EXHIBIT 10.71
SUBORDINATE CASH MANAGEMENT AGREEMENT
Dated: as of July ___, 2002
BY AND AMONG
XXXXXXXX HOLDINGS LLC, MEDFORD HOLDINGS LLC AND WARRENTON
HOLDINGS LLC,
collectively, as Borrowers
AND
UBS WARBURG REAL ESTATE INVESTMENTS INC.,
as Lender
AND
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent
490
SUBORDINATE CASH MANAGEMENT AGREEMENT
SUBORDINATE CASH MANAGEMENT AGREEMENT (this "AGREEMENT"), dated as of
July __, 2002, among XXXXXXXX HOLDINGS LLC, a Delaware limited liability company
("XXXXXXXX MEZZANINE BORROWER"), MEDFORD HOLDINGS LLC, a Delaware limited
liability company ("MEDFORD MEZZANINE BORROWER"), and WARRENTON HOLDINGS LLC, a
Delaware limited liability company ("WARRENTON MEZZANINE BORROWER"; and
Warrenton Mezzanine Borrower, together with Xxxxxxxx Mezzanine Borrower and
Medford Mezzanine Borrower, each a "BORROWER" and collectively, "BORROWERS"),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association ("AGENT"),
and UBS WARBURG REAL ESTATE INVESTMENTS INC., a Delaware corporation ("LENDER").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Mezzanine Loan Agreement (as the same
may be amended, modified or supplemented from time to time, the "MEZZANINE LOAN
AGREEMENT") dated as of the date hereof by and among Borrowers and Lender,
Lender has made a loan to (i) Xxxxxxxx Mezzanine Borrower in the principal
amount of up to $1,750,000.00 (the "XXXXXXXX MEZZANINE LOAN") (ii) Medford
Mezzanine Borrower in the principal amount of up to $1,000,000.00 (the "MEDFORD
MEZZANINE LOAN"), and (iii) Warrenton Mezzanine Borrower in the principal amount
of up to $750,000.00 (the "WARRENTON MEZZANINE LOAN"; and the Warrenton
Mezzanine Loan, together with the Xxxxxxxx Mezzanine Loan and the Medford
Mezzanine Loan, collectively, the "MEZZANINE LOAN");
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings set forth in the Mezzanine Loan Agreement;
WHEREAS, the Mezzanine Loan is secured by pledge and security
agreements (the "PLEDGES") encumbering Xxxxxxxx Mezzanine Borrower's ownership
interest in the Xxxxxxxx Owner ("XXXXXXXX OWNER"), Medford Mezzanine Borrower's
ownership interest in the Medford Owner ("MEDFORD OWNER"), and Warrenton
Mezzanine Borrower's ownership interest in the Warrenton Owner ("WARRENTON
OWNER"; and the Warrenton Owner together with Xxxxxxxx Owner and Medford Owner,
each an "OWNER" and collectively, "OWNERS");
WHEREAS, pursuant to that certain Cash Management Agreement (the
"SENIOR CASH MANAGEMENT AGREEMENT") dated as of the date hereof, among Agent,
Owners, Horizon Group Properties, L.P. ("MANAGER") and Lender (in its capacity
as "SENIOR LENDER"), Agent has agreed to make disbursements of Gross Revenue and
any other amounts from time to time deposited in that certain "Deposit Account"
(including those certain "Accounts", referenced thereunder and defined therein
(collectively, the "SENIOR DEPOSIT ACCOUNTS"), as provided in the Senior Cash
Management Agreement and the other Senior Loan Documents, and to perform certain
other services as provided therein;
491
WHEREAS, in connection with the execution and delivery of the
Mezzanine Loan Agreement, Lender and Borrowers desire to retain Agent to provide
the services described herein.
NOW, THEREFORE, in consideration of the covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
I. DEFINITIONS
Capitalized terms not otherwise defined herein shall have the meaning
set forth in the Mezzanine Loan Agreement. As used herein, the following terms
shall have the following definitions:
"ACCOUNT COLLATERAL" shall have the meaning set forth in Section 4.1.
"ACCOUNTS" shall mean, collectively, the Subordinate Deposit Account,
the Lender Account and the Borrower Account, and any and all other similar
accounts established under the Mezzanine Loan Agreement, this Agreement or
pursuant to the other Loan Documents.
"ACH SYSTEM" shall mean the automated clearinghouse system.
"AGREEMENT" shall mean this Subordinate Cash Management Agreement by
and among Borrowers, Agent and Lender, as amended, supplemented or otherwise
modified from time to time.
"BORROWER ACCOUNT" shall have the meaning set forth in Section 2.1(c).
"CLEARING ACCOUNTS" shall have the meaning set forth the Senior Loan
Agreement.
"DEBT SERVICE ACCOUNT" shall have the meaning set forth in Section
2.1(b).
"ELIGIBLE ACCOUNT" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (i) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (ii)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution insured by
the Federal Deposit Insurance Corporation the short term unsecured debt
obligations or commercial paper of which are rated at least A-1 by Standard &
Poor's Ratings Group, P-1 by Xxxxx'x Investors Service, Inc. and F-1+ by Fitch
IBCA, Inc. in the case of accounts in which funds are held for thirty (30) days
or less (or, in the case of letters of credit or accounts in which funds are
held for more than thirty (30)
492
days, the long term unsecured debt obligations of which are rated at least "AA"
by Fitch and S&P and "Aa2" by Moody's).
"XXXXXXXX OWNER" shall have the meaning set forth in the Recitals
hereto.
"LENDER ACCOUNT" shall have the meaning set forth in Section 2.1(b).
"MANAGER" shall have the meaning set forth in the Recitals hereto.
"MEDFORD OWNER" shall have the meaning set forth in the Recitals
hereto.
"MEZZANINE PAYMENT ACCOUNT" shall have the meaning set forth in the
Senior Cash Management Agreement.
"MONTHLY PAYMENT DATE" shall mean the eleventh (11th) day of every
calendar month occurring during the term of the Mezzanine Loan.
"OWNERS" and "OWNER" shall have the meaning set forth in the Recitals
hereto.
"OBLIGATIONS" shall have the meaning set forth in Section 4.1.
"PERMITTED INVESTMENTS" shall (i) prior to a Secondary Market
Transaction, mean any investment suitable for the investment of escrows and
reserves established under mortgage loans included in a Secondary Market
Transaction in which some or all of the Securities issued are rated "AAA" (or
the equivalent rating) by the Rating Agencies, as the standards therefor are
established from time to time, or such investments which are otherwise
acceptable to Lender, and (ii) from and after a Secondary Market Transaction,
have the meaning given to such term in the Pooling and Servicing Agreement (or
equivalent document) applicable to the Secondary Market Transaction.
"SENIOR CASH MANAGEMENT AGREEMENT" shall have the meaning set forth in
the Recitals hereto.
"SENIOR DEPOSIT ACCOUNTS" shall have the meaning set forth in the
Recitals hereto.
"SENIOR LENDER" shall have the meaning set forth in the Recitals
hereto.
"SUBORDINATE DEPOSIT ACCOUNT" shall have the meaning set forth in
Section 2.1(a).
"UCC" shall have the meaning set forth in Section 4.1(a)(iv).
"WARRENTON OWNER" shall have the meaning set forth in the Recitals
hereto.
II. THE ACCOUNTS
SECTION 2.1 ESTABLISHMENT OF ACCOUNTS. Borrowers acknowledge and
confirm that Borrowers have established the following Accounts with Agent:
493
(a) An account into which, on each Monthly Payment Date, Agent shall
transfer by wire transfer, via the ACH System or intrabank transfer all amounts
constituting available funds on deposit in the Mezzanine Payment Account (the
"SUBORDINATE DEPOSIT ACCOUNT");
(b) An account into which Agent shall deposit from the Subordinate
Deposit Account (i) the amounts required for the payment of the Xxxxxxxx
Mezzanine Monthly Debt Service Payment Amount, the Medford Mezzanine Monthly
Debt Service Payment Amount and the Warrenton Mezzanine Monthly Debt Service
Payment Amount (in such order and priority as Lender shall determine in its sole
discretion) and any other principal payment due on the next Monthly Payment
Date, together with any amounts due on account of any interest accruing at the
Default Rate and late payment charges (the "DEBT SERVICE ACCOUNT") and (ii) any
other amounts due to Lender pursuant to the Mezzanine Loan Documents (the
"LENDER ACCOUNT");
(c) An account into which Agent shall deposit, from the Subordinate
Deposit Account, the balance of funds, if any, remaining in the Subordinate
Deposit Account after payments to the Lender Account as set forth in clause (b)
above (the "BORROWER ACCOUNT");
At Lender's, or Agent's or Servicer's election, any of the Accounts
may be established as subaccounts of the Subordinate Deposit Account on a
ledger-entry basis, in which event the term "Account" shall refer to any such
subaccount.
SECTION 2.2 AGENT DEPOSITS INTO SUBORDINATE DEPOSIT ACCOUNT. Agent
represents, warrants and covenants that Agent shall cause all funds in the
Mezzanine Payment Account to be deposited directly into the Subordinate Deposit
Account on each Monthly Payment Date.
SECTION 2.3 BORROWER COVENANTS. Each Borrower represents, warrants
and covenants that, other than the Senior Deposit Accounts, the Clearing
Accounts and the Accounts created pursuant to this Agreement, there are no other
accounts maintained by Borrowers, Owners, Manager or any other Person into which
revenues from the ownership and operation of the Properties are deposited. So
long as the Mezzanine Notes shall be outstanding, no Borrower, no Owner or any
other Person shall open any other such account for the deposit of Gross Revenue.
SECTION 2.4 ACCOUNT NAME. The Accounts shall each be exclusively in
the name of Lender; provided, however, that in the event Lender transfers or
assigns the Mezzanine Loan, Agent, at Lender's request, shall change the name of
each Account to the name of the transferee or assignee. In the event Lender
retains a Servicer to service the Mezzanine Loan, Agent, at Lender's request,
shall comply with the instructions of Servicer, as agent for Lender.
SECTION 2.5 ELIGIBLE ACCOUNTS/CHARACTERIZATION OF ACCOUNTS. Each
Account shall be maintained as an Eligible Account. Each Account is and shall be
treated either as a "securities account" as such term is defined in Section
8-501(a) of the UCC or a "deposit account" as defined in Section 9-102(a)(29) of
the UCC. Agent acknowledges and agrees that it shall notify Lender which
Accounts are intended to be deposit accounts and which Accounts are intended to
be securities accounts. Agent hereby agrees that each item of property (whether
investment property,
494
financial asset, securities, instrument, cash or other property) credited to
each Account shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC. Subject to the terms of this Agreement, Lender
shall be treated as having the right to exercise the rights with respect to any
financial asset credited to each Account, but subject to the terms of the
Mezzanine Loan Agreement. All securities or other property underlying any
financial assets credited to each Account shall be registered in the name of
Lender, indorsed to Lender or in blank or credited to another securities account
maintained in the name of Lender and in no case will any financial asset
credited to any Account be registered in the name of any Borrower, any Owner or
Manager, payable to the order of any Borrower, any Owner or Manager or specially
indorsed to any Borrower, any Owner or Manager.
SECTION 2.6 PERMITTED INVESTMENTS. Sums on deposit in the Accounts
shall not be invested except in Permitted Investments. Lender shall have the
right to direct Agent to invest sums on deposit in the Accounts in Permitted
Investments; provided, however, in no event shall Agent make a Permitted
Investment if the maturity date of that Permitted Investment is later than the
date on which the invested sums are required for payment of an obligation for
which the Account (or applicable subaccount of the Subordinate Deposit Account)
was created. Each Borrower hereby irrevocably authorizes and directs Agent to
apply any income earned from Permitted Investments to the respective Accounts
(or applicable subaccount of the Subordinate Deposit Account). The amount of
actual losses sustained on a liquidation of a Permitted Investment shall be
deposited into the Subordinate Deposit Account by Borrowers no later than one
(1) Business Day following such liquidation. Each Borrower shall be responsible
for payment of any federal, state or local income or other tax applicable to
income earned from Permitted Investments. The Accounts relating to each
Individual Property shall be assigned the federal tax identification number of
the applicable Borrower, which number is (i) 00-0000000 for Xxxxxxxx Mezzanine
Borrower, (ii) 00-0000000 for Medford Mezzanine Borrower and (iii) 00-0000000
for Warrenton Mezzanine Borrower.
III. DEPOSITS/ALLOCATIONS/DISBURSEMENTS
SECTION 3.1 DEPOSITS. Agent shall make such deposits into the
Accounts as and when required in accordance with Article 6 or any other
applicable provisions of the Mezzanine Loan Agreement.
SECTION 3.2 ALLOCATIONS. Allocations from the Subordinate Deposit
Account into the other Accounts shall be made as and when required in accordance
with Section 6.3 or any other applicable provisions of the Mezzanine Loan
Agreement.
SECTION 3.3 DISBURSEMENTS. Disbursements from the Accounts shall be
made as and when required in accordance with Article 6 or any other applicable
provisions of the Mezzanine Loan Agreement.
SECTION 3.4 SOLE DOMINION AND CONTROL. Each Borrower acknowledges and
agrees that the Accounts (including any subaccounts thereof) are subject to the
sole dominion, control and discretion of Lender, its authorized agents or
designees, including Agent, subject to the terms hereof. Neither any Borrower
nor Manager shall have the right of withdrawal with respect to
495
any Account except with the prior written consent of Lender. Agent shall have
the right and agrees to comply with instructions originated by Lender with
respect to the disposition of funds in the Accounts without the further consent
of any Borrower or any other Person. Agent shall comply with all "entitlement
orders" (as defined in Section 8-102(a)(8) of the UCC) and instructions
originated by Lender directing the transfer or redemptions of any financial
asset relating to any Account without further consent by any Borrower or any
other Person.
IV. PLEDGE OF ACCOUNTS
SECTION 4.1 SECURITY FOR OBLIGATIONS. (a) To secure the full and
punctual payment and performance of all obligations of each Borrower now or
hereafter existing with respect to the Mezzanine Loan, whether for principal,
interest, fees, expenses or otherwise, and all obligations of each Borrower now
or hereafter existing under the Mezzanine Loan Agreement, the Mezzanine Notes,
the Pledges, this Agreement and all other Mezzanine Loan Documents (all such
obligations, collectively, the "Obligations"), each Borrower hereby grants to
Lender a first priority continuing security interest in and to the following
property of such Borrower, whether now owned or existing or hereafter acquired
or arising ad regardless of where located (all of the same, collectively, the
"Account Collateral"):
(i) the Accounts and all cash, checks, drafts, letters of
credit, certificates and instruments, if any, from time to time deposited or
held in the Accounts, including, without limitation, all deposits or wire
transfers made to the Accounts;
(ii) any and all Permitted Investments;
(iii) all interest, dividends, cash, instruments, investment
property and other property from time to time received, receivable or otherwise
payable in respect of, or in exchange for, any or all of the foregoing; and
(iv) to the extent not covered by clauses (i), (ii) or (iii)
above, all "proceeds" (as defined under the Uniform Commercial Code as in effect
in the State of New York (the "UCC")) of any or all of the foregoing.
(b) Lender and Agent, as agent for Lender, shall have with respect to
the Account Collateral, in addition to the rights and remedies herein set forth,
all of the rights and remedies available to a secured party under the UCC, as if
such rights and remedies were fully set forth herein.
SECTION 4.2 RIGHTS ON DEFAULT. Upon the occurrence and during the
continuation of an Event of Default, Lender shall promptly notify Agent of such
Event of Default and, without notice from Agent or Lender, (a) no Borrower shall
have any further right in respect of (including, without limitation, the right
to instruct Lender or Agent to transfer from) the Accounts or any of the Account
Collateral, (b) Lender may direct Agent to liquidate and transfer any amounts
then invested in Permitted Investments to the Accounts or reinvest such amounts
in other Permitted Investments as Lender may reasonably determine is necessary
to perfect or protect any security interest granted or purported to be granted
hereby or to enable Agent, as agent for Lender, or Lender to exercise and
enforce Lender's rights and remedies hereunder with respect to any Account
Collateral, and (c)
496
Lender may apply any Account Collateral to any Obligations in such order of
priority as Lender may determine in its sole and absolute discretion.
SECTION 4.3 FINANCING STATEMENT; FURTHER ASSURANCES.
Simultaneously herewith, each Borrower shall deliver to Lender for filing a
financing statement or statements in connection with the Account Collateral in
the form required by Lender to properly perfect Lender's security interest
therein. Each Borrower agrees that at any time and from time to time, at the
expense of Borrowers, each Borrower will promptly execute and deliver all
further reasonable instruments and documents, and take all further action, that
may be necessary or desirable, or that Agent or Lender may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby (including, without limitation, any security interest in and to
any Permitted Investments) or to enable Agent or Lender to exercise and enforce
its rights and remedies hereunder with respect to any Account Collateral.
SECTION 4.4 TERMINATION OF AGREEMENT. This Agreement shall create a
continuing security interest in the Account Collateral and shall remain in full
force and effect until payment and performance in full of the Obligations. Upon
payment and performance in full of the Obligations, this Agreement shall
terminate and Borrowers shall be entitled to the return, upon their request and
at their expense, of such of the Account Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof, and Agent and/or Lender shall
execute such instruments and documents as may be reasonably requested by
Borrowers to evidence such termination and the release of the lien hereof.
V. RIGHTS AND DUTIES OF LENDER AND AGENT
SECTION 5.1 REASONABLE CARE. Beyond the exercise of reasonable care
in the custody thereof or as otherwise expressly provided herein, neither Agent
nor Lender shall have any duty as to any Account Collateral in its possession or
control as agent therefor or bailee thereof or any income thereon or the
preservation of rights against any Person or otherwise with respect thereto.
Agent and Lender each shall be deemed to have exercised reasonable care in the
custody and preservation of the Account Collateral in its possession if the
Account Collateral is accorded treatment substantially equal to that which Agent
or Lender accords its own property, it being understood that Lender shall not be
liable or responsible for any loss or damage to any of the Account Collateral,
or for any diminution in value thereof, by reason of the act or omission of
Agent or Lender, or their respective affiliates, agents, employees or bailees,
except to the extent that such loss or damage results from Agent's or Lender's
gross negligence or willful misconduct. Neither Lender nor Agent shall have any
liability for any loss resulting from the investment of funds in Permitted
Investments in accordance with the terms and conditions of this Agreement.
SECTION 5.2 INDEMNITY. Agent, in its capacity as agent hereunder,
shall be responsible for the performance only of such duties as are specifically
set forth herein, and no duty shall be implied from any provision hereof. Agent
shall not be under any obligation or duty to perform any act which would involve
it in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies. Borrowers shall indemnify and hold Agent
and Lender, their respective employees and officers harmless from and against
any loss, cost or damage
497
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred by Agent and/or Lender in connection with the transactions contemplated
hereby, except to the extent that such loss or damage results from Agent's or
Lender's gross negligence or willful misconduct.
SECTION 5.3 RELIANCE. Agent shall be protected in acting upon any
written notice, resolution, request, consent, order, certificate, report,
opinion, bond or other paper, document or signature believed by it to be
genuine, and it may be assumed that any person purporting to act on behalf of
any Person giving any of the foregoing in connection with the provisions hereof
has been duly authorized to do so. Agent may consult with counsel, and the
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by it hereunder and in good faith in
accordance therewith. Agent shall not be liable for any act or omission done or
omitted to be done by Agent in reliance upon any instruction, direction or
certification received by Agent and without gross negligence or willful or
reckless misconduct.
SECTION 5.4 RESIGNATION OF AGENT.
(a) Agent shall have the right to resign as Agent hereunder upon
thirty (30) days' prior written notice to Lender, and in the event of such
resignation, Lender shall appoint a successor Agent which must be an Eligible
Institution. No such resignation by Agent shall become effective until a
successor Agent shall have accepted such appointment and executed an instrument
by which it shall have assumed all of the rights and obligations of Agent
hereunder. If no such successor Agent is appointed within sixty (60) days after
receipt of the resigning Agent's notice of resignation, the resigning Agent may
petition a court for the appointment of a successor Agent.
(b) In connection with any resignation by Agent, (i) the resigning
Agent shall, at the sole cost of Borrowers, (A) duly assign, transfer and
deliver to the successor Agent this Agreement and all cash and Permitted
Investments held by it hereunder, (B) execute and/or authorize such reasonable
documents and instruments as may be necessary to give effect to such succession
and (C) take such other actions as may be reasonably required by Lender or the
successor Agent in connection with the foregoing and (ii) the successor Agent
shall establish in its name, new cash collateral accounts, which shall become
the Accounts for purposes of this Agreement upon the succession of such Agent.
(c) Lender at its sole discretion shall have the right, upon thirty
(30) days' notice to Agent, to substitute Agent with a successor Agent that
satisfies the requirements of an Eligible Institution or to have one or more of
the Accounts held by another Eligible Institution, provided that such successor
Agent shall perform the duties of Agent pursuant to the terms of this Agreement.
SECTION 5.5 LENDER APPOINTED ATTORNEY-IN-FACT. Each Borrower hereby
irrevocably constitutes and appoints Lender as such Borrower's true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and to exercise and enforce every right, power, remedy,
option and privilege of such Borrower with respect to the Account Collateral,
and do in the name, place and stead of such Borrower, all such acts, things and
deeds for and on behalf of and in the name of such Borrower, which such Borrower
could or might do or which Agent or Lender may deem necessary or desirable to
more fully vest in Lender the rights
498
and remedies provided for herein and to accomplish the purposes of this
Agreement. The foregoing power of attorney is irrevocable and coupled with an
interest. If any Borrower fails to perform any agreement herein contained and
such failure shall continue for five (5) Business Days after noticof such
failure is given to such Borrower, Lender may perform or cause performance of
any such agreement, and any reasonable expenses of Lender and Agent in
connection therewith shall be paid by such Borrower.
SECTION 5.6 ACKNOWLEDGMENT OF LIEN/OFFSET RIGHTS. Agent hereby
acknowledges and agrees that (a) the Accounts shall be held by Agent in the name
of Lender, (b) all funds held in the Accounts shall be held for the benefit of
Lender, subject to the terms of this Agreement and the Mezzanine Loan Agreement,
(c) Borrowers have granted to Lender a first priority security interest in the
Account Collateral and all proceeds thereof, (d) Agent shall not disburse any
funds from the Accounts except as provided herein, and (e) Agent shall invest
and reinvest any balance of the Accounts in Permitted Investments. Agent hereby
waives any right of offset, banker's lien or similar rights against, or any
assignment of, or security interest or other interest in, the Account
Collateral.
VI. REMEDIES
SECTION 6.1 REMEDIES. At any time and from time to time following
the occurrence and during the continuance of an Event of Default, Lender or
Agent, as agent for Lender and only at Lender's direction, may do any (or any
combination of) the following, as determined in Lender's sole discretion:
(a) without notice to any Borrower, except as required by law, and at
any time or from time to time, charge, set-off and otherwise apply all or any
part of the Account Collateral against the Obligations or any part thereof;
(b) in Lender's sole discretion, at any time and from time to time,
exercise any and all rights and remedies available to it under this Agreement,
and/or as a secured party under the UCC and/or under any other applicable law;
and
(c) demand, collect, take possession of, receive, settle, compromise,
adjust, xxx for, foreclose or realize upon the Account Collateral (or any
portion thereof) as Lender may determine in its sole discretion.
SECTION 6.2 WAIVER. Each Borrower hereby expressly waives, to the
fullest extent permitted by law, presentment, demand, protest or any notice of
any kind in connection with this Agreement or the Account Collateral. Each
Borrower acknowledges and agrees that ten (10) days' prior written notice of the
time and place of any public sale of the Account Collateral or any other
intended disposition thereof shall be reasonable and sufficient notice to such
Borrower within the meaning of the UCC.
VII. MISCELLANEOUS
499
SECTION 7.1 TRANSFERS AND OTHER LIENS. Each Borrower agrees that it
will not (i) sell or otherwise dispose of any of the Account Collateral or (ii)
create or permit to exist any Lien upon or with respect to all or any of the
Account Collateral, except for the Lien granted under this Agreement.
SECTION 7.2 LENDER'S RIGHT TO PERFORM BORROWERS' OBLIGATIONS; NO
LIABILITY OF LENDER. If any Borrower fails to perform any of the covenants or
obligations contained herein, and such failure shall continue for a period five
(5) Business Days after such Borrower's receipt of written notice thereof from
Lender, Lender may itself perform, or cause performance of, such covenants or
obligations, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Borrowers to Lender.
SECTION 7.3 NO WAIVER. The rights and remedies provided in this
Agreement and the other Mezzanine Loan Documents are cumulative and may be
exercised independently or concurrently, and are not exclusive of any other
right or remedy provided at law or in equity. No failure to exercise or delay by
Agent or Lender in exercising any right or remedy hereunder or under the
Mezzanine Loan Documents shall impair or prohibit the exercise of any such
rights or remedies in the future or be deemed to constitute a waiver or
limitation of any such right or remedy or acquiescence therein. Every right and
remedy granted to Agent and/or Lender hereunder or by law may be exercised by
Agent and/or Lender at any time and from time to time, and as often as Agent
and/or Lender may deem it expedient. Any and all of Agent's and/or Lender's
rights with respect to the lien and security interest granted hereunder shall
continue unimpaired, and Borrowers shall be and remain obligated in accordance
with the terms hereof, notwithstanding (a) any proceeding of any Borrower under
the Federal Bankruptcy Code or any bankruptcy, insolvency or reorganization laws
or statutes of any state, (b) the release or substitution of Account Collateral
at any time, or of any rights or interests therein, (c) the release a
substitution of any Person liable for all or ANY PART of the Obligations, or (d)
any delay, extension of time, renewal, compromise or other indulgence granted by
the Agent and/or Lender in the event of any default, with respect to the Account
Collateral or otherwise hereunder. No delay or extension of time by Agent and/or
Lender in exercising any power of sale, option or other right or remedy
hereunder, and no notice or demand which may be given to or made upon any
Borrower by Agent and/or Lender, shall constitute a waiver thereof, or limit,
impair or prejudice Agent's and/or Lender's right, without notice or demand, to
take any action against all of the Borrowers or to exercise any other power of
sale, option or any other right or remedy.
SECTION 7.4 EXPENSES. The Account Collateral shall secure, and
Borrowers shall pay to Agent and Lender and/or Agent's and Lender's counsel on
demand, from time to time, all costs and expenses (including, but not limited
to, reasonable attorneys' fees and disbursements, and transfer, recording and
filing fees, taxes and other charges) of, incurred in connection with, or
incidental to, the creation or perfection of any lien or security interest
granted or intended to be granted hereby, the custody, care, sale, transfer,
administration, collection of or realization on the Account Collateral, or in
any way relating to the enforcement, protection or preservation of the rights or
remedies of Agent and/or Lender under this Agreement, the Mezzanine Loan
Agreement, the Notes, the Pledges, or the other Mezzanine Loan Documents.
Standard and customary fees and charges associated with the Accounts shall be
paid by Borrowers. Each Borrower agrees that Agent shall be entitled to charge
the Accounts for such fees and expenses.
500
SECTION 7.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
and final agreement amongst the parties with respect to the subject matter
hereof and may not be changed, terminated or otherwise varied, except by a
writing duly executed by the parties.
SECTION 7.6 NO WAIVER. No waiver of any term or condition of this
Agreement, whether by delay, omission or otherwise, shall be effective unless in
writing and signed by the party sought to be charged, and then such waiver shall
be effective only in the specific instance and for the purpose for which given.
SECTION 7.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their respective successors
and permitted assigns.
SECTION 7.8 NOTICES. All notices, demands, requests, consents,
approvals and other communications (any of the foregoing, a "Notice") required,
permitted, or desired to be given hereunder shall be in writing and shall be
sent by telefax (with answer back acknowledged) or by registered or certified
mail, postage prepaid, return receipt requested or delivered by hand or
reputable overnight courier addressed to the party to be so notified at its
address hereinafter set forth, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section 7.8. Any
such Notice shall be deemed to have been received three (3) days after the date
such Notice is mailed or on the date of sending by telefax if sent during
business hours on a Business Day (otherwise on the next Business Day), (c) on
the date of delivery by hand if delivered during business hours on a Business
Day (otherwise on the next Business Day), and (d) on the next Business Day if
sent by an overnight commercial courier, in each case addressed to the parties
as follows:
If to Lender: UBS Warburg Real Estate Investments Inc.
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
And with a copy to: Wachovia Bank, National Association
8739 Research Drive, URP4
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxx
Fax No.: (000) 000-0000
or any successor Servicer of the Loan
501
If to any Borrower: c/o Horizon Group Properties, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxxx
Fax No.: (000) 000-0000
And with a copy to: c/o Horizon Group Properties Inc.
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxxxxx
Fax No.: (000) 000-0000
And with a copy to: Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
If to Agent: Wachovia Bank, National Association
8739 Research Drive, URP4
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxx
Fax No.: (000) 000-0000
Any party may change the address to which any such Notice is to be delivered by
furnishing ten (10) days' written notice of such change to the other parties in
accordance with the provisions of this Section 7.8. Notices shall be deemed to
have been given on the date set forth above, even if there is an inability to
actually deliver any Notice because of a changed address of which no Notice was
given or there is a rejection or refusal to accept any Notice offered for
delivery. Notice for any party may be given by its respective counsel.
Additionally, Notice from Lender may also be given by Servicer.
SECTION 7.9 CAPTIONS. All captions in this Agreement are included
herein for convenience of reference only and shall not constitute part of this
Agreement for any other purpose.
SECTION 7.10 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in all respects in accordance with the laws of the State
of New York without regard to conflicts of law principles of such State.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be Agent's jurisdiction (within the many of Sections
8-110 and 9-304 of the UCC (as amended)).
SECTION 7.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original and all of
which, taken together, shall constitute one and the same document.
502
SECTION 7.12 TERMINOLOGY. Titles of Sections in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement, and all references in this Agreement to Sections, Subsections,
paragraphs, clauses, or subclauses shall refer to the corresponding Section,
Subsection, paragraph, clause, or subclause of this Agreement, unless specific
reference is made to the articles, sections or other subdivisions of another
document or instrument.
SECTION 7.13 RECITALS. The Recitals set forth at the beginning of
this Agreement are hereby incorporated into and made a part of the substantive
provisions of this Agreement.
SECTION 7.14 NO AMENDMENT. Nothing contained in this Agreement shall
be construed to amend, modify, alter, change or supersede the terms and
provisions of the Mezzanine Loan Agreement or any of the other Mezzanine Loan
Documents. In the event of a conflict between the terms hereof and the terms of
the Mezzanine Loan Agreement, the terms of the Mezzanine Loan Agreement shall
govern and control.
SECTION 7.15 JURISDICTION, VENUE, SERVICE OF PROCESS. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT, AT
LENDER'S OPTION, IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX, XXX XXXX XXXXXX OR OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH
BORROWER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS
AS SET FORTH ABOVE. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
SECTION 7.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY OR
PARTIES HERETO RELATING TO THE MEZZANINE LOAN AND THE LENDING RELATIONSHIP WHICH
IS THE SUBJECT OF THE
503
MEZZANINE LOAN AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
ENTERING INTO THIS AGREEMENT.
[NO FURTHER TEXT ON THIS PAGE]
504
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
XXXXXXXX HOLDINGS LLC
By
--------------------------------
Name:
Title:
MEDFORD HOLDINGS LLC
By
--------------------------------
Name:
Title:
WARRENTON HOLDINGS LLC
By
--------------------------------
Name:
Title:
505
LENDER:
UBS WARBURG REAL ESTATE
INVESTMENTS INC., a Delaware corporation
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
506
AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
507
