pursuant to the Loan Documents have been
paid in full.
Section N. Leases of the Property. The Borrower will cause the Property
Owner to take or cause to be taken all reasonable steps within the power of the
Property Owner to market and lease the leasable area of the Mortgaged Property.
Any proposed standard form of lease (a "Standard Form Lease") to be used by the
Property Owner in connection with the Mortgaged Property shall be submitted to
and approved by the Agent in its reasonable discretion prior to its submission
to any proposed tenant, and the Borrower will cause the Property Owner to make
such amendments, modifications or additions thereto as may be reasonably
required by the Agent. As used herein, "Leasing Parameters" means leasing
parameters for the Mortgaged Property approved by the Agent from time to time
in its reasonable discretion. Leasing Parameters shall include, without
limitation, the minimum and maximum term, the minimum rent, tax and operating
stops, tenant standard improvements, tenant allowances and other tenant
inducements and leasing commissions, and shall be submitted to and approved by
the Agent prior to the commencement of each calendar year during the term of
the Loans in connection with the approval of the Budget. So long as any Lease
covers less than 85,000 square feet of the Mortgaged Property, is a bona fide
arm's length lease with a party unaffiliated with the Property Owner, the
Borrower, the Guarantor, the Managing Member or any Additional Pledgor, falls
within the Leasing Parameters and is on the Standard Form Lease (without
material modification or addition), the Property Owner shall be entitled to
enter into such Lease without any approval of such lease by the Agent. Each
other Lease shall be submitted to the Agent for approval, which approval shall
not be unreasonably withheld, conditioned or delayed. Any such Lease submitted
to the Agent for approval shall be deemed approved by the Agent unless the
Agent expressly disapproves the same by written notice delivered to the
Borrower (which shall state the reasons for disapproval) within ten (10)
Business Days after the date of the delivery of such Lease to the Agent for
approval and all other information reasonably requested by the Agent in order
to make such determination. If any Lease submitted to the Agent for approval
covers more than 85,000 square feet of the Mortgaged Property, the request to
the Agent for approval must be accompanied by any financial statement or
statements obtained by the Borrower with respect to the proposed tenant. The
Agent shall have the right, and the Borrower hereby authorizes the Agent, to
communicate directly with any tenant under a Lease to verify any information
delivered to the Agent by the Borrower concerning such tenant or such tenant's
Lease.
Section O. Budgets.
1. The Borrower shall cause the Property Owner to manage, lease,
maintain, supervise, direct and operate the Mortgaged Property in accordance
with the Approved Budget. Without the prior written consent of the Agent, which
consent shall not be unreasonably withheld or delayed, and except for emergency
conditions as hereinafter permitted, the Borrower shall not permit the Property
Owner to use any income from the Mortgaged Property for any purpose other than
(i) the payment of expense items identified in the Approved Budget, (ii) the
funding of the accounts and sub-accounts pursuant to the Mortgage Cash
Collateral Agreement (to the extent such funding is in excess of the amounts
set forth in the Approved Budget), and (iii) the funding of any balance to the
Agent to be disbursed as provided in the Cash Collateral Agreement. The Agent
shall not be permitted to withhold its consent as to any line item or sum shown
in any proposed Budget that is required to be deposited with the Mortgagee
pursuant to the Mortgage Cash Collateral Agreement. Notwithstanding the
foregoing, the Borrower may permit the Property Owner without the prior written
consent of the Agent to make expenditures in excess of the amount set forth in
the applicable Approved Budget as a result in changes in occupancy of the
Mortgaged Property to which such Budget relates or increased cost of operations
to the extent required to maintain the same level of service and coverage for
the Mortgaged Property to which such Budgets relates, provided that such
expenditures shall not result in the amount of any category of an applicable
approved Budget being exceeded by ten percent (10%). After approval, the
Borrower may request that the Agent approve adjustments in the Budget, which
approval shall not be unreasonably withheld, conditioned or delayed. In the
event that the Agent does not notify the Borrower within ten (10) business days
that any revised Budget has been disapproved, said revised Budget shall be
deemed approved. Attached hereto as Exhibit C is the initial Approved Budget.
2. On or before November 15 of each year, the Borrower shall cause
the Property Owner to submit to the Agent for the Agent's approval a proposed
Budget for the Mortgaged Property for the next succeeding calendar year. Each
proposed Budget shall be submitted to the Agent together with a narrative
description of the assumptions upon which the proposed Budget is based and such
other information as the Agent may reasonably request. Upon the request of the
Agent, the Borrower shall cause the Property Owner and such other Persons as
the Agent may reasonably request to meet with the Agent to review and discuss
the proposed Budget and any proposed revisions thereto. Within thirty (30)
calendar days after the receipt by the Agent of the proposed Budget and all
supporting information reasonably required by the Agent, the Agent shall either
approve such proposed Budget or notify the Property Owner of its proposed
revisions. Upon approval by the Agent, such proposed Budget for each
subsequent period, together with any revisions approved by the Agent, shall be
deemed to constitute the "Approved Budget" for the period in question for all
purposes. If the Agent fails to approve a Budget for any period prior to the
commencement thereof, then, pending the final resolution of any dispute, the
Property Owner shall continue to manage, lease, maintain, supervise, direct and
operate the Mortgaged Property in accordance with the applicable Budget
approved for the previous period until a new Budget is approved; provided,
however, that Property Owner shall be authorized during any interim period to
reasonably exceed the budgeted amounts for taxes, utilities, contract services
and pre-existing contractual obligations and personnel and insurance costs to
the extent required to maintain the same level of service and coverage provided
during the previous calendar year.
3. In the event that any emergency repairs are required or any
emergency conditions exist, the Borrower shall have the right to permit the
Property Owner to expend such monies as are reasonably necessary to make any
emergency repairs or correct such emergency conditions. The Borrower shall
cause the Property Owner to confer with the Agent as soon as practical after
the occurrence of such emergency and to furnish to the Agent a complete report
promptly thereafter. For all purposes herein, "emergency conditions" or
"emergency repairs" shall refer to repairs or conditions requiring corrective
acts or repair (i) immediately necessary for the preservation and safety of the
Mortgaged Property, (ii) to avoid the immediate suspension of utility or
similar services to the Mortgaged Property or (iii) because of danger to life
or property.
Section P. Preservation and Maintenance.
1. Borrower (i) shall not permit or commit waste, impairment, or
deterioration of the Mortgaged Property or permit Property Owner to abandon the
Mortgaged Property, (ii) shall cause Property Owner to restore or repair
promptly and in a good and workmanlike manner all or any part of the Mortgaged
Property in the event of any damage, injury or loss thereto, to the equivalent
of its condition prior to such damage, injury or loss, or such other condition
as the Agent may approve in writing, (iii) shall cause Property Owner to keep
the Mortgaged Property, including the Building and any fixtures, equipment,
machinery and personal property, in good order, repair and tenantable condition
(subject to ordinary wear and tear) and shall replace fixtures, equipment,
machinery and personal property on the Mortgaged Property when necessary to
keep such items in good order, repair, and tenantable condition, and (iv) shall
cause Property Owner to keep all trademarks, tradenames, servicemarks and
licenses and permits necessary for the use and occupancy of the Mortgaged
Property in good standing and in full force and effect. Neither the Borrower,
Property Owner nor any tenant or other Person shall remove, demolish or alter
any Building now existing or hereafter erected on the Mortgaged Property or any
other fixtures, equipment, machinery or personal property in or on the
Mortgaged Property except when incident to the replacement of fixtures,
equipment, machinery or other personal property with items of like kind and
value. The Borrower shall cause the Property Owner to comply with the asbestos
operations and maintenance program in effect as of the date hereof, and shall
not permit the Property Owner to discontinue or materially modify such program
without the Agent's prior written consent. In the event that the Property
Owner shall remove any asbestos or asbestos-containing materials after the date
hereof, such removal shall be performed in accordance with all applicable laws
and, upon the request of the Agent, the Borrower shall provide evidence of such
compliance to the Agent.
2. Provided that no Event of Default shall have occurred and be
continuing hereunder, the Borrower may permit the Property Owner to undertake
any alteration, improvement, demolition or removal of Mortgaged Property or any
portion thereof (an "Alteration") so long as such Alteration (i) is performed
strictly in compliance with the terms and conditions of the Mortgage and the
other Mortgage Loan Documents, (ii) is permitted by the Leases, (iii) shall not
materially adversely effect the value of the Mortgaged Property taken as a
whole or materially reduce the income from the level available immediately
prior to commencement of such Alteration, (iv) shall not have a material
adverse effect on the ability of the Property Owner to perform its obligations
under the Mortgage Loan Documents and the Leases or of the Borrower to perform
its obligations under the Loan Documents, and (v) was approved as a part of the
current Approved Budget (or is otherwise permitted in Section 7.15) or is
required pursuant to the terms of the Mortgage Cash Collateral Agreement. Any
other Alteration shall require the prior written consent of the Agent, such
consent not to be unreasonably withheld or delayed. All work performed in
connection with any Alteration shall be performed in accordance with all
applicable laws. The Borrower shall cause the Property Owner to provide to the
Agent such evidence as the Agent may reasonably require to evidence the
Property Owner's compliance with the terms of the Mortgage and this Agreement
in connection with any Alteration.
Section Q. Use of Mortgaged Property. Unless required by applicable law
or unless the Agent has otherwise agreed in writing, the Borrower shall not
allow or permit the Property Owner to allow material changes in the nature of
the occupancy or use for which the Mortgaged Property was intended at the time
this Agreement was executed. The Borrower shall not initiate, permit to occur
or acquiesce in or permit the Property Owner to initiate, permit to occur or
acquiesce in a change in the zoning classification of the Mortgaged Property or
subject the Mortgaged Property to restrictive, negative or other covenants
without the Agent's written consent, which consent shall not be unreasonably
withheld or delayed. The Borrower shall cause the Property Owner to comply
with, observe and perform in all material respects all zoning and other laws
affecting the Mortgaged Property, all agreements and other covenants affecting
the Mortgaged Property (including without limitation the Mortgage Loan
Documents), and all licenses and permits affecting the Mortgaged Property.
Without limiting the foregoing, the Borrower shall cause the Property Owner to
take all actions as are necessary to cause the prompt distribution to Agent of
all "Excess Cash Flow" (as such term is defined in the Mortgage Cash
Collateral Agreement) to Agent as provided in the Mortgagee Cash Management
Agreement.
Section R. Curing of Misrepresentation. The Borrower covenants and
agrees that in the event that the Borrower obtains any knowledge that any
representation or warranty made by the Borrower, the Guarantor, the Managing
Member or any other Additional Pledgor in this Agreement or any of the other
Loan Documents or any acknowledgment delivered by any such of Persons to Agent
or the Banks in connection with the Loans shall be untrue or misleading, the
Borrower shall promptly notify the Agent in writing of the same and shall,
within thirty (30) days after learning such representation or warranty is
untrue or misleading, take such actions as are required to cause such warranty
or representation to be correct, which thirty (30) day period shall serve as a
cure period for such representation or warranty.
Section S. Property Owner to Remain a Single-Purpose Entity. The
Borrower shall cause the Property Owner to be and remain a "Single-Purpose
Entity" (as such term is defined in the Mortgage), shall cause the Property
Owner to do all things necessary to observe limited liability company
formalities and to preserve its existence, and will not permit the Property
Owner to amend, modify or otherwise change its operating agreement, articles of
incorporation, bylaws or other organizational documents.
Section T. Condominium. The Borrower hereby represents, warrants and
covenants that:
1. The Condominium Documents and all of the easements and other
rights granted thereby are now valid and subsisting.
2. Borrower will cause the Property Owner to fully and faithfully
pay when due and payable the assessments, common charges and other charges
mentioned in and made payable by the Property Owner under the Condominium
Documents, and shall cause the Property Owner to fully and faithfully perform
all obligations on the part of the Property Owner to be performed under the
Condominium Documents in the time and manner therein prescribed.
3. Borrower shall cause the Property Owner to do all things
necessary to preserve and to keep unimpaired its rights, powers and privileges
under the Condominium Documents and (subject to the provisions of subsection
7.20(i) below) to prevent the termination or expiration of the Condominium
Documents, or the withdrawal of the Building from a condominium form of
ownership under the Condominium Act, to the end that the Property Owner may
enjoy all of the rights granted to it as a party to the Condominium Documents.
4. The Borrower will promptly notify Agent of any failure by the
Property Owner to comply with the Condominium Documents.
5. The Borrower will (i) promptly notify Agent of the receipt by
Borrower, the Managing Member or the Property Owner of any notice from the
Board of Managers or owner of any other unit of the Condominium, asserting or
claiming a default by the Property Owner under, or lack of compliance by the
Property Owner with, the Condominium Documents, (ii) promptly notify Agent of
the receipt by the Borrower, the Managing Member or the Property Owner of any
notice or request from the Board of Managers or owner of any unit of a
termination or purported termination of the Condominium Documents or of the
condominium or of or for the commencement or taking of or intent to commence to
take any action to terminate the Condominium or the Condominium Documents or to
withdraw the Building from the Condominium ownership pursuant to the
Condominium Act or to seek any action for partition of the Condominium,
(iii) promptly notify Agent of the receipt by Borrower, the Managing Member or
the Property Owner of any notice or request from the Board of Managers or owner
of any unit of a modification or change or proposed modification or change of
or to the Condominium Documents, and (iv) promptly cause a copy of each such
notice or request received by the Property Owner, the Managing Member or the
Borrower from the Board of Managers or any unit owner, to be delivered to
Agent. Borrower will promptly notify Agent of the institution by the Board of
Mangers or owner of any other unit or any other person of a proceeding to
partition the Condominium or withdraw same from condominium ownership pursuant
to the Condominium Act, and of the institution of any such partition or
withdrawal proceeding. The Borrower will promptly deliver to Agent a copy of
each notice, pleading, brief and preliminary, interim and final determination
or decision and other papers received by it in each such partition or
withdrawal proceeding.
6. Subject to the provisions of subsection 7.20(i) below, Borrower
will not, without the prior consent of Agent, allow or suffer the Property
Owner to wholly or partially terminate, modify, subordinate or surrender or
suffer or permit in whole or in part any termination, modification, surrender
or expiration of any of the Condominium Documents, or withdraw or cause or
permit the withdrawal of the Condominium by operation of law or otherwise from
condominium ownership pursuant to the Condominium Act, or allow or suffer the
Property Owner to commence or prosecute any action or proceeding to partition
the Condominium or cause or permit the Condominium to be partitioned pursuant
to the Condominium Act or otherwise.
7. Borrower will, within 20 days after receipt of a demand from
Agent, obtain from the Board of Managers and deliver to Agent a duly signed and
acknowledged certificate certifying that the Condominium Documents are
unmodified and in full force and effect (or, if the same have been modified in
compliance with the Mortgage Loan Documents and this Agreement, that the
Condominium Documents are in full force and effect as so modified and that
there have been no other modifications, stating the dates to which the
assessments, common charges and other charges payable under the Condominium
Documents have been paid and stating whether to the certifying party's
knowledge the Property Owner is in compliance with the Condominium Documents
or, if not, specifying each default or failure of compliance of which the
certifying party has knowledge. Borrower will, promptly upon receipt thereof
by Borrower, the Managing Member or the Property Owner, furnish Agent with a
copy of all notices and statements, however characterized, issued by the Board
of Managers relating to the Condominium.
8. Borrower will not permit or suffer the Property Owner to
exercise any of the Property Owner's rights under the Condominium Documents,
or, to the extent not prohibited by applicable laws, vote at any meeting of the
Board of Mangers, in any way that is inconsistent with its duties or
obligations under the Mortgage Loan Documents or this Agreement.
Notwithstanding the foregoing, after the occurrence of an Event of Default
hereunder and for so long as such Event of Default is continuing, Borrower will
notify Agent of all meetings of the Board of Managers, at least five (5)
business days prior thereto, and, to the extent not prohibited by applicable
law, Borrower will cause the Property Owner to exercise all of its rights under
the Condominium Documents, and vote at all meetings of the Board of Managers,
in accordance with any instructions delivered by the Agent to the Borrower.
9. Notwithstanding anything contained in this Section 7.20 to the
contrary, Borrower may permit the Property Owner to terminate the Condominium
Documents and withdraw the Building from a condominium form of ownership,
provided that immediately upon the cessation of the condominium form of
ownership, fee simple title to the Building and the land described in the
Condominium Declaration shall vest in the Property Owner.
Section U. ERISA Compliances. The Borrower will not permit the present
value of all employee benefits vested in all Employee Benefit Plans,
Multiemployer Plans and Guaranteed Pension Plans maintained by the Borrower,
the Property Owner and any ERISA Affiliate thereof to exceed the present value
of the assets allocable to such vested benefits by an amount greater than
$500,000.00 in the aggregate. Neither the Borrower, the Property Owner nor any
ERISA Affiliate thereof will at any time permit any such Plan maintained by it
to engage in any "prohibited transaction" as such term is defined in Section
4975 of the Code or Section 406 of ERISA, incur any "accumulated funding
deficiency" as such term is defined in Section 302 of ERISA, whether or not
waived, or terminate any such Plan in any manner which could result in the
imposition of a lien on the property of the Borrower, the Property Owner, the
Managing Member or any Additional Pledgor pursuant to Section 4068 of ERISA.
Section VIII. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, until all of the Obligations have
been paid and performed in full:
Section A. Covenants with Respect to Indebtedness, Operations,
Fundamental Changes of the Borrower. The Borrower represents, warrants and
covenants as of the date hereof and until such time as the Obligations are paid
in full, that each Borrower and Managing Member:
1. does not own and will not own any encumbered asset other than,
as to the Borrower only, its interest as a member in the Property Owner (which
will only be encumbered by liens in favor of the Agent);
2. is not engaged and will not engage in any business other than
the ownership, operation and, as to the Borrower only, financing of its
interest as a member in the Property Owner;
3. does not and will not have any subsidiaries (whether the same
would constitute an entity that could be consolidated on the Borrower's or
Managing Member's financial statements or a minority interest) other than the
Property Owner;
4. will not enter into any contract or agreement with any member,
shareholder, principal or affiliate of the Borrower or Managing Member or any
affiliate of any such member, shareholder, principal or affiliate, except 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 an affiliate;
5. has not incurred and will not incur any Indebtedness, other
than, as to the Borrower only, the Obligations, and other than current
liabilities of the Borrower and Managing Member incurred in the ordinary
course of business in connection with normal purchases of goods and services;
no other debt of Borrower may be secured (senior, subordinate or pari passu) by
any right or asset of the Borrower;
6. has not made and will not make any loans or advances to any
third party (including the Property Owner or any affiliate of the Borrower or
Managing Member or any member or shareholder of the Borrower or Managing
Member);
7. is and will remain solvent and pay its debts and liabilities
(including, without limitation, employment and overhead expenses) from its
assets as the same shall become due;
8. has done or caused to be done and will do all things necessary
to observe limited liability company, corporate and partnership formalities (as
applicable) and to preserve its existence, and will not, nor will any member or
shareholder thereof, amend, modify or otherwise change its operating agreement,
articles of incorporation, by-laws or other organizational documents in a
manner which adversely affects the Borrower's or Managing Member's or such
member's or shareholder's existence as a single purpose entity;
9. will conduct and operate its business as presently conducted and
operated;
10. will maintain books and records and bank accounts separate from
those of its affiliates, including its members and shareholders;
11. 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 thereof, including any member, shareholder or any affiliate of any
member of the Borrower, Managing Member or Guarantor) and shall maintain and
use separate stationery, invoices and checks;
12. will file its own separate tax returns;
13. 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;
14. will not, nor shall any member, shareholder or affiliate, seek
the dissolution or winding up, in whole or in part, of the Borrower or Managing
Member;
15. will not enter into any transaction of merger, consolidation or
other business combination, or acquire by purchase or otherwise all or
substantially all of the business or assets of, or any stock or beneficial
ownership of, any entity;
16. will not commingle the funds and other assets of the Borrower or
Managing Member with those of any member, shareholder, any affiliate or any
other Person;
17. has and will maintain its assets in such a manner that it is not
costly or difficult to segregate, ascertain or identify its individual assets
from those of any affiliate or any other Person;
18. does not and will not hold itself out to be responsible for the
debts or obligations of any other Person;
19. shall comply with the provisions of its operating agreement,
articles of incorporation or bylaws or other organizational documents, as
applicable; and
20. shall be organized and conduct its business so that, and
otherwise cause, the assumptions of fact made with respect to the Borrower, the
Managing Member, the Guarantor, Holding Company Managing Member, the Property
Owner and 000 Xxxx Xxxxxx Finance Corp. in that certain opinion letter dated
the date hereof delivered by Xxxxxx & Xxxxxxx with respect to non-consolidation
issues, delivered in connection with the execution and delivery of the Loan
Documents shall be true and correct, in all material respects at all times.
Section B. Restrictions on Liens, Etc. The Borrower will not, and will
not permit Managing Member to, (a) create or incur or suffer to be created or
incurred or to exist any lien, security title, encumbrance, mortgage, pledge,
negative pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom; (b) transfer any
of its property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional
sale or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than 30 days after the
same shall have been incurred any Indebtedness or claim or demand against it
that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; (e) sell, assign,
pledge or otherwise transfer any accounts, contract rights, general
intangibles, chattel paper or instruments, with or without recourse; or (f)
incur or maintain any obligation to any holder of Indebtedness of the Borrower
which prohibits the creation or maintenance of any lien securing the
Obligations.
Section C. Sale and Leaseback; Ground Lease. The Borrower will not
permit the Property Owner to enter into any arrangement, directly or
indirectly, whereby the Property Owner shall sell or transfer the Mortgaged
Property in order that then or thereafter the Property Owner or any affiliate
thereof shall lease back the Mortgaged Property. The Borrower will not permit
the Property Owner to enter into a ground lease or similar lease for the
Mortgaged Property.
Section D. Compliance with Environmental Laws.
1. The Borrower will not permit the Property Owner to do any of the
following: (i) use any of the Mortgaged Property or any portion thereof as a
facility for the handling, processing, storage or disposal of Hazardous
Substances, except for small quantities of Hazardous Substances used in the
ordinary course of business and in compliance with all applicable Environmental
Laws and the presence of asbestos or asbestos-containing materials located in
the Building as of the date hereof which are to be maintained, contained and
removed in accordance with the terms of the Mortgage Loan Documents and this
Agreement, (ii) cause or permit to be located on the Mortgaged Property any
underground tank or other underground storage receptacle for Hazardous
Substances except in full compliance with Environmental Laws, (iii) generate
any Hazardous Substances on the Mortgaged Property, (iv) conduct any activity
at the Mortgaged Property or use the Mortgaged Property in any manner so as to
cause a Release of Hazardous Substances on, upon or into the Mortgaged Property
or any surrounding properties or any threatened Release of Hazardous Substances
which might give rise to liability under any Environmental Law, or (v) directly
or indirectly transport or arrange for the transport of any Hazardous
Substances (except in compliance with all Environmental Laws).
2. The Borrower shall, if any Release or disposal of Hazardous
Substances shall occur or shall have occurred on the Mortgaged Property
(including without limitation any such Release or disposal occurring prior to
the acquisition of such Mortgaged Property by the Property Owner), cause the
Property Owner to cause the prompt containment and removal of such Hazardous
Substances and remediation of the Mortgaged Property in full compliance with
all applicable laws and regulations and to the reasonable satisfaction of the
Majority Banks; provided, that the Borrower shall be deemed to be in compliance
with Environmental Laws for the purpose of this subparagraph (b) so long as the
Property Owner or a responsible third party with sufficient financial resources
is taking reasonable action to remediate or manage any event of noncompliance
to the satisfaction of the Majority Banks and no action shall have been
commenced by any enforcement agency. The Majority Banks may engage their own
Environmental Engineer to review the environmental assessments and the
Borrower's compliance with the covenants contained herein.
3. At any time after an Event of Default shall have occurred
hereunder, or, whether or not an Event of Default shall have occurred, at any
time that the Agent or the Majority Banks shall have reasonable grounds to
believe that a Release or threatened Release of Hazardous Substances may have
occurred, relating to the Mortgaged Property, or that the Mortgaged Property is
not in compliance with the Environmental Laws, the Agent may at its election
(and will at the request of the Majority Banks) obtain such environmental
assessments of the Mortgaged Property prepared by an Environmental Engineer as
may be necessary or advisable for the purpose of evaluating or confirming (i)
whether any Hazardous Substances are present in the soil or water at or
adjacent to the Mortgaged Property and (ii) whether the use and operation of
the Mortgaged Property comply with all Environmental Laws. Environmental
assessments may include detailed visual inspections of the Mortgaged Property
including, without limitation, any and all storage areas, storage tanks,
drains, dry xxxxx and leaching areas, and the taking of soil samples, as well
as such other investigations or analyses as are necessary or appropriate for a
complete determination of the compliance of the Mortgaged Property and the use
and operation thereof with all applicable Environmental Laws. All such
environmental assessments shall be at the sole cost and expense of the
Borrower.
Section E. Distributions. In the event that an Event of Default shall
have occurred and be continuing, at the option of the Majority Banks and
following receipt of written notice of such election, the Borrower shall make
no, and shall not permit the Managing Member to make any, Distributions
whatsoever, directly or indirectly, other than Distributions that are paid to
the Agent pursuant to the Cash Management Agreement.
Section F. Restriction on Leases. Except as provided in Section 7.14,
the Borrower will not permit the Property Owner to become a party to, or agree
to become a party to, any Lease without the prior approval of the Agent, which
approval shall not be unreasonably withheld, conditioned or delayed. The
Borrower shall not permit the Property Owner to collect any rents, issues,
profits, revenues, income or other benefits payable under any of the Leases
more than one (1) month in advance (provided that the foregoing shall not
prohibit the collection of security deposits). The Borrower will not permit
the Property Owner to amend, supplement or otherwise modify, or terminate or
cancel, or accept the surrender of, or consent to the assignment or subletting
of, or grant any concessions to or waive the performance of any obligations of
any tenant under, any Lease, without the prior approval of the Agent.
Notwithstanding anything herein to the contrary, (a) the Property Owner may,
without the prior written consent of the Agent, terminate the Lease of any
tenant of the Mortgaged Property which is not affiliated with the Property
Owner, the Borrower, the Guarantor, the Managing Member or any Additional
Pledgor and which provides for the payment of annual base or minimum rent of
less than $1,000,000.00 and which is then in default, provided that such
determination is made by the Property Owner in the normal course of business
and is consistent with sound and customary leasing and management practices for
similar properties, such termination shall not permit any other tenant or
occupant of the Mortgaged Property to terminate its Lease or cease the
operation of business from the Mortgaged Property or reduce or xxxxx rent, and
such action shall not cause (with the passage of time or otherwise) a default
under the Loan Documents, and (b) the Property Owner may, without the prior
written consent of the Agent, supplement, modify (including, without
limitation, deferring or adjusting rent) and/or consent to an assignment or
sublease with respect to the Lease of any tenant of the Mortgaged Property
which is not affiliated with the Property Owner, the Borrower, the Guarantor,
the Managing Member or any Additional Pledgor, provided that (i) the floor area
of the Lease involved is less than 50,000 rentable square feet, (ii) the
Property Owner may not, in any 36 month period, amend, supplement or modify
such Leases, or consent to an assignment or sublease with respect to such
Leases covering more than 200,000 rentable square feet in the aggregate,
(iii) the maximum aggregate amount of rent which at any time may be deferred or
adjusted pursuant to this provision with respect to the Mortgaged Property
shall not exceed $1,000,000.00, (iv) such action taken by the Property Owner is
taken in the normal course of business and is consistent with sound and
customary leasing and management practices for similar properties, and (v) such
action shall not cause (with the passage of time or otherwise) a default under
the Loan Documents. In the event that the consent of the Agent is required
under this Section 8.6, the Agent shall be deemed to have consented unless the
Agent notifies the Borrower that such consent has not been granted within ten
(10) Business Days after the receipt by the Agent of all documents and informa-
tion reasonably requested by the Agent in order to make such determination.
The Borrower shall promptly furnish to the Agent copies of any such termination
agreements or lease amendments which are permitted to be made hereunder without
the consent of the Agent. The Borrower will not, directly or indirectly, cause
or permit to exist, or allow the Property Owner to cause or permit to exist,
any condition which would result in the termination or cancellation of, or
which would relieve the performance of any obligations of any tenant under, any
Lease.
Section G. Additional Restrictions Concerning the Mortgaged Property.
1. Except as expressly provided in Section 7.14, Section 8.6, the
Mortgage and any assignment of leases executed by the Property Owner in favor
of the Mortgagee in connection with the Mortgage Loan and for Permitted
Transfers, the Borrower will not, without the prior written consent of the
Agent in each instance, permit the Property Owner, directly or indirectly to:
(i) sell, convey, assign, transfer, contribute, lease, option, mortgage,
pledge, encumber, charge, hypothecate or dispose of the Mortgaged Property, or
any part thereof or interest therein; or any income or profits therefrom, or
any other accounts, contract rights, general intangibles, instruments, chattel
paper or other assets or claims, whether now owned or hereafter acquired; or
(ii) create or suffer to be created or to exist any lien, encumbrance, security
interest, mortgage, pledge, restriction, attachment or other charge of any kind
upon, or any levy, seizure, attachment or foreclosure of, the Mortgaged
Property, or any part thereof or interest therein, or any income or profit
therefrom, or any other accounts, contract rights, general intangibles,
instruments, chattel paper or other assets or claims, whether now owned or
hereafter acquired, except for Permitted Liens. For the purposes of this
Section , the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of the interest of Borrower
or Managing Member in the Property Owner, or the creation or addition of a new
member or other owner of any interest in the Property Owner, shall be deemed to
be a transfer of an interest in the Property.
2. The Borrower will not permit the Property Owner to, create,
incur, assume, guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:
(i) Indebtedness arising under the Mortgage Loan Documents (it
being acknowledged and agreed that any refinancing of such
Indebtedness in connection with an assignment and restatement of the
Mortgage Loan Documents shall not constitute permitted Indebtedness);
(ii) current liabilities of the Property Owner permitted
pursuant to the Approved Budget incurred in the ordinary course of
business but not incurred through (A) the borrowing of money, or (B) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods
and services and leases of equipment in the ordinary course of business;
and
(iii) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 7.9.
Section H. Mortgage Loan Documents. The Borrower agrees to cause the
Property Owner to deliver immediately to the Agent copies of any notices,
certificates, requests, demands or other instruments furnished or delivered to
or by the Property Owner under or in any way relating to the Mortgage Loan
Documents. The Borrower shall not permit the Property Owner to seek nor to
obtain additional advances from the holder or holders of the Mortgage Loan
Documents (provided that the foregoing shall not be deemed violated in the
event that the holder or holders of the Mortgage Loan Documents shall make a
protective advance or advances for the payment of taxes, insurance premiums or
to protect the Mortgaged Property pursuant to the terms of the Mortgage,
provided that such advance may otherwise constitute a Default or Event of
Default hereunder to the extent that such protected advance is made by the
Mortgagee as a result of a Default or Event of Default under the Mortgage Loan
Documents), or to modify, amend, terminate, extend or seek a consent or waiver
under the Mortgage Loan Documents in any respect without the prior written
approval of the Agent.
Section I. Permitted Transfer. Notwithstanding anything herein or in the
other Loan Documents to the contrary, the Banks shall not withhold their
consent to a transfer (the "Permitted Transfer") by the Guarantor of its
interest in the Managing Member, Co-Managing Member, Holding Company and
Holding Company Managing Member provided that each of the following conditions
is satisfied: (a) no Default or Event of Default shall have occurred, nor
shall such transfer cause a Default or Event of Default; (b) such transfer
shall be a transfer by the Guarantor of all of its interest in each of the
foregoing entities, and such transfer shall be to a single trust controlled by
Xxxxxxx Xxxxx in the event that Xxxxxxx Xxxxx is alive and not otherwise
incapacitated, or in the event of the death or mental incapacity of Xxxxxxx
Xxxxx, then to a trust controlled by Xxxxx Xxxxxxx and/or Xxxxxxx Xxxxx
(provided that in the event that the Guarantor for compelling tax or liability
reasons relating to the current ownership structure of such interests desires
to transfer such interests to another entity, the Agent shall not unreasonably
withhold its consent to a transfer to another form of entity provided that the
same shall not cause a default or event of default under the Mortgage Loan
Documents or a Default or Event of Default, and the Borrower shall cause such
Persons as Agent may require to execute such amendments to the Loan Documents
or provide such additional pledges or assignments as the Agent may require in
order to provide the Agent with the same rights, pledges and security afforded
under the Loan Documents); (c) such transferee shall execute and deliver an
assumption agreement in form and substance satisfactory to the Agent assuming
the obligations of the Guarantor under the Loan Documents; (d) Guarantor shall
deliver to the Agent evidence satisfactory to the Agent that such transfer
shall not, or will not with the giving of notice or the passage of time,
constitute a default under the Mortgage Loan Documents or result in the
withdrawal, qualification or downgrading of the current ratings assigned to any
certificates relating to the Mortgage Loan (in the event that the same has been
securitized), to the extent the same is a condition to such transfer pursuant
to the Mortgage Loan Documents; and (e) the Agent receives and approves (such
approval not to be unreasonably withheld) certified copies of the
organizational documents and authorizing resolutions for such transferee and
such opinions of counsel to such transferee as may be reasonably required by
the Agent. From and after any such Permitted Transfer, such transferee shall
constitute an "Additional Pledgor" under this Agreement.
Section J. Managing Member.
1. Except for a Permitted Transfer, the Borrower shall not permit
the Managing Member, without the prior written consent of Agent, which consent
may be withheld by Agent in its sole and absolute discretion, directly,
indirectly or by operation of law, to sell, transfer, assign, dispose of,
pledge, convey, option, mortgage, hypothecate or encumber any of Managing
Member's interest, rights or claims in and to the Property Owner (including
without limitation any right to receive distributions from the Property Owner),
to withdraw from the Property Owner or to seek a partition of the assets of the
Property Owner.
2. (i) The Borrower shall not permit Managing Member, without the
prior written consent of Agent, which consent may be withheld by Agent in its
sole and absolute discretion, to take any action which could result in the
sale, reduction, cancellation, dilution, diminution or conversion of any
interest of Managing Member in the Property Owner, or omit to take any action
necessary to prevent any such sale, cancellation, reduction, dilution,
diminution or conversion.
Section IX. CLOSING CONDITIONS.
The obligations of the Agent and the Banks to make the Loans shall be
subject to the satisfaction of the following conditions precedent on or prior
to April 25, 1997.
Section A. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to the
Majority Banks. The Agent shall have received a fully executed copy of each
such document, except that each Bank shall have received the fully executed
counterpart of its Note.
Section B. Certified Copies of Organizational Documents. The Agent
shall have received from the Borrower a copy, certified as true and complete as
of a recent date by the appropriate officer of each State in which the
Borrower, the Managing Member, the Property Owner, and each Additional Pledgor,
as applicable, is organized and in which the Mortgaged Property is located, and
a duly authorized officer of such Person, of the certificate of formation,
operating agreement, corporate charter or other organizational documents of
such Person, and their qualifications to do business, as applicable, as in
effect on such date of certification.
Section C. Bylaws; Resolutions. All action on the part of the Borrower
and the Additional Pledgors, as applicable, necessary for the valid execution,
delivery and performance by such Person of this Agreement and the other Loan
Documents to which such Person is or is to become a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Agent shall
have been provided to the Agent. The Agent shall have received from the
Borrower and the Additional Pledgors true copies of its operating agreement or
bylaws, as applicable, and the resolutions adopted by its members or board of
directors authorizing the transactions described herein, certified by its
managing member or secretary as of a recent date to be true and complete. The
Agent shall have received from the Borrower true copies of the bylaws of
Managing Member certified by its secretary as of a recent date to be true and
complete.
Section D. Incumbency Certificate; Authorized Signers. The Agent shall
have received from the Borrower and the Additional Pledgors an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of such Person and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of such
Person, each of the Loan Documents to which such Person is or is to become a
party.
Section E. Opinion of Counsel. The Agent shall have received a
favorable opinion or opinions addressed to the Banks and the Agent and dated as
of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from counsel of the Borrower, the Guarantor and the Additional Pledgors,
as to such matters as the Agent shall reasonably request.
Section F. Appraisal. The Agent shall have received an appraisal of the
Mortgaged Property in form and substance satisfactory to the Majority Banks.
Section G. Environmental Reports. The Agent shall have received
environmental site assessment reports for the Mortgaged Property prepared by an
Environmental Engineer no more than three months prior to the Closing Date
(unless otherwise approved by the Majority Banks), which indicate the condition
of the Mortgaged Property and the Building and which set forth no
qualifications except those that are acceptable to the Majority Banks in their
sole and absolute discretion, and disclosing that the Mortgaged Property and
the Building is free of oil, underground storage tanks, asbestos or asbestos
containing material, lead paint and other Hazardous Substances (except to the
extent acceptable to the Majority Banks in their sole and absolute discretion),
and which reports are otherwise in form and substance satisfactory to the
Agent.
Section H. Insurance. The Agent shall have received duplicate originals
or certified copies of all policies of insurance required by this Agreement.
Section I. Performance; No Default. The Borrower shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Closing Date, and on the Closing Date
there shall exist no Default or Event of Default.
Section J. Representations and Warranties. The representations and
warranties made by the Borrower, the Guarantor and the Additional Pledgors in
the Loan Documents or otherwise made by or on behalf of the Borrower, Managing
Member, the Property Owner, the Guarantor and the other Additional Pledgors in
connection therewith or after the date thereof shall have been true and correct
in all respects when made and shall also be true and correct in all respects on
the Closing Date.
Section K. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory to the Agent and the Agent's Special
Counsel in form and substance, and the Agent shall have received all
information and such counterpart originals or certified copies of such
documents and such other certificates, opinions or documents as the Agent and
the Agent's Special Counsel may reasonably require.
Section L. Mortgage Loan. The Agent shall have received evidence
satisfactory to the Agent that the transactions contemplated by the Mortgage
Loan Documents have closed and that the Property Owner has received gross
proceeds therefrom in the amount of $345,000,000.00. In addition, the Agent
shall have received fully executed copies of each of the Mortgage Loan
Documents.
Section M. Due Diligence. The Banks shall have completed and found
satisfactory their due diligence regarding the Borrower, Managing Member, the
Guarantor, the Additional Pledgors, the Property Owner, the Mortgaged Property
and the Collateral.
Section N. Other Documents. To the extent requested by the Agent, the
Agent shall have received executed copies of all material agreements of any
nature whatsoever to which the Borrower or the Property Owner is a party
affecting or relating to the use, operation, development, construction or
management of the Mortgaged Property.
Section O. No Condemnation/Taking. The Agent shall have received
written confirmation from the Borrower that no condemnation proceedings are
pending or to the Borrower's knowledge threatened against the Mortgaged
Property or, if any such proceedings are pending or threatened, identifying the
same and the Agent shall have determined that none of such proceedings is or
will be material to the Mortgaged Property.
Section P. Other. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.
Section X. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section A. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults")
shall occur:
1. the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;
2. the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents, when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
3. the Borrower, Managing Member, the Property Owner, any
Additional Pledgor or any other Person acting on behalf of any of them shall
cause less than all of the Excess Cash Flow to be deposited with the Agent as
and when provided in the Cash Collateral Agreement,
4. any of the Borrower, Managing Member, the Property Owner, the
Guarantor or the other Additional Pledgors shall fail to perform any other
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified above in this Section 10);
5. any representation or warranty made by the Borrower, Managing
Member, the Property Owner, the Guarantor, the other Additional Pledgors,
Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxxxx in this Agreement or any other Loan
Document, or in any report, certificate, financial statement, or in any other
document or instrument delivered pursuant to or in connection with this
Agreement, any of the other Loan Documents or otherwise made in connection with
the transactions contemplated hereby, or any of such Person's respective
members, principals, directors, officers, or partners, or any agent, employee
or other person authorized or apparently authorized to make statements or
representations on behalf of any such Person to the extent of statements and
representations made to FNBB and Wellsford on their tour of the Mortgaged
Property on or about February 10, 1997, shall prove to have been false or
misleading in any respect upon the date when made or deemed to have been made
or repeated, subject to the provisions of Section 7.18 hereof.
6. any of the Borrower, Managing Member, the Property Owner, the
Guarantor or the other Additional Pledgors shall fail to pay at maturity, or
within any applicable period of grace, any obligation for borrowed money or
credit received or other Indebtedness in an amount individually or in the
aggregate in excess of $500,000.00 (or as to Guarantor, involving a recourse
obligation individually or in the aggregate in excess of $80,000,000.00), or
fail to observe or perform any term, covenant or agreement contained in any
agreement by which it is bound (including without limitation the Mortgage Loan
Documents), evidencing or securing any such borrowed money or credit received
or other Indebtedness in an amount individually or in the aggregate in excess
of $500,000.00 (or as to Guarantor, involving a recourse obligation
individually or in the aggregate in excess of $80,000,000.00) for such period
of time as would permit (assuming the giving of appropriate notice if required)
the holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
7. any of the Borrower, Managing Member, the Property Owner, the
Guarantor or the other Additional Pledgors (i) shall make an assignment for the
benefit of creditors, or admit in writing its general inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of any such Person or of any substantial part of the assets of any
thereof, (ii) shall commence any case or other proceeding relating to any such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or (iii) shall take any action to
authorize or in furtherance of any of the foregoing;
8. a petition or application shall be filed for the appointment of
a trustee or other custodian, liquidator or receiver of any of the Borrower,
Managing Member, the Property Owner, the Guarantor or the other Additional
Pledgors or any substantial part of the assets of any thereof, or a case or
other proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, and any such Person shall indicate its approval thereof, consent
thereto or acquiescence therein or such petition, application, case or
proceeding shall not have been dismissed within 120 days following the filing
or commencement thereof;
9. a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrower, Managing
Member, the Property Owner, the Guarantor or the Additional Pledgors bankrupt
or insolvent, or a decree or order for relief is entered in respect of any such
Person, in an involuntary case under federal bankruptcy laws as now or
hereafter constituted and, as to the Guarantor and the Property Owner only, any
decree or order appointing any such trustee, custodian, liquidator or receiver
as a result of an ex parte hearing shall not be vacated or reversed within
thirty (30) days of the entry of such decree or order (it being acknowledged
that such cure period shall not apply to the Borrower, the Managing Member or
any other Additional Pledgor other than Guarantor and shall not extend any cure
period that may have been available under Section 10.1(h) or be applicable in
the event that the provisions of Section 10.1(h) were applicable);
10. there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured
final judgment against any of the Borrower, Managing Member, the Property
Owner, the Guarantor or the other Additional Pledgors that, with other
outstanding uninsured final judgments, undischarged (and not bonded), against
such Persons exceeds in the aggregate $500,000.00 as to the Borrower, Managing
Member, or any Additional Pledgor other than Guarantor, $10,000,000.00 as to
the Property Owner, or $80,000,000.00 as to Guarantor (provided that in any
event such judgment shall be sooner removed prior to any foreclosure, levy or
other sale pursuant thereto);
11. if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks, or
any action at law, suit in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of any
of the Borrower, the Property Owner, the Guarantor or the other Additional
Pledgors or any of their respective holders of Voting Interests, or any court
or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents is
illegal, invalid or unenforceable in accordance with the terms thereof, and in
each case, such Loan Document is not replaced within five (5) Business Days by
the parties thereto with a document providing comparable warranties,
representations, covenants, rights, remedies and protections as determined by
the Agent;
12. any dissolution, termination, partial or complete liquidation,
merger or consolidation of any of the Borrower, Managing Member, the Property
Owner, the Guarantor or the other Additional Pledgors or any sale, transfer or
other disposition of the assets of any of the Borrower, Managing Member, the
Property Owner, the Guarantor or the Additional Pledgors other than as
permitted under the terms of this Agreement or the other Loan Documents;
13. any suit or proceeding shall be filed against the Borrower,
Managing Member, the Property Owner, the Guarantor, the other Additional
Pledgors, the Mortgaged Property or the Collateral which in the good faith
business judgment of the Majority Banks after giving consideration to the
likelihood of success of such suit or proceeding and the availability of
insurance to cover any judgment with respect thereto and based on the
information available to them, if adversely determined, would have a materially
adverse affect on the ability of the Property Owner to perform each and every
one of its obligations under and by virtue of the Mortgage Loan Documents or
Borrower, the Guarantor or the other Additional Pledgors to perform each and
every one of their respective obligations under and by virtue of the Loan
Documents, and such suit or proceeding shall not have been dismissed within 120
days following receipt of written notice of such determination from the Agent;
14. the Borrower, Managing Member, the Property Owner, the Guarantor
or any Additional Pledgor shall be indicted for a federal crime, a punishment
for which could include the forfeiture of any assets of such Person; provided,
however, that with respect to the Guarantor only, the foregoing shall be an
Event of Default only if the forfeiture of such assets would in the good faith
business judgment of the Agent likely reduce the net worth of the Guarantor (as
determined in accordance with the terms of the Guaranty) below $160,000,000.00;
15. with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of any of the Borrower, Managing Member, the Property Owner, the
Guarantor or the Additional Pledgors to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $1,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;
16. the Guarantor denies that the Guarantor has any liability or
obligations under the Guaranty, or shall notify the Agent or any Bank of the
Guarantor's intention to attempt to cancel or terminate the Guaranty, or shall
fail to observe or comply with any term, covenant, condition or agreement under
the Guaranty (after the expiration of any applicable notice and cure period) or
any "Triggering Event" (as defined in the Guaranty) shall occur;
17. the death or mental incapacity of the Guarantor;
18. the failure of the Property Owner to deliver a Refinance
Commitment on or before November 1, 2006, or the commencement of a "Curtailment
Period" (as defined in the Mortgage Cash Collateral Agreement); or
19. any warranty or representation of the Property Owner or the
Managing Member in any acknowledgment delivered to the Agent in connection with
the Loans shall prove to have been false or misleading in any respect upon the
date when made, subject to the provisions of Section 7.18 hereof, or the
Property Owner or the Managing Member shall fail to perform any term, covenant
or agreement contained in any such acknowledgment; or
20. any Event of Default as defined in any of the other Loan
Documents, shall occur and be continuing;
then, and in any such event, but subject to the terms of Section 10.1A, the
Agent may, and upon the request of the Majority Banks shall, by notice in
writing to the Borrower declare all amounts owing with respect to this
Agreement, the Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
specified in Section 10.1(g), Section 10.1(h) or Section 10.1(i), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from any of the Banks or the Agent.
Section 10.l(1) Limitation of Cure Periods.
(a) Notwithstanding anything contained in Section 10.1 to the
contrary, (i) no Event of Default shall exist hereunder upon the occurrence of
any failure described in Section 10.1(a) or Section 10.1(b) in the event that
the Borrower cures such default within five (5) days following receipt of
written notice of such default, provided, however, that the Borrower shall not
be entitled to receive more than two (2) notices in the aggregate pursuant to
this clause (i) in any period of 365 days ending on the date of any such
occurrence of default, and provided further that no such cure period shall
apply to any payments due upon the maturity of the Notes, and (ii) no Event of
Default shall exist hereunder upon the occurrence of any failure described in
Section 10.1(d) in the event that the Borrower cure such default with in thirty
(30) days following receipt of written notice of such default (provided,
however, that if such Default is not reasonably susceptible of being cured with
diligence within said thirty (30) day period, the same shall not constitute an
Event of Default in the event that the Borrower shall commence such cure
promptly within such thirty (30) day period and thereafter diligently and
continuously pursue such cure, provided further that in no event shall such
additional period exceed sixty (60) days, and provided further, that with
respect to any violations of applicable building codes, such cure period may be
extended for an additional period not to exceed ninety (90) days (for a total
cure period of 180 days) so long as the Borrower diligently and continuously
pursues such cure and provided that the Property Owner shall be permitted such
additional cure period pursuant to the Mortgage Loan Documents), provided that
the provisions of this clause (ii) shall not pertain to defaults consisting of
a failure to provide insurance as required by Section 7.7, to any default
consisting of a failure to comply with Section 7.7(c), Section 7.8, Section
7.15, Section 8.1, Section 8.2, Section 8.5, Section 8.7, Section 8.8 or
Section 10.3, or to any default excluded from any provision of cure of defaults
contained in any other of the Loan Documents.
(b) Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, any reference in this Agreement or any other Loan
Document to "the continuance of a default" or "the continuance of an Event of
Default" or any similar phrase shall not create or be deemed to create any
right on the part of Borrower or any other party to cure any default following
the expiration of any applicable grace or notice and cure period.
(c) Notwithstanding anything contained herein to the contrary, the
occurrence of any of the events described in Section 10.1(q) shall not
constitute an Event of Default hereunder so long as within twelve (12) months
from the date of such death or mental incapacitation (and in any event prior to
the distribution of any assets from Guarantor's estate) (i) the Borrower shall
establish to the satisfaction of the Agent that the value of the Mortgaged
Property, the Collateral and the assets of Guarantor pledged or negatively
pledged to the Agent pursuant to the Guaranty will not be adversely affected by
such death or mental incapacitation, (ii) with respect to a death only, all of
the material assets of the Guarantor (including, without limitation, the
"Protected Apple Stock" or the "Replacement Assets" (as such terms are defined
in the Guaranty), as applicable) shall have been transferred to a trust
pursuant to a Permitted Transfer (or in the event that a transfer pursuant to
Section 8.9 shall have previously occurred, Guarantor's assets shall be
transferred to the same trust or other entity that has been approved by the
Agent), and the requirements in Section 8.9 to a Permitted Transfer shall have
been satisfied, and (iv) such entity shall thereafter be the "Guarantor" under
the Loan Documents.
Section B. Remedies.
1. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to Section 10.1, the Agent on behalf of the
Banks, may, with the consent of the Majority Banks but not otherwise, proceed
to protect and enforce their rights and remedies under this Agreement, the
Notes or any of the other Loan Documents by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, including to
the full extent permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right. No remedy herein conferred upon the Agent or the
holder of any Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower shall
pay all costs of collection including, but not limited to, reasonable
attorney's fees.
2. Upon the occurrence and during the continuance of any Event of
Default, the Agent may direct the Borrower to, and the Borrower shall cause the
Property Owner to, replace the existing property manager and leasing agent, for
the Mortgaged Property with a property manager and leasing agent approved by
the Agent, subject to any conditions in the Mortgage to the qualifications of
such manager and leasing agent. Upon the occurrence and during the continuance
of an Event of Default, the Agent may direct the Borrower to, and the Borrower
shall, cause Co-Managing Member to become the sole managing member of the
Property Owner. The Borrower hereby irrevocably constitutes and appoints the
Agent its true and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and to do and perform any acts
which are referred to in this Section 10.2(b), in the name and on behalf of the
Borrower. The power vested in such attorney-in-fact is, and shall be deemed to
be, coupled with an interest and irrevocable.
3. Upon the demand of the Agent following the occurrence of an
Event of Default, the Borrower shall deliver to the Agent or the Agent's
designee all books, records, contracts, Leases, files and other correspondence
relating to the Mortgaged Property. In addition, the Borrower shall upon the
demand of the Agent cause all tenant security deposits (whether in the form of
cash, letter of credit or otherwise) and other refundable deposits paid to or
held by or on behalf of the Property Owner in connection with the Leases to be
delivered to the Agent, subject to the rights of the Mortgagee under the
Mortgage Loan Documents.
Section C. Default under Mortgage Loan Documents. The Borrower hereby
expressly agrees that any "Event of Default" (as defined in the Mortgage Loan
Documents) under the Mortgage Loan Documents (which shall be deemed to include
maturity of the debt secured by the Mortgage Loan Document or any other
occurrence which would give the holder of the Mortgage Loan Documents the right
to exercise remedies thereunder) shall constitute and be deemed to be an Event
of Default under this Agreement for which no right to cure shall be available.
Upon the occurrence of any "Default" (as defined in the Mortgage), the Borrower
shall cause the Property Owner to deliver to the Agent within five (5) Business
Days after the first to occur of (a) receipt by the Property Owner of notice of
such "Default" from the Mortgagee or (b) the date the Property Owner obtains
actual knowledge of the occurrence of such "Default", a detailed description of
the actions to be taken by the Property Owner to cure such "Default" and the
dates by which each such action shall occur. Such schedule shall be subject to
the approval of the Agent. The Borrower shall cause the Property Owner to take
all such actions as are necessary to cure such "Default" under the Mortgage
Loan Documents by the date approved by the Agent, and shall deliver to the
Agent not less frequently than weekly thereafter written updates concerning the
status of the Property Owner's efforts to cure such "Default". The Agent shall
have the right, but not the obligation, to pay any sums or to take any action
which the Agent deems necessary or advisable to cure any default or alleged
default under the Mortgage Loan Documents (whether or not the Property Owner is
undertaking efforts to cure such default or the same is an "Event of Default"
under the Mortgage Loan Documents or an Event of Default hereunder), and such
payment or such action is hereby authorized by the Borrower, and any sum so
paid and any expense incurred by the Agent in taking any such action shall be
evidenced by this Agreement and secured by the Security Documents and shall be
immediately due and payable by Borrower to the Agent with interest at the rate
for overdue amounts set forth in Section 4.6 until paid. The consent or waiver
by the Mortgagee of any "Event of Default" under the Mortgage Loan Documents
shall not annul the occurrence of an Event of Default hereunder unless
otherwise approved by the Majority Banks. The Borrower shall cause the
Property Owner to permit Agent to enter upon the Mortgaged Property for the
purpose of curing any default or alleged default under the Mortgage Loan
Documents or hereunder. Borrower hereby transfers and assigns any excess
proceeds arising from any foreclosure or sale under power pursuant to the
Mortgage or any instrument evidencing the indebtedness secured thereby, and
Borrower hereby authorizes and directs the holder or holders of the Mortgage to
pay such excess proceeds directly to the Agent up to the amount of the
Obligations.
Section D. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Event of Default, any
monies are received in connection with the enforcement of any of the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
1. First, to the payment of, or (as the case may be) the
reimbursement of, the Agent and the Banks for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Agent and the Banks to protect or preserve the collateral or
in connection with the collection of such monies by the Agent and the Banks,
for the exercise, protection or enforcement by the Agent and the Banks of all
or any of the rights, remedies, powers and privileges of the Agent and the
Banks under this Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Agent and the Banks against any taxes or liens which by law shall have, or may
have, priority over the rights of the Agent and the Banks to such monies;
2. Second, to all other Obligations in such order or preference as
the Majority Banks shall determine; provided, however, that Obligations owing
to the Banks with respect to each type of Obligation such as interest,
principal, fees and expenses shall be made among the Banks pro rata; and
provided, further that the Majority Banks may in their discretion make proper
allowance to take into account any Obligations not then due and payable; and
3. Third, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
Section XI. BANKRUPTCY.
Section A. Material Inducement. Each of the Borrower, the Guarantor and
the other Additional Pledgors, jointly and severally, acknowledges and agrees
that the representations, warranties, covenants and agreements contained in
this Section 11.1 constitute a material inducement to the Agent and the Banks
to enter into this Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby and that without the inclusion of this Section
11.1 herein the Agent and the Banks would not have entered into this Agreement
and the other Loan Documents.
Section B. No Fraudulent Intent. Each of the Borrower, the Guarantor and
the other Additional Pledgors, jointly and severally, hereby acknowledges,
warrants, represents and agrees that neither the execution and delivery of this
Agreement and the other Loan Documents nor the performance of any actions
required hereunder or thereunder is being consummated by the Borrower, the
Managing Member, the Property Owner, the Guarantor or any other Additional
Pledgor with or as a result of any actual intent by such Persons, or any of
them, to hinder, delay or defraud any entity to which such Persons, or any of
them, are now or will hereafter become indebted.
Section C. No Bankruptcy Intent. Each of the Borrower, the Guarantor and
the other Additional Pledgors, jointly and severally, hereby represents,
covenants and agrees that none of the Borrower, the Managing Member, the
Property Owner, the Guarantor nor any of the other Additional Pledgors has any
intent (a) to file any voluntary petition in bankruptcy under any Chapter of
the Bankruptcy Code or in any manner to seek relief, protection, reorganiza-
tion, liquidation, dissolution or similar relief for debtors under any local,
state, federal or other insolvency laws or laws providing for relief of
debtors, or in equity, or directly or indirectly to cause any of the other of
such Persons to file any such petition or to seek any such relief, either at
the present time, or at any time hereafter, or (b) directly or indirectly to
cause any involuntary petition under any Chapter of the Bankruptcy Code to be
filed against any of such Persons or directly or indirectly to cause any of
such Persons to become the subject of any dissolution, liquidation or
insolvency proceeding or any other proceeding pursuant to any local, state,
federal, or other insolvency laws or laws providing for relief of debtors, or
in equity, either at the present time, or at any time hereafter, or (c)
directly or indirectly to cause the Mortgaged Property, the Collateral or any
portion thereof or any interest of such Persons in the Mortgaged Property or
the Collateral to become the property of any bankruptcy estate or the subject
of any local, state, federal or other bankruptcy, dissolution, liquidation or
insolvency proceedings, either at the present time or at any time hereafter.
Section D. Agreement in Best Interests of Parties; Consideration. Each
of the Borrower, the Guarantor and the other Additional Pledgors, jointly and
severally, hereby acknowledges and agrees that (a) the transactions evidenced
by this Agreement and the other Loan Documents are in the best interests of
such Persons and the creditors of such Persons, and (b) the benefit to inure to
such Persons pursuant to this Agreement and the other Loan Documents constitute
substantially more than "reasonable equivalent value" (as such term is used in
Section 548 of the Bankruptcy Code) and "fair consideration" (as such term is
defined and used in the New York Debtor and Creditor Law Section s272-279), in
exchange for the benefits to be provided by such Persons to the Agent and the
Banks pursuant to this Agreement and the other Loan Documents.
Section E. Subsequent Bankruptcy; Waiver of Automatic Stay.
1. It is expressly agreed and understood by the parties hereto
that, in the event the Property Owner, the Borrower, the Managing Member, the
Guarantor, any of the other Additional Pledgors or the Collateral, or any
portion thereof, shall be or become the subject of any bankruptcy proceeding or
the property of any bankruptcy estate, the United States Bankruptcy Court for
the Southern District of New York, (hereinafter referred to as the "Bankruptcy
Court") shall have the sole and exclusive jurisdiction of such bankruptcy
proceeding. The parties hereto hereby further acknowledge and agree that any
voluntary bankruptcy petition filed by the Property Owner, the Borrower, the
Managing Member, the Guarantor or any other Additional Pledgor, or any
involuntary bankruptcy petition caused to be filed by the Property Owner, the
Borrower, the Managing Member, the Guarantor, any other Additional Pledgor or
any affiliate thereof against the Property Owner, the Borrower, the Managing
Member, the Guarantor or any other Additional Pledgor (any such bankruptcy
filing being hereinafter referred to as a "Bad Faith Filing"), or any other
action by Borrower or such Persons, or any of them, to attempt in any manner to
hinder, delay, impede, stay, void, rescind or nullify any lawful action taken
by Agent to exercise its rights and remedies under this Agreement or any of the
other Loan Documents, or at law or in equity, from and after the date hereof,
or pursuant to any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar proceedings, would be in bad faith and contrary to the
purposes of the bankruptcy laws, would be for the sole purpose of delaying,
inhibiting or interfering with the exercise by Agent of its rights and remedies
under this Agreement and the Loan Documents and would, in and of itself,
constitute "cause" for relief from the automatic stay pursuant to the
provisions of Section 362(d)(1) of the Bankruptcy Code. Without limitation of
the foregoing, the parties hereto hereby further acknowledge and agree that, in
the event of any Bad Faith Filing by or against the Property Owner, the
Borrower, the Managing Member, the Guarantor or any other Additional Pledgor,
or their respective successors, successors-in-interest or assigns, Agent shall
be entitled to obtain upon ex parte application therefor, and without further
notice or action of any kind or nature whatsoever, (i) an order from the
Bankruptcy Court prohibiting the use of Agent's "cash collateral" (as such term
is defined in Section 363 of the Bankruptcy Code) in connection with the Loans,
and (ii) an order from the Bankruptcy Court granting immediate relief from the
automatic stay pursuant to Section 362 of the Bankruptcy Code so as to permit
Agent to exercise all of its rights and remedies pursuant to this Agreement,
the Loan Documents, and at law and in equity.
2. The Borrower, the Guarantor and the other Additional Pledgors
covenant not to directly or indirectly oppose or otherwise defend against
Agent's effort to obtain relief from the stay pursuant to Section 11.5(a),
above, and covenant and agree that Agent shall be entitled to the lifting of
the stay pursuant to Section 11.5(a), above, without the necessity of an
evidentiary hearing and without the necessity or requirement that Agent
establish or prove the value of the Collateral, the lack of adequate protection
of Agent's interest in the Collateral, the lack of any reasonable prospect of
reorganization with respect either to the Property Owner, the Borrower, the
Managing Member, the Guarantor, the other Additional Pledgor or the Collateral,
or the Borrower's, the Managing Member's, the Guarantor's or the other
Additional Pledgor's lack of equity in the Collateral.
3. The waiver by the Borrower, the Guarantor, and the other
Additional Pledgors of the Section 362 automatic stay contained in the
Bankruptcy Code pursuant to Section s 11.5(a) and(b) above, and the waiver of
the Section 362 automatic and Section 105 supplemental stay contained in the
Bankruptcy Code pursuant to Section 11.6, below, shall be unconditional and
absolute, and each of the Borrower, the Guarantor, and the other Additional
Pledgors hereby agree never to directly or indirectly maintain before any court
that such waiver of the automatic stay and supplemental stay should not be
strictly enforced.
Section F. Waiver of Automatic and Supplemental Stays. Each of the
Borrower, the Guarantor, and the other Additional Pledgors, on behalf of itself
or himself only, hereby represents, covenants and agrees, in the event of the
filing of any voluntary or involuntary petition in bankruptcy by or against the
Property Owner, the Borrower, the Managing Member, the Guarantor or any other
Additional Pledgor, not to assert or request any other party to assert that the
automatic stay provided by Section 362 of the Bankruptcy Code shall operate or
be interpreted to stay, interdict, condition, reduce or inhibit the ability of
Agent to enforce any rights it has by virtue of this Agreement or the Loan
Documents, or any other rights Agent has, whether now or hereafter acquired,
against the Property Owner, the Borrower, the Managing Member, the Guarantor,
the other Additional Pledgors or against any Collateral; and further, in the
event of the filing of any voluntary or involuntary petition in bankruptcy by
or against the Property Owner, the Borrower, the Managing Member, the Guarantor
or the other Additional Pledgors, not to seek a supplemental stay or any other
relief, whether injunctive or otherwise, pursuant to Section 105 of the
Bankruptcy Code or any other provision of the Bankruptcy Code, to stay,
interdict, condition, reduce or inhibit the ability of Agent to enforce any
rights it has by virtue of this Agreement or the Loan Documents, or at law or
in equity, or any other rights Agent has, whether now or hereafter acquired
against the Property Owner, the Borrower, the Managing Member, the Guarantor,
the other Additional Pledgors or against any Collateral. The parties hereto
acknowledge that the waivers in this Section with respect to an involuntary
petition shall not be effective until the occurrence of an Event of Default.
Section G. Approval Rights Regarding Bankruptcy Proceeding. Upon the
occurrence and during the continuance of any Event of Default, all rights of
the Borrower, the Managing Member, Guarantor and the other Additional Pledgors
to exercise their Voting Interests in the Property Owner, the Borrower, the
Managing Member or the other Additional Pledgors, as the case may be, shall
automatically terminate and cease to exist and all such rights shall thereupon
be automatically vested in the Agent who shall thereupon have the sole and
exclusive right to exercise such Voting Interests. Without limiting the
foregoing, in the event of a Bad Faith Filing or any other voluntary or
involuntary bankruptcy filing or any other insolvency proceeding of any kind
under local, state, federal or other insolvency laws involving the Property
Owner, the Borrower, the Managing Member, the other Additional Pledgors or the
Guarantor, or all of them, or any of their properties (collectively the
"Bankruptcy Filings") the Borrower, the other Additional Pledgors, and the
Guarantor each acknowledge and agree to recognize the rights and powers granted
to the Agent in this Section 11.7 and agree not to oppose or object on any
basis whatsoever to the exercise by the Agent of such rights in connection with
the Bankruptcy Filings. Further, upon the commencement of one or more
Bankruptcy Filings, the Borrower, the other Additional Pledgors and the
Guarantor, jointly and severally, covenant and agree: (i) not to propose,
approve, vote for, or acquiesce in a plan of reorganization concerning the
Property Owner, the Borrower, the Managing Member, the other Additional
Pledgors or the Guarantors, or all of them, without the consent of Agent; (ii)
not to challenge or object on any basis whatsoever to the standing of Agent to
be recognized as a creditor and/or party-in-interest in the Bankruptcy Filings;
and (iii) not to violate or breach any of the covenants or agreements contained
in any of the Loan Documents.
Section H. Miscellaneous Representations. Borrower and Holding
Company Managing Member and each of them, jointly and severally, warrant and
represent to Agent that, other than Agent and applicable taxing authorities,
Borrower and Holding Company Managing Members have no creditors; that neither
Borrower nor Holding Company Managing Member has any employees; that Borrower
and Holding Company Managing Member are single asset entities such that
Borrower and Holding Company Managing Member do not own or hold any beneficial
interest in any property of any kind or nature whatsoever other than their
direct or indirect interests in the Property Owner; and that any dispute which
may arise between Agent and Borrower and Holding Company Managing Member would
be, for all intents and purposes, a two (2) party dispute, involving only Agent
and Borrower and Holding Company Managing Member.
Section I. Covenant of Noninterference and Cooperation.
1. The Borrower, the Guarantor and the other Additional Pledgors,
jointly and severally, covenant and agree that none of them shall take any
action of any kind or nature whatsoever, either directly or indirectly, to
oppose, impede, obstruct, hinder, frustrate, enjoin or otherwise interfere with
the exercise by Agent of any of Agent's rights and remedies against or with
respect to the Loan, the Collateral, this Agreement or the other Loan
Documents, including specifically, but without limitation, those rights and
remedies contained in this Section 11, at law or in equity, and shall not,
either directly or indirectly cause any other Person to take any of the
foregoing actions.
2. The Borrower, the Guarantor and the other Additional Pledgors,
jointly and severally, covenant and agree to cooperate fully and completely
with the exercise by Agent of any of Agent's rights and remedies against or
with respect to the Collateral, this Agreement or the other Loan Documents,
including specifically, but without limitation, those rights and remedies
contained in this Section 11.
3. The Borrower, the Guarantor and the other Additional Pledgors,
jointly and severally covenant and agree that any violation of either Section
11.9(a) or (b), above, or the occurrence of any Triggering Event, will
constitute an act of bad faith undertaken with intent to hinder, delay and
defraud Agent and the Banks.
Section XII. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch of where
such deposits are held) or other sums credited by or due from any of the Banks
to the Borrower, the Guarantor or any other Additional Pledgor and any
securities or other property of the Borrower, the Guarantor or any other
Additional Pledgor in the possession of such Bank may be applied to or set off
against the payment of Obligations and any and all other liabilities, direct,
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of such Person to such Bank. Each of the Banks agrees with
each other Bank that if such Bank shall receive from the Borrower, the
Guarantor or any other Additional Pledgor, whether by voluntary payment,
exercise of the right of setoff, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to
the Notes held by all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise as shall
result in each Bank receiving in respect of the Notes held by it its
proportionate payment as contemplated by this Agreement; provided that if all
or any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
Section XIII. THE AGENT.
Section A. Authorization. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated
to the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The obligations of
Agent hereunder are primarily administrative in nature, and nothing contained
in this Agreement or any of the other Loan Documents shall be construed to
constitute the Agent as a trustee for any Bank or to create an agency or
fiduciary relationship. The Borrower and any other Person shall be entitled to
conclusively rely on a statement from the Agent that it has the authority to
act for and bind the Banks pursuant to this Agreement and the other Loan
Documents.
Section B. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent may reasonably
determine.
Section C. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent, or employee thereof, shall be liable to any of the Banks
for any waiver, consent or approval given or any action taken, or omitted to be
taken, in good faith by it or them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever, except that the
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
Section D. No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any
of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower or any other Person, or be
bound to ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in any other of the Loan
Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes or any other Person shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the creditworthiness or financial
condition of the Borrower, the Guarantor, the Additional Pledgors, or the
Property Owner, or the value of the Collateral, the Mortgaged Property or any
other assets of the Borrower, the Guarantor, the Additional Pledgors or the
Property Owner. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon the Agent or any other Bank,
based upon such information and documents as it deems appropriate at the time,
continue to make its own credit analysis and decisions in taking or not taking
action under this Agreement and the other Loan Documents.
Section E. Payments.
1. A payment by the Borrower to the Agent hereunder or under any of
the other Loan Documents for the account of any Bank shall constitute a payment
to such Bank. The Agent agrees to distribute to each Bank not later than one
Business Day after the Agent's receipt of good funds, determined in accordance
with the Agent's customary practices, such Bank's pro rata share of payments
received by the Agent for the account of the Banks except as otherwise
expressly provided herein or in any of the other Loan Documents.
2. If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated
by a court of competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is to be
repaid, each Person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
3. Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails to comply
with the provisions of Section 12 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Agreement, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank until
such time as such delinquency is satisfied. A Delinquent Bank shall be deemed
to have assigned any and all payments due to it from the Borrower and the
Guarantor, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans. The
Delinquent Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata shares of all
outstanding Loans. A Delinquent Bank shall be deemed to have satisfied in full
a delinquency when and if, as a result of application of the assigned payments
to all outstanding Loans of the nondelinquent Banks or as a result of other
payments by the Delinquent Banks to the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans have returned to those in
effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
Section F. Holders of Notes. Subject to the terms of Article 17, the
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
Section G. Indemnity. The Banks ratably agree hereby to indemnify and
hold harmless the Agent (in its capacity as the Agent and not as a Bank) from
and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by Section 14),
and liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder to the extent not paid by the Borrower within thirty
(30) days of demand, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
Section H. Agent as Bank. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
as it would have were it not also the Agent.
Section I. Resignation. Subject to Section 17.1, the Agent may resign
at any time by giving 30 days' prior written notice thereof to the Banks and
the Borrower. In addition, the Majority Banks may remove the Agent from its
capacity as agent in the event of the Agent's gross negligence or willful
misconduct. In the event of any such removal, the Majority Banks shall give
notice of such removal to the Borrower. Upon any such resignation or removal,
the Majority Banks shall have the right to appoint as a successor Agent any
Bank or any other sophisticated investor knowledgeable in the lending to and
operation of real estate similar to the Mortgaged Property, subject to the
approval of the successor Agent by the Rating Agency as provided in Section
17.1. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then subject to the terms of
Section 17.1 the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be any Bank or any other entity which shall be a
sophisticated investor knowledgeable in the lending and/or operation of real
estate similar to the Mortgaged Property. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, notice thereof shall be
delivered to the Borrower and such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Agent, and the retiring or removed Agent shall be
discharged from its duties and obligations hereunder as Agent. After any
retiring or removed Agent's resignation or removal, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as Agent.
Section J. Duties in the Case of Enforcement. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful
or commercially unreasonable in any applicable jurisdiction.
Section K. Notification of Banks. Promptly after receiving any notice
under Section 7.5 or any other material information from the Borrower, the
Agent will forward a copy thereof to each of the Banks, together with copies of
any certificates or other written information that accompanied such notice.
Section XIV. EXPENSES.
The Borrower agrees to pay upon demand (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's gross or net
income, except that the Agent and the Banks shall be entitled to
indemnification for any and all amounts paid by them in respect of taxes based
on income or other taxes assessed by any State in which Mortgaged Property or
other Collateral is located, such indemnification to be limited to taxes due
solely on account of the granting of Collateral under the Security Documents
and to be net of any credit allowed to the indemnified party from any other
State on account of the payment or incurrence of such tax by such indemnified
party, subject to the limitations in Section 4.13), including any recording,
mortgage, transfer, documentary or intangibles taxes in connection with the
Loan Documents, or other taxes payable on or with respect to the transactions
(other than remedies) contemplated by this Agreement, including any such taxes
payable by the Agent or any of the Banks after the Closing Date (the Borrower
hereby agreeing to indemnify the Agent and each Bank with respect thereto), (c)
all title examination charges, appraisal fees, engineer's fees, reasonable
internal charges of the Agent (determined in good faith and in accordance with
the Agent's internal policies applicable generally to its customers) for
commercial finance exams and engineering and environmental reviews and the
reasonable fees, expenses and disbursements of the counsel to the Agent, FNBB,
Wellsford and any local counsel to the Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein (excluding, however, the preparation of agreements
evidencing participation granted under Section 17.4), each closing hereunder,
and the reasonable fees, expenses and disbursements of the counsel to the Agent
and each Bank incurred in connection with amendments, modifications, approvals,
consents or waivers hereto or hereunder, (d) the reasonable fees, expenses and
disbursements of the Agent incurred by the Agent in connection with the
preparation or interpretation of the Loan Documents and other instruments
mentioned herein, or the addition or substitution of other Collateral, (e) all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
costs, which attorneys may be employees of any Bank or the Agent and the
reasonable fees and costs of appraisers, engineers, investment bankers or other
experts retained by any Bank or the Agent) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any other Person or the
administration thereof after the occurrence of a Default or Event of Default,
(ii) the sale of, collection from or other realization upon any of the
Collateral, (iii) the failure by the Property Owner, the Borrower, the Managing
Member, the Guarantor or any other Additional Pledgor to perform or observe any
provision of the Loan Documents, and (iv) any litigation, proceeding or
dispute whether arising hereunder or otherwise, in any way related to the
Agent's or any of the Bank's relationship with the Borrower, the Guarantor or
any other Additional Pledgor, (f) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with U.C.C.
searches, U.C.C. filings, title rundowns or title searches and (g) all
reasonable fees, expenses and disbursements (including reasonable attorneys'
fees and costs) which may be reasonably incurred by FNBB and the other Banks in
connection with the execution and delivery of this Agreement and the other Loan
Documents. The Borrower shall not be liable for the payment of the
registration fee pursuant to Section 17.2. The covenants of this Section 14
shall survive payment or satisfaction of payment of amounts owing with respect
to the Notes.
Section XV. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks and each director, officer, employee, agent and Person who controls the
Agent or any Bank from and against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or
relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation, (a)
any brokerage, leasing, finders or similar fees asserted against any Person
indemnified under this Section 15 based upon any agreement, arrangement or
action made or taken, or alleged to have been made or taken, by the Borrower,
the Property Owner, the Guarantor, the Managing Member or any Additional
Pledgor (other than claims that are finally determined by court of competent
jurisdiction to have resulted from agreements (actual or de facto) made by a
Bank for the payment of such fees), (b) any condition, use, operation or
occupancy of the Mortgaged Property or the other Collateral first occurring
prior to the Agent or its nominee becoming the owner of the Collateral
following a foreclosure thereof or prior to a foreclosure of the Mortgage,
(c) any actual or proposed use by the Borrower of the proceeds of any of the
Loans, (d) any actual or alleged infringement of any patent, copyright,
trademark, service xxxx or similar right of the Borrower, the Guarantor or any
Additional Pledgor comprised in the Collateral, (e) the Borrower, the Guarantor
and the Additional Pledgors entering into or performing this Agreement or any
of the other Loan Documents, (f) any actual or alleged violation of any law,
ordinance, code, order, rule, regulation, approval, consent, permit or license
relating to the Mortgaged Property first occurring prior to the Agent or its
nominee becoming the owner of the Collateral following a foreclosure thereof or
prior to a foreclosure of the Mortgage, (g) in the event that the Agent or any
nominee of the Agent or the Banks shall foreclose or otherwise obtain title to
all or any portion of the Collateral, any obligations, duties or liabilities of
the Property Owner, the Borrower, the Managing Member, or any Additional
Pledgor other than those pursuant to the Mortgage Loan Documents (subject to
the terms of the Loan Documents) or the Approved Budget (except as provided in
Section 7.15), first occurring prior to the Agent or its nominee becoming the
owner of the Collateral following a foreclosure thereof or prior to a
foreclosure of the Mortgage, (h) with respect to the Borrower, the Property
Owner, the Managing Member and the Additional Pledgors and their respective
properties and assets, the violation of any Environmental Law, the Release or
threatened Release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death, personal
injury or damage to property) first occurring prior to the Agent or its nominee
becoming the owner of the Collateral following a foreclosure thereof or prior
to a foreclosure of the Mortgage, (i) the exercise by the Agent or the Banks of
the rights and remedies set forth in Article 11, or (j) any statement or
omission in any offering statement or memorandum used in connection with any
securitization of interests in the Mortgage Loan, in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that the
Borrower shall not be obligated under this Section 15 to indemnify any Person
for liabilities arising from such Person's own gross negligence or willful
misconduct. In litigation, or the preparation therefor, the Banks and the
Agent shall be entitled to select a single law firm as their own counsel and,
in addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 15 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this Section 15 shall survive the repayment
of the Loans and the termination of the obligations of the Banks hereunder.
Section XVI. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by the Borrower, the Managing Member, the Property Owner, the
Guarantor, any other Additional Pledgor, Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxxxx
pursuant hereto or thereto or any of such Person's respective members,
principals, directors, officers, partners, or any agent, employee or any other
Person authorized or apparently authorized to make statements or representa-
tions on behalf of any such Person to the extent of statements and
representations made to FNBB and Wellsford on their tour of the Mortgaged
Property on or about February 10, 1997 shall be deemed to have been relied upon
by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement or the Notes or any of
the other Loan Documents remains outstanding. The indemnification obligations
of the Borrower provided herein and the other Loan Documents shall survive the
full repayment of amounts due and the termination of the obligations of the
Banks hereunder and thereunder to the extent provided herein and therein. All
statements contained in any certificate or other paper delivered to any Bank or
the Agent at any time by or on behalf of the Borrower, the Managing Member, the
Property Owner, the Guarantor or any Additional Pledgor pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by such Person hereunder.
Section XVII. ASSIGNMENT AND PARTICIPATION.
Section A. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more banks or other entities all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and the
same portion of the Loans at the time owing to it, and the Notes held by it);
provided that (a) the Agent shall have given its prior written consent to such
assignment, which consent shall not be unreasonably withheld, conditioned or
delayed (provided that such consent shall not be required for any assignment to
another Bank, to a bank which is under common control with the assigning Bank
or to a wholly-owned Subsidiary of such Bank provided that such assignee shall
remain a wholly-owned Subsidiary of such Bank), (b) each such assignment shall
be of a constant, and not a varying, percentage of all the assigning Bank's
rights and obligations under this Agreement, (c) the parties to such assignment
shall execute and deliver to the Agent, for recording in the Register (as
hereinafter defined), a notice of such assignment, together with any Notes
subject to such assignment, (d) in no event shall any voting, consent or
approval rights of a Bank be assigned to any Person controlling, controlled by
or under common control with, or which is not otherwise free from influence or
control by, any of the Borrower, the Managing Member, the Guarantor or any
Additional Pledgor, which rights shall instead be allocated pro rata among the
other remaining Banks, (e) such assignee shall have a net worth as of the date
of such assignment of not less than $500,000,000, unless otherwise approved by
the Agent, such consent not to be unreasonably withheld, conditioned or
delayed, (f) such assignee shall acquire an interest in the Loans of not less
than $10,000,000.00, unless otherwise approved by the Agent, such consent not
to be unreasonably withheld, conditioned or delayed, and (g) such assignment
shall be of an equal percentage of such assignee's Commitment Percentage. Upon
such execution, delivery, acceptance and recording on the Register of such
notice of assignment, (i) the assignee thereunder shall be a party hereto and
all other Loan Documents executed by the Banks and, to the extent provided in
such assignment, have the rights and obligations of a Bank hereunder, (ii) the
assigning Bank shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in Section 17.2, be
released from its obligations under this Agreement, and (iii) the Agent may
unilaterally amend Schedule 1 to reflect such assignment. In connection with
each assignment, the assignee shall represent and warrant to the Agent, the
assignor and each other Bank as to whether such assignee is controlling,
controlled by, under common control with or is not otherwise free from
influence or control by, the Borrower, the Managing Member, the Guarantor or
any Additional Pledgor. FNBB may assign all or any portion of its interest,
rights and obligations under this Agreement; provided, however, that
notwithstanding anything herein to the contrary, in the event that FNBB desires
to resign its position as Agent under the Loan Documents, then FNBB shall first
provide written notice thereof to the Banks and the Rating Agency and allow the
Banks, with the approval of the Rating Agency a period of thirty (30) calendar
days following the receipt of such notice within which to select a replacement
Agent. In the event that the Majority Banks are unable to select a successor
Agent as provided above that is approved by the Rating Agency, FNBB may
thereafter resign as Agent as provided in this Agreement in the event that FNBB
selects a successor Agent that is approved by the Rating Agency. Each Agent,
as a condition to any resignation of its position as Agent, shall be required
to comply with the foregoing provisions. Upon any change in the Agent under
this Agreement, the resigning Agent shall execute such assignments of and
amendments to the Loan Documents as may be necessary to substitute the
successor Agent for the resigning Agent.
Section B. Register. The Agent shall maintain a copy of each assignment
delivered to it and a register or similar list (the "Register") for the
recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable
prior notice. Upon each such recordation, the assigning Bank agrees to pay to
the Agent a registration fee in the sum of $2,000.
Section C. New Notes. Upon its receipt of an assignment executed by the
parties to such assignment, together with each Note subject to such assignment,
the Agent shall (a) record the information contained therein in the Register,
and (b) give prompt notice thereof to the Borrower and the Banks (other than
the assigning Bank). Within five Business Days after receipt of such notice,
the Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such assignee in
an amount equal to the amount assumed by such assignee pursuant to such
assignment and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Bank in an
amount equal to the amount retained by it hereunder, and shall cause the
Guarantor and each Additional Pledgor to deliver to the Agent an acknowledgment
in form and substance satisfactory to the Agent to the effect that the Loan
Documents executed by such Persons extend to and are applicable to each new
Note. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such assignment and shall otherwise be in substantially the
form of the assigned Notes. The surrendered Notes shall be canceled and
returned to the Borrower.
Section D. Participations. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of
the selling Bank hereunder to the Borrower, (b) such participation shall not
entitle such participant to any rights or privileges under this Agreement or
any Loan Documents, including without limitation, the right to approve waivers,
amendments or modifications, (c) such participant shall have no direct rights
against the Borrower except the rights granted to the Banks pursuant to Section
12, (d) such sale is effected in accordance with all applicable laws, and (e)
such participant shall not be a Person controlling, controlled by or under
common control with, or which is not otherwise free from influence or control
by any of the Borrower or the General Partner. Any Bank which sells a
participation shall promptly notify the Agent of such sale and the identity of
the purchaser of such interest.
Section E. Pledge by Bank. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341 or as otherwise
approved by the Agent, such consent not to be unreasonably withheld,
conditioned or delayed. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations hereunder or under any of the
other Loan Documents.
Section F. No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section G. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
The financial statements and other reports delivered by the Borrower to the
Agent hereunder will be treated as confidential by the Agent and the Banks, and
each assignee and participant hereunder and each potential assignee or
participant hereunder, and such parties for themselves agree not to disclose
such information to any Person, provided that such information may be disclosed
to any of the following in connection with their participation in the
transactions contemplated by the Loan Documents: directors, officers,
employees, representatives, legal counsel, accountants and prospective
investors of any of such Persons, it being understood that such Persons shall
be informed of the confidential nature of such information and shall agree to
treat such information confidentially. Notwithstanding the foregoing, such
Persons shall be permitted to disclose such information (a) to the extent
required by law, (b) to the extent such confidential information becomes
publicly available other than as a result of the breach of this Agreement,
(c) to the extent such information becomes available to any of such Persons on
a non-confidential basis, or (d) to the extent necessary to enforce the Loan
Documents (provided that in connection with such enforcement the Agent shall
take reasonable efforts to cause such information to remain confidential).
Section H. Amendments to Loan Documents. Upon any such assignment or
participation, the Borrower shall, upon the request of the Agent, enter into
such documents and cause the Guarantor and the Additional Pledgors to enter
into such documents as may be reasonably required by the Agent to modify the
Loan Documents to reflect such assignment or participation.
Section XVIII. NOTICES.
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 18 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law
any notices of the institution or commencement of foreclosure proceedings, must
be in writing and shall be deemed to have been properly given or served by
personal delivery or by sending same by overnight courier or by depositing same
in the United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
If to the Agent or any Bank, at the address set forth on the signature
page for the Agent or such Bank; and
If to the Borrower or Holding Company Managing Member, to such party at:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
Fax: 212/000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Guarantor, in the manner provided in the Guaranty; and
and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or upon
being deposited in the United States Mail as aforesaid. The time period in
which a response to such Notice must be given or any action taken with respect
thereto (if any), however, shall commence to run from the date of receipt if
personally delivered or sent by overnight courier, or if so deposited in the
United States Mail, the earlier of three (3) Business Days following such
deposit or the date of receipt as disclosed on the return receipt. Rejection
or other refusal to accept or the inability to deliver because of changed
address for which no notice was given shall be deemed to be receipt of the
Notice sent. By giving at least fifteen (15) days prior Notice thereof, the
Borrower, a Bank or Agent shall have the right from time to time and at any
time during the term of this Agreement to change their respective addresses and
each shall have the right to specify as its address any other address within
the United States of America.
Section XIX. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of a
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
Section XX. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE INTERNAL LAWS
OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER, THE GUARANTOR AND THE OTHER
ADDITIONAL PLEDGORS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON SUCH PERSON BY MAIL AT THE ADDRESS SPECIFIED IN Section 18. THE
BORROWER, THE GUARANTOR AND THE OTHER ADDITIONAL PLEDGORS HEREBY WAIVE ANY
OBJECTION THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section XXI. HEADINGS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
Section XXII. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
Section XXIII. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to
the transactions contemplated hereby. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 26.
Section XXIV. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
EACH OF THE BORROWER, THE GUARANTOR AND THE OTHER ADDITIONAL PLEDGORS, THE
AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE
BORROWER, THE GUARANTOR AND THE OTHER ADDITIONAL PLEDGORS (A) CERTIFY THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE
AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS Section 24. BORROWER, THE
GUARANTOR AND THE OTHER ADDITIONAL PLEDGORS, ACKNOWLEDGES THAT IT HAS HAD AN
OPPORTUNITY TO REVIEW THIS Section 24 WITH ITS LEGAL COUNSEL AND THAT BORROWER
AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.
Section XXV. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit to
and generally engage in any kind of banking, trust or other business with the
Borrower, the Managing Member, the Property Owner, the Guarantor and the
Additional Pledgors or any of their affiliates regardless of the capacity of
the Bank hereunder.
Section XXVI. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower, the Property
Owner, the Guarantor and the Additional Pledgors of any terms of this Agreement
or such other instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Majority Banks. Notwithstanding the foregoing, none of the following may occur
without the written consent of each Bank: a change in the rate of interest on
and the term of the Notes; a change in the amount of the Commitments of the
Banks; a forgiveness, reduction or waiver of the principal of any unpaid Loan
or any interest thereon or fee payable under the Loan Documents; a change in
the amount of any fee payable to a Bank hereunder; the postponement of any date
fixed for any payment of principal of or interest on the Loan; an extension of
the Maturity Date; a change in the manner of distribution of any payments to
the Banks or the Agent; the release of the Borrower, the Guarantor, an
Additional Pledgor or any Collateral except as otherwise provided herein; an
amendment of the definition of Majority Banks or of any requirement for consent
by all of the Banks; an amendment of this Section 26; or an amendment of any
provision of this Agreement or the Loan Documents which requires the approval
of all of the Banks or the Majority Banks to require a lesser number of Banks
to approve such action. The provisions of Section 13 may not be amended
without the written consent of the Agent and the Majority Banks. No waiver
under the Loan Documents shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay
or omission on the part of the Agent or any Bank in exercising any right under
the Loan Documents shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
Section XXVII. RIGHTS OF THIRD PARTIES
All conditions to the performance of the obligations of the Agent and the
Banks under this Agreement and the other Loan Documents are imposed solely and
exclusively for the benefit of the Agent and the Banks and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms, and no other Person shall, under any circumstances, be deemed
to be a beneficiary of such conditions, any and all of which may be freely
waived in whole or in part by the Agent and the Banks at any time if in their
sole and absolute discretion they deems it desirable to do so.
Section XXVIII. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
Section XXIX. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant, agreement
and obligation of the Borrower, the Agent and the Banks under this Agreement
and the other Loan Documents.
Section XXX. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN
THE PARTIES ARE SET FORTH BELOW.
Section XXXI. JOINT AND SEVERAL LIABILITY.
Each of the Borrowers covenants and agrees that each and every covenant
and obligation of Borrower hereunder and under the other Loan Documents shall
be the joint and several obligations of each Borrower.
Section XXXII. NONRECOURSE OBLIGATIONS.
Anything contained in this Agreement or the other Loan Documents to the
contrary notwithstanding (except as provided below), Agent's and the Banks'
recourse for the payment and performance of all of the Obligation of Borrower
and the Additional Pledgors (but excluding Guarantor's liability under the
Guaranty and the Indemnity Agreement) under this Agreement or the other Loan
Documents shall be limited solely to the interest of such Person in the
Collateral, and none of such Persons, any partner, member, principal, officer,
controlling person, beneficiary, trustee, advisor, shareholder, employee, agent
or director of any such Person shall be personally liable for the performance
of any of the Obligations; provided, however, that (a) the foregoing limitation
on the personal liability of the Persons described above shall not impair the
validity of any lien, pledge, security interest or other encumbrance created by
the Loan Documents, or the right of Agent to foreclose and/or enforce any of
its rights or remedies in and to the Collateral upon the occurrence of an Event
of Default as provided in this Agreement or the other Loan Documents or be
deemed to be a release or impairment of the Obligations, (b) Borrower and
Guarantor will be fully and personally liable and subject to legal action for
(i) misapplication or misappropriation by any of the persons described above
(excluding agents) of insurance proceeds, condemnation proceeds, tenant
security deposits, rents and any other funds due Agent under the Loan
Documents, and (ii) fraud by any of the Persons described in Section 10.1(e) to
the full extent of any losses, damages and expenses of the Agent or the Banks
on account thereof and (c) Borrower shall be fully liable for any and all
losses or damages (including those resulting from diminution in value of the
Mortgaged Property) incurred by the Agent or the Banks relating to the presence
or release of any Hazardous Substances on or about the Mortgaged Property as a
result of the acts or omissions of Property Owner, Borrower, Managing Member or
any Additional Pledgor or any principal, officer, member or partner of any of
such Persons from and after the date hereof. Nothing herein shall be deemed to
be a waiver of any right which Agent may have under Section 506(a), 506(b),
1111(b) or any other provision of the Bankruptcy Code or any successor thereto
or similar provisions under applicable state law to file a claim for the full
amount of the Obligations or to require that all the Collateral shall continue
to secure al of the Obligations in accordance with this Agreement and the other
Loan Documents. Noting herein shall relieve, reduce or impair any obligation of
Guarantor under the Guaranty or the Indemnity Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
PARK AVENUE FINANCING COMPANY, LLC, a Delaware
limited liability company, by its managing member
By: PAFC Management, Inc., a Delaware
corporation
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Title:
[CORPORATE SEAL]
PAMC CO-MANAGER INC., a Delaware
corporation
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Title:
[CORPORATE SEAL]
PAFC MANAGEMENT, INC., a Delaware corporation
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Title:
[CORPORATE SEAL]
/s/ Xxxxxxx Xxxxx
-----------------------------------
XXXXXXX XXXXX
FIRST NATIONAL BANK OF BOSTON, individually and as
Agent
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Managing Director
[BANK SEAL]
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
With a copy to:
The First National Bank of Boston
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx
Fax: 770/000-0000
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Title: President
[CORPORATE SEAL]
Wellsford Real Properties, Inc.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Fax: 212/000-0000
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
FORM OF NOTE
$______________ ____________, 1997
FOR VALUE RECEIVED, the undersigned PARK AVENUE FINANCING COMPANY, LLC, a
Delaware limited liability company, and PAMC CO-MANAGER INC., a Delaware
corporation, hereby jointly and severally promise to pay to
_______________________ _______________________________________ or order, in
accordance with the terms of that certain Credit Agreement dated as of April
__, 1997 (the "Credit Agreement"), as from time to time in effect, among the
undersigned, The First National Bank of Boston, for itself and as Agent, such
other Banks as may be from time to time named therein, the Additional Pledgors
and Guarantor, to the extent not sooner paid, on or before the Maturity Date,
the principal sum of _________________________
________________________________________________ DOLLARS ($___________), or
such amount as may be outstanding hereunder with daily interest from the date
hereof, computed as provided in the Credit Agreement, on the principal amount
hereof from time to time unpaid, at a rate per annum on each portion of the
principal amount which shall at all times be equal to the rate of interest
applicable to such portion in accordance with the Credit Agreement, and with
interest on overdue principal and, to the extent permitted by applicable law,
on overdue installments of interest and late charges at the rates provided in
the Credit Agreement. Unpaid interest shall be added to the outstanding
principal balance hereof as provided in the Credit Agreement. Interest shall
be payable on the dates specified in the Credit Agreement, except that all
accrued interest shall be paid at the stated or accelerated maturity hereof or
upon the prepayment in full hereof. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
Payments hereunder shall be made to The First National Bank of Boston, as
Agent for the payee hereof, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the maturity date stated above and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the
Credit Agreement.
Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be payable
to the Banks in excess of the maximum lawful amount, the interest payable to
the Banks shall be reduced to the maximum amount permitted under applicable
law; and if from any circumstance the Banks shall ever receive anything of
value deemed interest by applicable law in excess of the maximum lawful amount,
an amount equal to any excessive interest shall be applied to the reduction of
the principal balance of the Obligations of the undersigned Borrower and to the
payment of interest or, if such excessive interest exceeds the unpaid balance
of principal of the Obligations of the undersigned Borrower, such excess shall
be refunded to the undersigned Borrower. All interest paid or agreed to be
paid to the Banks shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations of the undersigned Borrower
(including the period of any renewal or extension thereof) so that the interest
thereon for such full period shall not exceed the maximum amount permitted by
applicable law. This paragraph shall control all agreements between the
undersigned Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the
effect provided in said Credit Agreement.
This Note shall be governed by and construed in accordance with the internal
laws of the State of New York (without giving effect to the conflict of laws
rules of any jurisdiction).
The liability and obligations of the undersigned makers and their respective
officers, members, shareholders, partners or other person or entity having an
interest therein to perform and observe the obligations contained in this Note
shall be subject and limited by the terms of Section 32 of the Credit
Agreement.
The undersigned makers and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.
IN WITNESS WHEREOF the undersigned have duly executed this Note under seal as
of the day and year first above written.
PARK AVENUE FINANCING COMPANY, LLC, a Delaware
limited liability company, by its managing member
By: PAFC Management, Inc., a Delaware
corporation
By: __________________________________
Title:
[CORPORATE SEAL]
PAMC CO-MANAGER INC., a Delaware
corporation
By: _______________________________________
Title:
[CORPORATE SEAL]
EXHIBIT C
APPROVED BUDGET
SCHEDULE 1
BANKS AND COMMITMENTS
Commitment
Commitment Percentage
The First National Bank of $60,000,000.00 75.0%
Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
Wellsford Real Properties, Inc. $20,000,000.00 25.0%
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
______________ _____
$80,000,000.00 100%
SCHEDULE 6.7
LITIGATION
NONE
SCHEDULE 6.17
ERISA PLANS
NONE
SCHEDULE 6.24
MORTGAGE LOAN DOCUMENTS
