Exhibit 2.2
LOAN AGREEMENT
Dated as of December 31, 1997
By and Between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
AND
000 0xx XXXXXX, X.X.
LOCATION OF PROPERTY:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
TABLE OF CONTENTS
PAGE
ARTICLE 1 PARTICULAR TERMS; DEFINITIONS....................................1
ARTICLE 2 THE LOAN........................................................13
2.1 Funding...................................................13
2.2 Loan Term.................................................13
2.2.1 Maturity Date....................................13
2.2.2 Extension Option.................................13
2.3 Interest..................................................14
2.3.1 Interest Rate....................................14
2.3.2 Calculation of Interest..........................14
2.4 Payments..................................................14
2.4.1 Interest.........................................14
2.4.2 Repayment of Outstanding Principal Balance.......14
2.4.3 General..........................................14
2.5 Funding Losses; Change in Law, Etc........................15
2.6 Prepayment................................................17
2.7 Default Interest; Late Charge.............................17
2.8 Excess Interest...........................................17
2.9 Loan Taxes................................................18
2.10 Uses of Loan Proceeds......................................20
2.11 Servicing..................................................20
ARTICLE 3 CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER..............20
3.1 Borrower Organization, Enforceability, Etc................20
3.2 Borrower Address..........................................21
3.3 Borrower's Organizational Documents.......................21
3.4 Managing Member's Organizational Documents................21
3.5 Title.....................................................22
3.6 Valid Liens...............................................22
3.7 Uses......................................................22
3.8 No Structural Defects.....................................22
3.9 Compliance with Zoning, Etc...............................22
3.10 No Condemnation............................................23
3.11 No Casualty................................................23
3.12 Purchase Options...........................................23
3.13 No Encroachments...........................................23
3.14 Litigation.................................................23
3.15 No Conflict with Law or Agreements.........................23
3.16 Personal Property..........................................23
(i)
3.17 Easements; Access; Utilities................................24
3.18 No Flood Hazard, Etc........................................24
3.19 Premises Taxed as a Separate Tax Lot........................24
3.20 Leases......................................................24
3.21 Environmental...............................................25
3.22 Americans with Disabilities Act.............................26
3.23 No Default..................................................26
3.24 No Offsets..................................................26
3.25 Financial Statements........................................26
3.26 No Insolvency...............................................27
3.27 Fraudulent Conveyance.......................................27
3.28 Broker......................................................27
3.29 Fiscal Year.................................................27
3.30 No Other Financing..........................................27
3.31 ERISA.......................................................27
3.32 FIRPTA......................................................28
3.33 PUHCA.......................................................28
3.34 Insurance...................................................28
3.35 No Margin Stock.............................................28
3.36 Investment Company Act......................................28
3.37 Taxes.......................................................28
3.38 Full and Accurate Disclosure................................28
3.39 Contracts...................................................29
3.40 Other Obligations and Liabilities...........................29
ARTICLE 4 CERTAIN COVENANTS OF BORROWER....................................29
4.1 Payment and Performance of Obligations.....................29
4.2 Transfers..................................................29
4.3 Liens......................................................30
4.4 Indebtedness...............................................31
4.5 Compliance with Restrictive Covenants, Etc.................32
4.6 Leases.....................................................32
4.7 Delivery of Notices........................................34
4.8 ERISA......................................................35
4.9 Agreements with Affiliates.................................36
4.10 After Acquired Property.....................................36
4.11 Books and Records...........................................36
4.12 Delivery of Estoppel Certificates...........................36
4.13 Management, Etc.............................................36
4.13.1 Management.......................................36
4.13.2 Management Termination...........................37
4.14 Financial Statements; Audit Rights..........................37
4.14.1 Statements to be Delivered.......................37
4.14.2 Time for Delivery................................38
(ii)
4.14.3 Officer's Certificate............................38
4.15 Maintenance of Non-Taxable Status...........................39
4.16 Lender's Attorneys' Fees and Expenses.......................39
4.17 Environmental...............................................40
4.18 Report Updates..............................................41
4.19 Lender Access to Premises...................................42
4.20 Delivery of Documents Regarding Ownership...................42
4.21 Use of Premises.............................................42
4.22 Insurance...................................................42
ARTICLE 5 EVENTS OF DEFAULT.....................................42
5.1 Events of Default; Defaults................................42
5.1.1 Non-Payment.....................................42
5.1.2 Affirmative Covenants...........................42
5.1.3 Negative Covenants..............................43
5.1.4 Financial Statements............................43
5.1.5 Representations.................................43
5.1.6 Other Loan Documents............................43
5.1.7 Demolition or Alterations.......................43
5.1.8 Failure to Deliver Estoppel Certificate.........43
5.1.9 Reserves; Deposits..............................43
5.1.10 Cessation of Borrower............................43
5.1.11 Transfer.........................................44
5.1.12 Liens............................................44
5.1.13 Involuntary Bankruptcy, Etc......................44
5.1.14 Voluntary Bankruptcy, Etc........................44
5.1.15 Judgments........................................44
5.1.16 Termination or Modification of Leases............44
5.1.17 Organizational Documents.........................44
5.1.18 Delivery of Financial Statements.................45
5.1.19 ERISA............................................45
5.1.20 Termination of Management Agreement, etc.........45
5.1.21 Other Conditions for Acceleration................45
5.1.23 Denial of Obligation.............................45
5.1.24 Misapplication of Receipts.......................45
5.1.25 Failure to Provide Further Assurances............45
5.2 Rights upon Event of Default...............................46
5.3 Waiver of Stay, Extension and Moratorium Laws,
Appraisal and Valuation, redemption and Marshalling......46
5.4 Preferences............................................... 47
ARTICLE 6 GENERAL PROVISIONS.............................................. 47
6.1 Rights Cumulative; Waivers................................ 47
6.2 Lender's Action for its Own Protection Only............... 48
(iii)
6.3 No Third Party Beneficiaries...............................48
6.4 Payment of Expenses, Etc...................................49
6.4.1 Payment of Expenses.............................49
6.4.2 Advances Secured................................50
6.5 Indemnification............................................50
6.6 Notices....................................................51
6.7 No Oral Modification.......................................53
6.8 Assignment by Lender.......................................53
6.8.1 Assignment......................................53
6.8.2 Participations..................................53
6.8.3 Assignment and Acceptance.......................53
6.8.4 Other Business..................................54
6.8.5 Privity of Contract.............................54
6.8.6. Availability of Records.........................54
6.9 Severability...............................................54
6.10 No Assignment by Borrower...................................54
6.11 Governing Law...............................................54
6.12 Successors and/or Assigns...................................54
6.13 Entire Contract.............................................54
6.14 Liability...................................................54
6.15 Counterparts; Headings......................................55
6.16 Time of the Essence.........................................55
6.17 Consents....................................................55
6.17.1 No Subsequent Consent............................55
6.17.2 Withholding of Consent...........................55
6.18 No Partnership..............................................56
6.19 Waiver of Jury Trial........................................56
6.20 Limited Recourse............................................56
6.21 Limitation on Liability.....................................58
6.22 Jurisdiction, Venue, Service of Process.....................58
6.23 Appointment of Agent for Service of Process.................59
6.24 Rule of Construction........................................59
6.25 Further Assurances..........................................59
6.26 Recitals....................................................60
6.27 Placement of Loan...........................................60
6.27.1 Loan Pool........................................60
6.27.2 Rating Agency Requirements.......................60
6.27.3 Disclosure; Indemnification......................61
6.27.4 Trustee..........................................62
6.27.5 Information Access...............................63
6.27.6 Timing of Transfer or Placement..................63
ARTICLE 7 SPECIAL PROVISIONS...............................................64
7.1 Tax, Insurance and Air Rights Lease Escrow.................64
(iv)
7.1.1 Tax, Insurance and Air Rights Lease Deposits....64
7.1.2 Payment of Taxes, Insurance Premiums and Air
Rights Lease Rentals............................64
7.1.3 Application upon Event of Default...............65
7.1.4 Reliance........................................65
7.1.5 Intentionally Omitted...........................65
7.1.6 No Third Party Beneficiary......................65
7.2 Receipts...................................................65
7.2.1 Deposits into Clearing Account..................65
7.2.2 Application of Receipts.........................65
ARTICLE 8 SINGLE PURPOSE ENTITY/SEPARATENESS...............................66
8.1 Representations, Warranties and Covenants..................66
SCHEDULES
Schedule A-1 Description of Land
Schedule A-2 Description of Air Rights Leases
Schedule B Contracts
Schedule C Leases
Schedule D Litigation
Schedule E Contingent Liabilities
(v)
LOAN AGREEMENT
THIS LOAN AGREEMENT (as amended from time to time in accordance with
the terms hereof and in effect, this "Agreement"), dated as of December 31,
1997, by and between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, a Delaware
limited liability company having an address at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, its successors and/or assigns ("Lender"), and 000 0xx Xxxxxx, L.P.,
a New York limited partnership, having an address at c/o Tower Realty Trust,
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower has entered into a contract to purchase the fee
estate in a certain tract of land known as 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, as more particularly described in Schedule A-1 annexed hereto (the
"Land"), and the building and other improvements located thereon (collectively,
the "Improvements"), together with certain leasehold estates appurtenant thereto
pursuant to the Air Rights Leases (as hereinafter defined);
WHEREAS, Borrower has requested Lender to lend to it the principal
sum of ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00) (the "Loan") to
be used to acquire the Premises (as hereinafter defined) and to pay certain
closing costs; and
WHEREAS, Lender has advised Borrower that, subject to the terms of
this Agreement and the documents to be executed in connection herewith, and
based upon the representations, warranties, covenants and undertakings of
Borrower herein and therein contained, Lender is willing to make the Loan to
Borrower on the terms and conditions set forth herein and therein.
NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:
ARTICLE 1
PARTICULAR TERMS; DEFINITIONS
For all purposes of this Agreement, the following terms shall have
the respective meanings hereinafter specified, such definitions to be applicable
equally to the singular and plural forms of such terms:
"ACM" shall mean asbestos-containing materials.
"Affiliate" shall mean, with respect to a specified Person, (i) a
Person who, directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with, the specified Person, (ii) any
Person who is an officer, director, partner, manager, employee, or trustee of,
or serves in a similar capacity with respect to, the specified Person or of
which the
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specified Person is an officer, partner, manager or trustee, or with respect to
which the specified Person serves in a similar capacity, (iii) any Person who,
directly or indirectly, has an Ownership Interest in the specified Person, (iv)
any Person in which the specified Person has an Ownership Interest, (v) the
spouse, issue, or parent of the specified Person, and (vi) any Person which
would constitute an Affiliate of any such Person described in clauses (i)
through (v) above.
"Affirmative Covenant" shall mean a promise or covenant by any Person
to perform, act, suffer, permit or consent to.
"Agreement" shall have the meaning ascribed to such term in the
introductory paragraph hereof.
"Agreement of Principal" shall mean that certain Agreement of
Principal dated the date hereof executed by Limited Partner in favor of Lender.
"Air Rights Lease Rentals" shall mean all rent, additional rent and
other amounts (however characterized) payable from time to time by Borrower to
the lessor under any of the Air Rights Leases.
"Air Rights Leases" shall mean those leases described on Schedule A-2
attached hereto and made a part hereof.
"Approved Accountant" shall mean one of the so-called "Big Six"
accounting firms or such other independent certified public accountant of
nationally recognized standing selected by the Person required to deliver the
applicable Financial Statements and other reports specified herein, which
Approved Accountant shall be approved by Lender. Lender hereby approves Xxxxxx,
Xxxx and Company as the Approved Accountant as of the date hereof.
"Approved Budget" shall have the meaning ascribed to such term in
Section 4.14.1 (iv) hereof.
"Approved Contracts" shall mean the Contracts listed on Schedule B
annexed hereto.
"Approved Leases" shall mean the Leases set forth on Schedule C
annexed hereto and all Leases entered into after the date of this Agreement in
accordance with Section 4.6 hereof.
"Assignees" shall have the meaning ascribed to such term in Section
6.8.1 hereof.
"Assignment of Leases and Rents" shall mean that certain Assignment
of Leases and Rents, dated as of the date hereof, made by Borrower in favor of
Lender, relating to the Loan, as the same may hereafter be amended or modified
from time to time.
"Bankruptcy Code" shall mean Title 11 of the United States Code, 11
U.S.C. ss.ss.101 et seq., as amended.
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"Base Rate" shall mean the rate per annum equal to (i) one percent
(1.0%) in excess of the then applicable Treasury Rate during the period prior to
and including the Scheduled Maturity Date and, (ii) nine percent (9.0%) in
excess of the Treasury Rate at any time after the Maturity Date.
"best knowledge" or "knowledge" shall mean, for the purpose of this
Agreement and the other Loan Documents, the actual knowledge of the Person in
question, without duty of inquiry unless the applicable provision shall so
state. If any entity with respect to which this term would be applicable is a
corporation, knowledge of such entity shall refer to actual knowledge of its
officers or directors. If any such entity is a partnership, knowledge of such
entity shall refer to actual knowledge of each of its partners who participates
in the management of such partnership (directly or indirectly). If any such
entity is a limited liability company, knowledge of such entity shall refer to
actual knowledge of its managing members. The knowledge or best knowledge of
Borrower for purposes of this definition shall mean the actual knowledge of
Xxxxxxxx Xxxxxxx, without obligation to make inquiry of any kind.
"Borrower" shall have the meaning ascribed to such term in the
introductory paragraph hereof.
"Capital Adequacy Events" shall have the meaning ascribed to such
term in Section 2.5(d) hereof.
"Cash Management Agreement" shall mean that certain Cash Management
Agreement, dated as of the date hereof, between Borrower and Lender, as the same
may be amended or modified from time to time.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss.960, et seq.), as the same may be
amended from time to time.
"Certificates" means the securities issued in connection with a
Securitization of the Loan.
"Claim" shall have the meaning ascribed to such term in Section
6.5(b) hereof.
"Clearing Account" shall have the meaning ascribed to such term in
the Cash Management Agreement.
"Closing Date" shall mean the time of execution and delivery of this
Agreement by Borrower to Lender.
"Closing Statement" shall have the meaning ascribed to such term in
Section 2.10 hereof.
"Collateral" shall mean all collateral pledged to Lender in respect
of the Loan hereunder or under any of the other Loan Documents.
"Collection Period" shall have the meaning ascribed to such term in
the Cash Management Agreement.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Contest" shall have the meaning ascribed to such term in Section
6.20 hereof.
"Contract" shall mean (i) any management, brokerage or leasing
agreement or (ii) any cleaning, maintenance, service or other contract or
agreement of any kind (other than Leases) of a material nature (materiality for
these purposes to include contracts in excess of $10,000 or which extend beyond
one year (unless cancelable on thirty (30) days or less notice)), in either case
relating to the ownership, leasing, management, use, operation, maintenance,
repair or restoration of the Premises, whether written or oral.
"control" (and the correlative terms "controlled by" and
"controlling") shall mean, with respect to a specified Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through ownership of voting
securities or partnership or other ownership interests, by contract or
otherwise; provided, however, that, without limiting the generality of the
foregoing, (i) any Person (including family members of such Person) which owns,
directly or indirectly, securities representing twenty percent (20%) or more of
the value or ordinary voting power of a corporation or twenty percent (20%) or
more of the partnership or other Ownership Interests (based upon value or vote)
of any other Person is deemed to control such corporation or other Person, (ii)
a general partner shall always be deemed to control any partnership of which it
is a general partner, and (iii) a manager or member-manager of a limited
liability company shall always be deemed to control any limited liability
company of which it is a manager or member-manager, as the case may be.
"Default" shall have the meaning ascribed to such term in Section 5.1
hereof.
"Default Rate" shall have the meaning ascribed to such term in
Section 2.7 hereof. In no event shall the Default Rate exceed the maximum
interest rate permitted under applicable law.
"Deposit Bank" shall have the meaning ascribed to such term in the
Cash Management Agreement.
"Designated Officer" shall mean (i) if Borrower is a corporation, the
chief financial officer of such corporation or such other officer of such
corporation as is fully familiar with the financial affairs of Borrower and is
approved by Lender, (ii) if Borrower is a partnership, such officer of
Borrower's managing general partner as satisfies the first sentence of this
definition, or (iii) if Borrower is a limited liability company, such officer of
Borrower's managing member as satisfies the first sentence of this definition.
"Designee" shall have the meaning ascribed to such term in Section
6.23 hereof.
"Disbursement Instructions" shall have the meaning ascribed to such
term in the Cash Management Agreement.
"Disbursement Period" shall mean a period of thirty (30) calendar
days.
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"Disclosed Violations" shall have the meaning ascribed to such term
in Section 3.9 hereof.
"Disclosure Document" shall have the meaning ascribed to such term in
Section 6.27.3 hereof.
"Disqualified Person" shall have the meaning ascribed to such term in
Section 3.31 hereof.
"Dollar" or "$" shall mean lawful money of the United States of
America.
"Domestic Business Day" shall mean any day except a Saturday, Sunday
or other day on which commercial banks are required or permitted by law to close
in New York City.
"Easements" shall have the meaning ascribed to such term in Section
2.7 hereof.
"Engineering Consultant" shall mean Aquaterra Environmental Services
Corp.
"Engineer's Report" shall mean the report dated August 18, 1997
prepared by the Engineering Consultant.
"Entities" shall have the meaning ascribed to such term in Section
6.27.2(i) hereof.
"Environmental Consultant" shall mean General Consolidated
Industries.
"Environmental Costs" shall mean "Indemnified Costs" as such term is
defined in the Environmental Indemnification Agreement.
"Environmental Indemnification Agreement" shall mean that certain
Environmental Indemnification Agreement, dated as of the date hereof, made by
Borrower and Limited Partner to Lender, as the same may hereafter be amended or
modified from time to time.
"Environmental Laws" shall mean CERCLA; The Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq.; The Hazardous Substances
Transportation Act, 42 U.S.C. ss. 9601, et seq.; The Emergency Planning &
Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001, et seq.; The Toxic
Substances Control Act, 15 U.S.C. ss. 2601 et seq.; The Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; The Clean Water Act, 33 U.S.C. ss. 1251 et seq.; The Safe
Drinking Water Act, 42 U.S.C. ss. 201 et seq.; as any of the foregoing may be
amended from time to time; and any other federal, state and local laws or
regulations, codes, statutes, orders, decrees, guidance documents, judgments or
injunctions, now or hereafter issued, promulgated, approved or entered
thereunder, relating to pollution, contamination or protection of the
environment, including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata, buildings or facilities) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.
-5-
"Environmental Matter" shall mean any matter arising out of, relating
to, or resulting from pollution, contamination or protection of the environment
(including natural resources), and any matters relating to emission, discharge,
release or threatened release, of Hazardous Substances into the air (indoor and
outdoor), surface water, groundwater, soil, land surface or subsurface,
buildings or facilities or otherwise arising out of, relating to, or resulting
from the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, handling, release or threatened release of Hazardous
Substances.
"Environmental Report" shall mean the report dated August 7, 1997
prepared by the Environmental Consultant.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder from time to time.
"Eurodollar Business Day" shall mean any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London, England.
"Event of Default" shall have the meaning ascribed to such term in
Section 5.1 hereof.
"Excess Interest" shall have the meaning ascribed to such term in
Section 2.8 hereof.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
"Excluded Revenue Items" shall have the meaning ascribed to such term
in the definition of "Receipts" set forth below.
"Expenses" shall mean all actual and customary operating expenses and
all other unanticipated or non-recurring expenses for or in connection with the
Premises (as adjusted by Lender to reflect, inter alia, timing of the payment of
expenses and such other factors as Lender shall reasonably determine to be
relevant), including, without limitation (i) recurring expenses (e.g. capital or
non-capital improvements, fixtures, furnishings and/or equipment replacements,
and such others as determined by Lender), (ii) Taxes (whether paid directly by
Borrower or escrowed with Lender in accordance with Section 7.1 hereof), (iii)
Insurance Premiums (whether paid directly by Borrower or escrowed with Lender in
accordance with Section 7.1 hereof), and (iv) management fees due under the
Management Agreement (whether paid or not) in an amount not to exceed four
percent (4.0%) of Receipts.
"Extension Commencement Date" shall have the meaning ascribed to such
term in Section 2.2.2 hereof.
"Extension Notice" shall have the meaning ascribed to such term in
Section 2.2.2 hereof.
"Extension Term" shall have the meaning ascribed to such term in
Section 2.2.2 hereof.
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"Financial Statements" shall mean the financial statements and other
documentation required to be delivered pursuant to Section 4.14 hereof.
"Funding Losses" shall have the meaning ascribed to such term in
Section 2.5(a) hereof.
"Funding Party" shall mean any bank or other entity, if any, which is
indirectly or directly funding Lender with respect to the Loan, in whole or in
part, including, without limitation, any direct or indirect assignee of, or
participant in, the Loan.
"General Partner" shall mean 000 0xx Xxxxxx XX LLC, a Delaware
limited liability company.
"Governmental Authority" shall mean the United States, the State of
New York, the City of New York and any political subdivision of any of the
foregoing, and any agency, department, commission, board, court, bureau or
instrumentality of any of them.
"Hazardous Substances" shall mean asbestos, ACM, PCBs,
urea-formaldehyde and urea- formaldehyde foam insulation, nuclear fuel or waste,
petroleum products and any hazardous waste, toxic substance, related components,
related constituents, pollutant or contaminant, including, without limitation,
any substance defined or treated as a "hazardous substance", "extremely
hazardous substance" or "toxic substance" (or comparable term) in any applicable
Environmental Law and any other material, which may give rise to Environmental
Costs.
"Improvements" shall have the meaning ascribed to such term in the
Recitals hereof.
"Indebtedness" shall mean any and all liabilities and obligations
owing by any Person to any Person, including principal, interest, charges, fees,
reimbursements and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, original, renewed or extended, (i) in
respect of any borrowed money (whether by loans, the issuance and sale of debt
securities or the sale of any property to another Person subject to an
understanding, agreement, contract or otherwise to repurchase such property) or
for the deferred purchase price of any property or services (other than trade
accounts payable, or accrued expenses, that are or would be incurred in the
ordinary course of business of such Person ("Trade Payables") and payable within
ninety (90) days), (ii) as lessee under any leases which shall have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases, (iii) under direct or indirect guarantees and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise assure
any creditor against loss in respect of the obligations of others, (iv) in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for the account of such indebted Person, or (v)
in respect of unfunded vested benefits under plans covered by ERISA or any
similar liabilities to, for the benefit of, or on behalf of, any employees of
such indebted Person.
"Indemnified Parties" shall mean each of Lender, the Affiliates of
Lender and the Participants and their respective successors, assigns, partners,
members, shareholders, officers, directors, employees, agents and attorneys.
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"Independent Director" shall mean a duly appointed member of the
board of directors of the relevant Person (which shall be an entity) who shall
not have been, at the time of such appointment or at any time in the preceding
five (5) years, (i) a direct or indirect, legal or beneficial, owner in such
Person or any of its Affiliates, (ii) a creditor, supplier, employee, officer,
director, family member, manager or contractor of such Person or any of its
Affiliates, or (iii) a natural person who controls (whether directly,
indirectly, or otherwise) such Person or any of its Affiliates or any creditor,
supplier, employee, officer, director, manager or contractor of such Person or
any of its Affiliates.
"Insolvent" shall mean (i) the inability of a Person to pay its debts
as they become due and/or (ii) the fair value of such Person's debts is greater
than the fair value of such Person's assets.
"Insurance Premiums" shall have the meaning ascribed to such term in
Section 7.1 hereof.
"Interest Accrual Period" shall mean, with respect to any Payment
Date, the calendar month preceding such Payment Date, provided, however, that no
Interest Accrual Period shall end later than the Maturity Date (other than for
purposes of calculating interest at the Default Rate), and the initial Interest
Accrual Period shall begin on the date of this Agreement.
"Land" shall have the meaning ascribed to such term in the Recitals
hereof.
"Law Change" shall have the meaning ascribed to such term in Section
2.9(c) hereof.
"Lease" shall mean any lease now or hereafter on or affecting the
Premises, or any part thereof, whether written or oral, and all licenses and
other agreements for the use and/or occupancy of the Premises, or any part
thereof, as the same shall have been or shall hereafter be amended.
"Legal Requirement" shall mean any law, statute, ordinance, order,
rule, regulation, decree or other requirement of a Governmental Authority, and
all conditions of any Permit.
"Lender" shall have the meaning ascribed to such term in the
introductory paragraph hereof.
"Lender's Counsel" shall mean Xxxxx Raysman Xxxxxxxxx Xxxxxx &
Xxxxxxx LLP, located in New York, New York, and any other law firm acting as
counsel to Lender.
"Lender's Counsel Fees" shall mean all fees and disbursements of
Lender's Counsel.
"LIBOR" shall mean, with respect to any Interest Accrual Period, the
rate per annum (rounded upwards, if necessary, to the nearest one-sixteenth
(1/16th) of one percent (1%)) reported, with respect to the initial Interest
Accrual Period, at 11:00 a.m. London time on the date of this Agreement (or if
such date is not a Eurodollar Business Day, the immediately preceding Eurodollar
Business Day), and thereafter, at 11:00 a.m. London time on the date two (2)
Eurodollar Business Days prior to the first day of such Interest Accrual Period,
on Telerate Access Service Page 3750 (British Bankers Association Settlement
Rate) as the non-reserve adjusted London Interbank Offered Rate for U.S. dollar
deposits having a thirty (30) day term and in an amount of $1,000,000 or more
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(or on such other page as may replace Telerate Page 3750 on that service or such
other service or services as may be nominated by the British Bankers Association
for the purpose of displaying such rate, all as determined by Lender in its sole
but good faith discretion). In the event that (i) more than one such LIBOR is
provided, the average of such rates shall apply, or (ii) no such LIBOR is
published, then LIBOR shall be determined from such comparable financial
reporting company as Lender in its sole but good faith discretion shall
determine. LIBOR for any Interest Accrual Period shall be adjusted from time to
time by increasing the rate thereof to compensate Lender and any Funding Party
for any aggregate reserve requirements (including, without limitation, all
basic, supplemental, marginal and other reserve requirements and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements during any Interest Accrual Period) which are required to be
maintained by Lender or such Funding Party with respect to "Eurocurrency
Liabilities" (as presently defined in Regulation D of the Board of Governors of
the Federal Reserve System) of the same term under Regulation D, or any other
regulations of a Governmental Authority having jurisdiction over Lender or such
Funding Party of similar effect.
"LIBOR Interest Rate" shall have the meaning ascribed to such term in
Section 2.3.1 hereof.
"Liens" shall have the meaning ascribed to such term in Section 4.3
hereof.
"Limited Partner" shall mean Tower Realty Operating Partnership,
L.P., a Delaware limited partnership.
"Loan" shall have the meaning ascribed to such term in the Recitals
hereof.
"Loan Amount" shall mean One Hundred Million and 00/100 Dollars
($100,000,000.00).
"Loan Documents" shall mean this Agreement, the Note, the Mortgage,
the Assignment of Leases and Rents, the Environmental Indemnification Agreement,
the Cash Management Agreement, the Agreement of Principal and any other document
or agreement now or hereafter executed by Borrower or any other Person for the
benefit of Lender securing, evidencing or otherwise relating to the Loan.
"Loan Interest" shall have the meaning ascribed to such term in
Section 6.27.1 hereof.
"Loan Pool" shall have the meaning ascribed to such term in Section
6.27.1 hereof.
"Loan Taxes" shall have the meaning ascribed to such term in Section
2.9(a) hereof.
"Major Lease" shall mean any Lease described on Schedule C annexed
hereto, which is marked with an asterisk, and any other Lease entered into after
the date hereof which either (i) is with an Affiliate of Borrower or (ii) when
taken together with all Leases, if any, to Affiliates of the tenant thereunder
demises in excess of ten percent (10%) of the net rentable square feet in the
Improvements. For purposes of this definition only, in determining the net
rentable square footage demised under any Lease, all space in the Improvements
which may in the future be demised to the
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tenant under such Lease by reason of such tenant exercising any right or option
contained in such Lease shall be included in the calculation of the square
footage demised under such Lease.
"Management Agreement" shall have the meaning ascribed to such term
in Section 4.13.1(a) hereof.
"Manager" shall have the meaning ascribed to such term in Section
4.13.1(a) hereof. The Manager on the date hereof is Borrower.
"Manager Assignment and Subordination" shall have the meaning
ascribed to such term in Section 4.13.1(b) hereof.
"Managing Member" shall have the meaning ascribed to such term in
Section 3.1.4 hereof.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the property, business, operations, financial condition, prospects or
liabilities of any Significant Party, (ii) the ability of any Significant Party
to perform its material obligations under any of the Loan Documents, including,
without limitation, the timely payment of principal of or interest on the Loan
or other amounts payable in connection therewith by any Significant Party liable
therefor, (iii) the validity or enforceability of any of the Loan Documents by
or against any Significant Party, (iv) the rights and remedies of Lender under
any of the Loan Documents, or (v) without limiting the foregoing, the Premises
or any use or occupancy thereof and/or the Collateral and the priority of the
Liens thereon in favor of Lender.
"Maturity Date" shall mean the day which is the earlier to occur of
(i) the Scheduled Maturity Date, or (ii) the date on which payment of the Loan
shall have been accelerated pursuant to the terms of this Agreement.
"Mortgage" shall mean that certain Mortgage Consolidation,
Modification, Extension and Security Agreement, dated as of the date hereof,
made by Borrower in favor of Lender, as the same may hereafter be amended,
modified, increased, consolidated or extended from time to time.
"Negative Covenant" shall mean a promise or covenant by any Person to
not act, perform, suffer, permit or consent to.
"Note" shall mean that certain Consolidated, Amended and Restated
Mortgage Note, dated the date hereof, made by Borrower to Lender, in the
original principal amount of One Hundred Million and 00/100 Dollars
($100,000,000.00), as the same may hereafter be amended, modified, extended or
substituted from time to time.
"Notices" shall have the meaning ascribed to such term in Section 6.6
hereof.
"Obligated Party" shall have the meaning ascribed to such term in
Section 5.2(i) hereof.
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"Obligations" shall mean Borrower's obligation to pay the principal,
interest and any other sums payable to Lender in respect of the Loan hereunder
and/or under the Note, the Mortgage or any of the other Loan Documents, and to
perform and observe all of the terms, covenants and provisions of each of the
Loan Documents.
"Officer's Certificate" shall mean a certificate delivered to Lender
and signed by the President or a Vice President of Borrower (or if, at any time,
Borrower shall be a partnership or limited liability company, by such an officer
of a general partner or managing member, as the case may be, of Borrower, or if
such general partner or managing member is a limited liability company, by such
an officer of such general partner or managing member, as the case may be). Any
Officer's Certificate shall be based on the actual knowledge, upon due inquiry,
of the officer executing the same and shall contain a statement by such officer
that (i) in the ordinary course of the performance of his duties he would
normally obtain knowledge of, or (ii) he has made such inquiry as in his
judgment is reasonably sufficient to obtain knowledge of, the existence of any
condition or event necessary to make the statement(s) otherwise set forth in
such Officer's Certificate.
"Organizational Documents" shall mean, with respect to any Person who
is not a natural person, the certificate or articles of incorporation,
memorandum of association, articles of association, trust agreement, by-laws,
partnership agreement, limited partnership agreement, certificate of partnership
or limited partnership, limited liability company articles of organization,
limited liability company operating agreement or any other organizational
document, and all shareholder agreements, voting trusts and similar arrangements
with respect to its stock, partnership interests, membership interests or other
equity interests.
"Outstanding Principal Balance" shall mean, as of any date, the
outstanding principal balance of the Loan.
"Ownership Interest" shall mean, with respect to any Person,
ownership of the right to profits and losses of, and/or the right to exercise
voting power to elect directors, managers, operators or other management of, or
otherwise to affect the direction of management, policies or affairs of, such
Person, whether through ownership of securities or partnership, membership or
other interests therein, by contract or otherwise.
"Participants" shall have the meaning ascribed to such term in
Section 6.8.2 hereof.
"Party In Interest" shall have the meaning ascribed to such term in
Section 3.31 hereof.
"Payment Date" shall mean February 1, 1998 and the first day of each
month thereafter during the Term.
"PCBs" shall mean polychlorinated biphenyls.
"Permit" shall mean all approvals, consents, registrations,
franchises, permits, licenses, variances, certificates of occupancy and other
authorizations with regard to zoning, landmark, ecological, environmental, air
quality, subdivision, planning, building or land use required by any
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Governmental Authority for the construction, lawful occupancy and operation of
the Improvements and the actual and contemplated uses thereof.
"Permitted Encumbrances" shall mean the encumbrances listed on
Schedule B of the Title Policy.
"Person" shall mean any individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
estate, trust, unincorporated association, joint venture or other entity or a
government or an agency or political subdivision thereof.
"Placement Party" shall have the meaning ascribed to such term in
Section 6.27.1 hereof.
"Premises" shall mean the Land, the Improvements, the Air Rights
Leases and all personal property and other items described in the granting
clauses of the Mortgage, and any other property owned and/or leased by Borrower
and used or usable in the operation of the Improvements.
"Prohibited Transaction" shall mean a prohibited transaction as
described under Section 406 of ERISA or Section 4975 of the Code which is not
the subject of a statutory exemption under Section 408(b) of ERISA or an
administrative exemption granted pursuant to Section 408(a) of ERISA.
"Rating Agencies" shall mean (i) any nationally-recognized
statistical rating organizations that provide a rating on any of the
Certificates on the date of issuance of such Certificates, or (ii) prior to the
issuance of the Certificates, Standard & Poor's Rating Group, a division of The
McGraw Hill Corporation, and any other nationally-recognized statistical rating
organization that has been designated by Lender in its sole discretion.
"Receipts" shall mean for any period all receipts, revenues, income
(including service charges), fees, payments and proceeds of sales of every kind
received by or on behalf of Borrower, directly or indirectly, from operating the
Premises for that period, and services rendered to, and rentals, percentage
rentals and other fees, payments and charges received from, tenants,
sub-tenants, licensees, concessionaires and occupants of commercial, public and
retail space located in or at the Premises, calculated on a cash basis, whether
in cash or on credit, including, without limitation, revenues from the rental of
parking at the Premises, the fair market value of any barter transaction, and
other fees and charges resulting from the operations of the Premises by or on
behalf of Borrower in the ordinary course of business, and proceeds, if any,
from business interruption or other loss of income insurance (net of the costs
of collection thereof); provided, however, that Receipts shall not include (i)
non-recurring income and non-Premises related income (as determined by Lender in
its reasonable discretion), (ii) security deposits received from any tenant
unless and until the same are applied to rent or any other of such tenant's
obligations in accordance with the terms of such tenant's Lease, (iii) any Loan
proceeds, (iv) gratuities or service charges or other similar receipts which are
to be paid over to Premises employees or persons occupying similar positions for
performing similar duties; (v) proceeds of insurance or other money or credits
received in settlement for loss, theft or damage to property relating to or used
in or at the Premises; (vi) excise taxes, sales taxes, use taxes, gross receipts
taxes, value added taxes, or other taxes or similar charges payable to any
Governmental
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Authority; (vii) condemnation awards; and (viii) proceeds from the sale of
furniture, fixtures and/or equipment no longer required for the operation of the
Premises; and (the revenue exclusions in the preceding clauses (i) through
(viii), collectively, the "Excluded Revenue Items").
"Related Party" shall have the meaning ascribed to such term in
Section 6.20 hereof.
"Remaining Receipts" shall have the meaning ascribed to such term in
Section 7.2.2(a)(iii) hereof.
"Rent Roll" shall mean a rent roll for the Premises supplied to
Lender, in such form as Lender shall reasonably request. The Rent Roll must
indicate whether any tenant is in arrears in the payment of rent or expense
reimbursement obligations under its Lease, and the duration and amount of any
such arrears.
"RICO" shall have the meaning ascribed to such term in Section 6.20
hereof.
"Scheduled Maturity Date" shall mean June 30, 1998.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securitization" shall have the meaning ascribed to such term in
Section 6.27.1 hereof.
"Securitization Indemnification" shall have the meaning ascribed to
such term in Section 6.27.3 hereof.
"Securitization Indemnified Party" shall have the meaning ascribed to
such term in Section 6.27.3 hereof.
"Servicer" shall have the meaning ascribed to such term in Section
2.11 hereof.
"Significant Party" shall mean each of Borrower, General Partner,
Limited Partner and Managing Member.
"Survey" shall mean that survey of the Land, dated December 19, 1970,
as most recently updated on December 26, 1997, prepared by Xxxx X. Xxxxxx-X.X.
Xxxxxxx, Inc..
"Tax, Insurance and Air Rights Lease Deposits" shall have the meaning
ascribed to such term in Section 7.1.1 hereof.
"Tax, Insurance and Air Rights Lease Escrow Subaccount" shall have
the meaning ascribed to such term in the Cash Management Agreement.
"Taxes" shall have the meaning ascribed to such term in the Mortgage.
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"Term" shall mean the period commencing on the date hereof and ending
on the date on which the entire Outstanding Principal Balance and all other sums
that shall be due and payable to Lender hereunder and under any of the other
Loan Documents shall be paid in full to Lender.
"Title Insurers" shall mean, collectively, Commonwealth Land Title
Insurance Company, Lawyers Title Insurance Company and Chicago Title Insurance
Company.
"Title Policy" shall mean, collectively, the following title
insurance policies, each dated the date hereof: (i) policy in the amount of
$50,000,000 issued by Commonwealth Land Title Insurance Company under Title No.
NY971601, (ii) policy in the amount of $35,000,000 issued by Lawyers Title
Insurance Company under Title No. LTM 8244M, and (iii) policy in the amount of
$15,000,000 issued by Chicago Title Insurance Company under Title No.
TA97(01)985.
"Trade Payables" shall have the meaning ascribed to such term in the
definition of "Indebtedness" set forth above.
"Transfer" shall have the meaning ascribed to such term in Section
4.2(a) hereof.
"Treasury Rate" shall mean, with respect to any Interest Accrual
Period, the rate per annum (rounded upwards, if necessary, to the nearest
one-sixteenth (1/16th) of one percent (1%)) reported, with respect to the
initial Interest Accrual Period, at 11:00 a.m. New York time on the date of this
Agreement (or if such date is not a Domestic Business Day, the immediately
preceding Domestic Business Day), and during any Interest Accrual Period
thereafter, at 11:00 a.m. New York time on the date two (2) Domestic Business
Days prior to the first day of each such Interest Accrual Period, on United
States Treasury Securities, adjusted to a constant maturity of one (1) year.
"Tower" shall have the meaning ascribed to such term in Section 3.1.4
hereof.
"U.S. Person" shall mean any Person that is (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized under the laws of the United States or any state thereof or (iii) any
estate or trust that is subject to United States federal income taxation,
regardless of the source of its income.
ARTICLE 2
THE LOAN
2.1 Funding. On the Closing Date, subject to the terms and conditions
of this Agreement, and relying upon the representations and warranties set forth
herein, Lender shall disburse the Loan to or on behalf of Borrower.
2.2 Loan Term.
2.2.1 Maturity Date. The Loan shall mature on the Maturity
Date, at which time the entire Loan shall be due and payable.
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2.2.2 Extension Option. Borrower shall have the right to
extend the Scheduled Maturity Date to December 31, 1998 (the period commencing
on the first (1st) day following the original Scheduled Maturity Date and ending
on December 31, 1998 being referred to herein as the "Extension Term"), provided
that: (i) Borrower shall have given Lender its written notice of such extension
(an "Extension Notice") not less than thirty (30) days nor more than ninety (90)
days prior to the original Scheduled Maturity Date; and (ii) no Event of Default
shall have occurred and be continuing at the time of the delivery of the
Extension Notice with respect to the Extension Term or on the date of the
commencement of the Extension Term (the "Extension Commencement Date"). In the
event the original Scheduled Maturity Date is extended by the Extension Term in
accordance with the terms hereof, thereafter, all references herein and in any
of the other Loan Documents (except any such references in this Section 2.2.2)
to the "Scheduled Maturity Date" shall be deemed to refer to the last day of the
Extension Term.
2.3 Interest.
2.3.1 Interest Rate. Subject to the further provisions of
this Agreement, including, without limitation, Sections 2.5 and 2.7 hereof, the
Outstanding Principal Balance shall bear interest throughout the Term at a
floating rate per annum equal to one percent (1%) in excess of LIBOR (the
aggregate rate referred to in the preceding clause being referred to as the
"LIBOR Interest Rate") for any Interest Accrual Period commencing prior to the
Maturity Date.
2.3.2 Calculation of Interest. All interest payable
hereunder shall be computed on the basis of a 360-day year for the actual number
of days elapsed. In computing the number of days during which interest accrues,
the day on which funds are initially advanced shall be included regardless of
the time of day such advance is made, and the day on which funds are repaid
shall, subject to Section 2.4.3 hereof, be excluded.
2.4 Payments.
2.4.1 Interest. Prior to the Maturity Date, interest
accruing on the Outstanding Principal Balance during each Interest Accrual
Period shall be payable by Borrower monthly in arrears on each Payment Date.
2.4.2 Repayment of Outstanding Principal Balance. The
entire Outstanding Principal Balance, together with all accrued and unpaid
interest thereon and all other amounts payable hereunder or under any of the
other Loan Documents, shall, to the extent not sooner paid pursuant to the terms
of the Note and the other Loan Documents, be due and payable in full on the
Maturity Date.
2.4.3 General. All sums payable to Lender hereunder shall
be payable, without setoff, deduction or counterclaim, in immediately available
funds, no later than 2:00 P.M. New York City time on the date when due by wire
transfer to the following account: Bank of America, San Francisco, CA, ABA
Number: 000-000-000, Account Number: 0000-0-00000, Account Name: Pacific Life in
Trust for Credit Suisse First Boston Mortgage Capital LLC, Reference: 000 0xx
Xxxxxx, or to such other account or address as Lender may from time to time
designate in a written
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notice to Borrower. Payments received by Lender in immediately available funds
on any day after 2:00 P.M. New York City time shall be treated for all purposes
of the Loan as having been paid and received by Lender on the next Domestic
Business Day. Notwithstanding anything to the contrary contained herein, when
any payment is due hereunder or under any of the other Loan Documents on a day
which is not a Domestic Business Day, such payment shall be made on the next
succeeding Domestic Business Day.
2.5 Funding Losses; Change in Law, Etc.
(a) Borrower hereby agrees to pay to Lender any amount necessary to
compensate Lender and any Funding Party for any actual losses or costs
(including, without limitation, the costs of breaking any "LIBOR" contract, if
applicable, or funding losses determined on the basis of Lender's or such
Funding Party's reinvestment rate and the interest rate thereon) (collectively,
"Funding Losses") sustained by Lender or any Funding Party: (i) if the Loan, or
any portion hereof, is repaid for any reason whatsoever on any date other than a
Payment Date (including, without limitation, from condemnation or insurance
proceeds); (ii) upon the conversion of the interest rate on the Loan to the Base
Rate in accordance with Section 2.5(b) hereof; (iii) as a consequence of (A) any
increased costs that Lender or any Funding Party may sustain in maintaining the
borrowing evidenced hereby or (B) the reduction of any amounts received or
receivable from Borrower, in either case, due to the introduction of, or any
change in, law or applicable regulation or treaty (including the administration
or interpretation thereof), whether or not having the force of law, or due to
the compliance by Lender or the Funding Party, as the case may be, with any
directive, whether or not having the force of law, or request from any central
bank or domestic or foreign governmental authority, agency or instrumentality
having jurisdiction; and/or (iv) any other set of circumstances not attributable
to Lender's or a Funding Party's acts. Payment of Funding Losses hereunder shall
be in addition to any obligation to pay a prepayment premium under Section 2.6
hereof in circumstances where such prepayment premium would be due and owing.
(b) If Lender determines (which determination shall be reasonably
made by Lender in good faith) (i) that Dollar deposits in an amount
approximately equal to the then Outstanding Principal Balance are not generally
available at such time in the London Interbank Market for deposits in
Eurodollars, (ii) that the rate at which such deposits are being offered will
not adequately and fairly reflect the cost to Lender or a Funding Party of
maintaining a LIBOR Interest Rate on the Loan (or the portion of the Loan being
funded by such Funding Party), or of funding the same in such market for such
Interest Accrual Period, due to circumstances affecting the London Interbank
Market generally, (iii) that reasonable means do not exist for ascertaining
LIBOR, or (iv) that the LIBOR Interest Rate would be in excess of the maximum
interest rate which Borrower may by law pay, then, in any such event, Lender
shall so notify Borrower and, as of the date of such notification with respect
to an event described in clause (ii) or (iv) above, or as of the expiration of
the applicable Interest Accrual Period with respect to an event described in
clause (i) or (iii) above, interest shall accrue at the Base Rate until such
time as the situations described above are no longer in effect, or as otherwise
provided herein; provided, however, if the situation described in clause (ii)
above occurs, (x) Borrower shall have the option, to be exercised by written
notice to Lender, to pay Lender (in the manner reasonably required by Lender)
for such increased cost of maintaining the LIBOR Interest Rate, and (y) if the
same only affects a portion of the Loan, then only such portion shall have
interest
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accrue at the Base Rate (provided the remaining portion is at least $1,000,000),
and interest shall continue to accrue on the remaining portion at the LIBOR
Interest Rate.
(c) If the introduction of, or any change in, any law, regulation or
treaty, or in the interpretation thereof by any governmental authority charged
with the administration or interpretation thereof, shall make it unlawful for
Lender or any Funding Party to maintain the LIBOR Interest Rate with respect to
the Loan, or any portion thereof, or to fund the Loan, or any portion thereof,
in Eurodollars in the London Interbank Market, then, (i) the Loan (or such
portion of the Loan) shall thereafter bear interest at the Base Rate (unless the
Default Rate shall be applicable), and (ii) Borrower shall pay to Lender the
amount of Funding Losses (if any) incurred in connection with such conversion.
The accrual of interest at the Base Rate shall continue until such Payment Date,
if any, as the situation described in this Section 2.5(c) is no longer in
effect.
(d) If Lender or a Funding Party, as the case may be, shall have
determined that the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption of any other law, rule, regulation or guideline (including, but not
limited to, any United States law, rule, regulation or guideline) regarding
capital adequacy, or any change becoming effective in any of the foregoing or in
the enforce1ment or interpretation or administration of any of the foregoing by
any court or any domestic or foreign governmental authority, central bank or
comparable agency charged with the enforcement or interpretation or
administration thereof, or compliance by Lender or its holding company or such
Funding Party or its holding company, as the case may be, with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of Lender, Lender's holding
company, such Funding Party or such Funding Party's holding company, as the case
may be, to a level below that which Lender or its holding company or the Funding
Party or its holding company, as the case may be, could have achieved but for
such applicability, adoption, change or compliance (taking into consideration
Lender's or its holding company's or such Funding Party's or its holding
company's, as the case may be, policies with respect to capital adequacy) (the
foregoing being hereinafter referred to as "Capital Adequacy Events"), then,
upon demand by Lender, Borrower shall pay to Lender, from time to time, such
additional amount or amounts as will compensate Lender or such Funding Party for
any such reduction suffered.
(e) Any amount payable by Borrower under Section 2.5(a) or 2.5(d)
hereof shall be paid to Lender within five (5) days of receipt by Borrower of a
certificate signed by an officer of Lender setting forth the amount due and the
basis for the determination of such amount (which determination shall be
reasonably made by Lender in good faith). Failure on the part of Lender to
demand payment from Borrower for any such amount attributable to any particular
period shall not constitute a waiver of Lender's right to demand payment of such
amount for any subsequent or prior period. Lender shall use reasonable efforts
to deliver to Borrower prompt notice of any event described in Sections 2.5(a)
or 2.5(d) hereof and of the amount to be paid under this Section 2.5 as a result
thereof; provided, however, any failure by Lender to so notify Borrower shall
not affect Borrower's obligation to make the payments to be made under this
Section 2.5 as a result thereof. All amounts which may become
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due and payable by Borrower in accordance with the provisions of this Section
2.5 shall constitute additional interest hereunder and shall be secured by the
Mortgage and the other Loan Documents.
(f) If Lender or any Funding Party requests compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of Sections 2.5(a)(iii), 2.5(a)(iv) or 2.5(d) hereof, or if any event occurs as
described in Sections 2.5(b) or 2.5(c) hereof which would cause the Note no
longer to bear interest at the LIBOR Interest Rate then, upon request of
Borrower, Lender or such Funding Party shall use reasonable efforts, in a manner
consistent with such institution's practice in connection with loans like the
Loan, to designate a different lending office for funding or booking the Loan or
to assign its rights and obligations under this Agreement to another of its
offices, branches or Affiliates if such designation or assignment, in Lender's
sole but good faith judgment, (i) would eliminate, mitigate or reduce amounts
payable by Borrower in connection with Funding Losses or Capital Adequacy Events
or, with respect to an event described in Sections 2.5(b) or 2.5(c) hereof,
would allow the Loan to continue to bear interest at the LIBOR Interest Rate
without additional cost to Lender, and (ii) would not be otherwise prejudicial
to Lender. Borrower hereby agrees to pay all reasonably incurred costs and
expenses incurred by Lender or any Funding Party in connection with any such
designation or assignment.
2.6 Prepayment.
(a) Provided that no Event of Default shall have occurred and be
continuing, Borrower may elect to prepay the Loan in whole or in part, on any
Payment Date, provided, in either case, and with respect to each such prepayment
(x) Borrower has given Lender written notice of such prepayment not more than
thirty (30) days and not less than ten (10) days prior to the date of such
prepayment, and (y) such prepayment is accompanied by all interest accrued on
the amount so prepaid and all other fees and other sums due hereunder and under
the other Loan Documents, including, without limitation, any amounts due under
Section 2.5 hereof, up to and including the date of prepayment
(b) Any voluntary partial prepayments in accordance with the Section
2.6(a) hereof shall be in the minimum amount of $500,000.00. Mandatory
prepayments made in connection with the application pursuant to the Mortgage of
insurance proceeds or condemnation awards shall be paid in the amounts and at
the times specified in the Mortgage, and, notwithstanding anything herein to the
contrary, no prepayment fee or premium shall be due or payable in connection
with any such mandatory prepayment whenever paid.
2.7 Default Interest; Late Charge.
(a) If any payment of principal, interest or other sum payable
hereunder, or under any of the other Loan Documents, is not paid when due
(including by reason of failure to pay all principal, interest and all other
amounts due hereunder and under the other Loan Documents on the Maturity Date
(or such earlier date as the same may become due, whether by acceleration or
otherwise)), such principal amount, interest or other sum shall bear interest at
a rate per annum (the "Default Rate") equal to nine percent (9%) in excess of
LIBOR (or, if at such time Lender shall have notified Borrower that reasonable
means do not exist for ascertaining LIBOR as provided in clause (iii) of
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Section 2.5(b) hereof, the Treasury Rate), which Default Rate shall so apply
from the date such amount was due (after giving effect to any notice and/or cure
period afforded hereunder) until the date such amount is indefeasibly paid to
Lender. Without limiting the foregoing, upon the occurrence of, and during the
continuance of, an Event of Default hereunder, the entire principal balance of
the Loan shall bear interest at the Default Rate. Interest at the Default Rate
shall be paid immediately upon demand, which demand may be made as frequently as
Lender shall elect.
(b) If any installment of interest or principal (including, without
limitation, the entire Outstanding Principal Balance on the Maturity Date) is
not paid within five (5) days after the date when due, or if any other amount
payable hereunder or under any other Loan Document is not paid within ten (10)
days after written notice thereof is given to Borrower, Borrower shall pay to
Lender a late charge of three percent (3%) of the amount so overdue in order to
defray part of the expense incident to handling such delinquent payment or
payments. Such late charge shall be immediately due and payable without notice
or demand by Lender. Such late charge shall be in addition to, and separate
from, any increase in interest due hereunder as a result of calculation of
interest due hereunder at the Default Rate. Acceptance by Lender of any late
charge or interest at the Default Rate shall not be deemed a waiver of any of
Lender's rights hereunder or under the other Loan Documents with respect to such
late payment.
2.8 Excess Interest. It is agreed that, notwithstanding any provision
to the contrary in this Agreement, the Note, the Mortgage or any of the other
Loan Documents, no such provision shall require the payment or permit the
collection of any amount ("Excess Interest") in excess of the maximum amount of
interest permitted by law to be charged for the use or detention, or the
forbearance in the collection, of all or any portion of the indebtedness
evidenced by the Note. If any Excess Interest is provided for, or is adjudicated
to be provided for, in the Note, this Agreement or any of the other Loan
Documents, then in such event:
(i) the provisions of this Section 2.8 shall govern and
control;
(ii) neither Borrower nor any of the other Persons required
to pay any amounts with respect to the Loan shall be obligated to pay
any Excess Interest;
(iii) any Excess Interest that Lender may have received
hereunder shall, at the option of Lender, (i) be applied as a credit
against the then Outstanding Principal Balance (without payment of
prepayment premium) due hereunder, accrued and unpaid interest
thereon not to exceed the maximum amount permitted by law, or both,
(ii) be refunded to the payor thereof, or (iii) any combination of
the foregoing;
(iv) the applicable interest rate or rates shall be
automatically subject to reduction to the maximum lawful rate and
this Agreement, the Note, the Mortgage and the other Loan Documents
shall be deemed to have been, and shall be, reformed and modified to
reflect such reduction in such interest rate or rates; and
(v) neither Borrower nor any of the other Persons required
to pay any amounts with respect to the Loan shall have any action or
remedy against Lender for any damages
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whatsoever, or any defense to enforcement of this Agreement, the
Note, the Mortgage or any of the other Loan Documents, arising out of
the payment or collection of any Excess Interest.
2.9 Loan Taxes.
(a) Any and all payments by Borrower to Lender hereunder and under
the other Loan Documents shall, provided that Lender complies with the
requirements of Section 2.9(c) hereof, be made free and clear of, and without
deduction for, any and all present or future taxes, levies, imposts, deductions,
charges, withholdings or liabilities with respect thereto, except for the
following, for which Borrower shall not be responsible: (i) taxes imposed on or
measured by Lender's net income or net receipts; or (ii) franchise taxes imposed
on Lender by the jurisdiction in which (A) Lender is organized, (B) Lender is
"doing business" (unless such determination of "doing business" is made solely
as a result of Lender's interest in the Loan and the security therefor), or (C)
Lender's applicable lending office is located (all such taxes, levies, imposts,
deductions, charges or withholdings and liabilities (except those described in
the foregoing clauses (i) and (ii)) being hereinafter referred to as "Loan
Taxes"). If Borrower shall be required by law to deduct or withhold any Loan
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document, then (1) any such sum payable hereunder or under any other Loan
Document shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions applicable to
additional sums payable under this Section 2.9), Lender receives an amount equal
to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this Section
2.9) been made, (2) Borrower shall make such deductions or withholdings, and (3)
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable law. Borrower will indemnify Lender for
the full amount of any Loan Taxes (including, without limitation, any Loan Taxes
(as well as taxes described in clauses (i) and (ii) of the second preceding
sentence) imposed by any jurisdiction on any amounts payable under this Section
2.9) paid or payable by Lender and any liability (including, without limitation,
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Loan Taxes were correctly or legally asserted A certificate
as to the amount of such payment or liability delivered to Borrower by Lender
(the amount of which payment or liability shall be reasonably determined by
Lender in good faith); notwithstanding the foregoing, provided Borrower shall
timely pay to Lender all such Loan Taxes shown on such certificate, Borrower
shall not be liable for interest and/or penalties that shall accrue as a result
of (i) Lender's miscalculation of Loan Taxes, or (ii) Lender's failure to pay
such Loan Taxes to the applicable authority after receipt thereof from Borrower.
The agreements and obligations of Borrower contained in this Section 2.9 shall
survive the payment in full of principal and interest under this Agreement and
the Note.
(b) Within thirty (30) days after the date of any payment of Loan
Taxes withheld by Borrower in respect of any payment to Lender, Borrower will
furnish to Lender the original or a certified copy of a receipt or other
evidence satisfactory to Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the lender originally
named herein), Lender shall deliver to Borrower, upon request, a Form W-9
(unless it establishes to the reasonable satisfaction of Borrower that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, a
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Form W-8 and either (i) a Form 1001 which indicates a 0% rate of tax or (ii) a
Form 4224. If Lender is not a U.S. Person, Lender further undertakes to deliver
to Borrower additional Forms W-8, 1001, 4224 (or any successor forms) or other
manner of certification, as the case may be, (A) on or before the date that any
such form expires or becomes obsolete, (B) after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
Borrower, and (C) such extensions or renewals thereof as may reasonably be
requested by Borrower, certifying that Lender is entitled to receive payments
hereunder without deduction or withholding of any Loan Taxes. However, in the
event that any change in law, rule, regulation, treaty or directive, or in the
interpretation or application thereof (a "Law Change"), has occurred prior to
the date on which any delivery pursuant to the preceding sentence would
otherwise be required which renders such form inapplicable, or which would
prevent Lender from duly completing and delivering any such form, or if such Law
Change results in Lender being unable to deliver a Form W-9 (or other
satisfactory evidence that it is otherwise eligible for an exemption from backup
withholding tax or other withholding tax), Lender shall not be obligated to
deliver such forms but shall, promptly following such Law Change, but in any
event prior to the time the next payment hereunder is due following such Law
Change, advise Borrower in writing whether it is capable of receiving payments
without any deduction or withholding of Loan Taxes. In the event of such Law
Change, Borrower shall have the obligation to make Lender whole and to
"gross-up" under Section 2.9(a) hereof, despite the failure by Lender to deliver
such forms.
(d) If Lender receives a refund in respect of Loan Taxes paid by
Borrower, it shall promptly pay such refund, together with any other amounts
paid by Borrower pursuant to Section 2.9(a) hereof in connection with such
refunded Loan Taxes, to Borrower; provided, however, that Borrower agrees to
promptly return such refund to Lender if it receives notice from Lender that it
is required to repay such refund. Nothing contained herein shall be construed to
require Lender to seek any refund and Lender shall have no obligation to
Borrower to do so; provided, however, that Lender will reasonably cooperate with
Borrower, at Borrower's sole cost and expense, should Borrower desire to seek
any such refund.
(e) All amounts payable under this Section 2.9 shall constitute
additional interest hereunder and shall be secured by the Mortgage and the other
Loan Documents. The provisions of this Section 2.9 shall survive any payment or
prepayment of the Loan and any foreclosure or satisfaction of the Mortgage.
(f) Any reference under this Section 2.9 to "Lender" shall be deemed
to include any Participant and any Assignees.
2.10 Uses of Loan Proceeds. The uses of the proceeds of the Loan
shall be as set forth on a closing statement to be executed by Borrower and
Lender on the Closing Date (the "Closing Statement"). Borrower shall deliver
such information and documentation as Lender shall reasonably request to verify
that the uses are as set forth on the Closing Statement. To the extent that
Borrower shall not apply any amounts necessary for any of such uses as indicated
on the Closing Statement, the Loan shall be reduced by an equal amount.
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2.11 Servicing. The Loan shall be serviced by an insured financial
servicer selected by Lender in its sole discretion (the "Servicer"). Lender may
change the Servicer from time to time without the consent of Borrower, on notice
to Borrower.
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER
As an inducement to Lender to enter into this Agreement and to make
the Loan, Borrower hereby represents and warrants as follows, which
representations and warranties shall be true and correct as of the date hereof
and which shall survive the Closing Date hereunder and shall remain true and
correct until all of the Obligations are repaid in full:
3.1 Borrower Organization, Enforceability, Etc.
3.1.1 Borrower Status. Borrower is a duly formed limited
partnership under the laws of the State of New York, validly existing and in
good standing under the laws of the State of New York, and has full power and
authority to execute and deliver to Lender this Agreement and all other Loan
Documents to which it is a party, and to own and operate the Premises and
perform the obligations and carry out the duties imposed upon Borrower by this
Agreement and the other Loan Documents. All Loan Documents to be executed by
Borrower have been duly authorized, approved, executed and delivered by all
necessary parties and constitute the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms. Borrower is authorized to do business in the State of New York and is not
required by applicable law to be authorized to do business in any other
jurisdiction.
3.1.2 General Partner. General Partner (a) is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware; (b) is in good standing under the laws of,
and is authorized to transact business in, all jurisdictions where it conducts
business, including the State of New York; (c) has all requisite power and
authority to own its properties and to carry on its business as now being
conducted; (d) is the sole general partner of Borrower and owns a one percent
(1%) partnership interest in Borrower, free and clear of all liens, claims, and
encumbrances, except as otherwise contemplated or permitted under this
Agreement; (e) has full right, power and authority to execute and deliver this
Agreement and the other Loan Documents on its own behalf and on behalf of
Borrower; and (f) shall have full right, power and authority to make all
material business decisions for Borrower during the Term.
3.1.3 Limited Partner. Limited Partner (a) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of New York; (b) is in good standing under the laws of, and is
authorized to transact business in, all jurisdictions where it conducts
business, including the State of New York; (c) has all requisite power and
authority to own its properties and to carry on its business as now being
conducted; and (d) is the sole limited partner of Borrower and owns a ninety
nine percent (99%) partnership interest in Borrower, free and clear of all
liens, claims, and encumbrances, except as otherwise contemplated or permitted
under this Agreement.
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3.1.4 Managing Member. The managing member of General
Partner is Tower QRS NO. 5 Corp., a Delaware corporation (the "Managing
Member"). The sole shareholder of Managing Member is Tower Realty Trust, Inc.
("Tower") Managing Member is (a) duly organized, validly existing and in good
standing under the laws of the State of Delaware; (b) is in good standing under
the laws of, and is authorized to transact business in, all jurisdictions where
it conducts business, including the State of New York; (c) has all requisite
power and authority to own its properties and to carry on its business as now
being conducted; (d) is the sole managing member of General Partner and owns a
one percent (1%) membership interest in General Partner, free and clear of all
liens, claims, and encumbrances, except as otherwise contemplated or permitted
under this Agreement; (e) has full right, power and authority to execute and
deliver this Agreement and the other Loan Documents on its own behalf and on
behalf of General Partner; and (f) shall have full right, power and authority to
make all material business decisions for General Partner during the Term.
3.1.5 Other Member. The other member of General Partner is
Limited Partner, which owns a ninety nine percent (99%) membership interest in
General Partner.
3.1.6. Tower . Tower is (a) duly organized, validly
existing and in good standing under the laws of the State of Maryland; (b) is in
good standing under the laws of, and is authorized to transact business in, all
jurisdictions where it conducts business, including the State of New York; (c)
has all requisite power and authority to own its properties and to carry on its
business as now being conducted; (d) is the sole shareholder of Managing Member;
(e) is the sole limited partner of Limited Partner; and (f) has full right,
power and authority to execute and deliver the Agreement of Princpal and the
other Loan Documents on its own behalf and on behalf of Limited Partner.
3.2 Borrower Address. Borrower's principal place of
business is at the address first set forth above, and shall not be changed
during the Term without giving Lender at least thirty (30) days' prior notice
thereof. Borrower uses no trade name, and has not and will not do any business
under any name other than its actual name set forth herein.
3.3 Borrower's Organizational Documents. A true and
complete copy of Borrower's Organizational Documents have been furnished to
Lender. Borrower's Organizational Documents constitute the entire agreement
among the members in Borrower and are binding upon and enforceable against all
of such partners in accordance with their respective terms. There are no other
agreements, oral or written, among any of the members in Borrower relating to
Borrower. No party is in default of its obligations under Borrower's
Organizational Documents and no condition exists which, with the giving of
notice and/or the passage of time, would constitute a default under Borrower's
Organizational Documents.
3.4 General Partner's Organizational Documents. A true and
complete copy of General Partner's Organizational Documents have been furnished
to Lender. General Partner's Organizational Documents constitute the entire
agreement relating to such General Partner among the shareholders in General
Partner and are binding upon and enforceable against all of such shareholders in
accordance with their respective terms. There are no other agreements, oral or
written, among any of the shareholders in General Partner relating to General
Partner. No party is
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in default of its obligations under General Partner's Organizational Documents
and no condition exists which, with the giving of notice and/or the passage of
time, would constitute a default under General Partner's Organizational
Documents.
3.5 Title. Fee simple title to the Premises is, or will on the
Closing Date be, owned by Borrower, free and clear of all liens, claims,
encumbrances, covenants, conditions, restrictions, security interests and claims
of others, except for the Loan Documents, the Permitted Encumbrances and such
exceptions as have been approved in writing by Lender.
3.6 Valid Liens. Subject to the Permitted Encumbrances, the Mortgage
is a good and valid first mortgage lien on the Premises and first priority
security interest in the personal property described in the Mortgage.
3.7 Uses. The Premises consists solely of an office building with
ground floor retail space and related operations and is used for no other
purpose.
3.8 No Structural Defects. To Borrower's knowledge, there are no
structural defects in the Improvements, or material defects to the building
systems thereof, except as shown in the Engineer's Report.
3.9 Compliance with Zoning, Etc.
(a) To Borrower's knowledge, except as may be disclosed by the
Engineer's Report or in the violations searches received from the Title Insurers
in connection with the Title Policy (the "Disclosed Violations"), the Premises
comply in all material respects with all applicable Legal Requirements. Borrower
shall use its diligent efforts to cure, or cause to be cured, the Disclosed
Violations and to have them removed of record. Any zoning or subdivision
approval is based on no real property, or rights appurtenant thereto, other than
the Premises. The Premises as improved and used are not in material violation of
any recorded and, to the best knowledge of Borrower, unrecorded covenants,
conditions or restrictions of any kind or nature affecting all or any part of
the Premises, or any interest therein. To the best knowledge of Borrower, the
Improvements can be fully rebuilt in the event of casualty or destruction
thereof under the Permits applicable to the Premises, subject, however, to
non-discretionary requirements of any Governmental Authority. No amendment or
change in any such material Permit, and no amendment or change in zoning or any
other land use control, has been sought or obtained by Borrower or any Affiliate
of Borrower, or will be sought or obtained by Borrower or any Affiliate of
Borrower, with respect to the Premises or the Improvements, except as
specifically approved in writing by Lender.
(b) To Borrower's knowledge, except as may be disclosed in the
Disclosed Violations, all Permits required by any Governmental Authority for the
operation of the Improvements and the actual and contemplated uses thereof, or
otherwise required to be in compliance with any Environmental Laws, have been
obtained. The copy of the certificate of occupancy for the Premises delivered to
Lender prior to the date hereof is a true and correct copy of the permanent
certificate of occupancy for the Premises, remains in full force and effect, and
is not subject to any conditions
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or limitations, other than those of general applicability to all certificates of
occupancy for office buildings located in New York County, New York.
(c) To Borrower's knowledge, there are no pending or threatened
actions, suits or proceedings to revoke, attack, invalidate, rescind or modify
the zoning of the Premises, or any material Permits issued with respect to the
Premises or any part thereof, or asserting that such Permits or the zoning of
the Premises do not permit the use of the Premises as contemplated by the Loan
Documents.
3.10 No Condemnation. Borrower has not received any notice of, and to
the best of Borrower's knowledge there does not exist, any actual, proposed or
threatened exercise of the power of eminent domain or other taking by any
governmental or quasi-governmental body or agency, of all or any portion of the
Premises, or any interest therein, or any right of access thereto.
3.11 No Casualty. The Improvements have suffered no material casualty
or damage which has not been fully repaired and the cost thereof fully paid.
3.12 Purchase Options. To Borrower's knowledge, neither the Premises
nor any part thereof are subject to any purchase options or other similar rights
in favor of third parties.
3.13 No Encroachments. To Borrower's knowledge, there are no material
encroachments on the Land and the Improvements do not encroach upon any
Easement, any other interest in real property, any adjoining land or any
adjoining street, except as set forth in the Survey.
3.14 Litigation. Except as set forth on Schedule D annexed hereto,
there are no actions, suits, proceedings, arbitrations, tenant disputes, labor
disputes or governmental investigations (i) pending against Borrower or any
Affiliate of Borrower, or, to the best knowledge of Borrower, the Premises, or
(ii) to the best knowledge of Borrower, threatened against or affecting
Borrower, any Affiliate of Borrower or the Premises, which, if successful, could
have a Material Adverse Effect. None of Borrower, General Partner or any other
Significant Party is operating under, or is subject to, any order, writ,
injunction, decree or demand of any court or any Governmental Authority. Other
than as set forth on said Schedule D, no actions, suits, proceedings or
arbitrations are pending or, to the best knowledge of Borrower, threatened
against Borrower, General Partner or any other Significant Party which involve
claims, damages or sums of money not covered (including all applicable
deductibles) by insurance.
3.15 No Conflict with Law or Agreements. The execution and delivery
of this Agreement and the other Loan Documents, and the performance and
consummation of the transactions contemplated hereby and thereby, on the part of
Borrower and all other Significant Parties (as applicable), and fulfillment of
the terms of the Loan Documents by Borrower and the other Significant Parties
(as applicable), (i) do not and will not conflict with, violate, or constitute a
default (or a condition or event which, after notice or lapse of time or both,
would constitute such a default) under any provision of any Organizational
Document or any contractual obligation of Borrower or any other Significant
Party, or any Legal Requirement or any court decree or order applicable to the
Premises, Borrower or any other Significant Party, and (ii) will not result in,
or require, the creation
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or imposition of any lien or encumbrance on, or conveyance of, any of Borrower's
properties pursuant to any contractual obligation, and (iii) do not require the
consent or approval of any Governmental Authority or other Person, except for
consents and approvals already obtained.
3.16 Personal Property. To Borrower's knowledge, all equipment and
other personal property necessary for (or otherwise actually used in connection
with) the proper and efficient operation and maintenance of the Premises, the
actual and contemplated uses of the Premises and/or Borrower's compliance with
its obligations under the Leases, are owned or leased by Borrower and constitute
part of the Premises subject to the Mortgage and located thereat, other than (i)
any such equipment which is owned by a utility company, or (ii) any such
equipment and personal property which is owned by tenants of the Premises and
utilized solely by such tenant.
3.17 Easements; Access; Utilities. To Borrower's knowledge, all
easements, cross easements, licenses, air rights and rights-of-way or other
similar property interests (collectively, "Easements"), if any, necessary for
the full utilization of the Improvements for their intended purposes have been
obtained, are described in the Title Policy and are in full force and effect
without default thereunder. The Premises has direct rights of access to public
ways and is served by water, sewer, sanitary sewer and storm drain facilities
adequate to service the Premises for its intended uses. All public utilities
necessary or convenient to the full use and enjoyment of the Premises are
located either in the public right of way abutting the Premises (which are
connected so as to serve the Premises without passing over other property) or in
recorded easements serving the Premises and described in the Title Policy. All
roads necessary for the use of the Premises for its current purposes have been
completed and are available for public use.
3.18 No Flood Hazard, Etc. Except as set forth in the Survey, (i) the
Premises are not situated in an area designated as having special flood hazards
as defined by the Flood Disaster Protection Act of 1973, as amended, or
designated a wetlands by any governmental entity having jurisdiction over such
Premises, or (b) the Premises are situated in an area designated as having
special flood hazards as defined by the Flood Disaster Protection Act of 1973,
as amended, or as a wetlands by any governmental entity having jurisdiction over
the Premises, but Borrower has obtained and paid for, and there is currently in
effect, the flood insurance required under the terms of the Mortgage. No portion
of the Premises is located on or adjacent to navigable waters and no portion of
the Premises consists of filled-in land.
3.19 Premises Taxed as a Separate Tax Lot. The Premises (other than
that portion which consists of the Air Rights Leases) are taxed as a separate
and distinct tax lot. No part of the Premises shares a tax lot with any
adjoining lands and for all purposes the Premises may be mortgaged, conveyed and
otherwise dealt with as a single, independent parcel.
3.20 Leases.
(a) Borrower has not entered into any Lease which continues in
existence, and is not bound by any such Lease, other than the Approved Leases.
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(b) To Borrower's knowledge (i) Rent has not been collected under any
of the Leases more than one (1) month in advance of the due date, (ii) except as
disclosed on the Rent Roll, the term of each Lease has commenced and the tenant
has commenced the full payment of rent under such Lease without the tenant
thereunder being entitled to any abatement thereof, (iii) except as disclosed on
the Rent Roll, the landlord is not required to perform any tenant work or pay
any work allowances under any Lease, (iv) all security and other escrow deposits
made under any Lease are being, and have been held, in accordance with all Legal
Requirements and the terms of such Lease, (v) except as disclosed on the Rent
Roll, no tenant under a Lease has any right of expansion, extension,
cancellation or any other option pursuant to such Leases, and (vi) no tenant has
any right of set off or reduction against rent.
(c) To Borrower's knowledge, each of the Leases has been duly
authorized, approved and executed by all parties thereto and constitutes the
legal, valid and binding obligations of the parties thereto, enforceable against
the parties thereto in accordance with their respective terms. Borrower has
delivered true, correct and complete copies of the Leases (including all
amendments and supplements thereto) to Lender.
(d) To Borrower's knowledge, each of the Leases is in full force and
effect and there are no monetary or other material defaults by Borrower
thereunder, and, to the best knowledge of Borrower, except as set forth on the
Rent Roll, there are no monetary or other material defaults by any tenant
thereunder. None of Borrower, Manager or any other Person acting on Borrower's
behalf has given or received any notice of default under any of the Leases that
remains uncured or in dispute, and Borrower is not intending to deliver such a
notice of default within the thirty (30) days following the date hereof.
(e) Borrower has delivered to Lender true and correct copies of all
guaranties of Leases in Borrower's possession and to Borrower's knowledge all
such guaranties are in full force and effect and constitute the legal, valid and
binding obligations of the parties thereto, enforceable against such parties in
accordance with their respective terms.
(f) To Borrower's knowledge, the Rent Roll for the Premises delivered
to Lender is true, correct and complete in all material respects.
(g) To Borrower's knowledge, Borrower has delivered to Lender a true,
correct and complete list of all security deposits made by tenants at the
Premises which have not been applied (including accrued interest thereon), all
of which are held by Borrower in accordance with the terms of the applicable
Lease and applicable Legal Requirements.
(h) To Borrower's knowledge, each tenant under a Major Lease is free
from bankruptcy or reorganization proceedings.
(i) No tenant under any Lease (or any sublease) is an Affiliate of
Borrower, except as may be disclosed otherwise on Schedule C annexed hereto.
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(j) To Borrower's knowledge, there are no brokerage fees or
commissions due and payable in connection with the leasing of space at the
Premises, except as has been previously disclosed to Lender in writing, and no
such fees or commissions will become due and payable in the future in connection
with the Leases, including by reason of any extension of such Lease or expansion
of the space leased thereunder, except as has previously been disclosed to
Lender in writing.
3.21 Environmental. Borrower covenants and represents to Lender that
to its knowledge, except as disclosed in the Environmental Report, (i) no
Hazardous Substances are now, or have ever been, located, produced, used,
stored, treated, transported, incorporated, discharged, emitted, released,
deposited or disposed of in, upon, under, over or from the Premises in a manner
that may give rise to any actual or potential liability to pay response costs or
other damages, losses or expenses or otherwise violate any Environmental Laws;
(ii) no Hazardous Substances are currently located, stored or used at the
Premises, except with respect to such Hazardous Substances which are (A)
customarily located, stored or used in premises similar to the Premises, or (B)
unique and necessary to a tenant's business located in the Premises, provided
that such Hazardous Substances described in clause (ii)(A) or (ii)(B) are at all
times stored, located and used in compliance with all Environmental Laws; (iii)
no Hazardous Substances have been discharged, released or emitted, upon or from
the Premises into the environment, and no threat exists of a discharge, release
or emission of a Hazardous Substance upon or from the Premises into the
environment, which discharge, release or emission, in either case, would subject
the owner of the Premises to any damages, penalties or liabilities under any
applicable Environmental Laws; (iv) the Premises have not ever been used as or
for a mine, a landfill, a dump or other disposal facility, or a gasoline service
station; (v) no underground storage tank is now located on or in the Premises
or, if previously located therein, each such tank has been removed therefrom in
compliance with all applicable Environmental Laws and any clean-up of the
surrounding soil in connection therewith has been completed; (vi) no asbestos,
ACM, materials containing urea-formaldehyde, or transformers, capacitors,
ballasts or other equipment that contain PCBs are located about the Premises;
(vii) the Premises have never been used by Borrower or any Affiliate of Borrower
or, to the best of Borrower's knowledge, any other Person (including any prior
owner of the Premises), as a permanent or temporary treatment, storage or
disposal site for any Hazardous Substance; (viii) (A) no violation of any
Environmental Law now exists in, upon, under, over or from the Premises, (B) no
notice of any such violation or any alleged violation thereof has been issued or
given by any Governmental Authority, and (C) there is not now any investigation
or report involving the Premises by any Governmental Authority or agency which
in any way relates to Hazardous Substances; (ix) no Person has given any notice
of or asserted any claim, cause of action, penalty, cost or demand for payment
or compensation, whether or not involving any injury or threatened injury to
human health, the environment or natural resources, resulting or allegedly
resulting from any activity or event described in clauses (i)-(viii) above and,
to the best knowledge of Borrower, no basis for such a claim exists; (x) there
are not now, nor to Borrower's best knowledge have there ever been, any actions,
suits, proceedings or damage settlements relating in any way to Hazardous
Substances in, upon, under, over or from the Premises; (xi) no oral or written
notification of a Release (as such term is defined in 42 U.S.C. ss. 9601(22)) of
any Hazardous Substances has been filed by or on behalf of Borrower through
authorized employees or agents and the Premises are not listed on the United
States Environmental Protection Agency's List of Hazardous Waste Sites or any
other list of Hazardous Substance sites maintained by any federal, state or
local Governmental Authority; (xii) there are no environmental liens on the
Premises and, to the best
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knowledge of Borrower, no governmental actions have been taken or are in process
which could subject the Premises to such liens; (xiii) Borrower has not
transported or arranged for the transportation of any Hazardous Substances to
any location which is listed or proposed for listing under CERCLA or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations; (xiv) no environmental or
engineering investigations, studies, audits, tests, reviews or other analyses
have been conducted by, or are in the possession of, Borrower or its Affiliates
in relation to the Premises, other than the Environmental Report; Borrower has
delivered a true, correct and complete copy of the Environmental Report to
Lender; and (xv) to the best of Borrower's knowledge, the Environmental Report
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make any statement contained therein or herein, in
light of the circumstances under which such statement was made, not misleading.
3.22 Americans with Disabilities Act. Except as set forth in the
Engineer's Report, to Borrower's knowledge the Premises is in compliance in all
material respects with all of the requirements of the Americans with
Disabilities Act of 1990.
3.23 No Default. There is no Default on the part of Borrower under
this Agreement, the Note, the Mortgage or any other Loan Document.
3.24 No Offsets. Borrower has no counterclaims, offsets or defenses
with respect to the Loan, the Note or any other Loan Document.
3.25 Financial Statements. All financial statements of Borrower,
Limited Partner and/or Tower heretofore delivered to Lender in connection with
the Loan are true and correct in all material respects and fairly present the
financial condition of the subjects thereof as of the respective dates thereof,
and no material adverse change has occurred in the financial condition reflected
therein, or the operations or business of, such Persons since the respective
dates of the most recent financial statements delivered to Lender. The financial
statements heretofore delivered have been prepared in accordance with the
procedures and accounting principles and standards required by Section 4.14
hereof.
3.26 No Insolvency. None of Borrower or any other Significant Party
is Insolvent, and none of the foregoing Persons will be rendered Insolvent by
the execution of this Agreement, the Note or any other Loan Documents, or by the
consummation of the transactions contemplated hereby or thereby.
3.27 Fraudulent Conveyance. Borrower (i) has not entered into the
transactions contemplated by this Agreement or any other Loan Document with the
actual intent to hinder, delay, or defraud any creditor, and (ii) has received
reasonably equivalent value in exchange for its obligations under the Note, this
Agreement and the other Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair salable value of Borrower's assets
exceeds, and will, immediately following the execution and delivery of the Loan
Documents and the advance of the Loan proceeds thereunder, exceed, Borrower's
total probable liabilities, including, without limitation, the maximum amount of
its subordinated, unliquidated, disputed and/or contingent liabilities.
Borrower's assets do not, and, immediately following the execution and delivery
of the
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Loan Documents and the advance of the Loan proceeds thereunder, will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted. Borrower does not intend to, and does not believe
that it will, incur debts and liabilities (including, without limitation,
contingent liabilities and other commitments) beyond its ability to pay such
debts and liabilities as they mature (taking into account the timing and amounts
to be payable on or in respect of obligations of Borrower).
3.28 Broker. No broker or consultant has been retained by Borrower or
any Affiliate of Borrower in connection with the Loan or the Loan Documents.
Borrower will indemnify, defend and hold the Indemnified Parties harmless from
and against all loss, cost, liability and expense arising from the claims of all
brokers and consultants relating to the Loan and/or the Premises with whom
Borrower, any Affiliate of Borrower or any employee or agent of Borrower has
dealt, including, without limitation, sales, mortgage or leasing brokers or
consultants.
3.29 Fiscal Year. Each fiscal year of Borrower commences on January
1.
3.30 No Other Financing. Borrower has not borrowed any funds which
have not heretofore been repaid in full, except for the Loan.
3.31 ERISA.
(a) The execution, delivery and performance of this Agreement, the
Mortgage and the other Loan Documents do not constitute a Prohibited
Transaction, assuming solely for this purpose that Lender is a party in interest
as defined in Section 3(14) of ERISA ("Party In Interest") or a disqualified
person as defined in Section 4975(e)(2) of the Code ("Disqualified Person") with
respect to an employee benefit plan, if any, which has directly or indirectly
invested in Borrower or in any General Partner.
(b) Borrower has made, and shall continue to make, all required
contributions to all employee benefit plans, if any, within the time periods
required by the applicable provisions of ERISA and any other federal or state
law, and Borrower has no knowledge of any material liability which has been
incurred by Borrower which remains unsatisfied for any taxes or penalties with
respect to any employee benefit plan or any multi-employer plan. Each such plan
has been administered in compliance with its terms and the applicable provisions
of ERISA and any other federal or state law.
3.32 FIRPTA. Borrower is not a "foreign person" within the meaning of
Sections 1445 or 7701 of the Code.
3.33 PUHCA. Borrower is not a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company", all as defined in the Public Utility Holding Company
Act of 1935, as amended.
3.34 Insurance. All Insurance Policies (as defined in the Mortgage)
required to be obtained and maintained by Borrower pursuant to the Mortgage are
in full force and effect and the premiums due thereon have been paid in full.
Borrower and the Premises are in compliance with the
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provisions of such Insurance Policies and the provisions relating to Insurance
Policies in the Mortgage, and no notice of cancellation, termination or default
has been received with respect to any such policy.
3.35 No Margin Stock. None of the proceeds of the Loan will be used
by Borrower for the purpose of purchasing or carrying "margin stock" within the
meaning of Regulation G, T, U or X issued by the Board of Governors of the
Federal Reserve System, as at any time amended, and Borrower agrees to execute
all instruments which may be necessary from time to time, if any, to comply with
all the requirements of Regulation U of the Federal Reserve System, as at any
time amended.
3.36 Investment Company Act. Borrower is not (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) subject to any other
United States federal or state law or regulation which purports to restrict or
regulate its ability to borrow money.
3.37 Taxes. Borrower has filed all federal, state and local tax
returns required to be filed prior to the date hereof and has paid all taxes,
charges and assessments shown to be due from Borrower on such tax returns. All
Taxes due and owing in respect of, and affecting, the Premises have been paid.
There are no pending, or to Borrower's best knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Premises.
3.38 Full and Accurate Disclosure. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading
provided, that with respect to any third party information provided by the
seller of the Premises to Borrower, the foregoing representation is made to
Borrower's knowledge. There is no material fact presently known to Borrower
which has not been disclosed to Lender which adversely affects, nor as far as
Borrower can foresee, might adversely affect, the Premises or the business,
operations or condition (financial or otherwise) of Borrower, other than with
regard to market risk inherent in projecting future operations.
3.39 Contracts.
(a) Borrower has not entered into, and to its knowledge is not bound
by, any Contract which continues in existence, except the Approved Contracts.
(b) To Borrower's knowledge, each of the Contracts is in full force
and effect, there are no monetary or other material defaults by Borrower
thereunder and, to the best knowledge of Borrower, there are no monetary or
other material defaults thereunder by any other party thereto. None of Borrower
or any other Person acting on Borrower's behalf has given or received any notice
of default under any of the Contracts that remains uncured or in dispute.
(c) Borrower has delivered true, correct and complete copies of the
Contracts in Borrower's possession (including all amendments and supplements
thereto) to Lender.
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3.40 Other Obligations and Liabilities. Borrower has no liabilities
or other obligations that arose or accrued prior to the date hereof that, either
individually or in the aggregate, could have a Material Adverse Effect. Borrower
has no known material contingent liabilities, except as may be set forth on
Schedule E annexed hereto.
ARTICLE 4
CERTAIN COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Lender as follows:
4.1 Payment and Performance of Obligations. Borrower shall pay and
otherwise perform the Obligations in accordance with the terms of the Loan
Documents.
4.2 Transfers.
(a) Borrower will not, directly or indirectly, sell, assign, convey,
pledge, hypothecate, encumber or otherwise transfer (each of the foregoing
constituting a "Transfer") the Premises or any part thereof, or any interest
therein, or suffer, consent to or permit the foregoing, without, in each
instance, the prior written consent of Lender. Borrower will not permit any
owner (directly or indirectly) of a legal or beneficial interest in Borrower
(including, without limitation, any owner, (directly or indirectly) of a legal
or beneficial ownership interest in General Partner to Transfer such interest,
whether by transfer of stock, assignment of partnership interest or other
transfer of legal or beneficial interest in Borrower or in any direct or
indirect owner thereof, or otherwise permit any new or additional legal or
beneficial ownership interests in Borrower or any direct or indirect owner to be
issued, including, without limitation, by admission of new members, without, in
each instance, the prior written consent of Lender, which consent shall not be
unreasonably withheld in the case of a Transfer to an Affiliate of Borrower
only; provided, however, that nothing contained herein shall be construed to
prohibit any Transfers of the capital stock of Tower.
(b) To the extent that Lender elects to consent to any Transfer as to
which its consent is required hereunder, Lender shall be entitled to condition
its consent on such matters as Lender may elect, in its sole discretion,
including, without limitation, execution of instruments of assignment and
assumption with respect to the Loan Documents and the Collateral, payment of a
transfer fee or other consideration, delivery of Officer's Certificates and
affidavits and indemnities, including an affidavit and indemnification regarding
Code Sections 1445 and 7701, agreements restricting actions which may or may not
be taken by any transferee or its owners or restrictions in any such Person's
Organizational Documents with respect thereto, additional or replacement
security for the Loan, restrictions as to the use of any consideration paid for
such Transfer, and opinions, including opinions regarding the assumptions of
obligations hereunder, substantive consolidation and such other matters as
Lender may request. Within ten (10) days after the closing of any Transfer,
whether or not such Transfer required Lender's consent, if (i) the Premises or
any part thereof or any interest therein, or (ii) any direct or indirect
ownership interests in Borrower, is transferred, Borrower will provide Lender
with a copy of the deed or other instrument of Transfer to the transferee.
Borrower will promptly after request therefor provide Lender with such other
information and documentation with
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respect to such Transfer as Lender shall reasonably request,
including, without limitation, information as to ownership of such transferee.
(c) Upon the occurrence of any Transfer, the provisions of this
Section 4.2 shall continue to apply to the transferee as if it were the
transferor hereunder, and any consent by Lender permitting a transaction
otherwise prohibited under this Section 4.2, or any right of Borrower or any
other Person to Transfer without such consent, shall not constitute a consent to
or waiver of any right, remedy or power of Lender to withhold its consent on a
subsequent occasion to a transaction not otherwise permitted by the provisions
of this Section 4.2. Notwithstanding the giving of any consent hereunder by
Lender, Borrower shall not engage in any Prohibited Transaction.
(d) Notwithstanding the provisions of this Section 4.2, Obsolete
Collateral (as such term is defined in the Mortgage) may be sold or otherwise
disposed of, provided, however, that either (i) such Obsolete Collateral has
been or is contemporaneously being replaced by Collateral (as such term is
defined in the Mortgage) of at least equal value and utility which is subject to
the Lien of the Mortgage with the same priority as with respect to the Obsolete
Collateral, or (ii) such Obsolete Collateral may be removed without adversely
affecting the maintenance, safety and operations at the Premises.
4.3 Liens. Borrower shall not create, suffer or permit to exist any
mortgage, pledge, lien, security interest (including, without limitation, a
purchase money security interest), encumbrance, charge, attachment, levy,
distraint or other judicial process (collectively, "Liens") on, of or against,
or otherwise affecting, all or any portion of the Premises (including, without
limitation, fixtures and other personal property), or any other property of
Borrower (whether tangible or intangible and now owned or hereafter acquired) in
favor of any Person other than Lender, without the prior written consent of
Lender (which consent may be withheld in Lender's sole discretion) in each
instance, other than the Permitted Encumbrances.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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4.4 Indebtedness.
(a) Borrower shall not without Lender's prior written consent,
create, incur or assume any Indebtedness, except for (i) the Loan, (ii) Trade
Payables in connection with the operation of the Premises payable within ninety
(90) days, which shall in no event exceed at any one time $500,000 (or such
greater sum as shall be included in any Approved Budget), and (iii) Indebtedness
evidenced by capital lease agreements which are secured solely by the assets
financed thereby, but in no event shall all of such capital leases, in the
aggregate, exceed at any time $1,000,000. Each month, together with the other
financial statements required to be furnished hereunder, Borrower shall furnish
Lender a Certification detailing the Indebtedness then outstanding, including
the number of days (in increments of 30 days) that each Trade Payable of
Borrower has been outstanding. Borrower shall not create, incur or assume any
other Indebtedness, if doing so would cause Borrower to be in violation of
Section 8.1(vii) hereof, or any other provision of this Agreement or the other
Loan Documents applicable thereto.
(b) Notwithstanding that any Trade Payables incurred with respect to
the Premises are otherwise permitted hereunder, Borrower shall pay any portion
of such Trade Payables which becomes due and payable within sixty (60) days
following the date on which each such amount is due and payable. Except with
respect to the Loan, nothing contained in this Section 4.4 shall be deemed to
require Borrower to pay any amount, so long as Borrower is in good faith, and by
proper legal proceedings, diligently contesting the validity, amount or
application thereof, provided, however, that in each case, at the time of the
commencement of any such action or proceeding, and during the pendency of such
action or proceeding (i) adequate reserves with respect thereto are maintained
on the books of Borrower in accordance with generally accepted accounting
procedures (as determined by the Approved Accountant), (ii) such contest
operates to suspend collection or enforcement, as the case may be, of the
contested amount and such contest is maintained and prosecuted continuously and
with diligence, and (iii) Borrower shall deliver to Lender cash in an amount
equal to the amounts being contested which exceed $100,000 in the aggregate and
any estimated additional interest, charge or penalty arising from such contest.
Any cash so delivered shall constitute additional security for the Loan. Any
such cash shall be held and invested in the same manner and subject to the same
general terms as amounts deposited in the Cash Collateral Account under the Cash
Management Agreement and, upon the occurrence of an Event of Default, Lender may
apply such monies in the same manner as other monies held in the Cash Collateral
Account. Borrower shall execute such instruments as Lender shall require to
evidence Lender's perfected first priority security interest therein and to
effectuate the provisions hereof. If, prior to the occurrence of an Event of
Default, Borrower shall provide evidence satisfactory to Lender, in its
reasonable judgment, that Borrower has paid the disputed amount, or otherwise
settled the same and paid any amount to be paid under such settlement, or that
Borrower has received a final unappealable judgment in its favor that it need
not pay any disputed amount, together with an Officer's Certificate confirming
the foregoing, then Lender shall return any cash deposited with Lender with
respect to such disputed amount. If Borrower ceases to contest continuously and
with due diligence any contest described above, or fails to provide Lender with
evidence satisfactory to Lender that it is doing so within ten (10) days after
Lender's request, or if there shall be a final judgment against Borrower with
respect thereto, then Lender may apply all or any portion of the cash to pay
such disputed amount and Lender shall have no liability to Borrower for any
determination made by Lender, in good faith, that it is entitled to do
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so or as to the amount to then be paid with respect to such disputed amount,
whether or not that determination is found to be accurate.
4.5 Compliance with Restrictive Covenants, Etc.
(a) Borrower will not modify, waive in any material respect or
release any Easements, restrictive covenants or other Permitted Encumbrances, or
suffer, consent to or permit the foregoing, without Lender's prior written
consent, which consent may be granted or denied in Lender's sole discretion.
Borrower will timely comply in all material respects with the terms of all
Easements, restrictive covenants and all other Permitted Encumbrances. Borrower
shall take such further actions as Lender may reasonably request from time to
time with respect to such Easements, restrictive covenants or Permitted
Encumbrances.
(b) Borrower shall observe and comply with any conditions and
requirements necessary to preserve and extend any and all rights, privileges,
franchises and concessions that are applicable to the Premises, the use and
occupancy thereof, or the business conducted thereat, and will timely comply in
all material respects with all regulations, rules, ordinances, statutes, orders
and decrees of any Governmental Authority or court applicable to it and/or the
Premises or any part thereof.
4.6 Leases.
(a) Except as permitted in this Section 4.6, Borrower will not enter
into, modify, amend, consent to the cancellation or surrender of (except to the
extent such cancellation or surrender is by the tenant thereunder pursuant to a
pre-existing right to do so under a Lease) or terminate any Lease, whether now
existing or hereafter entered into, without the prior written consent of Lender,
which may be granted or withheld in Lender's sole discretion. Notwithstanding
the foregoing, Lender shall use its commercially reasonable discretion in
granting or withholding its consent with respect to a new Lease or a
modification of a Lease, provided, however, that (i) the tenant under the Lease
in question is not an Affiliate of Borrower, (ii) such transaction is entered
into on arms length terms (without consideration of any other relationship
Borrower or any Affiliate of Borrower may have with the tenant or any Affiliate
of such tenant), and (iii) the fair market value of the Premises and the ability
of Borrower to make all payments under the Loan Documents is not adversely
affected thereby.
(b) Borrower will timely comply with all material terms and
conditions on its part to be performed under each Lease. Borrower shall neither
do nor neglect to do, nor permit to be done, anything which may cause the
termination of any Lease, other than due to the default of the tenant(s) under
such Lease. Borrower shall not collect any rent or other payment under any Lease
more than one month in advance of the due date thereof. Borrower will use its
best efforts to require the performance of all of the obligations of tenants and
other Persons bound by the Leases and to enforce the Leases, subject, however,
to the limitation on termination described in this Section 4.6.
(c) Borrower may, without Lender's prior written consent, enter into
any Lease which will not be a Major Lease when such Lease comes into effect,
provided that each of the following conditions is satisfied: (i) the rent and
other material business terms of such Lease are on then prevailing market
standards for similar buildings in mid-town Manhattan, New York at the time of
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execution of such Lease; (ii) the Lease does not provide for the rent to decline
at any point during the term of such Lease; (iii) such Lease does not contain
any options to purchase or other rights with respect to the ownership of the
Premises; (iv) such Lease does not contain any restrictions on the landlord's
rights to lease remaining portions of the Premises, except that such Lease may
contain options to lease additional space in the Premises in accordance with
then existing market standards; (v) such Lease does not contain any options for
the tenant thereunder to terminate such Lease, other than in the event of a
material casualty or condemnation; (vi) such Lease does not contain any
extraordinary landlord obligations (including obligations which an unaffiliated
landlord would have difficulty performing); (vii) such Lease is entered into on
the standard form of Lease which Lender has previously approved, with such
changes therein as are necessitated by the business terms or such other
non-material changes thereto as a proposed tenant may request and Borrower is
willing to agree to; (viii) such Lease is entered into on arms length terms,
without consideration of any relationship Borrower or any Affiliate of Borrower
may otherwise have with the tenant thereunder or any Affiliate thereof; and (ix)
the Lease shall contain each of the provisions required by this Section 4.6.
(d) Borrower may, without Lender's prior written consent, modify or
amend any Lease which is not a Major Lease, provided that either (i) such
modification or amendment is required to be entered into pursuant to the terms
of such Lease, or (ii) each of the following conditions is satisfied: (A) such
amendment or modification is entered into on an arms-length basis without
consideration of any relationship of Borrower or any Affiliate of Borrower with
the tenant thereunder or any Affiliate thereof; (B) such Lease would not be a
Major Lease and would, after such amendment or modification, satisfy the
conditions set forth in clauses (ii), (iii), (iv), (v), (vi), (vii) and (ix) of
Subsection 4.6(c) hereof, to as great an extent as it did prior to such
amendment or modification; (C) such amendment or modification does not release
any party from its liability under the Lease or reduce the square footage
demised thereunder; (D) to the extent that any additional space is demised
pursuant to such amendment or modification, with respect thereto, such amendment
or modification satisfies this Section 4.6; (E) such amendment or modification
does not reduce the rent paid under the Lease; (F) after such amendment, such
Lease, as modified, continues to be subordinate to the Liens of the Mortgage and
the Assignment of Leases and Rents; and (G) such amendment or modification does
not otherwise have a material adverse effect on the fair market value of the
Premises or the Lien of the Mortgage on the Premises. Borrower may, without the
prior written consent of Lender, terminate any Lease which is not a Major Lease
in its good faith exercise of its remedies under such Lease, or at law or in
equity, by reason of a material monetary default having continued under such
Lease for at least thirty (30) days after notice to the tenant thereof. Without
first obtaining Lender's prior written consent, Borrower shall not consent to
any assignment or subletting of any Lease unless the consent of Borrower may not
be withheld under such circumstances under the terms of the applicable Lease,
except that Borrower may, without Lender's prior written consent, consent to any
assignment or subletting which does not release the liability of any Person then
liable thereunder as tenant, guarantor or otherwise (1) if such assignment or
subletting is of a Lease which is not a Major Lease, or (2) is for a sublease
under a Major Lease, which, if Borrower had entered into such sublease directly,
would not constitute a Major Lease.
(e) Each Lease executed by Borrower after the date hereof shall
provide, in a manner satisfactory to Lender, for (i) automatic subordination of
such Lease to the Liens of the Mortgage
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and the Assignment of Leases and Rents, (ii) attornment by the tenant or
licensee thereunder to Lender promptly after the giving by Lender of a notice to
such tenant requiring such attornment, (iii) the tenant or licensee thereunder
to give a notice to Lender of each material default by the landlord or licensor
thereunder, simultaneously with the giving of notice of such default to such
landlord or licensor, (iv) Lender to have the right, but not the obligation, to
cure any default by the landlord or licensor thereunder after the expiration of
the landlord's or licensor's cure period, if any, and (v) execution and delivery
(not more than ten (10) days after a request therefor) of an estoppel
certificate satisfactory to Lender. Without limiting the foregoing, each Lease
shall also provide that Lender (or any other successor to the landlord or
licensor acquiring the Premises by foreclosure, deed in lieu of foreclosure or
otherwise in connection with the enforcement of the Loan Documents) shall not
be: (A) liable for any previous act or omission of the landlord or licensor
under such Lease; (B) subject to any credit, demand, claim, counterclaim, offset
or defense which theretofore accrued to such tenant or licensee against the
landlord or licensor; (C) unless consented to by Lender or permitted without
Lender's consent under this Section 4.6, bound by any previous modification of
such Lease, or by any previous prepayment of more than one month's fixed rent or
additional rent; (D) bound by any covenant or obligation of the landlord or
licensor to perform, undertake or complete any work in the leased space of the
Premises or to prepare it for occupancy; (E) required to account for any
security deposit of the tenant or licensee other than any security deposit
actually delivered to Lender by Borrower; (F) bound by any obligation to make
any payment to such tenant or licensee or grant any credits, except for
services, repairs, maintenance and restoration provided for under the Lease to
be performed by landlord or licensor after the date of such attornment; and (G)
responsible for any monies owing by the landlord or licensor to such tenant or
licensee. Lender shall, upon request, execute and exchange with any tenant under
a Major Lease or any other Lease of office space at the Premises demising one
full floor or more of office space, a non-disturbance, subordination and
attornment agreement in such form as Lender shall approve in its sole and
absolute discretion, provided, however, that Borrower shall deliver with such
request an Officer's Certificate stating that such Lease was entered into in
accordance with the terms of this Section 4.6 and any other provisions of the
Loan Documents applicable thereto. All actual out of pocket costs and expenses
of Lender (including, without limitation, attorneys' fees and disbursements) in
connection with Lender's review of any Lease and the negotiation, preparation,
execution and delivery of any non-disturbance agreement shall be paid by
Borrower within five (5) days after request therefor by Lender. Prior to seeking
Lender's consent to any Lease, Borrower shall deliver to Lender a copy of such
Lease, blacklined to show the changes from the standard form of Lease previously
approved by Lender.
(f) All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by Borrower at such commercial or savings bank or banks
as may be reasonably satisfactory to Lender. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under any
applicable legal requirements (i) shall be maintained in full force and effect
in the full amount of such deposits unless replaced by cash deposits as herein
above described, (ii) shall be issued by an institution reasonably satisfactory
to Lender, (iii) shall, if permitted pursuant to any legal requirements, name
Lender as payee or mortgagee thereunder (or at Lender's option, be fully
assignable to Lender), and (iv) shall in all respects comply with any applicable
Legal Requirements and otherwise be satisfactory to Lender. Borrower shall, upon
request, provide Lender with evidence satisfactory to Lender of Borrower's
compliance with the foregoing. Following the occurrence and during the
continuance of
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any Event of Default, upon Lender's demand, Borrower shall turn over to Lender
the security deposits (and any interest theretofore earned thereon) with respect
to all or any portion of the Premises, to be held by Lender subject to the terms
of the Leases. If Borrower is entitled to retain a security deposit, then such
amount shall be transferred by Borrower into the Clearing Account.
4.7 Delivery of Notices. Borrower will promptly, but in no event
later than five (5) days after Borrower becomes aware of any of the following
events, furnish a written notice to Lender (together with the applicable
correspondence and papers relating thereto) specifying the nature and period of
existence of such condition or event and, with respect to events described in
clause (i) below, what action Borrower is taking or proposes to take with
respect thereto (compliance with the provisions of this Section 4.7 shall not be
deemed or construed to constitute a waiver of or consent to any Default or Event
of Default of which Borrower has given Lender notice pursuant to this Section
4.7):
(i) any Default hereunder or under any of the other Loan
Documents, or any Event of Default;
(ii) (A) any receipt or delivery by Borrower of a notice of
default or termination, (B) any proposed action with respect to any
default, or (C) any failure by any person or entity to perform any
material obligation, maintain any material representation or warranty
or satisfy any material condition, in each instance, in connection
with any Major Lease, the Management Agreement, any material
Contract, any Easement, any recorded instrument or any Permit;
(iii) the filing of any action, suit or proceeding against
or affecting Borrower or the Premises that, if adversely determined,
could singly or collectively (A) impair the validity or
enforceability of this Agreement or any of the other Loan Documents
or otherwise have a Material Adverse Effect, or (B) result in a Lien
on any portion of the Premises; and/or
(iv) any notice received from any Governmental Authority
asserting a violation of any material Legal Requirement and any
correspondence to or from Borrower with respect thereto.
Without limiting the generality of the foregoing, Borrower will
transmit to Lender, immediately upon receipt thereof, any communication
(addressed to Borrower or any Affiliate of Borrower) which relates to matters
which could adversely affect Lender's security for the Loan or could have an
adverse effect on the financial condition of Borrower and/or any other
Significant Party, and will promptly respond fully to any inquiry of Lender made
with respect thereto.
4.8 ERISA.
(a) In addition to the prohibitions set forth in Section 4.2 hereof,
and not in limitation thereof, Borrower shall not Transfer or hypothecate its
interest or rights in this Agreement or in the Premises, or attempt to do any of
the foregoing or suffer any of the foregoing, nor shall any Person owning a
direct or indirect interest in Borrower Transfer any of its rights or interest
(direct or
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indirect) in Borrower, attempt to do any of the foregoing or suffer any of the
foregoing, nor shall Borrower or any Person owning a direct or indirect interest
in Borrower take, without limitation, any action or fail to take any action, if,
in any such case, doing so would (i) cause the Loan or the exercise of any of
Lender's rights in connection therewith to constitute a Prohibited Transaction
(unless Borrower furnishes a legal opinion reasonably satisfactory to Lender
that the same is exempt from the Prohibited Transaction provisions of ERISA and
the Code or otherwise does not constitute a Prohibited Transaction), assuming
solely for this purpose that Lender is a Party In Interest or a Disqualified
Person with respect to an employee benefit plan, if any, which has directly or
indirectly invested in Borrower or General Partner, or (ii) otherwise result in
Lender being deemed in violation of any applicable provisions of ERISA with
respect to the Loan. Borrower and General Partner shall take such steps as are
necessary to assure that each of them (and their respective shareholders,
partners and members) does not commit any act, or fail to commit any act, the
occurrence of which or the failure of which to occur would cause the Loan to be
a Prohibited Transaction.
(b) If the provisions of this Section 4.8 are violated, Borrower
agrees, at its own cost and expense, to take such steps as Lender shall
reasonably request to prevent the occurrence of a Prohibited Transaction or to
correct the occurrence of a Prohibited Transaction. Borrower agrees to
indemnify, defend and hold the Indemnified Parties free and harmless from and
against all loss, costs (including attorney's fees and expenses), taxes,
penalties, damages and expenses any Indemnified Party may suffer by reason of
the investigation, defense and settlement of claims based upon a breach of the
foregoing provisions. The provisions of Section 6.5 hereof shall apply to such
indemnification. The foregoing indemnification shall survive repayment of the
Loan.
4.9 Agreements with Affiliates. Borrower shall not enter into any
contract, agreement or other arrangement with any Affiliate of Borrower unless
such contract or agreement provides for market rates which would be charged by
third parties which are not Affiliates in respect of the goods and/or services
provided thereunder. If requested by Lender, such contract or agreement shall
provide Lender the right to terminate it upon Lender's (or its designee's)
acquisition of the Premises through foreclosure, a deed-in-lieu of foreclosure,
Uniform Commercial Code sale or otherwise.
4.10 After Acquired Property. Borrower will grant to Lender a first
lien security interest in and to all equipment and other personal property owned
by Borrower, whether or not used in the construction, maintenance and/or
operation of the Improvements, immediately upon acquisition of same or any part
of same.
4.11 Books and Records. Borrower shall keep and maintain at all times
at its principal office complete, true and accurate books of account and records
reflecting the results of its operations. Borrower shall permit Lender, its
agents, consultants and representatives, upon reasonable notice (which may be
given orally or in writing) and at reasonable times, to examine and audit the
books and records of Borrower and make copies thereof, at Borrower's expense.
Borrower shall cause the Manager and its Affiliates to make all records relating
to the Premises available to Lender and shall cause the Manager to cooperate
with any examination, audit or other inquiry (including causing the personnel
responsible for the Premises to be available to respond to inquiries).
4.12 Delivery of Estoppel Certificates.
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(a) Borrower shall, from time to time, within twenty (20) days after
written request from Lender, furnish to Lender or such other party (or parties
as may be requested by Lender) a written certificate setting forth the unpaid
principal of and interest due on the Note and any other sums evidenced or
secured by the Mortgage, and/or the other Loan Documents, stating the date
through which interest has been paid, and stating whether or not any offsets,
defenses or counterclaims exist with respect to the Loan Documents. If
requested, such certificate will also attach true and correct copies of any Loan
Documents and state such other information as Lender shall require. Upon request
of Lender, Borrower shall cause Manager within twenty (20) days (or thirty (30)
days if Manager is not an Affiliate of Borrower) after such request to furnish
Lender or such other party or parties as Lender may request, a written
certificate certifying as to such matters as Lender may reasonably request.
(b) Borrower shall use all reasonable efforts to deliver to Lender
upon request, which may be made from time to time (but not more than once during
the Term in respect of any such tenant), tenant estoppel certificates from each
commercial tenant at the Premises in form and substance reasonably satisfactory
to Lender.
4.13 Management, Etc.
4.13.1 Management.
(a) The Premises are at all times to be managed in a competent and
professional manner appropriate for office premises similar to the Premises by
either (i) Borrower, or (ii) by a prominent professional managing agent
("Manager"), in which case Borrower shall enter into a written Agreement with
Manager (each such agreement, as the same may be amended or modified in
accordance with the terms hereof and any replacement thereof entered into in
accordance with the terms of this Agreement, a "Management Agreement");
provided, however, that prior to engaging such Manager or executing any
Management Agreement, such Manager and Management Agreement shall be subject to
approval by Lender in its reasonable discretion.
(b) Borrower represents it will deliver to Lender a true, correct and
complete copy of any Management Agreement, and will cause any Manager to execute
and deliver an Assignment and Subordination of Management Agreement in form and
substance reasonably satisfactory to Lender (a "Manager Assignment and
Subordination"), which shall provide, inter alia, that the terms and conditions
of any subsequent Management Agreement between Manager and Borrower, or any
amendment or modification of any Management Agreement between Manager and
Borrower, and any compensation of Manager with respect to its services performed
at or in connection with the Premises (other than an extension of the existing
Management Agreement for compensation which is no greater, and on terms and
conditions no less favorable to Borrower, than those contained in the existing
Management Agreement) are subject to approval by Lender in its sole and absolute
discretion.
4.13.2 Management Termination. In the event that there
shall have occurred and be continuing an Event of Default, then, upon Lender's
request, Borrower shall replace the present Manager with a managing agent
approved by Lender in its sole discretion.
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4.14 Financial Statements; Audit Rights.
4.14.1 Statements to be Delivered. Until the Loan is repaid
in full, Borrower shall cause the following financial statements and
documentation to be delivered at the time and in the form and manner referenced
below:
(i) audited statements of financial position (balance
sheet) of Borrower as of the close of each fiscal year of Borrower
during the Term (which may be included in a consolidated financial
statement of Tower), and of Receipts, Expenses and retained earnings,
changes in financial position and cash flows for such fiscal year,
which statements shall be duly certified by the Designated Officer to
fairly represent the financial condition of Borrower as of the date
thereof and to have been prepared in accordance with generally
accepted accounting principles and accompanied by an opinion of the
Approved Accountant (which opinion shall be unqualified and shall not
contain any "statement of emphasis") to the effect that such
financial statements present fairly, in all material respects, the
financial condition of Borrower as of the end of the fiscal year
being reported on and that the results of the operations and cash
flows for said year are in conformity with generally accepted
accounting principles, consistently applied, and that the examination
of the Approved Accountant in connection with such financial
statements has been conducted in accordance with generally accepted
auditing standards and included such tests of the accounting records
and such other auditing procedures as the Approved Accountant deemed
necessary in the circumstances;
(ii) an unaudited quarterly balance sheet of Borrower, a
statement of profits and losses and a calculation of net cash flows
for the applicable quarter, including Receipts and Expenses, such
quarterly financial statements to be certified by a Designated
Officer to fairly represent the financial condition of Borrower as of
the date thereof and to have been prepared in accordance with
generally accepted accounting principles;
(iii) a monthly operating statement showing all Receipts,
Expenses and net cash flow for the applicable calendar month,
year-to-date results and variances from the same month in the prior
calendar year and from the Approved Budget, and such other matters as
Lender shall reasonably require, which monthly operating statements
shall be certified by a Designated Officer to be true, correct and
complete in all material respects and shall be prepared on a cash
basis;
(iv) not later than each December 1 during the Term,
Borrower shall submit to Lender a detailed budget for the Premises
covering the calendar year commencing on the following January 1,
each of which budgets shall be subject to Lender's approval (provided
that Borrower shall have the option to submit to Lender a revised
budget not later than June 30 of each year during the Term to adjust
such budget on the basis of the actual results of Borrower to such
point in such calendar year)(each such budget, when so approved, is
referred to as an "Approved Budget"); until Lender shall approve a
new budget, the Approved Budget from the prior year shall remain in
effect. It is expressly understood and agreed that the budget for the
1998 calendar year shall be submitted to Lender for approval within
ninety (90) days following the Closing Date;
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(v) the annual Form 1065 (with accompanying schedules K-1)
(or any substitute therefor) prepared by Borrower;
(vi) a schedule of all accounts payable at the end of each
calendar quarter, certified by a Designated Officer to be true,
correct and complete in all material respects;
(vii) monthly Rent Rolls, certified by a Designated Officer
to be true, correct and complete in all material respects; and
(viii) such other reports and information which Lender
reasonably requires certified by a Designated Officer to be true,
correct and complete in all material respects.
4.14.2 Time for Delivery. The statements referred to in
paragraph (i) of Section 4.14.1 hereof shall be delivered to Lender within
ninety (90) days after the last day of each fiscal year of Borrower. The
statements referred to in paragraphs (ii) and (vi) of Section 4.14.1 hereof
shall be delivered to Lender within thirty (30) days after the last day of each
calendar quarter. The reports referred to in paragraphs (iii) and (vii) of
Section 4.14.1 hereof shall be delivered to Lender within twenty (20) days after
the last day of each calendar month. Notwithstanding anything to the contrary,
the information required under paragraph (v) of Section 4.14.1 hereof shall be
delivered to Lender simultaneously with delivery to the partners/members of
Borrower but in no event later than ninety (90) days after the last day of each
fiscal year of Borrower. All Financial Statements shall be in form and substance
satisfactory to Lender.
4.14.3 Officer's Certificate. Each Financial Statement
described in paragraphs (i), (ii) and (iii) of Section 4.14.1 hereof shall be
accompanied by an Officer's Certificate of Borrower certifying that, to the best
of such officer's knowledge, after due inquiry, Borrower has observed and
performed, in all material respects, all of its covenants and other agreements
contained in this Agreement and the other Loan Documents, whether there exists
any material Default or Event of Default and, if there is, specifying the nature
and period of existence thereof and the action Borrower is taking or proposing
to take with respect thereto.
4.15 Maintenance of Non-Taxable Status. Borrower will maintain its
status of being taxed as a partnership for the purposes of federal, state and
local income taxes.
4.16 Lender's Attorneys' Fees and Expenses. Borrower shall appear in
and defend any action or proceeding purporting to affect the security of the
Mortgage or the security interests granted under any of the other Loan
Documents, or the rights and powers of Lender under any of the Loan Documents,
and Borrower (in addition to Lender's attorneys' fees and expenses to be paid by
Borrower otherwise pursuant to this Agreement or the other Loan Documents) shall
pay all of Lender's attorneys' fees and expenses in connection with the
enforcement of this Agreement and the other Loan Documents and the collection of
all amounts payable hereunder and thereunder. In case of any Default under this
Agreement or any of the other Loan Documents, or if any action or proceeding is
commenced in which it becomes necessary to defend or uphold the Lien or priority
of the Mortgage or the other Loan Documents, or which adversely affects Lender's
interests in the Premises or any part thereof, including, but not limited to,
eminent domain, or proceedings of any
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nature affecting the Premises or involving the bankruptcy, insolvency,
arrangement, reorganization or other form of debtor relief with respect to
Borrower or any other Significant Party or relating to a decedent, then Lender
may, but without obligation to do so, and without releasing Borrower or any
other Significant Party from any obligation hereunder or under the other Loan
Documents, make such appearances, disburse such reasonable sums and take such
action as Lender deems necessary or appropriate to protect Lender's interest in
the Premises. All costs incurred by Lender, including attorneys' fees and
disbursements, in taking any action described above shall be paid by Borrower
upon demand together with interest thereon at the Default Rate from the date
paid by Lender through the date of repayment by Borrower and the same shall be
deemed to constitute protective advances evidenced by the Note and secured by
the Mortgage and the other Loan Documents. In addition to, and without limiting
the generality of, the foregoing, if, at any time hereafter, Lender employs
counsel (i) for advice or other representation (whether or not any suit has
been, or shall thereafter be, filed, and whether or not other legal proceedings
have been, or shall thereafter be, instituted, and whether or not Lender shall
be a party thereto) with respect to the Loan, the Premises or any part thereof,
this Agreement or any of the other Loan Documents, or (ii) to protect, collect,
lease, sell, take possession of, foreclose upon or liquidate all or any part of
the Premises, or to attempt to enforce any security interest or Lien in all or
on any part of the Premises, or to enforce any rights of Lender or any of
Borrower's obligations hereunder or under any of the other Loan Documents, or
any obligations of any other Person which may be obligated to Lender by virtue
of this Agreement or any other agreement, instrument or document heretofore or
hereafter delivered to Lender by or for the benefit of Borrower, then, in any
such event, all of the attorneys' fees and expenses arising from such services,
and all expenses, costs and charges relating thereto, shall be paid by Borrower
upon demand, together with interest thereon at the Default Rate from the date
paid by Lender through the date of repayment by Borrower, and the same shall be
deemed to constitute protective advances evidenced by the Note and secured by
the Mortgage and the other Loan Documents.
4.17 Environmental.
(a) Borrower shall not (and it shall not permit any tenant,
subtenant, contractor, agent or manager to) locate, produce, use, store, treat,
transport, incorporate, discharge, emit, release, deposit or dispose of any
Hazardous Substance in, upon, under, at, over or from the Premises, except that
Borrower (its tenants, subtenants, manager, contractors or agents) may store,
locate and use on the Premises Hazardous Substances which are (i) customarily
located, stored or used in office premises similar to the Premises, or (ii)
unique to a tenant's business located in the Premises, provided that such
Hazardous Substances described in clauses (i) or (ii) above are at all times
stored, located and used in compliance with all Environmental Laws. Borrower
shall not permit any Hazardous Substances to be located, produced, used, stored,
treated, transported, incorporated, discharged, emitted, released, deposited,
disposed of or to escape in, upon, under, over or from the Premises in violation
of any Environmental Law, and shall comply with all Environmental Laws which are
applicable to the Premises. Borrower shall not engage in any conduct in
connection with the Premises that may subject Borrower to Environmental Costs or
contribute to or aggravate a release of Hazardous Substances. In addition to the
foregoing restrictions, Borrower agrees that no asbestos, ACM, materials
containing urea-formaldehyde, or transformers, capacitors, ballasts or other
equipment that contain PCBs are, or will at any time be, located about the
Premises.
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(b) Borrower shall, promptly within the time permitted by
Environmental Laws, initiate and diligently pursue to completion, any and all
remedial action required pursuant to any Environmental Laws in response to the
presence of any Hazardous Substances at, on, under or about, or emanating from,
the Premises, and shall take such remedial action as is required to minimize any
impairment of Lender's Lien on, and security interest in, the Premises. If
Borrower undertakes any remedial action with respect to any Hazardous Substance
about the Premises, Borrower shall conduct and complete such remedial action in
compliance with all applicable Environmental Laws. If any Hazardous Substance is
removed or caused to be removed from the Premises by Borrower, the generator
number assigned by the Environmental Protection Agency to such Hazardous
Substance shall not be in the name of Lender, and Borrower shall assume any and
all liability for such removed Hazardous Substance.
(c) The representations and warranties contained in Section 3.21
hereof and the covenants contained in this Section 4.17 shall be deemed
continuing covenants for the benefit of Lender and any successors and assigns of
Lender, including, but not limited to, any purchaser at a foreclosure sale, any
transferee of the title of Lender or any other purchaser at a foreclosure sale,
and any subsequent owner of the Premises, and shall survive the termination of
this Agreement, or the satisfaction or release of the Mortgage, any foreclosure
of the Mortgage and/or any acquisition of title to the Premises or any part
thereof by Lender, or anyone claiming by, through or under Lender, by deed in
lieu of foreclosure or otherwise.
(d) Borrower shall give prompt written notice to Lender of:
(i) any proceeding or inquiry by any Governmental Authority
with respect to the presence of any Hazardous Substance on the
Premises or the migration thereof from or to other property;
(ii) all claims made or threatened by any third party
against Borrower or the Premises relating to any loss or injury
resulting from any Hazardous Substance;
(iii) the storage, production, release, discharge or
disposal of any Hazardous Substances on the Premises other than in
accordance with all applicable Environmental Laws; and/or
(iv) Borrower's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Premises that
could cause the Premises or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of
the Premises under any Environmental Law or to be otherwise subject
to any restrictions on the ownership, occupancy, transferability or
use of the Premises under any Environmental Law.
(e) Borrower shall keep Lender apprised of the status of, and any
material developments in, any governmental investigation relating to
Environmental Matters at or about the Premises, any and all enforcement,
clean-up, removal or other governmental or regulatory actions instituted,
completed or threatened pursuant to any Environmental Law with respect to the
Premises and any other claims, actions or proceedings with respect to the
Premises relating to Environmental Matters.
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Borrower shall provide Lender with copies of all communications with all
Governmental Authorities relating to Hazardous Substances Claims. Without
Lender's prior written consent, Borrower shall not enter into any settlement
agreement, consent decree or other compromise with respect to any such
governmental investigation or action, or other claim, action or proceeding
relating to Hazardous Substances which Borrower does not have the funds
available to pay or which may adversely affect Lender's Lien on, or the value
of, the Premises.
(f) The foregoing rights and remedies contained in this Section 4.17
are cumulative with, and in addition to, any rights and remedies Lender may have
against Borrower or any other Significant Party under the other terms and
provisions of this Agreement, under any other Loan Document or under any
Environmental Law, including, without limitation, CERCLA.
4.18 Report Updates.
(a) Lender reserves the right at any time during the Term to conduct
or require Borrower to conduct, at Borrower's expense, such environmental
inspections, audits and tests as Lender shall deem reasonably necessary or
advisable from time to time utilizing a company acceptable to Lender; provided,
however, that Borrower shall not be required to pay for such environmental
inspections, audits and tests so long as: (i) no Event of Default exists under
this Agreement or any other Loan Document; (ii) Lender has no cause to believe,
in Lender's sole but good faith judgment, that there has been a release or a
threatened release of Hazardous Substances at the Premises or that Borrower or
the Premises is in violation of any applicable Environmental Law; (iii) such
inspections, audits and tests are not being obtained in satisfaction of the
provisions of Section 6.27 hereof; and (iv) such inspection, audit or test has
not been recommended in any other audit, inspection, test or consultants report
previously conducted with respect to the Premises. In the event that any
environmental site assessment report prepared for the Premises recommends that
an operations and maintenance plan be implemented for any Hazardous Substance,
including, without limitation, asbestos, Borrower shall cause such operations
and maintenance plan to be prepared and implemented at Borrower's expense upon
request of Lender and in accordance with the recommendation.
(b) Lender shall have the right from time to time throughout the Term
to order additional engineering reports with respect to the Premises. Such
additional engineering reports shall be paid for by Borrower in accordance with
Section 6.4 hereof; provided, however, that Borrower shall not be required to
pay for such additional engineering reports unless (i) an Event of Default has
occurred, (ii) any such additional engineering report is being obtained pursuant
to Section 6.27 hereof, (iii) any such additional engineering report is required
by applicable Legal Requirements to be obtained, or (iv) in Lender's sole but
good faith judgment, an adverse change in the condition of the Premises has
occurred.
(c) Lender shall not be liable for any action or inaction by Borrower
with respect to any remedial or other response activity in connection with any
Hazardous Substance or any repair or replacement recommended in any engineering
report, notwithstanding any review or approval of Borrower's method of
remediation or repair or replacement, as applicable, or any response by Lender.
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4.19 Lender Access to Premises. Borrower will permit Lender and its
agents, consultants or representatives, to enter upon the Premises on reasonable
notice (which may be given orally or in writing) at reasonable times to inspect
the Improvements. Lender or its agents, consultants or representatives as part
of any inspection may take soil, air, water, building material and other
samples, subject to the rights of tenants under Leases.
4.20 Delivery of Documents Regarding Ownership. Borrower will deliver
to Lender, on demand made therefor by Lender, copies of all documents which
evidence Borrower's title in or to any materials, fixtures or articles
incorporated in the Improvements or subject to the Lien of any of the Loan
Documents.
4.21 Use of Premises. Unless required by applicable law, Borrower
shall not permit changes in the use of any part of the Premises from the use
existing on the date hereof. Borrower shall not initiate or acquiesce in a
change in the plat of subdivision or zoning classification of the Premises
without Lender's prior written consent.
4.22 Insurance. Borrower shall at all times maintain all Insurance
Policies required to be obtained and maintained by Borrower pursuant to the
terms of the Mortgage.
ARTICLE 5
EVENTS OF DEFAULT
5.1 Events of Default; Defaults. The term "Default" as used herein
shall mean any one or more of the events set forth below prior to the expiration
of the applicable notice or grace period, if any. The term "Event of Default",
wherever used in this Agreement, shall mean any one or more of the events set
forth below after the expiration of the applicable notice or grace period, if
any.
5.1.1 Non-Payment. Failure by Borrower to pay (i) any
periodic installment of interest or principal when the same shall become due and
payable hereunder or under the Note, in each case, within five (5) Domestic
Business Days of the date when the same shall become due and payable, (ii) the
outstanding principal balance of the Note, together with the interest accrued
thereon and all other sums which may then be owed by Borrower to Lender, at
maturity or upon prepayment of the Note in full, and (iii) any other sums to be
paid by Borrower hereunder or under any other Loan Documents, within ten (10)
days following the date on which Lender gives Borrower written notice of such
failure.
5.1.2 Affirmative Covenants. Failure by Borrower or any
other Person to duly keep, perform and observe any Affirmative Covenant or
agreement in this Agreement, the Note, the Mortgage or any other Loan Document
(unless same constitutes a Default under any other clause of this Section 5.1 or
any other Loan Document, in which case, the grace or cure period, if any, set
forth in such other clause shall govern) within thirty (30) days after Lender
gives Borrower written notice of such failure; provided, however, that in the
event such failure is not susceptible of cure within such thirty (30) day
period, it shall not be an Event of Default hereunder if such failure is
curable, Borrower commences to cure such failure within such thirty (30) day
period, and Borrower diligently
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prosecutes such cure to completion within ninety (90) days after the expiration
of such thirty (30) day period, but in no event beyond the Maturity Date.
5.1.3 Negative Covenants. If Borrower or any other Person
shall breach or otherwise not comply with any Negative Covenant set forth herein
or in any other Loan Document (unless same constitutes a Default under any other
clause of this Section 5.1 or any other Loan Document, in which case, the grace
or cure period, if any, set forth in such other clause shall govern) and such
Default shall continue for five (5) Domestic Business Days after written notice
thereof by Lender to Borrower, provided that no such notice and grace shall be
required with respect to a knowing, intentional and willful breach of a Negative
Covenant.
5.1.4 Financial Statements. If any material inaccuracy
shall exist in any of the Financial Statements or in any other financial
statement or other information (i) furnished to Lender by Borrower, any other
Significant Party, any officer of Borrower or of any other Significant Party (or
their direct or indirect General Partners, managers or managing members), or any
other Person on behalf of the foregoing Persons, to Lender pursuant to the
provisions of this Agreement or any other Loan Document, or (ii) furnished to or
to be furnished to Lender to induce Lender to make the Loan or any advance
thereunder, to extend the Term or to consent to any matter hereunder or under
any other Loan Document.
5.1.5 Representations. If, at any time, any representation,
warranty or certification made by Borrower or any other Significant Party, as
applicable, in this Agreement, the Note or any other Loan Document, or in any
document delivered pursuant to any Loan Document, or otherwise delivered in
connection with the Loan, shall be untrue, incorrect or misleading in any
material respect when made, materiality to be reasonably determined by Lender.
5.1.6 Other Loan Documents. If an "Event of Default" shall
occur under the Mortgage or any other Loan Document (or under any document
evidencing or securing or delivered in connection with any loan (other than the
Loan) which Lender may hereafter elect to make to Borrower) or any other default
shall occur and continue beyond the applicable notice or grace period, if any,
under or with respect to any other Loan Document (or under or with respect to
any of the documents evidencing or securing any such other loan).
5.1.7 Demolition or Alterations. Except as permitted herein
or in the other Loan Documents, the commencement of demolition of or material
alterations (as such term is defined in the Mortgage) to the Premises without
the prior written consent of Lender, which consent may be withheld by Lender in
Lender's sole discretion.
5.1.8 Failure to Deliver Estoppel Certificate. If Borrower
shall fail to deliver any estoppel certificate required by Section 4.12 hereof
within the time period provided in said Section.
5.1.9 Reserves; Deposits. If Borrower or Manager fails to
deposit any Receipts into the Clearing Account within the time period provided
herein or in the Cash Management Agreement to do so.
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5.1.10 Cessation of Borrower. If Borrower or any other
non-natural Person which is a Significant Party ceases to exist.
5.1.11 Transfer. If, in violation of Section 4.2 hereof,
(i) the Premises, or any part thereof, is Transferred, or (ii) any direct or
indirect legal or beneficial interest in Borrower is Transferred.
5.1.12 Liens. If, in violation of Section 4.3 hereof, the
Premises or any part thereof is mortgaged or any other Lien is voluntarily
placed thereon by Borrower.
5.1.13 Involuntary Bankruptcy, Etc. The entry by a court of
(i) a decree or order for relief in respect of any Significant Party in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law; or (ii) a decree or order
adjudging any Significant Party a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of any Significant Party under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of any Significant Party or of any substantial part of
the property of any Significant Party, or ordering the winding up or liquidation
of the affairs of any Significant Party, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of sixty (60) days.
5.1.14 Voluntary Bankruptcy, Etc. (i) The commencement by
any Significant Party of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law, or
of any other case or proceeding, to be adjudicated a bankrupt or insolvent; (ii)
the consent by any Significant Party (A) to the entry of a decree or order for
relief in respect of Borrower or such Significant Party in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or (B) to the commencement of any
bankruptcy or insolvency case or proceeding against Borrower or such other
Significant Party; (iii) the filing by any Significant Party of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law; (iv) the
consent by any Significant Party to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of any Significant Party, or
of any substantial part of any property of any Significant Party; (v) the making
by any Significant Party of an assignment for the benefit of creditors; or (vi)
the admission by any Significant Party in writing of its inability to pay its
debts generally as they become due.
5.1.15 Judgments. If, at any time, a judgment shall be
rendered against a Significant Party which could adversely affect the ability of
such Significant Party to perform any of its obligations, if any, under this
Agreement, the Note or any other Loan Document; provided, however, that if such
Significant Party appeals said judgment and (i) said appeal (A) is timely filed,
(B) is diligently pursued, (C) is permitted by law, and (D) has the effect of
staying any action on such judgment, (ii) such Significant Party posts any
security required by law or required by Lender in respect of said judgment,
(iii) said judgment does not subject Lender or the Premises to any civil or
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criminal penalties, and (iv) such judgment is not a Lien on the Premises or any
other Collateral, then it shall not be an Event of Default hereunder until such
judgment is final and non-appealable.
5.1.16 Termination or Modification of Leases. Except as
otherwise expressly permitted under Section 4.6 hereof, if any Major Lease shall
be terminated or materially modified or amended by Borrower without the prior
written consent of Lender.
5.1.17 Organizational Documents. If at any time (i) any
Organizational Document of Borrower or General Partner is modified in violation
of Article 8 hereof; (ii) Borrower or General Partner shall fail to comply with
the bankruptcy remote single purpose entity requirements of its Organizational
Documents; or (iii) Borrower or General Partner shall otherwise violate Article
8 hereof.
5.1.18 Delivery of Financial Statements. If Borrower or
Manager fails to deliver to Lender any Financial Statement required to be
delivered hereunder or under the Cash Management Agreement or any other Loan
Document, and such failure continues (i) for fifteen (15) days after the date
such Financial Statement was required to be so delivered with respect to any
Financial Statement required to be delivered to Lender on a monthly basis, (ii)
for thirty (30) days after the date such Financial Statement was required to be
so delivered with respect to any Financial Statement required to be delivered to
Lender on a quarterly basis, (iii) for sixty (60) days after the date such
Financial Statement was required to be so delivered with respect to any
Financial Statement required to be delivered to Lender on an annual basis, or
(iv) for thirty (30) days after request therefor by Lender with respect to any
other Financial Statement.
5.1.19 ERISA. If Borrower shall breach any of the
provisions of Section 4.8 hereof.
5.1.20 Termination of Management Agreement, etc. If,
without Lender's prior written consent, (i) the Manager resigns or is removed or
the Management Agreement terminates, unless, in the case of a Management
Agreement with an entity which is not an Affiliate of Borrower, such Management
Agreement is replaced, within twenty (20) days after notice of such resignation,
removal or termination with a replacement Management Agreement and Manager
satisfying the provisions of Section 4.13.1 hereof; (ii) there is any material
change in the Management Agreement or termination thereof by reason of any
default thereunder by Borrower; or (iii) with respect to any Manager which is an
Affiliate of Borrower, the ownership, management or control of such Manager is
transferred to a Person who is not an Affiliate of Borrower.
5.1.21 Other Conditions for Acceleration. The occurrence of
any conditions set forth herein or in the Note, the Mortgage or any other Loan
Document permitting Lender to accelerate the Loan.
5.1.22 Intentionally Omitted
5.1.23 Denial of Obligation. If Borrower shall take the
position in any written communication with Lender, or in any litigation, that
any Loan Document is no longer the valid, binding and enforceable obligation of
Borrower or any other party thereto.
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5.1.24 Misapplication of Receipts. If Borrower shall (i)
apply any monies delivered to Borrower pursuant to Section 8 of the Cash
Management Agreement (or the Disbursement Instructions effectuating the same)
other than to pay amounts permitted to be paid with such funds pursuant to the
provisions of Section 8 of the Cash Management Agreement, and such breach shall
continue for three (3) Domestic Business Days following notice thereof;
provided, however, that no such notice and grace shall be required with respect
to an intentional breach of such provision; or (ii) fail to pay to Lender any
amounts required to be paid to Lender pursuant to Section 8(c) of the Cash
Management Agreement at the time such payment is to be made to Lender
thereunder.
5.1.25 Failure to Provide Further Assurances. If, after
fifteen (15) days, notice from Lender to Borrower that Borrower has failed to
comply with any of the provisions of Section 6.25 hereof, Borrower fails to cure
such Default.
5.2 Rights upon Event of Default. Upon the occurrence and during the
continuance of any Event of Default, Lender shall, in addition to all other
remedies conferred upon Lender at law or in equity or by the terms of the Note,
the Mortgage and the other Loan Documents, have the right, but not the
obligation, to pursue any one or more of the following remedies, concurrently or
successively, it being the intent hereof that all such remedies shall be
cumulative and that no such remedy shall be to the exclusion of any other:
(i) take any action which, in Lender's sole judgment, is necessary or
appropriate to effect observance and performance of the covenants, agreements
and obligations (under this Agreement and the other Loan Documents) of Borrower
or any other Person providing Collateral pursuant to, or obligated to perform
any of the terms and provisions of, this Agreement or the other Loan Documents
(each, an "Obligated Party");
(ii) declare the Note to be immediately due and payable;
(iii) use and apply any monies deposited in or credited to, as the
case may be, the Tax and Insurance Escrow Subaccount, the Clearing Account, the
Cash Collateral Account or any other monies deposited by Borrower with Lender,
regardless of the purpose for which the same were deposited, to cure any Default
or Event of Default, or to apply such monies on account of any indebtedness
under this Agreement or any of the other Loan Documents which is due and owing
to Lender, or to operate the Premises, or for any other purposes described
herein or in any other Loan Document;
(iv) institute an action, suit or proceeding at law or in equity for
the specific performance of any covenant, condition or agreement contained
herein or in the Mortgage, Note or any other Loan Document, or in aid of the
execution of any power granted hereunder or for the enforcement of any other
appropriate legal or equitable remedy; and/or
(v) setoff against the obligations to Lender of Borrower or any other
Obligated Party, any sum owed by Lender or any Affiliate of Lender in any
capacity to Borrower or such other Obligated Party, or any property of any of
them in the possession of Lender or any Affiliate of Lender.
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5.3 Waiver of Stay, Extension and Moratorium Laws, Appraisal and
Valuation, Redemption and Marshalling.
(a) Borrower shall not at any time insist upon, or plead, or in any
manner whatever claim or take any benefit or advantage of any stay or extension
or moratorium law, any exemption from execution or sale of any of the
Collateral, or any part of any thereof, wherever enacted, which may affect the
covenants and terms of performance of the Loan Documents, nor claim, take or
insist upon any benefit or advantage of any law now or hereafter in force
providing for the valuation or appraisal of any of the Collateral, or any part
of any thereof, prior to any sale or sales thereof which may be made pursuant to
any provision of any Loan Document, or pursuant to the decree, judgment or order
of any court of competent jurisdiction; nor, after any such sale or sales, claim
or exercise any right under any statute to redeem the property so sold, or any
part thereof, and Borrower hereby expressly waives all benefit or advantage of
any such law or laws, and covenants not to hinder, delay or impede the execution
of any power herein granted or delegated to Lender, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
Borrower, for itself and all who may claim under it, waives, to the extent that
it lawfully may, all right to have the Premises marshalled upon any foreclosure.
(b) In the event that any bankruptcy or insolvency proceeding under
any federal, state or local law is filed by or against Borrower or any of its
assignees or designees at any time prior to full satisfaction of the Loan,
Lender shall, to the extent permitted by law, be absolutely and unconditionally
entitled to relief from any automatic stay imposed with respect to Borrower or
its assignees or designees and/or the Premises by the filing of such bankruptcy
or insolvency proceeding, including, but not limited to, the stay imposed by
section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a), effective as of any
such filing, without further action by Lender or order of any court, and Lender
shall be authorized to exercise all of its rights and remedies with respect to
the Premises, including, but not limited to, commencing a foreclosure action,
seeking the appointment of a receiver therein and selling the Premises therein,
and Borrower hereby irrevocably consents to the foregoing. Without limiting the
previous sentence, Borrower hereby irrevocably consents to, shall not oppose or
contest, and shall not request or cause any creditors' committee or any party in
interest to oppose or contest, any application for relief from the automatic
stay or for "adequate protection," as that term is defined in the Bankruptcy
Code, which may be filed by Lender in any future bankruptcy or insolvency
proceeding with respect to Borrower and/or the Premises. No other action,
inaction or agreement by Lender in any future bankruptcy or insolvency
proceeding shall be deemed to be a waiver of the rights given to Lender hereby.
5.4 Preferences. Lender shall have no obligation to marshal any
assets in favor of Borrower or any other party or against or in payment of the
Loan. To the extent Borrower makes a payment to Lender, which payment or the
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent, preferential or avoidable, set aside or required to be repaid to a
trustee, receiver or any other party having requisite authority under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligation hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received.
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ARTICLE 6
GENERAL PROVISIONS
6.1 Rights Cumulative; Waivers.
(a) Each right, power and remedy conferred upon Lender herein or in
any of the other Loan Documents is cumulative and in addition to every other
right, power or remedy, express or implied, now or hereafter provided by law or
in equity, and each and every right, power and remedy herein set forth or
otherwise so existing may be exercised, concurrently or independently, from time
to time as often and in such order as may be deemed expedient to Lender. The
exercise of one right, power or remedy shall not be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy; and no
delay or omission of Lender in the exercise of any right, power or remedy
accruing hereunder or arising otherwise shall impair any such right, power or
remedy, or be construed to be a waiver of any Default or acquiescence therein.
Enumeration of special rights or powers herein, in the Mortgage or in the other
Loan Documents shall not be construed to limit any grant of general rights or
powers herein, in the Mortgage or in the other Loan Documents or to limit
Lender's exercise of any and all rights granted under the laws of the State of
New York, the state where the Premises are located or the United States of
America. No act of Lender shall be construed as an election to proceed under any
provision herein or in any other Loan Document to the exclusion of any other
provision herein or in any other Loan Document. Except as otherwise specifically
required herein, notice of the exercise of any right, remedy or power granted to
Lender by this Agreement or any other Loan Document is not required to be given.
Lender shall be entitled to enforce payment of the Loan and any other amount
payable under the Loan Documents, and performance of this Agreement and the
other Loan Documents, and to exercise all rights and remedies under this
Agreement or the other Loan Documents or otherwise at law or in equity,
notwithstanding that some or all of the indebtedness secured thereby may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Agreement nor its
enforcement shall prejudice or in any manner affect Lender's right to realize
upon or enforce any other security now or hereafter held by Lender, it being
agreed that Lender shall be entitled to enforce this Agreement, the Mortgage and
any other security now or hereafter held by Lender hereunder, under any of the
other Loan Documents or otherwise, in such order and manner as Lender may
determine in its absolute discretion.
(b) Lender may, by written notice to Borrower, at any time and from
time to time, waive in whole or in part, and absolutely or conditionally, any
Default or Event of Default hereunder. Any such waiver shall be subject to such
conditions or limitations as shall be specified in any such notice. In the case
of any such waiver, the rights of Borrower shall be otherwise unaffected, and
any Default or Event of Default so waived shall be deemed to be cured and not
continuing only to the extent, and only on the conditions or limitations, set
forth in such waiver, but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right, remedy or power consequent
thereupon.
6.2 Lender's Action for its Own Protection Only. The authority herein
conferred upon Lender, and any action taken by Lender, to inspect the Premises,
to review and/or approve all documents and instruments submitted to Lender, or
otherwise, will be exercised and taken by Lender
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and by Lender's employees, agents, consultants or representatives for their own
protection only and may not be relied upon by Borrower or any other party for
any purposes whatever; and neither Lender nor Lender's employees, agents,
consultants or representatives shall be deemed to have assumed any
responsibility to Borrower or any other party with respect to any such action
herein or under any of the other Loan Documents authorized to be taken by Lender
or Lender's employees, agents and representatives. Any review, investigation or
inspection conducted by Lender, any architect, engineer or other consultant
retained by Lender, or any agent or representative of Lender, in order to verify
independently Borrower's satisfaction of the covenants, agreements and
obligations of Borrower under this Agreement or any of the other Loan Documents,
or the validity of any representations and warranties made by Borrower or any
other party (regardless of whether or not the party conducting such review,
investigation or inspection should have discovered that any of such conditions
precedent were not satisfied or that any such covenants, agreements or
obligations were not performed or that any such representations or warranties
were not true) shall not affect (or constitute, except as may specifically be
provided in this Agreement or in the other Loan Documents to the contrary, a
waiver by Lender of) (i) any representations and warranties under this Agreement
or the other Loan Documents or Lender's reliance thereon, or (ii) Lender's
reliance upon any certifications of Borrower or any other party in connection
with the Loan, or any other facts, information or reports furnished to Lender by
Borrower or any other party in connection with the Loan. Lender neither
undertakes nor assumes any responsibility or duty to Borrower to select, review,
inspect, supervise, pass judgment upon or inform Borrower of any matter in
connection with the Premises, and Borrower shall rely entirely upon its own
judgment with respect to such matters, and any review, inspection, supervision,
exercise of judgment or supply of information to Borrower by Lender in
connection with such matters is for the protection of Lender only and neither
Borrower nor any third party is entitled to rely thereon.
6.3 No Third Party Beneficiaries. All conditions to the obligations
of Lender hereunder and under the other Loan Documents are imposed solely and
exclusively for the benefit of Lender and its Assignees and Participants, if
any, and its or their successors and assigns, and no other Person (other than
Servicer) shall have standing to require satisfaction of such conditions in
accordance with their terms, or be entitled to assume that Lender will refuse to
advance proceeds of the Loan or refuse to agree or consent to any matter in the
absence of strict compliance with any or all thereof, and no other Person (other
than Servicer) shall, under any circumstances, be deemed to be the beneficiary
of such conditions, any or all of which may be freely waived in whole or in part
by Lender at any time if, in its sole discretion, it deems it advisable to do
so, it being further understood that Lender and its Assignees and Participants,
if any, and its or their successors and assigns, shall have no obligation to see
to it that the Improvements or any other work required or contemplated hereby or
by the other Loan Documents are properly and/or timely completed.
6.4 Payment of Expenses, Etc..
6.4.1 Payment of Expenses. Borrower will, on the Closing
Date and at all times thereafter, pay all reasonable costs and fees incurred by
Lender in connection with the preparation, negotiation, consummation, execution,
administration, repayment, collection and enforcement of the Loan, the Loan
Documents and any approval, consent, amendment, modification or waiver related
thereto. Without limiting the generality of the foregoing, Borrower will pay:
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(i) all reasonable Lender's Counsel Fees in connection with
the foregoing;
(ii) all taxes and recording fees and expenses, including,
without limitation, stamp and/or mortgage taxes and transfer taxes,
if any;
(iii) all reasonable fees and out-of-pocket expenses
incurred by Lender, including all expenses of Lender and its
respective agents and representatives, in connection with any Default
or Event of Default hereunder, under the Note or under any other Loan
Document or the collection or enforcement thereof;
(iv) subject to Sections 4.18 and 6.27 hereof, all
reasonable fees and expenses of any environmental, engineering,
appraisal, construction, insurance or other consultants retained by
Lender in connection with the Loan or the administration, enforcement
or collection thereof; and
(v) all brokers' fees and commissions, if any, relative to
the Loan, the Premises and/or any lease or purchase contract
affecting same.
Without limiting the generality of the foregoing, to the extent that Lender,
after the Closing Date, deems it necessary to employ counsel and/or any other
consultant for whatever purpose relative to the Loan or Lender's interest in the
Premises, including, without limitation, all future amendments, supplements,
notices, recordings, approvals, consents and waivers with respect to the Loan
Documents (or any proposal by Borrower therefor), whether or not consummated,
the adjustment and collection of any and all insurance proceeds with respect to
any insurance coverage required hereunder, or obtaining any and all awards in
connection with any condemnation, the fees and expenses of such counsel and/or
consultants shall be borne by Borrower. Any fees and expenses referred to in
this Section 6.4 which are incurred by Lender are to be paid by Borrower within
five (5) days after demand is made by Lender therefor. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any loss, cost
(including attorneys' fees) or damage whatsoever incurred by Lender as a result
of Borrower's failure to pay any cost or expense contemplated hereby. The
provisions of this Section 6.4.1 are not intended to limit any other obligation
of Borrower or any other Obligated Party to pay fees and expenses of Lender or
other Persons contained herein or in any other Loan Document.
6.4.2 Advances Secured. All costs and expenses incurred and payments
made by Lender under this Agreement or any of the other Loan Documents from time
to time, which are to be paid or reimbursed by Borrower as described herein or
in any of the other Loan Documents shall, as and when advanced or incurred by
Lender, constitute protective advances evidenced by the Note and secured by the
Mortgage and the other Loan Documents to the same extent and with the same
effect as if the terms and provisions of this Agreement were set forth therein,
whether or not the principal balance of the Note plus such protective advances
shall exceed the face amount of the Note. If Borrower shall fail to reimburse or
pay to Lender the amount of such protective advances by the applicable due date
therefor, interest at the Default Rate shall accrue on such protective advances
from the date such protective advances were made by Lender to and including the
date that such
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protective advances are reimbursed or paid to Lender in full, together with all
such accrued interest thereon.
6.5 Indemnification.
(a) In addition to any other indemnifications provided herein or in
the other Loan Documents, Borrower shall protect, defend, indemnify and save
harmless the Indemnified Parties from and against all liabilities, obligations,
claims, demands, damages, penalties, causes of action, losses, fines, costs,
expenses (including, without limitation, attorneys' fees and disbursements) and
Environmental Costs, imposed upon or incurred by or asserted against any
Indemnified Party (other than by reason of such Indemnified Party's gross
negligence or willful misconduct, provided that such gross negligence or willful
misconduct is determined to have occurred by a final and unappealable decision
of a court of competent jurisdiction) by reason of (i) ownership or holding of
the Mortgage, this Agreement, the other Loan Documents, the Premises or any
interest therein or any other Collateral, including any funds deposited with
Lender, (ii) receipt and application of any Receipts or an Indemnified Party's
payment or non-payment of cost and expenses of operating the Premises, (iii) any
accident, injury to or death of Persons or loss of or damage to property
occurring on or about the Premises or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways,
(iv) any design, construction, alteration, operation, maintenance, use, nonuse
or condition of the Premises or any part thereof or on adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways, (v) any
failure on the part of Borrower to perform or comply with any of the terms of
this Agreement or any other Loan Document, (vi) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Premises or any part thereof, (vii) any failure of the Premises to comply with
any Legal Requirements, (viii) the presence in, at or under the Premises of any
Hazardous Substance, or any release or discharge on or from the Premises of any
Hazardous Substance, (ix) any representation or warranty made in the Note, the
Mortgage, this Agreement or any of the other Loan Documents being false or
misleading in any material respect as of the date such representation or
warranty was made, (x) except to the extent any such claims are made solely as a
result of any dealings between Lender and any broker, finder or similar person
claiming to be entitled to a commission in connection with the Loan, and with
whom Borrower has had no dealings in connection with the Loan, any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with the Loan, any Lease or any other action involving the Premises
or any part thereof, (xi) the claims of any tenant of any portion of the
Premises or any person acting through or out of any tenant or otherwise arising
out of or as a consequence of any Lease, (xii) any claim that the relationship
of Lender and Borrower is other than that of lender and borrower, and/or (xiii)
the execution and delivery of this Agreement, the Mortgage and the other Loan
Documents, the transactions contemplated hereby or thereby and the performance
by the parties hereto of their respective obligations hereunder or thereunder.
Any amounts payable to any Indemnified Party by reason of the application of
this Section 6.5 shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by any
Indemnified Party until paid. The obligations and liabilities of Borrower under
this Section 6.5 shall survive any termination, satisfaction or assignment of
this Agreement and the exercise by Lender of any of its rights or remedies
hereunder, including, but not limited to, the acquisition of the Premises by
foreclosure or a conveyance in lieu of foreclosure.
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(b) In case any claim, action or proceeding (a "Claim") is brought
against any Indemnified Party in respect of which indemnification may be sought
by such Indemnified Party pursuant to this Section 6.5, such Indemnified Party
shall give notice thereof to Borrower, provided, however, that the failure of
such Indemnified Party to so notify Borrower shall not limit or affect such
Indemnified Party's rights to be indemnified pursuant to this Section 6.5,
except to the extent such delay shall materially and adversely prejudice
Borrower's defense of such Claim. Upon receipt of such notice of Claim, Borrower
shall, at its sole cost and expense, diligently defend any such Claim with
counsel reasonably satisfactory to such Indemnified Party (it being understood
that counsel selected by Borrower's insurance carrier shall be deemed to be
acceptable to such Indemnified Party, provided that such insurer is an
acceptable insurer under this Agreement and the other Loan Documents or
otherwise was accepted by Lender as an insurer), which counsel may, without
limiting the rights of Indemnified Party pursuant to the next succeeding
sentence, also represent Borrower in such Claim. In the alternative, the
Indemnified Parties may elect to conduct their own defense through counsel of
their own choosing, and at the expense of Borrower, if (i) the Indemnified
Parties reasonably determine that the conduct of its defense by Borrower
presents a conflict or potential conflict between Borrower and Lender that would
make separate representation advisable or otherwise could be prejudicial to its
interests, (ii) Borrower refuses to defend or (iii) Borrower (or, if applicable,
its insurance carrier) shall have failed, in Lender's reasonable judgment, to
diligently defend the Claim. Except as provided in the preceding sentence,
Borrower shall not be responsible for the fees of counsel for any Indemnified
Party incurred in connection with the indemnification contained in this Section
6.5. Borrower may settle any Claim against Indemnified Parties without such
Indemnified Parties' consent, provided that (i) such settlement is without any
liability, cost or expense whatsoever to such Indemnified Parties, (ii) the
settlement does not include or require any admission of liability or culpability
by such Indemnified Parties under any Legal Requirement, whether criminal or
civil in nature, and (iii) Borrower obtains an effective written release of
liability for such Indemnified Parties from the party to the Claim with whom
such settlement is being made, which release must be reasonably acceptable to
such Indemnified Parties, and a dismissal with prejudice with respect to all
claims made by the party with whom such settlement is being made, with respect
to any pending legal action against such Indemnified Parties in connection with
such Claim. If the Indemnified Parties are conducting their own defense as
provided above, Borrower shall be responsible for any good faith settlement of
such Claim entered into by such Indemnified Parties, and such Indemnified
Parties shall not be required to obtain Borrower's consent to any such
settlement. Nothing contained herein shall be construed as requiring any
Indemnified Parties to expend funds or incur costs to defend any Claim in
connection with the matters for which such Indemnified Parties are entitled to
indemnification pursuant to this Section 6.5.
6.6 Notices. Any notice, report, demand or other instrument
authorized or required to be given or furnished ("Notices") shall be in writing
and shall be given as follows: (i) by hand delivery; (ii) by deposit in the
United States mail as first class certified mail, return receipt requested,
postage paid; (iii) by overnight nationwide commercial courier service; or (iv)
by telecopy transmission with a confirmation copy to be delivered by duplicate
notice in accordance with any of clauses (i) through (iii) above, in each case,
to the party intended to receive the same at the following address(es):
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Lender: Credit Suisse First Boston Mortgage
Capital LLC
Principal Transactions
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Re: Xxxx Xxxxxx/810 Seventh Avenue
Telecopier: (000) 000-0000
with a copy to: Credit Suisse First Boston Mortgage
Capital LLC
Legal & Compliance Department
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Re: Xxxx Xxxxxx/810 Seventh Avenue
Telecopier: (000) 000-0000
and
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopier: (000) 000-0000
(or any successor Servicer)
and
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
Borrower: c/o Tower Realty Trust, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
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with a copy to: Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier: (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 6.6. Notices shall be deemed to
have been given on the date they are actually received; provided, however, that
the inability to deliver Notices because of a changed address of which no Notice
was given, or rejection or refusal to accept any Notice offered for delivery
shall be deemed to be receipt of the Notice as of the date of such inability to
deliver or rejection or refusal to accept delivery. Notice for either party may
be given by its respective counsel. Additionally, notice from Lender may also be
given by Servicer.
6.7 No Oral Modification. Borrower recognizes that, in general,
borrowers who experience difficulties in honoring their loan obligations, in an
effort to inhibit or impede lenders from exercising the rights and remedies
available to lenders pursuant to mortgages, notes, loan agreements or other
instruments evidencing or affecting loan transactions, frequently present in
court the argument, often without merit, that some loan officer or administrator
of lender made an oral modification or made some statement which could be
interpreted as an extension or modification or amendment of one or more debt
instruments and that the borrower relied to its detriment upon such "oral
modification of the loan document." For that reason, and in order to protect
Lender from such allegations in connection with the transaction contemplated by
this Agreement, Borrower acknowledges that this Agreement, the Mortgage, the
Note and the other Loan Documents and all instruments referred to in any of them
can be extended, modified or amended only in a writing executed by Lender and
Borrower and that none of the rights or benefits of Lender can be waived
permanently except in a written document executed by Lender. Borrower further
acknowledges Borrower's understanding that no officer or administrator of Lender
has the power or the authority from Lender to make an oral extension or
modification or amendment of any such instrument or agreement on behalf of
Lender.
6.8 Assignment by Lender.
6.8.1 Assignment. Lender may assign (and thereafter, at any
time and from time to time, repurchase) all or a portion of its rights and
obligations under this Agreement and the other Loan Documents to one or more
Persons ("Assignees"; the term "Assignee" or "Assignees" shall, unless otherwise
expressly indicated, include Lender) and, with respect to any Assignee, be
released from its rights and obligations as Lender in respect of such portion of
the Loan, this Agreement and the other Loan Documents.
6.8.2 Participations. Lender and each of the other
Assignees may sell participations in the Loan to one or more Persons
(collectively, the "Participants"). Notwithstanding such sale, (i) the selling
party's obligations to Borrower under this Agreement and the other Loan
Documents shall remain unchanged by reason thereof, and (ii) the selling party
shall remain solely responsible to
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Borrower for the performance of such obligations. In order to assist Lender in
any sales of interests in the Loan, Borrower agrees for itself, and agrees to
cause General Partner and the Manager, to reasonably cooperate with Lender in
connection with any efforts by Lender to obtain one or more Assignees or
Participants, to provide additional information and to execute and deliver such
further documents, instruments or agreements, in each case, as Lender or any
Assignee or Participant may reasonably require.
6.8.3 Assignment and Acceptance. From and after the
effective date of any assignment to an Assignee, (i) such Assignee shall be a
party hereto and to each of the other Loan Documents to the extent of the
applicable percentage or percentages assigned to such Assignee and, except as
otherwise specified herein, shall succeed to the rights and obligations of
Lender hereunder in respect of such applicable percentage or percentages, and
(ii) Lender shall relinquish its rights and be released from its obligations
hereunder and under the Loan Documents to the extent of such applicable
percentage or percentages. The liabilities of Lender and each of the other
Assignees shall be separate and not joint and several. Neither Lender nor any
Assignee shall be responsible for the obligations of any other Assignee.
6.8.4 Other Business. Lender, each Assignee and each
Participant and their respective Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, Borrower, any Affiliate of Borrower, any of Borrower's
subsidiaries and any Person who may do business with or own interests in or
securities of Borrower or any such Affiliate or subsidiary, without any duty to
account therefor to each other.
6.8.5 Privity of Contract. This Agreement is being entered
into by Lender individually and as agent for all present and future Assignees,
and privity of contract is hereby created among Lender, all present and future
Assignees and Borrower.
6.8.6 Availability of Records. Borrower acknowledges and
agrees that Lender may provide to any Assignees or prospective Assignees, and
that Lender and each of the Assignees may provide to any Participants or
prospective Participants, originals or copies of this Agreement, all other Loan
Documents and all other documents, instruments, certificates, opinions,
insurance policies, letters of credit, reports, requisitions and other materials
and information of every nature or description, and may communicate all oral
information, at any time submitted by or on behalf of Borrower, General Partner,
the Manager, any other Significant Party or any Affiliate of any of the
foregoing.
6.9 Severability. In the event that any of the covenants, agreements,
terms or provisions contained in the Note, this Agreement, the Mortgage or any
other Loan Document shall be invalid, illegal or unenforceable in any respect,
the validity of the remaining covenants, agreements, terms or provisions
contained herein or in the Note, the Mortgage or any other Loan Document shall
be in no way affected, prejudiced or diminished thereby.
6.10 No Assignment by Borrower. Borrower shall not assign or transfer
any of its rights hereunder without the prior written consent of Lender. Any
assignment made without Lender's prior written consent shall be void.
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6.11 Governing Law. The place of negotiation, execution and delivery
of this Agreement is the State of New York. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York.
6.12 Successors and/or Assigns. Subject to the restrictions on
transfer and assignment contained in this Agreement and the other Loan
Documents, whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the permitted successors and/or
assigns of such party, and this Agreement shall inure to the benefit of and
shall be binding on the parties hereto and the successors and/or assigns of such
party.
6.13 Entire Contract. This Agreement and the other Loan Documents,
including all annexes, schedules and exhibits hereto and all other documents
furnished to Lender in connection with this Agreement and/or the Loan,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and thereof and shall supersede and take the place of any
other instruments purporting to be an agreement of the parties hereto relating
to the transactions contemplated hereby, including, without limitation, any
letter of intent or loan commitment letter.
6.14 Liability. If Borrower consists of more than one Person, the
obligations and liabilities of each such Person hereunder and under the other
Loan Documents shall be joint and several.
6.15 Counterparts; Headings. This Agreement may be executed in
counterparts, each of which shall constitute an original, and all of which, when
taken together, shall constitute but one instrument. The captions and headings
of the various sections of this Agreement are for purposes of reference only and
are not to be construed as confining or limiting in any way the scope or intent
of the provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular, and the
masculine, feminine and neuter shall be freely interchangeable.
6.16 Time of the Essence. Time is of the essence as to Borrower's
obligations under this Agreement and the other Loan Documents.
6.17 Consents.
6.17.1 No Subsequent Consent. Any consent or approval by
Lender in any single instance shall not be deemed or construed to be Lender's
consent or approval in any like matter arising at a subsequent date. Any consent
or approval requested of and granted by Lender pursuant hereto or to any of the
other Loan Documents shall be narrowly construed to be applicable only to
Borrower and to the matter identified in such consent or approval and no third
party shall claim any benefit by reason thereof. Wherever this Agreement, the
Mortgage, the Cash Management Agreement or any other Loan Document refers to the
consent or approval of Lender, or provides that any document or Person will be
satisfactory or acceptable to Lender or words of similar import, (i) such
consent or approval may be given or withheld by Lender, and such document or
Person must be satisfactory or acceptable to Lender, in its sole and absolute
discretion, unless otherwise expressly provided herein or therein, and (ii) such
consent or approval shall not be effective unless given in writing. Wherever
this Agreement, the Mortgage, the Cash Management Agreement or any other
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Loan Document refers to the provision of documents or other items being as
Lender may require, provides for the selection by Lender of any person to
provide reports or other items hereunder or thereunder or for the selection by
Lender of any means of determining any matter, or otherwise refers to terms and
conditions hereof or thereof being as Lender deems appropriate, any such
requirement, selection or determination of appropriateness shall be made by
Lender in its sole and absolute discretion, unless expressly provided otherwise
herein or therein. The foregoing provisions are intended to be effective whether
or not the applicable provision hereof or of any other Loan Document specifies
that the applicable consent, approval or other matter is to be determined by
Lender in its "sole and absolute discretion" or words of similar import.
6.17.2 Withholding of Consent. Wherever in this Agreement,
the Mortgage, the Cash Management Agreement or any other Loan Document,
reference is made to any consent or approval not being "unreasonably withheld"
or words of similar import, the same shall be deemed to include within its
meaning (unless expressly provided otherwise) that if such consent or approval
is to be granted, the same will occur within a commercially reasonable period of
time. If Borrower believes that Lender has improperly failed to grant its
consent or approval (or otherwise improperly failed to act as requested by
Borrower as described in Section 6.17.1 hereof (e.g., determined that a document
is not acceptable to Lender) hereunder or under the Mortgage, the Cash
Management Agreement or any other Loan Document (including, without limitation,
by failing to respond within a commercially reasonable period of time) where
such consent or approval is required to be given by (or such action which was
not taken is in breach of) the terms of this Agreement or such other Loan
Document, Borrower's sole remedy shall be to obtain declaratory relief in a
final, non-appealable judgment determining such withholding to have been
improper, whereupon such consent or approval shall be deemed given (or such
other action described in Section 6.17.1 hereof shall be deemed taken), and
Borrower hereby waives all claims for damages or set-off resulting from any
withholding of consent or approval (or failure to take any other action
described in Section 6.17.1 hereof) by Lender.
6.18 No Partnership. Nothing contained in this Agreement or the other
Loan Documents shall be deemed to create an equity investment in Borrower or the
Premises on the part of Lender or a joint venture or partnership between Lender
and Borrower, it being the intent of the parties hereto that only the
relationship of lender and borrower shall exist with respect to the Premises.
Borrower agrees that it shall report this transaction for income tax purposes,
and file all related tax returns, in a manner consistent with the form of this
transaction as a loan.
6.19 Waiver of Jury Trial. EACH OF BORROWER AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE 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, THE MORTGAGE, THE CASH MANAGEMENT
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF BORROWER,
MANAGING MEMBER OR LENDER RELATING TO THE LOAN AND/OR THE LENDING RELATIONSHIP
WHICH IS THE SUBJECT OF THIS AGREEMENT. THIS PROVISION IS
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A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
6.20 Limited Recourse. Notwithstanding anything to the contrary
contained in this Agreement or in any of the other Loan Documents, except as
provided otherwise in this Section 6.20, neither Borrower nor any direct or
indirect member, shareholder, partner, principal, Affiliate, employee, officer,
director, agent or representative of Borrower (each, a "Related Party") shall
have any personal liability for (i) the payment of any sum of money which is or
may be payable hereunder or under the Note or any other Loan Document,
including, but not limited to, the repayment of the Loan, or (ii) the
performance or discharge of any covenants, obligations or undertakings of
Borrower hereunder or under any Loan Document, and no monetary or deficiency
judgment shall be sought or enforced against Borrower or any Related Party with
respect thereto; provided, however, that a judgment may be sought against
Borrower or any Related Party to enforce the rights of Lender in, to or against
the Premises, including the Receipts and any other Collateral, and Lender shall
have full recourse to and the right to proceed against the Premises, the
Receipts and any other Collateral. Notwithstanding the foregoing, nothing
contained herein shall impair the validity of the Obligations or in any way
affect or impair the Lien of the Mortgage, or the right of Lender to enforce any
and all rights and remedies under and by virtue of the Note, this Agreement
and/or any other Loan Document (limited, however, as expressly provided
otherwise above), including, without limitation, naming Borrower as a party
defendant in any foreclosure action, or limit Lender from pursuing or seeking to
enforce the rights of Lender against any third parties, including any guarantor,
indemnitor or surety under any guaranty or indemnity delivered in connection
with this Agreement, the Note or any other Loan Document or otherwise in
connection with the Loan. Additionally, the provisions of this Section 6.20
shall not relieve Borrower from any personal liability for, and Borrower shall
be fully and personally liable for, (i) the full recourse obligation to pay the
Obligations upon the occurrence of any event set forth in the following clauses
(M) and/or (N), and (ii) any liabilities, costs, losses (including, without
limitation, any reduction in value of the Premises or any other Collateral, or
the loss of any such Collateral or Lender's security interest therein), damages,
expenses (including, without limitation, attorneys' fees and disbursements and
court costs, if any), or claims suffered or incurred by Lender (or any
Indemnified Party) by reason of or in connection with the occurrence of any
event set forth in any of the following clauses (A) through (N):
(A) any fraud or breach of trust by Borrower or any Related Party,
including by reason of any claim under the Racketeer Influenced and Corrupt
Organizations Act ("RICO");
(B) the misapplication of any insurance proceeds or condemnation
awards;
(C) the failure of Borrower or any Related Party to direct or pay
Receipts received by Borrower or any Related Party to the Clearing Account or
the Cash Collateral Account as and when required hereunder and under the Cash
Management Agreement;
(D) the misapplication by Borrower or any Related Party (or at any
such Person's direction) of monies held in or paid out from any account
(including any reserve or escrow) maintained under this Agreement, the Cash
Management Agreement or any of the other Loan Documents, including
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without limitation, monies paid to Borrower pursuant to Section 8 of the Cash
Management Agreement;
(E) any and all tenant security deposits held by Borrower not being
properly applied, returned to tenants when due or delivered to Lender, any
receiver or any Person purchasing the Premises at a foreclosure sale upon the
taking of possession of the Premises by Lender, such receiver or other Person as
provided herein;
(F) a breach by Borrower of any of the covenants contained in
Sections 4.2 or 4.8 hereof;
(G) wrongful removal or destruction of property constituting the
Premises or any intentional waste of the Premises by Borrower or a Related
Party;
(H) any Legal Requirement (including RICO) mandating the forfeiture
by Borrower of the Premises, or any portion thereof, because of the conduct or
purported conduct of criminal activity by Borrower or any Related Party in
connection therewith;
(I) any material misrepresentation, miscertification or breach of
warranty by Borrower with respect to any representation, warranty or
certification contained in this Agreement or any other Loan Document or in any
document executed in connection therewith, pursuant to any of the Loan Documents
or otherwise to induce Lender to make the Loan, or any advance thereof, or to
release monies from any account held by Lender (including any reserve or escrow)
or to take any other action with respect to any of the Collateral;
(J) a breach of any of the provisions of Article 8 hereof (if and to
the extent a substantive consolidation of Borrower and another Person occurs as
a result thereof);
(K) any damage or destruction of the Premises or any part thereof due
to fire or other casualty to the extent not covered by insurance required under
the Mortgage, but only to the extent the same would have been covered by
insurance if Borrower had obtained and maintained the insurance coverage
required under the Mortgage;
(L) the amount of any Lien voluntarily placed on the Premises by
Borrower (or any predecessor-owner of the Premises which is an Affiliate of
Borrower) which is prior to the Lien of the Mortgage against the Property;
(M) (1) Any Significant Party filing a voluntary petition under the
Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or
(2) any Affiliate of Borrower filing or joining in the filing of, an involuntary
petition against any Significant Party under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law, or (3) Any Significant Party
filing an answer consenting to or acquiescing in any involuntary petition filed
against it or against other Significant Party by any other Person under the
Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or
(4) any Affiliate of Borrower consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee or examiner
for any Significant Party
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or any portion of the Collateral, or (5) any Significant Party making an
assignment for the benefit of creditors, or admitting its insolvency or
inability to pay its debts as they become due; or
(N) Borrower or any Affiliate of Borrower contesting or in any way
interfering with, directly or indirectly (collectively, a "Contest"), any
foreclosure action, Uniform Commercial Code sale and/or deed in lieu of
foreclosure transaction commenced by Lender or with any other enforcement of
Lender's rights, powers or remedies under any of the Loan Documents or under any
document evidencing, securing or otherwise relating to any of the Collateral
(whether by making any motion, bringing any counterclaim, claiming any defense,
seeking any injunction or other restraint, commencing any action, seeking to
consolidate any such foreclosure or other enforcement with any other action, or
otherwise); provided, however, that Borrower shall not be so liable if a court
of competent jurisdiction determines that such Contest was brought in good faith
(even if such Contest was unsuccessful).
Nothing contained herein is intended to limit the obligations and
personal liability of the guarantors under any guaranty and the indemnitors
under any indemnity agreement, including, without limitation, the Environmental
Indemnification Agreement, executed by Borrower or any other Person for the
benefit of Lender.
6.21 Limitation on Liability. In no event shall Lender be liable to
Borrower for consequential damages, whatever the nature of a breach by Lender of
its obligations under this Agreement or any of the other Loan Documents and
Borrower, for itself and all Related Parties, hereby waives all claims for
consequential damages. Unless, within ninety (90) days after Borrower first has
actual knowledge of the occurrence of any event about which Borrower has a
dispute or claim, Borrower notifies Lender in writing of the general nature of
its dispute or claim, Borrower shall be deemed to have waived any and all rights
to raise such dispute or claim in any lawsuit, action or proceeding of any kind.
6.22 Jurisdiction, Venue, Service of Process. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE MORTGAGE OR ANY OTHER LOAN
DOCUMENT 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. BORROWER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. 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 BORROWER
AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 6.6 HEREOF. 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, THE MORTGAGE OR ANY OTHER LOAN DOCUMENT
BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
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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 BORROWER IN ANY OTHER JURISDICTION.
6.23 Appointment of Agent for Service of Process. Borrower hereby
designates Xxxxxxx X. Xxxxxxx, Esq. ("Designee") as its agent and
attorney-in-fact to accept service of process in any action or proceeding
arising under or in connection with this Agreement, the Mortgage and/or the
other Loan Documents. The foregoing designation is irrevocable and coupled with
an interest. If Designee is not personally available, process may be served upon
Designee by United States registered or certified mail, which service will be
effective five (5) days after mailing, to the address of Designee set forth
below:
c/o Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
6.24 Rule of Construction. This Agreement and the other Loan
Documents shall not be construed more strictly against one party than against
the other merely by virtue of the fact that it may have been prepared by counsel
for one of the parties, it being recognized that both Lender and Borrower have
contributed substantially and materially to the preparation of this Agreement
and the other Loan Documents.
6.25 Further Assurances.
(a) Borrower will, at its sole cost and expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, conveyances, notes, mortgages, assignments,
security agreements, financing statements and assurances as Lender shall from
time to time reasonably require or reasonably deem advisable (i) to carry into
effect the purposes of this Agreement and the other Loan Documents, (ii) for the
better assuring, conveying, mortgaging, assigning and confirming unto Lender of
all property and rights mortgaged, granted, bargained, alienated, confirmed,
pledged, hypothecated, conveyed or assigned by this Agreement or any of the
other Loan Documents or property intended now or hereafter to be, or which
Borrower may be or may hereafter become bound to convey or assign to Lender,
(iii) for facilitating the placement of a Loan Interest in a Loan Pool as
described in Section 6.27 hereof, (iv) for the perfection of any Lien or
security interest granted herein or in the other Loan Documents, and (v) for the
better assuring and confirming of all of Lender's rights, powers and remedies
hereunder and under the other Loan Documents. Borrower, on demand, will execute
and deliver, and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Lender in the Premises and
the other Collateral.
(b) Borrower forthwith upon the execution and delivery of this
Agreement and thereafter, from time to time, will cause the Mortgage and any
security instrument creating a Lien or security
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interest or evidencing the Lien of the Mortgage and the other applicable Loan
Documents upon the Premises or other property and each instrument of further
assurance to be filed, registered or recorded in such manner and in such places
as may be required by any present or future Legal Requirement in order to
publish notice of and fully to protect the Lien or security interest of, and the
priority of, each of the Mortgage and the other Loan Documents upon, and the
interest of Lender in, the Premises or other applicable property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
foregoing and all taxes, duties, assessments and charges of any Governmental
Authority arising out of or in connection with the execution and delivery of the
Mortgage, any other security instrument, any instrument of further assurance or
any other Loan Document. Upon Lender's request, Borrower shall, from time to
time, furnish Lender with evidence reasonably satisfactory to Lender that such
property is free of Liens and security interests (except as permitted
hereunder), including searches of applicable public records.
(c) Upon any failure by Borrower to do so, Lender may make, execute,
record, file, re- record or refile any and all such mortgages, instruments,
certificates and documents for and in the name of Borrower, and Borrower hereby
irrevocably appoints (which appointment is coupled with an interest and with
full power of substitution) Lender the agent and attorney-in-fact of Borrower to
do so, and Borrower shall reimburse Lender, on demand, for all costs and
expenses (including attorneys' fees) incurred by Lender in connection therewith.
Upon foreclosure, the appointment of a receiver or any other relevant action,
Borrower will, at the cost of Borrower and without expense to Lender, cooperate
fully and completely to effect the assignment or transfer of any Permit,
agreement or any other right necessary or useful to the operation of the
Premises and shall deliver to Lender all books and records relating to the
Premises.
6.26 Recitals. The Recitals set forth at the beginning of this
Agreement are hereby incorporated into the substantive provisions of this
Agreement.
6.27 Placement of Loan.
6.27.1 Loan Pool. Borrower acknowledges that Lender, any
Assignee or any Participant (each of Lender, any Assignee or any Participant, a
"Placement Party") may elect to place the Loan, or its participation interest in
the Loan, as the case may be (whichever of the Loan or such participation is to
be so placed, is called the "Loan Interest") in a pool of loans, participation
interests and/or notes secured by or dependent on the cash flow of mortgage
loans, which will constitute security for a rated securities offering (such pool
is called a "Loan Pool"; and such rated securities offering is called a
"Securitization").
6.27.2 Rating Agency Requirements. At the request of
Lender, Borrower will use its best efforts (but at the cost and expense of
Lender to the extent such cost or expense shall exceed $5,000, otherwise at the
cost and expense of Borrower) to satisfy the market standards to which Lender
customarily adheres or which may be required in the marketplace or by any Rating
Agency in order to enable a Placement Party to place a Loan Interest in a Loan
Pool, including, without limitation, to:
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(i) structure and maintain its organizational, operational
and financial affairs and those of its Affiliates (collectively, the
"Entities") as special-purpose bankruptcy remote entities to enable
its counsel to render a reasoned opinion customarily given in
securitization transactions that upon a petition for bankruptcy under
the Bankruptcy Code, none of an Entity as a debtor in possession, its
bankruptcy trustee or its creditors could cause a court to order the
substantive consolidation of the assets and liabilities of such
Entity with those of Borrower or General Partner, which counsel shall
be reasonably satisfactory to, and which opinions or memoranda shall
be satisfactory to, Lender and each Rating Agency;
(ii) provide such financial and other information with
respect to the Premises, the Manager and the Entities as may be
reasonably requested by Lender or any Rating Agency for annual rating
reviews, including, without limitation, occupancy statistics, average
rents and periodic and annual financial statements (including cash
flow statements) for the Premises (reviewed and, in the case of
annual financial statements, audited) by a firm of certified public
accountants reasonably acceptable to Lender and each Rating Agency
(Lender acknowledging that the Approved Accountant is an accounting
firm acceptable to Lender);
(iii) prepare and deliver such agreements and instruments
relating to the Note, the Loan Interest, the Premises and the
Entities, including (A) agreements to indemnify each Rating Agency,
Lender and any servicer or trustee (except to the extent that any
requested indemnification for any loss, claim, damage, cost, expense
or liability results solely from the negligent, or with respect to
Lender, grossly negligent acts or omissions by such indemnified party
in performing the duties, functions and activities undertaken by it
in connection with the placement of the Loan Interest in a Loan Pool,
including, without limitation, any failure by the indemnified party
or parties to comply with all applicable securities laws and
regulations), and (B) amendments of any of the Loan Documents that
are necessary to effect the placement of the Loan Interest in a Loan
Pool, as may be reasonably requested by, and in form and scope
reasonably satisfactory to, Lender and each Rating Agency; provided,
however, that such amendments shall not, without the consent of
Borrower, affect the terms and conditions of the Note or any other
material obligation of Borrower under the Loan Documents;
(iv) cause to be performed such site inspections,
appraisals, market studies, environmental reviews and reports (Phase
I assessments and, where appropriate, Phase II assessments),
engineering reports and other due diligence investigations of the
Premises customarily and reasonably requested by Lender or any Rating
Agency in connection with the placement of the Loan Interest in a
Loan Pool and the rating of any securities issued in connection
therewith;
(v) provide such business plans, budgets and title
insurance (including surveys) relating to the Premises as may be
reasonably requested by Lender or any Rating Agency;
(vi) cause counsel to render opinions as to "true sale" and
bankruptcy remoteness and other matters customary in securitization
transactions with respect to the Premises, the Entities, the Loan
Interest and the Loan Documents, which counsel shall be reasonably
satisfactory to, and which opinion shall be satisfactory to, Lender
and each Rating Agency;
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provided, however, that Borrower shall not be responsible for
providing a "true sale" opinion that relates solely to the sale by
Lender of the Loan or a Loan Interest into a Loan Pool; and
(vii) make the representations and warranties contained in
the Loan Documents as of the date of the closing of the transfer of
the Loan Interest and make such other representations with respect to
the Premises, the Entities, the Loan Interest and the Loan Documents
as are customarily provided in securitization transactions and as may
be reasonably requested by Lender or any Rating Agency in connection
with such closing.
6.27.3 Disclosure; Indemnification. At Lender's request, Borrower
shall cooperate with Lender's preparation of a private placement memorandum or
registration statement and amendments and supplements thereto (the "Disclosure
Document") to privately place or publicly distribute the Note or the Loan
Interest or securities issued in connection therewith in a manner that satisfies
the requirements of the Securities Act and applicable state Legal Requirements.
At the time of Lender's preparation of such Disclosure Document, Borrower shall
execute and deliver to Lender and any underwriter or placement agent an
instrument (a "Securitization Indemnification") (in form and substance
reasonably satisfactory to Lender) (i) certifying as to the veracity of all
written information that it supplied and which was incorporated in such
Disclosure Document, and (ii) indemnifying and holding each of them and any
Person who controls any of them, within the meaning of Section 15 of the
Securities Act or Section 70 of the Exchange Act (each, a "Securitization
Indemnified Party"), harmless against all costs, expenses and damages incurred
by any Securitization Indemnified Party as a result of any untrue statement of a
material fact made or supplied by Borrower as contained in such Disclosure
Document or the failure by Borrower (after receipt of a draft of the Disclosure
Statement) to specify for inclusion in the Disclosure Document any material fact
regarding Borrower (or any General Partner), the Premises or the Loan necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, but only to the extent that such statement
of material fact is made in reliance upon and in conformity with written
information Borrower furnished for use therein or the omission of such a
material fact is based upon Borrower's failure to specify such material fact or
upon Borrower's furnishing inaccurate information that shows that such material
fact is not material. If Lender (or a placement agent or underwriter acting on
behalf of Lender) shall deliver a draft of the Disclosure Document to Borrower
for its review, Borrower shall provide Lender (or the placement agent or
underwriter acting on behalf of Lender) with its comments, if any, on such
Disclosure Document as soon as practicable, but in all events within fifteen
(15) days after receipt thereof, in the case of the first draft of such
Disclosure Document, and within three (3) Domestic Business Days after receipt
of any subsequent draft of such Disclosure Document. If, in connection with such
review, Borrower advises Lender of the existence of a fact regarding Borrower
(or any General Partner), the Premises or the Loan and advises Lender that it
deems such fact material, Lender shall include such fact in the Disclosure
Document or shall waive the rights of the Indemnified Parties with respect to
such fact. Upon receipt of the Securitization Indemnification, Lender shall
execute and deliver to Borrower an instrument (in form and substance reasonably
satisfactory to Borrower) indemnifying and holding Borrower harmless against all
costs, expenses and damages incurred by it as a result of the preparation or
distribution of, and any untrue statement of a material fact contained in, such
Disclosure Document or the failure to include therein any material fact in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; provided, however, that such
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indemnification shall not apply if any such costs, expenses or damages arise out
of or are based upon an untrue statement of a material fact or an omission to
state a material fact in such Disclosure Document made in reliance upon and in
conformity with written information furnished by Borrower expressly for use
therein or (after receipt of a draft of the Disclosure Statement) the omission
of a material fact concerning Borrower (or any General Partner), the Premises or
the Loan (other than the express terms of the Loan Documents) necessary to make
the statements in the Disclosure Statement not misleading. Borrower shall notify
Lender if it is necessary to amend or supplement such Disclosure Document at any
time in order that such Disclosure Document does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Lender shall prepare as soon as may be
reasonably practicable an amendment or supplement to such Disclosure Document
correcting such statement or omission. At the request of Lender, in connection
with any sale of the Note or any Loan Interest, Borrower shall confirm, as of
the date of such sale, that such Disclosure Document, as it may be so amended or
supplemented, does not contain any untrue statement of a material fact
concerning Borrower, any General Partner, the Premises or the Loan or omit to
state a material fact concerning Borrower, any General Partner, the Premises or
the Loan necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.27.4 Trustee. It is expressly understood hereunder that
in connection with the placement of any Loan Interest in a Loan Pool, Lender
intends to transfer the Loan Interest to a trustee which shall hold such Loan
Interest for the benefit of the holders of the interests in the Loan Pool. In
connection therewith, Borrower shall execute and deliver or cause to be executed
and delivered, all such additional instruments, and do, or cause to be done, all
such additional acts as (i) may be necessary or proper to carry out such
transfer, including, without limitation, the delivery of such instruments and
documents, including assignments of mortgage (and similar documents),
assignments of Loan Documents, re-certifications of surveys with respect to the
Premises, and the delivery of such mortgagee's title insurance endorsements in
favor of the trustee as may be required to confirm and/or evidence the transfer
to the trustee of the title insurance issued to Lender in respect of the
Premises or the Mortgage, including payment of all fees, title insurance
premiums and other insurance premiums, and/ or (ii) Lender may reasonably
request.
6.27.5 Information Access. Lender shall be permitted to
share any information provided by Borrower pursuant to this Section 6.27 in
connection with the placement of a Loan Interest in a Loan Pool with the
investment banking firms, each Rating Agency, accounting firms, law firms and
other third-party advisory firms involved with any transfer of the Loan, the
Loan Documents or the applicable Securitization. It is understood that the
information provided by Borrower to Lender may ultimately be incorporated into
the offering documents for the Securitization and thus various investors may
also see some or all of the information.
6.27.6 Timing of Transfer or Placement. Borrower
acknowledges that any transfer of the Loan or the placement of a Loan Interest
in a Loan Pool may occur at any time during the term of this Agreement and the
provisions of this Section 6.27 shall be applicable throughout the Term.
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ARTICLE 7
SPECIAL PROVISIONS
7.1 Tax, Insurance and Air Rights Lease Escrow. In order to assure
the payment of Taxes, premiums with respect to all insurance coverage required
pursuant to Section 7 of the Mortgage (collectively, "Insurance Premiums") and
Air Rights Lease Rentals as and when the same shall become due and payable, the
following provisions shall apply:
7.1.1 Tax, Insurance and Air Rights Lease Deposits. On the
date hereof, $318,333.33 of the Loan proceeds advanced to Borrower shall be
deposited with Lender for deposit into the Tax, Insurance and Air Rights Lease
Escrow Subaccount (and shall constitute part of the Outstanding Principal
Balance) and shall be pledged to Lender as additional Collateral, all as more
particularly described in the Cash Management Agreement. Thereafter, on each
Payment Date, Borrower shall pay to Lender, in immediately available funds for
deposit into the Tax, Insurance and Air Rights Lease Escrow Subaccount, an
amount equal to one-twelfth (1/12) of the Taxes, Insurance Premiums and Air
Rights Lease Rentals to become due during the period commencing on the first day
of the first month following such Payment Date and ending twelve (12) months
following such first day. In all cases there must be paid hereunder, to be
deposited and held in the Tax, Insurance and Air Rights Lease Escrow Subaccount,
an amount sufficient to pay such Taxes, Insurance Premiums and Air Rights Lease
Rentals one month prior to the date when they are due and payable. The amounts
of all of the foregoing deposits with respect to Taxes, Insurance Premiums and
Air Rights Lease Rentals together with all interest accruing thereon from time
to time, being (herein collectively called "Tax, Insurance and Air Rights Lease
Deposits") shall be determined by Lender based on actual invoices, or if such
invoices are not available, based on one hundred and five percent (105%) of the
cost of the prior year's Taxes, Insurance Premiums and Air Rights Lease Rentals.
Borrower shall promptly, upon the demand of Lender, make additional Tax,
Insurance and Air Rights Lease Deposits as Lender may from time to time require
due to (i) failure of Borrower to make Tax, Insurance and Air Rights Lease
Deposits in previous months, (ii) underestimation of the amounts of Taxes,
Insurance Premiums and/or Air Rights Lease Rentals, (iii) the particular due
dates and amounts of Taxes, Insurance Premiums and/or Air Rights Lease Rentals,
or (iv) application of the Tax, Insurance and Air Rights Lease Deposits pursuant
to this Agreement. All Tax, Insurance and Air Rights Lease Deposits shall be
held by Lender in the Tax, Insurance and Air Rights Lease Escrow Subaccount and
invested and applied as provided in the Cash Management Agreement.
7.1.2 Payment of Taxes, Insurance Premiums and Air Rights
Lease Rentals. Provided that no Event of Default has then occurred and is
continuing, Lender will, out of the funds in the Tax, Insurance and Air Rights
Lease Escrow Subaccount (provided such funds are sufficient for such purpose),
upon the presentation to Lender by Borrower of the bills therefor, pay the
Taxes, Insurance Premiums and Air Rights Lease Rentals or will, upon the
presentation of official receipted bills therefor, reimburse Borrower for such
payments made by Borrower. If the total funds on deposit in the Tax, Insurance
and Air Rights Lease Escrow Subaccount shall not be sufficient to pay all of the
Taxes, Insurance Premiums and Air Rights Lease Rentals when the same shall
become due, then Borrower shall pay to Lender on demand the amount necessary to
make up the deficiency.
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Lender shall be entitled, without request of Borrower, but, prior to an Event of
Default upon two (2) Domestic Business Days notice to Borrower, to apply any
funds in the Tax, Insurance and Air Rights Lease Escrow Subaccount to the
payment of any Taxes (other than any Taxes which Borrower has notified Lender
that it is contesting and such contest is then permitted under the Mortgage),
Insurance Premiums and/or Air Rights Lease Rentals which have become due and
have not yet been paid. Borrower and Lender acknowledge and agree that Borrower
shall not be in default under the Mortgage for failure to pay Taxes, Insurance
Premiums and/or Air Rights Lease Rentals, if such failure arises by reason of
Lender's failure to comply with its agreement contained in this Section 7.1.2.
7.1.3 Application upon Event of Default. Upon the
occurrence and during the continuance of an Event of Default, Lender may, at its
option, without being required to do so, apply any Tax, Insurance and Air Rights
Lease Deposits on hand to pay Taxes, Insurance Premiums or Air Rights Lease
Rental or to pay principal, interest and other amounts payable to Lender
hereunder or under the other Loan Documents, all in such order and manner as
Lender, in its sole discretion, may elect. When the principal and interest under
the Note and all prepayment premiums, if any, in connection therewith and all
other Obligations have been fully and properly paid, any remaining Tax,
Insurance and Air Rights Lease Deposits shall be returned to Borrower.
7.1.4 Reliance. Lender shall be absolutely entitled to rely
on any statements of any Governmental Authority with respect to Taxes and any
statement of Borrower's insurance carrier or its agent with respect to Insurance
Premiums.
7.1.5 Intentionally Omitted.
7.1.6 No Third Party Beneficiary. No provision of this
Agreement, the Mortgage or any other Loan Document shall be construed as
creating in any party other than Borrower and Lender (and Servicer), any rights
in and to the Tax, Insurance and Air Rights Lease Deposits or any rights to have
the Tax, Insurance and Air Rights Lease Deposits applied to payment of Taxes,
Insurance Premiums and/or Air Rights Lease Rentals. Lender shall have no
obligation or duty to any third party to collect or apply Tax, Insurance and Air
Rights Lease Deposits.
7.2 Receipts.
7.2.1 Deposits into Clearing Account. After the occurrence
of an Event of Default and thereafter throughout the term, within one (1)
Domestic Business Day of receipt by or on behalf of Borrower, all Receipts from
the Premises shall be deposited into the Clearing Account, for credit to the
Cash Collateral Account in accordance with the terms of the Cash Management
Agreement. The terms, covenants and conditions of the Cash Management Agreement
are hereby incorporated herein by reference.
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7.2.2 Application of Receipts.
(a) Unless and until the occurrence of an Event of Default,
on each Payment Date, Borrower shall apply all Receipts (which, for purposes of
this Section 7.2.2, shall include the sum of all Excluded Revenue Items)
received by or on behalf of Borrower during the previous calendar month in the
following order of priority:
(i) first, to Lender, in payment of the Tax, Insurance and
Air Rights Lease Deposits due on such date;
(ii) second, to Lender, in payment of (w) all interest due
to Lender on such date in accordance with Section 2.4.1 hereof, then
(x) any principal payment due on such date, including all prepayments
required or permitted under any Loan Documents, and then (y) the
Servicing Fee due on such date in accordance with Section 2.11
hereof, and then (z) any other amount payable on such date to Lender
or Servicer pursuant to this Agreement or any of the other Loan
Documents including, without limitation, pursuant to Section 2.5
hereof;
(iii) third, to Borrower, for the payment of Expenses in
accordance with the applicable Approved Budget (other than Taxes,
Insurance Premiums and Air Rights Lease Rentals to be paid for out of
the Tax, Insurance and Air Rights Lease Escrow Subaccount) or such
other Expenses as shall have been approved by Lender (such Receipts
as remain after application of Receipts in accordance with items (i)
and (ii) above and this item (iii), the "Remaining Receipts"); and
(iv) finally, subject to Section 7.2.2(b) hereof, to
Borrower, the Remaining Receipts, to be used by Borrower for any
purpose determined by Borrower.
(b) Notwithstanding anything to the contrary contained herein, upon
the occurrence and during the continuance of an Event of Default, Servicer shall
apply Receipts in any manner permitted under the Cash Management Agreement,
including, without limitation, applying any portion of Receipts to all or any
portion of the outstanding Obligations, and in no event shall Borrower be
entitled to receive any of the Remaining Receipts.
(c) Lender and Borrower hereby acknowledge and agree that Borrower
shall remain liable for the payment of all amounts due under clauses (i), (ii)
and (iii) of Section 7.2.2(a) hereof whether or not sufficient Receipts exist to
satisfy the same.
ARTICLE 8
SINGLE PURPOSE ENTITY/SEPARATENESS
8.1 Representations, Warranties and Covenants. Borrower represents,
warrants and covenants as of the date hereof and until such time as the Loan and
all other amounts payable under any of the Loan Documents are paid in full,
that:
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(i) neither Borrower, General Partner nor Managing Member
shall enter into any transaction of acquisition, merger,
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), create any
subsidiaries, or acquire by purchase or otherwise all or
substantially all the business or assets of, or stock or other
evidences of beneficial ownership of, or make any investment in, any
Person, or make any material change in its present method of
conducting business or amend the terms of their respective
Organizational Documents;
(ii) neither Borrower, General Partner nor Managing Member
is contemplating either the filing of a petition by such Person under
any state or federal bankruptcy or insolvency laws or the liquidation
of all or a major portion of such Person's assets or property, and
Borrower has no knowledge (after due inquiry) of any Person
contemplating the filing of any such petition against it, General
Partner or Managing Member;
(iii) except with respect to a Person which is (i) General
Partner, in the ordinary course of such Person acting as General
Partner, or (ii) Managing Member, in the ordinary course of such
Person acting as Managing Member, none of Borrower, General Partner
nor Managing Member has, and no such Person will, guarantee or
otherwise hold out its credit as being available to satisfy
obligations of any other Person;
(iv) Borrower was organized for the sole purpose of owning,
managing and operating the Premises and activities ancillary thereto,
General Partner was organized for the sole purpose of acting as the
General Partner of Borrower and Managing Member was organized for the
sole purpose of acting as the Managing Member of General Partner;
(v) Borrower has not, and will not, engage in any business
unrelated to the ownership, management and operation of the Premises
and activities ancillary thereto and will conduct and operate its
business as presently conducted and operated. General Partner has
not, and will not, engage in any business unrelated to acting as the
General Partner of Borrower. Managing Member has not, and will not,
engage in any business unrelated to acting as the Managing Member of
General Partner;
(vi) none of Borrower, General Partner or Managing Member
will enter into any contract or agreement with any member, partner,
principal, shareholder or Affiliate of Borrower, General Partner or
Managing Member, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be
available on an arms-length basis with unrelated third parties;
(vii) in addition to any limitations with respect thereto
contained in Section 4.4 hereof, none of Borrower, General Partner or
Managing Member have incurred, and will not incur, any Indebtedness
or material liabilities, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Indebtedness
permitted under Section 4.4 hereof; provided, however, that no such
Indebtedness or liabilities (other than the Loan) may be secured
(senior, subordinate or pari passu) by the Premises or any portion
thereof, except as expressly permitted in said Section 4.4 hereof;
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(viii) none of Borrower, General Partner or Managing Member
has made, nor will they make, any loans or advances to any third
party (including any Affiliate of Borrower) and will not pledge its
assets for the benefit of any third party (including any Affiliate of
Borrower);
(ix) each of Borrower, General Partner and Managing Member
is and will be solvent and will pay its debts and liabilities
(including employment and overhead expenses) from its own assets as
the same shall become due;
(x) each of Borrower, General Partner and Managing Member
will maintain its own separate books and records and bank accounts,
in each case which are and will be separate and apart from those of
any other Person;
(xi) each of Borrower, General Partner and Managing Member
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), shall maintain and utilize separate
stationery, invoices and checks, shall otherwise conduct its business
and own its assets in its own name, and shall correct any known
misunderstanding regarding its separate identity;
(xii) each of Borrower, General Partner and Managing Member
has and will maintain separate financial statements and will file its
own tax returns;
(xiii) each of Borrower, General Partner and Managing
Member 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;
(xiv) none of Borrower, General Partner or Managing Member
will seek the dissolution or winding up, in whole or in part, of any
such Person;
(xv) none of Borrower, General Partner or Managing Member
will commingle its funds or other assets with those of any Affiliate
or other Person;
(xvi) each of Borrower, General Partner and Managing Member
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;
(xvii) each of Borrower, General Partner and Managing
Member has and will maintain a reasonable number of employees in
light of its contemplated business operations and shall pay the
salaries of its employees, and will not do any act which would make
it impossible to carry on the ordinary business of such Person;
(xviii) none of Borrower, General Partner or Managing
Member will file or consent to the filing of a petition for
bankruptcy, reorganization, assignment for the benefit of creditors
or similar proceeding under any federal or state bankruptcy,
insolvency, reorganization or other similar law with respect to
Borrower, General Partner or Managing
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Member , without (A) if such Person shall be a limited liability
company, without the unanimous consent of its members, (B) if such
Person shall be a partnership, the unanimous consent of its limited
partners and general partners, or (C) if such Person shall be a
corporation, the unanimous consent of its directors;
(xix) the sole assets of Borrower are, and for the Term
shall be, (A) the fee interest in the Premises, (B) such assets as
are otherwise acquired in connection with the use, operation,
maintenance, repair or management of the Premises, and (C) cash and
accounts receivable;
(xx) each of Borrower, General Partner and Managing Member
has and will observe all partnership formalities, limited liability
company formalities or corporate formalities, as applicable;
(xxi) Borrower, General Partner and Managing Member have
not and will not acquire the obligations or securities of any of
their partners, members or shareholders, as applicable;
(xxii) Borrower, General Partner and Managing Member shall
each allocate fairly and reasonably any overhead for any office space
which such entity shares with any other entity;
(xxiii) Borrower, General Partner and Managing Member will
at all times comply, with each of the representations, warranties,
and covenants contained in this Article 8; and
(xxiv) Managing Member shall, at all times while any of the
Obligations remain outstanding and for a period of three hundred
sixty six (366) days thereafter, have an Independent Director, whose
vote shall be required as set forth in the Organizational Documents
of Borrower, General Partner and Managing Member as existing on the
date hereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of Borrower and Lender have executed and
delivered this Agreement or caused its duly authorized representative to execute
and deliver the same as of the day and year first above written.
LENDER:
CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC
By: /s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Authorized Signatory
BORROWER:
000 0XX XXXXXX, X.X., x
Xxx Xxxx limited partnership
By: 000 0xx Xxxxxx XX LLC, a
Delaware limited liability company, its
General Partner
By: Tower QRS NO. 5 Corp., a Delaware corporation,
its Managing Member
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
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SCHEDULE A - continued
SCHEDULE A
LOT 38:
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northerly side of West 52nd Street opposite the
center of a certain party wall standing partly on the premises and partly on the
premises adjoining on the easterly side thereof, which point is distant 74 feet
4 inches westerly from the northwesterly corner of Xxxxxxx Xxxxxx xxx Xxxx 00xx
Xxxxxx; and
RUNNING THENCE northerly parallel with the westerly side of Seventh Avenue and
for part of the distance through the center of said party wall, 75 feet 5
inches;
THENCE easterly and parallel with the said northerly side of West 52nd Street,
74 feet 3-3/4 inches to the westerly side of Seventh Avenue;
THENCE northerly along the said westerly side of Seventh Avenue, 125 feet 5
inches to the corner formed by the intersection of the said westerly side of
Seventh Avenue and the southerly side of West 00xx Xxxxxx;
THENCE westerly along the said southerly side of West 53rd Street, 195 feet
2-3/8 inches to the intersection of the said southerly side of West 00xx Xxxxxx
and the easterly side of Broadway;
THENCE southerly along the said easterly side of Broadway, 126 feet 1-1/2 inches
more or less, to a point in a line parallel to the northerly side of West 52nd
Street, 75 feet 5 inches northerly therefrom measured on a line at right angles
to the northerly side of West 52nd Street;
THENCE easterly parallel with the said northerly side of West 52nd Street, 69
feet 11 inches;
THENCE southerly at right angles to the said northerly side of West 52nd Street,
75 feet 5 inches to the said northerly side of West 52nd Street; and
THENCE easterly along the said northerly side of West 52nd Street, 37 feet 7
inches to the point or place of BEGINNING.
SCHEDULE A - continued
AIR RIGHTS LOT 29 LEASE:
The Air Rights Lot 29 Lease covers premises more particularly bounded and
described as follows:
ALL that certain lot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York bounded and described
as follows:
BEGINNING at a point formed by the intersection of the northerly side of West
52nd Street with the westerly side of Seventh Avenue; and
RUNNING THENCE westwardly along the northerly side of West 52nd Street, 74 feet
4 inches to a point opposite the center line of a 16 inch party wall;
THENCE northwardly parallel with Seventh Avenue and part of the distance through
the center of said party wall, 75 feet 5 inches;
THENCE eastwardly parallel with West 52nd Street, 74 feet 4 inches to the
westerly side of Seventh Avenue; and
THENCE southwardly along the westerly side of Seventh Avenue, 75 feet 5 inches
to the point or place of BEGINNING.
SCHEDULE A - continued
AIR RIGHTS LOT 131 LEASE:
The Air Rights Lot 131 Lease covers premises more particularly bounded and
described as follows:
ALL that certain lot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York, bounded and described
as follows:
BEGINNING at the corner formed by the intersection of the northerly side of 00xx
Xxxxxx with the easterly side of Broadway as now laid down;
RUNNING THENCE easterly along the northerly side of 52nd Street, 61 feet 10
inches to the center line of the westerly wall of building erected in the
premises adjoining on the east of the premises hereby described;
RUNNING THENCE northerly parallel with the westerly side of Seventh Avenue and
along said line of said wall and a line in prolongation thereof, 75 feet 5
inches;
RUNNING THENCE westerly parallel with the northerly side of 52nd Street, 69 feet
11 inches to the said easterly side of Broadway; and
RUNNING THENCE southerly along the easterly side of Broadway, 75 feet 11 inches
to the point or place of BEGINNING.
BE said several distances and dimensions more or less.
SCHEDULE A-2
Air Rights Lease over Lot 29
That certain Lease dated March 28, 1967 by and between Xxxxx Xxxxxxx, as lessor
and Xxxxxxx Xxxxxx, as lessee, a memorandum of which was recorded on May 29,
1967 in the City Register's Office, New York County (the "Register's Office") in
Record Liber 185, page 27.
WITH RESPECT THERETO:
a. Agreement between Xxxxxxx Xxxxxx and Xxxxx Xxxxxxx, dated
March 28, 1967 and recorded May 29, 1967 in the Register's
Office in Record Liber 185, Page 144.
b. Assignment of Lease made by Xxxxxxx Xxxxxx to Croydon
Office Building, Inc., dated February 21, 1969 and recorded
February 26, 1969 in the Register's Office in Reel 132,
Page 394.
c. Assignment of Lease made by Croydon Office Building, Inc.
to Xxxxxxx Xxxxxx, dated February 21, 1969 and recorded
February 26, 1969 in the Register's Office in Reel 132,
Page 583.
d. Assignment of Lease made by Xxxxxxx Xxxxxx to Croydon
Office Building, Inc., dated September 9, 1969 and recorded
September 12, 1969 in the Register's Office in Reel 150,
Page 1951.
e. Assignment of Lease made by Croydon Office Building, Inc.
to Xxxxxxx Xxxxxx, dated September 10, 1969 and recorded
September 16, 1969 in the Register's Office in Reel 151,
Page 425.
f. Assignment of Lease made by Xxxxxxx Xxxxxx and Xxxxxx
Xxxxxx, as Trustees of the Trust under Article Fifth of the
Will of Xxxxxxx Xxxxxx, and Xxx Xxxxxx to 000 Xxxxxxx
Xxxxxx LLC, dated September 22, 1995 and recorded December
15, 1995 in the Register's Office in Reel 2271, Page 2237.
g. Assignment of Air Rights Lease from 000 Xxxxxxx Xxxxxx LLC
to 810 Partners, LLC, dated October 23, 1997 and to be
recorded in the Register's Office.
h. Assignment of Air Rights Lease from 810 Partners, LLC to
000 0xx Xxxxxx, L.P., dated December ____, 1997 and to be
recorded in the Register's Office.
Schedule A-2 - Page 1
Air Rights Lease over Lot 29 Continued
That certain Sublease dated October 19, 1955 by and between Xxxxx Xxxxxxx, as
lessor and 800 Estates Corp., as lessee, which lease was recorded on November 2,
1955 in the City Register's Office, New York County (the "Register's Office") in
Record Liber 4940, Page 609.
WITH RESPECT THERETO:
A. Agreement between Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx and 800
Estates Corp., dated March 28, 1967 and recorded May 29,
1967 in the Register's Office in Record Liber 185, Page 30.
B. Agreement between Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx and 800
Estates Corp., dated March 28, 1967 and recorded May 13,
1981 in the Register's Office in Reel 566, Page 1.
C. Amendment of Lease dated March 28, 1967 by and between 800
Estates Corp. and Xxxxxxx Xxxxxx.
D. Assignment of Lease made by 800 Estates Corp. to Tydel
Holding Corp., dated May 5, 1981 and recorded May 22, 1981
in the Register's Office in Reel 567, page 506.
E. Amendment to Lease made by and between Xxxxxxx Xxxxxx and
Xxxxxx X. Xxxxx, as Trustees under Article Fifth of the
Last Will and Testament of Xxxxxxx Xxxxxx, and Xxxxxxx
Xxxxxx and Xxxxxx X. Xxxxx, as Trustees under Article Ninth
of the Last Will and Testament of Xxxxxxx Xxxxxx, and Tydel
Holding Corp., dated April 17, 1986 and recorded May 28,
1986 in the Register's Office in Reel 1069, page 817.
Schedule A-2 - Page 2
Air Rights Lease over Lot 131
That certain Lease dated April 10, 1968 by and between Chatham Associates, Inc.,
as landlord and Xxxxxxx Xxxxxx, as tenant, which lease was recorded on April 11,
1968 in the City Register's Office, New York County (the "Register's Office") in
Record Liber 294, Page 49.
WITH RESPECT THERETO:
a. Amendment of Lease made between Chatham Associates, Inc.
and Xxxxxxx Xxxxxx, dated as of February 13, 1969 and
recorded February 25, 1969 in the Register's Office in Reel
132, Page 171.
b. Assignment of Lease made by Xxxxxxx Xxxxxx to Croydon
Office Building, Inc., dated February 21, 1969 and recorded
February 26, 1969 in the Register's Office in Reel 132,
Page 390.
c. Assignment of Lease made by Croydon Office Building, Inc.
to Xxxxxxx Xxxxxx, dated February 21, 1969 and recorded
February 26, 1969 in the Register's Office in Reel 132,
Page 587.
d. Subordination and Non-disturbance Agreement made between
Xxxxxxxxx and Xxxxxxxxx, Inc., Chatham Associates, Inc. and
Xxxxxxx Xxxxxx, dated February 26, 1969 and recorded
February 28, 1969 in Reel 132, page 1276.
e. Assignment of Lease made by Xxxxxxx Xxxxxx to Croydon
Office Building, Inc., dated September 9, 1969 and recorded
September 12, 1969 in the Register's Office in Reel 150,
Page 1947.
f. Assignment of Lease made by Croydon Office Building, Inc.
to Xxxxxxx Xxxxxx, dated September 10, 1969 and recorded
September 16, 1969 in the Register's Office in Reel 151,
Page 421.
g. Assignment of Lease made by Xxxxxxx Xxxxxx and Xxxxxx
Xxxxxx, as Trustees of the Trust under Article Fifth of the
Will of Xxxxxxx Xxxxxx, and Xxx Xxxxxx to 000 Xxxxxxx
Xxxxxx LLC, dated September 22, 1995 and recorded December
15, 1995 in the Register's Office in Reel 2271, page 2237.
h. Assignment of Air Rights Lease from 000 Xxxxxxx Xxxxxx LLC
to 810 Partners, LLC, dated October 23, 1997 and to be
recorded in the Register's Office.
i. Assignment of Air Rights Lease from 810 Partners, LLC to
000 0xx Xxxxxx, L.P., dated December __, 1997 and to be
recorded in the Register's Office.
Schedule A-2 - Page 3
SCHEDULE B
Contracts
None.
SCHEDULE C
Leases
SCHEDULE D
Litigation
None.
SCHEDULE E
Contingent Liabilities
None.
