AMENDED AND RESTATED LOAN AGREEMENT
AMENDED AND RESTATED LOAN AGREEMENT (as the same may be
amended or otherwise modified from time to time, this "Agreement") dated as of
October 12, 2000, among CORPORATE REALTY INCOME FUND I, L.P., a Delaware limited
partnership ("Borrower"); FLEET NATIONAL BANK, a national banking association
and successor by merger to Fleet Bank, National Association, in its capacity as
agent for itself and Lenders (as hereinafter defined) ("Agent"); and the Lenders
from time to time parties hereto ("Lenders").
RECITAL
WHEREAS, Borrower and Agent (in its capacity as a Lender) are
parties to a Loan Agreement dated as of September 26, 1996, as amended by First,
Second and Third Amendments thereto dated as of December 6, 1996, March 17, 1997
and September 25, 1998, respectively (as so amended, the "Original Loan
Agreement"), pursuant to which the Agent (in its capacity as Lender) and others
agreed to make available to the Borrower certain credit facilities;
WHEREAS, pursuant to the Original Loan Agreement, Agent
assigned a portion of its interest in the Loan (made under the Original Loan
Agreement) to First American Bank Texas, SSB ("FABT") and The Travelers
Insurance Company ("Travelers");
WHEREAS, prior to the date hereof, Agent, in its capacity as a
Lender, acquired the interests of FABT under the Original Loan Agreement;
WHEREAS, simultaneously herewith, Agent, in its capacity as a
Lender, is acquiring all of the interests of Travelers under the Original Loan
Agreement; and
WHEREAS, the parties hereto desire to amend and restate the
Original Loan Agreement in its entirety subject to the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Original Loan Agreement is hereby amended and restated to read
in its entirety as follows:
ARTICLE I.
THE LOAN
1.01 Loan. By and subject to the terms of this Agreement and each
other document identified on EXHIBIT A hereto as a Loan Document (this
Agreement, such other document(s), and such amendments thereto as may hereafter
be made from time to time, are herein collectively called the "Loan Documents"),
Lenders agree to loan Borrower up to (the "Loan Commitment") the principal sum
of TWENTY-FIVE MILLION AND 00/100THS DOLLARS ($25,000,000) ("Loan"). On the date
hereof, the sole Lender is Fleet National Bank.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to
Agent and Lenders as of the date hereof and continuing thereafter:
2.01 Authority. To the best of Borrower's knowledge, Borrower has
complied with all laws and regulations concerning its organization, existence
and transaction of business.
2.02 Enforceability. Borrower is authorized to execute, deliver
and perform its obligations under the Loan Documents, and the Loan Documents are
the legal, valid and binding obligations of Borrower, enforceable in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, reorganization, insolvency or similar laws generally affecting the
enforcement of creditor's rights and by generally applicable principles of
equity. Borrower has, as of the date of this Agreement, no cause of action at
law or in equity, including, without limitation, any offset, counterclaim or
deduction, against Agent or Lender with respect to the Loan Documents, and to
the extent that any such cause of action, defense, counterclaim or offset exists
without Borrower's knowledge, the same is hereby waived to the fullest extent
allowed by law. Each of the Loan Documents, including the Environmental
Compliance and Indemnification Agreement dated September 26, 1996, is hereby
ratified and confirmed.
2.03 No Violation. To the best of Borrower's knowledge, Borrower's
undertakings under the Loan Documents do not violate any applicable statute,
law, regulation or ordinance or any order or ruling of any court or governmental
entity, or conflict with, or constitute a breach or default under, any agreement
by which Borrower, or any of its assets, is bound or regulated. To the best of
Borrower's knowledge, Borrower is not in violation of any statute, law,
regulation or ordinance, or of any order of any court or governmental entity.
There are no claims, actions or proceedings pending or, to Borrower's knowledge,
threatened against Borrower which, in either event, would impair the ability of
Borrower to perform its obligations under the Loan Documents.
2.04 Financial Information. All financial information delivered to
Agent with respect to Borrower, including, without limitation, financial
information relating to the Projects, fairly and accurately represents
Borrower's financial condition and the financial condition of the Projects (in
each instance as of the date thereof) and, in the case of the annual financial
statements of Borrower, has been prepared in accordance with generally accepted
accounting principles consistently applied, unless otherwise noted in such
information. No material adverse change in such financial condition has
occurred.
2.05 Accuracy. All reports, documents, instruments and information
delivered to Agent concerning the Loan, any of Borrower's assets or required by
the Loan Documents are accurate, correct and sufficiently complete to give Agent
and Lenders true and accurate knowledge of their subject matter (in each
instance as of the date thereof), and do not contain any material
misrepresentation or material omission.
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2.06 Taxes. Except for its 1999 Federal and State tax returns due
October 15, 2000, Borrower has filed all required federal, state, county and
municipal tax returns and has paid all taxes owed and payable by it, and
Borrower knows of no basis for additional assessment with respect to any taxes.
2.07 No Subordination. There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower or any of its
assets may be bound that requires the subordination (a) in right of payment of
any of Borrower's obligations under the Loan Documents to any other obligation
of Borrower and/or (b) in priority of lien of any of the Mortgages to any other
lien upon any of the assets of Borrower.
2.08 Permits, Franchises. To the best of Borrower's knowledge,
Borrower possesses all permits, memberships, franchises, contracts and licenses
required and all trademark rights, trade names, trade name rights, patents,
patent rights and fictitious name rights necessary to enable it to conduct the
business in which it is engaged without conflict with the rights of others.
2.09 ERISA. To the best of Borrower's knowledge, Borrower is in
compliance in all material respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974, and no Reportable Event, as
defined in said Act, has occurred and is continuing with respect to any Plan
initiated by Borrower thereunder.
2.10 Outstanding Loans. Immediately prior to the effectiveness
hereof, the outstanding principal amount under the Original Loan Agreement is
$13,141,440.34.
2.11 Other Obligations. To the best of its knowledge, Borrower is
not in default on any obligation for borrowed money, any purchase money
obligation or any other material lease, commitment, contract, instrument or
obligation (including, without limitation, the Original Loan Agreement).
ARTICLE III.
CONDITIONS PRECEDENT
Neither Agent nor any Lender shall be obligated to make any
disbursement or take any other action under the Loan Documents unless all of the
following conditions precedent are satisfied at the time of such disbursement or
other action:
3.01 Appraisal. The receipt, review and acceptance by Agent of
appraisals on all Projects comprising the collateral for the Loan performed by a
firm acceptable to Agent, which indicates a satisfactory market value of the
Projects or not less than $45,454,546, resulting in a loan to value ratio of no
greater than 55%.
3.02 Environmental. The receipt, review and acceptance by Agent of
Phase I and, if required by Agent, Phase II environmental assessment of the
Projects.
3.03 Expenses. The payment by Borrower of all reasonable
out-of-pocket costs incurred by Agent in connection with the Loan, including,
but not limited to, the following:
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title insurance fees, mortgage recording fees, Agent's legal fees and appraisal
and environmental report fees.
3.04 Compliance. The representations and warranties contained
herein shall be true on and as of the date of such disbursement or other action,
with the same effect as though such representations and warranties had been made
on and as of such date, and on such date no Default (as defined herein) shall
exist and be continuing.
3.05 Documentation. Prior to such disbursement or other action
hereunder, Borrower shall have delivered to Agent all Loan Documents and such
other documents, instruments, policies, forms of evidence and other materials as
may reasonably be required under the Loan Documents.
3.06 Approval of Agent's Counsel. All legal matters incidental to
such disbursement or other action shall be reasonably satisfactory to counsel of
Agent.
3.07 Certain Covenants. After giving effect to the proposed
additional Loan advance, Borrower shall, as reasonably calculated by Agent,
remain in compliance with the covenants set forth in SECTION 6.18(a)(A)(i) and
(ii).
3.08 Loan Facility Fee. Upon the execution and delivery of this
Agreement, Borrower shall pay to Agent, for the ratable benefit of the then
Lenders, a non-refundable Loan facility fee of $250,000.
ARTICLE IV.
COVENANTS
Borrower covenants that so long as any credit remains available
under this Agreement, and until payment in full of all amounts owing by Borrower
under the Loan Documents, Borrower will:
4.01 Existence. Preserve and maintain its existence and all of its
rights, privileges and franchises; comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority;
and not change its name or, except in such a manner that will not violate
SECTION 5.01(i), organizational structure.
4.02 Taxes and Other Liabilities. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real and
personal, owed by or relating to Borrower, any of the Projects or any of the
Additional Properties (including federal and state income taxes), except such as
Borrower may in good faith contest or as to which a bona fide dispute may arise,
provided provision is made to the reasonable satisfaction of Agent for eventual
payment thereof in the event that it is found that the same is an obligation of
Borrower.
4.03 Notice. Promptly give notice in writing to Agent of (1) any
material litigation pending or threatened against Borrower; (2) the occurrence
of any breach or default (beyond any applicable notice and cure period) in the
payment or performance of any material obligation owing by Borrower to any
person or entity, other than Agent or Lenders hereunder; (3) any uninsured or
partially uninsured loss (relating to any of the Projects or any of the
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Additional Properties) occurring as a result of fire, theft, liability or other
casualty; or (4) any termination or cancellation (without the simultaneous
substitution of a replacement policy meeting the requirements of the Loan
Documents) of any insurance policy which Borrower is required herein to maintain
under the Loan Documents.
4.04 Accounting Records. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Agent, at any reasonable time and upon
reasonable notice to Borrower, to inspect, audit and examine such books and
records, to make copies of the same, and to inspect the properties of Borrower.
4.05 Facilities. Keep all of Borrower's properties which are
useful or necessary to Borrower's business or which are encumbered by the
Mortgages, or any of them, in good repair and condition (reasonable wear and
tear excepted), and from time to time make necessary repairs, renewals and
replacements thereto so that Borrower's properties shall be fully and
efficiently preserved and maintained.
ARTICLE V.
DEFAULT
5.01 Default. Each of the following shall constitute a "Default"
under the Loan Documents:
(a) Payment. The failure of Borrower to pay within ten (10) days
after the same becomes due, any sum payable on account of principal of the Loan
and/or interest thereon; or
(b) Other Payments; Performance. The failure of Borrower (i) to
perform when due any obligation of Borrower under the Loan Documents (other than
an obligation referred to in SECTION 5.01(a)), or (ii) to observe any covenant,
the performance or observance of which is required under any Loan Document; and
such failure described in the preceding clauses (i) or (ii) shall continue for a
period of at least thirty (30) business days after written notice thereof shall
have been given to Borrower by Agent; provided, however, that a Default shall
not be deemed to exist hereunder, if (w) such failure referred to in the
preceding clauses (i) or (ii) is reasonably capable of being cured within a
period of time Agent, in its reasonable discretion, advises Borrower that Agent
deems to be reasonable in the circumstances, which period of time shall in no
event be less than thirty (30) business days from the day of Agent's notice, (x)
Borrower promptly after receipt of a notice of default from Agent commences and
at all times diligently proceeds to cure such failure and (y) within the time
period so prescribed by Agent, Borrower does, in fact cure such failure; or
(c) Attachment. The sequestration or attachment of, or any levy or
execution upon, any property of Borrower encumbered by the Mortgages, or any of
them, which is not released, expunged, bonded or dismissed prior to the earlier
of: thirty (30) days after Borrower has received notice of such sequestration,
attachment or execution and the sale of the property affected thereby; or
(d) Performance of Other Obligations. Subject to Borrower's rights
under SECTION 5.03, the occurrence of a breach or default (beyond any applicable
notice and cure
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period) in the payment or performance of any obligation imposed by any
instrument or agreement (other than the Loan Documents) pursuant to which
Borrower has borrowed money (in excess of $250,000) from, or incurred liability
(in excess of $250,000) to, any person or entity including Agent and any Lender;
or
(e) Representations and Warranties. The failure of any
representation or warranty made by Borrower in any Loan Document to be true
within fifteen (15) days after written notice by Agent to Borrower; provided,
however, that a Default shall not be deemed to exist if (i) such incorrectness
is reasonably capable of being cured within a period of time which Agent, in its
sole but reasonable discretion, advises Borrower that Agent deems to be
reasonable in the circumstances, which period of time shall in no event be less
than thirty (30) business days from the day of Agent's notice, (ii) Borrower
promptly after receipt of a notice of default from Agent commences and at all
times diligently proceeds to cure such default and (iii) within the time period
prescribed by Agent, Borrower does, in fact, cure such default; or
(f) Voluntary Bankruptcy; Insolvency; Dissolution. (i) Borrower's
filing of a petition for relief under the Bankruptcy Reform Act of 1978 (as
amended or recodified, the "Bankruptcy Code"), or under any other present or
future state or federal law regarding bankruptcy, reorganization or other relief
to debtors (collectively, "Debtor Relief Law"); or (ii) Borrower's filing any
pleading in any involuntary proceeding under the Bankruptcy Code or other Debtor
Relief Law, which admits the petition's material allegations regarding
Borrower's insolvency; or (iii) Borrower's making a general assignment for the
benefit of creditors; or (iv) Borrower's applying for, or the appointment of, a
receiver, trustee, custodian or liquidator of Borrower; or (v) the filing by or
against Borrower of a petition seeking the liquidation or dissolution of
Borrower or the commencement of any other procedure to liquidate or dissolve
Borrower; or
(g) Involuntary Bankruptcy. Borrower's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code or any other
Debtor Relief Law that is filed against Borrower or in any way restrains or
limits Agent's rights under the Loan Documents, prior to the earlier of the
entry of any order granting relief sought in the involuntary petition or sixty
(60) days after the date of filing of the petition; or
(h) Loan Documents. The occurrence of an "Event of Default" (as
defined in any Loan Document); or
(i) Transfers; Management. (i) The direct or indirect sale,
transfer, conveyance or voluntary encumbrance (except for permitted leases and
for releases where Agent receives, for the benefit of Lenders, the required
release price, it being understood and agreed that, in the case of the
Additional Properties, no release payment is required) of any of the Projects or
any part thereof or of any of the Additional Properties or any part thereof,
except by reason of the transfer of equity interests in Borrower (provided,
however, that Xxxxxx X. Xxxxxxx, Xx. and members of his immediate family (i.e.,
his spouse, children and grandchildren) and trusts, corporations and other
entities controlled by him or his immediate family or for his benefit or the
benefit of his immediate family shall, in the aggregate, retain the equity
interests in Borrower collectively held by such persons and entities as of June
30, 1996) or (ii) Xxxxxx X. Xxxxxxx, Xx., other than by
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reason of death or disability, ceases to be the managing general partner of
Borrower with substantially all of the management powers he presently possesses.
5.02 Remedies. Upon the occurrence of a Default, Agent, upon the
direction of the Majority Lenders, shall declare all sums owing to Agent and
Lenders under the Loan Documents immediately due and payable; provided, however,
that upon the occurrence of a Default specified in SECTIONS 5.01(f) or 5.01(g),
or upon the occurrence of any other Default specified in any Loan Document where
provision is made for acceleration to occur automatically as a consequence
thereof, all sums owing to Agent and Lenders under the Loan Documents shall
automatically become immediately due and payable. In addition, upon the
occurrence of any Default, (a) the obligation, if any, of Agent or any Lender to
permit further borrowings under the Loan Documents shall immediately cease and
terminate, and (b) Agent shall have all rights, powers and remedies available
under the Loan Documents, or accorded by law, including without limitation, the
right to resort to any or all security for the Loan, and to exercise any or all
of the rights of a beneficiary or secured party pursuant to applicable law. All
rights, powers and remedies of Agent and Lenders may be exercised by Agent, for
the ratable benefit of Lenders, at any time and from time to time during the
continuation of a Default. All rights, powers and remedies of Agent, for the
ratable benefit of Lenders, in connection with each of the Loan Documents are
cumulative and not exclusive and shall be in addition to any other rights,
powers or remedies provided by law or equity.
5.03 Right of Contest. Borrower may contest in good faith any
claim, demand, levy or assessment by any person (other than Agent with respect
to the Loan Documents) which would constitute a Default, if (a) Borrower pursues
the contest diligently and in a manner which Agent reasonably determines will
not be prejudicial to Agent or Lenders nor impair the rights of Agent, for the
ratable benefit of Lenders, under the Loan Documents; and (b) Borrower deposits
with Agent any funds or other forms of assurance which Agent in good faith from
time to time reasonably determines appropriate to protect Lenders from the
consequences of the contest being unsuccessful. Borrower's compliance with this
SECTION 5.03 shall operate to prevent such claim, demand, levy or assessment
from becoming a Default.
ARTICLE VI.
ADDITIONAL PROVISIONS
6.01 Note. The Loan shall be evidenced by an amended and restated
promissory note (as the same may be amended or otherwise modified from time to
time and together with all substitutions therefor and replacements thereof, the
"Note") in the form of EXHIBIT B hereto.
6.02 Purpose. The proceeds of the Loan shall be used for the
following purposes and no others: (i) providing mortgage financing for the
Projects, (ii) paying for tenant improvements and leasing commissions incurred
by Borrower in connection with the Projects, (iii) acquiring Additional
Properties or paying costs related to an Additional Property, in each case in
accordance with the requirements of SECTIONS 6.11, (iv) paying closing costs
incurred by Borrower in connection with the closing of the Loan, (v) paying
other costs of owning and operating any of the Projects and/or (vi) making
repairs and other improvements to the Projects. In no event shall any Loan
proceeds be used to pay costs relating to Affiliate Properties.
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6.03 Maturity; Extension Options. Subject to the limitations,
terms and conditions contained in the Loan Documents, the outstanding principal
balance of the Loan, together with all accrued and unpaid interest owing
hereunder or under the Note, shall be due and payable on September 30, 2003 (the
"Initial Maturity Date"); provided that, subject to (a) Borrower complying with
the financial covenants in SECTION 6.18; and (b) the absence of any Default or
Event of Default, Borrower shall have the option to extend the maturity of the
Loan for two additional one year periods; provided that such options are
expressly conditioned on Borrower giving written notice, in each case, of its
desire to so extend the Initial Maturity Date and then existing Maturity Date at
least thirty (30) days prior to the then existing Maturity Date. The Initial
Maturity Date and each succeeding Maturity Date (as extended pursuant to the
terms hereof) shall be referred to as the "Maturity Date." Each notice by
Borrower extending the then Maturity Date must be accompanied by payment of a
non-refundable extension fee of one-quarter of one percent of the sum of the
outstanding principal balance of the Loan at the time of such notice; provided,
however, that if Borrower borrows any additional monies after the giving of the
notice extending the Maturity Date to September 30, 2004, then at the time of
each such borrowing, Borrower shall pay to Agent, for the ratable benefit of the
then Lenders, a non-refundable extension fee of one-quarter of one percent on
such additional borrowing. From and after the Initial Maturity Date, Borrower
shall have no further right to receive Loan advances.
6.04 Advances. Subject to and in accordance with the provisions
hereof, the Loan will be disbursed in a series of advances ("Advances") to
Borrower, from time to time during the period commencing on the date hereof and
ending on the Initial Maturity Date. That portion of the initial Advance which
represents a refinancing of the $13,141,440.34 heretofore outstanding under the
Original Loan Agreement shall be made without an exchange of funds. Advances
shall be limited to one Advance per month and shall be in minimum amounts of
$1,000,000 and integral multiples of $100,000. The aggregate total of all
Advances outstanding at any time shall never exceed the principal amount of the
Loan Commitment less any permanent Loan Commitment reductions hereunder, and all
borrowings shall otherwise be subject to all the limitations, terms and
conditions contained in the Loan Documents. Reductions in the Loan Commitment
shall occur as a result of the provisions of SECTIONS 6.06(d) and 6.07(b).
6.05 Requests for Advances. (a) Borrower shall make a request for
each Advance by completing, executing and delivering to Agent, not less than
three (3) business days prior to the date upon which Borrower wishes Agent to
disburse the Advance, a request for an Advance in form reasonably satisfactory
to Agent. Upon receipt of such a request for an Advance and such other
information and documents regarding the Advance or the purpose for the Advance
as Agent may reasonably request or as may be required hereby, Agent shall
disburse such Advance in the manner provided in clauses (b), (c) and (d) below.
(b) Upon Agent's receipt of any request for an advance of the
Loan, Agent shall promptly forward a copy of the same to each Lender. Upon
notification that an Advance is to be made, each Lender shall advise Agent if
Lender does not intend to make its Percentage share of such Advance, but this
provision shall not relieve such Lender of any obligation which it may have to
fund its Percentage share of such Advance or constitute a waiver of any rights
and/or remedies that Borrower may have as a result of a failure by such Lender
to fund its Percentage share of such Advance.
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(c) The failure of any Lender to fund its Percentage share of an
Advance on account of the Loan on the date specified therefor under the Loan
Documents shall not relieve any other Lender of its obligation to fund its
Percentage share of such Advance on account of the Loan on such date, and
neither any Lender (other than the defaulting Lender as to its own obligations)
nor Agent shall be responsible for the failure of a Lender to fund its
Percentage share of an Advance on account of the Loan.
(d) Agent shall receive borrowing and other notices from Borrower
under the Loan Documents, shall be the payee of the Note and the secured party
under the Mortgages and any other security documents, in each case, for the
ratable benefit of the Lenders, shall receive payments due from Borrower to
Lenders and, subject to the provisions of this Agreement, shall distribute such
payments to Lenders.
6.06 Borrowing and Repayment. (a) Borrower may from time to time
during the term of the Loan borrow and partially or wholly repay its outstanding
borrowings, subject to all of the limitations, terms and conditions of the Loan
Documents.
(b) After giving effect to the initial Advance under this
Agreement, the outstanding principal amount of the Loan is $19,641,440.34.
Accordingly, Borrower, subject to the terms of the Loan Documents, may hereafter
borrower an additional $5,358,559.66. Such additional Advances must be secured
by the Mortgages and, with respect to such additional Advances, the Mortgages
must continue as first priority liens. Accordingly, as a condition to Borrower's
right to receive an additional Advance hereunder, the title insurer of the liens
of the Mortgages must have so insured that the Mortgages will, on a first
priority basis, secure the Loan.
(c) Advances shall also be conditioned on a clear continuation of
title to the date of each Advance, showing marketable title to the Projects and
the Additional Properties, if any, vested in Borrower, with no exceptions other
than those approved by Agent, and the issuance of such endorsements (if not
previously issued) to the mortgage title insurance policies insuring the
continuing first priority of the liens of the Mortgages as Agent may reasonably
require. Notwithstanding the foregoing, to the extent the mortgage title
insurance policies issued to Agent, for the ratable benefit of Lenders, on the
date hereof insure the first lien priority of future advances without the
requirement for a clean continuation of title, no such continuation of title
shall be required.
(d) The Loan Commitment shall be permanently reduced by required
monthly principal payments described in SECTION 6.07(b), by any voluntary
repayments, by any other mandatory prepayments and, at the election of Borrower,
by such amounts as Borrower shall elect by written notice to Agent. If Borrower
elects to reduce the Loan Commitment to an amount less than the outstanding
Loan, Borrower's notice making such an election must be accompanied by a
repayment of the Loan (in an amount such that the outstanding Loan does not
exceed the reduced Loan Commitment) and by the payment of any amounts due under
PARAGRAPH 8 of the Note as a result of such prepayment.
(e) No Lender shall accept, receive or apply any repayment with
respect to the Loans made by it in any form or manner, whether by counterclaim,
set-off or otherwise, other
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than as may be expressly provided in the Loan Documents or in this Agreement.
If, however, any Lender does obtain any payment under any Loan Document, such
Lender shall not commingle the other Lender's or Lenders' Percentage of such
payment with its other funds and shall hold such Percentage in trust for the
benefit of and, as promptly as is reasonably practicable, shall pay over such
Percentage to Agent for distribution to the other Lenders as provided herein;
provided, however, that if all or any portion of such payment is thereafter
recovered from Lender which received such payment, the other Lenders shall, upon
demand, return an amount equal to their respective Percentage of the amount of
such recovery, together with an amount equal to their respective Percentage of
any interest which Lender who received such excess payment is compelled to pay
in connection with such recovery.
(f) Notwithstanding anything in the Loan Documents to the
contrary, Loan amounts repaid (regardless of the reason for such repayments) may
not be reborrowed.
6.07 Interest and Amortization. (a) Interest shall accrue upon the
outstanding principal balance of the Loan at the rate(s) provided in the Note,
and such interest shall be payable as required therein.
(b) Concurrently with each monthly payment of interest under the
Loan, Borrower shall make monthly principal payments to Agent, for the ratable
benefit of Lenders, in an amount equal to the sum of the following: the initial
principal amount of each Advance of the Loan divided by 500, with such
calculation to be made separately for each Advance and the monthly payment shall
be sum of such separate calculations. In the event of any repayments of the Loan
(other than as a result of the required monthly amortization), Agent shall
allocate such repayment to one or more of the Loan Advances and recalculate the
required monthly principal amortization with respect to such Advance and the
aggregate required monthly amortization payment. Any monthly principal payments
pursuant to this SECTION 6.07 shall reduce the Loan Commitment by a like amount
and may not be reborrowed.
6.08 ACM Report. On or prior to December 15, 2000, Borrower shall
obtain and furnish to Agent, at Borrower's sole cost and expense, an asbestos
operations and maintenance plan with respect to the Project located in San
Antonio, Texas, which plan must be prepared by a reasonably qualified engineer
or other professional, describe the location and condition of asbestos
containing materials at such Project and provide Borrower with lawful methods of
responding to the presence of such asbestos containing material.
6.09 Expenses. Without in any way limiting SECTION 9.01 of this Agreement,
Borrower shall pay Agent immediately upon demand all reasonable costs and
expenses incurred by Agent or any Lender in connection with: (1) the preparation
of any commitment letter relating to the Loan and any and all Loan Documents;
(2) the enforcement or satisfaction by Agent or any Lender of any of Borrower's
obligations under this Agreement or under the other Loan Documents; and (3) the
negotiation, preparation and/or execution of any amendment, waiver, termination,
release, supplement or modification to any of the Loan Documents and any other
documents and instruments prepared in connection therewith and the consummation
of the transactions contemplated thereby, and the negotiation, preparation
and/or execution (x) of any participation, agency and other agreements whereby
Agent or any Lender sells an interest in the Loan and the execution and delivery
of all instruments and documents
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related thereto and (y) of any amendments, waivers, supplements or modifications
thereto, including, in the event of costs or expenses referred to in the
preceding clauses (1), (2) and/or (3), the reasonable fees and disbursements of
counsel to Agent or any Lender. For all purposes of this Agreement, Agent's and
any Lender's costs and expenses shall include, without limitation, all
reasonable legal fees, accounting fees, auditor fees and inspection fees.
6.10 Collateral; Release of Collateral. (a) The performance of all
obligations of Borrower to Agent and Lenders under the Loan Documents shall be
secured by the Security Documents (as such term is defined in the Note).
(b) Agent, on behalf of Lenders, agrees to release its liens and
security interests from one or more of the Projects if (i) no Default shall
exist and no event or circumstance shall have occurred or arisen (or would occur
or arise as a result of such release) which would constitute a Default but for
any unsatisfied requirement for the giving of notice or passage of time or both,
(ii) Borrower pays to Agent, for the ratable benefit of Lenders, 110% of the
Loan allocation for the Project to be released (as provided for in SECTION
6.10(c)); provided that the release prices for the Project in (x) San Antonio,
Texas shall be the greater of (A) 100% of the gross sales price or the principal
amount of any refinancing for such Project less only customary and reasonable
costs directly related to such sale or refinancing or (B) 110% of the loan
allocation for such Project, not to exceed, in either case, $7,500,000; and (y)
Irving, Texas shall be the greater of (A) 100% of the gross sales price or the
principal amount of any refinancing for such Project less only customary and
reasonable costs directly related to such sale or refinancing or (B) 110% of the
loan allocation for such Project, not to exceed, in either case, $17,500,000;
and (iii) without limiting the foregoing, the remaining Projects will,
immediately after giving effect to the proposed release and any repayment of the
Loan as a result thereof, in the reasonable calculation of Agent, satisfy the
Loan to Value Ratio and Debt Service Coverage Ratio covenants contained in
SECTIONS 6.18. With respect to Additional Properties which are subjected to the
lien of a Mortgage, Agent, without receipt of any release price, will release an
Additional Property upon any bona-fide sale or refinancing thereof or upon any
transfer thereof to an Affiliate Property Owner.
(c) The Loan allocations for the initial Projects are set forth on
EXHIBIT C hereto. Only if, as and when an Additional Property becomes a Project
will Borrower and Agent adjust the Loan allocations for all of the then Projects
(and amend EXHIBIT C in connection therewith) on a basis consistent with that
used to establish the Loan allocations for the initial Projects.
6.11 Additional Properties. If Borrower desires to use Loan
proceeds to acquire an additional property or an interest therein (an
"Additional Property") or to pay any cost or expense related to an Additional
Property, Borrower shall submit such request to Agent. Notwithstanding anything
in the Loan Documents to the contrary, including SECTION 6.02, neither Agent nor
any Lender shall have any obligation to allow Loan proceeds to be used for any
such purpose, and the decision to allow Loan proceeds to be used for any purpose
related to an Additional Property shall be made in the sole and absolute
discretion of Agent. Borrower's interest in an Affiliate Property Owner is not
Additional Property. Any Additional Property so acquired shall become part of
the collateral securing the Loan (and Borrower, at its sole cost and expense,
shall execute and deliver to Agent such Mortgages, security agreements and
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assignments as Agent may reasonably require in order to subject the Additional
Property to a lien in favor of Agent for the ratable benefit of Lenders).
Additional Properties shall not be deemed to be "Projects" or be included in the
calculation of the Loan to Value Ratio or Debt Service Coverage Ratio covenants
contained in SECTION 6.18 unless Agent, in its sole and absolute discretion,
consents thereto in writing. In the event that an Additional Property shall, by
reason of such consent by Agent, become a "Project", then such Additional
Property shall be included in the calculation of the Loan to Value Ratio and
Debt Service Coverage Ratio. Upon any acquisition of an Additional Property,
whether or not such Additional Property is to become a Project, Borrower shall
at its cost also deliver to Agent with respect to the Additional Property a
survey, a mortgage title insurance policy and the other items described in
EXHIBIT D hereto. Borrower may transfer Additional Properties to Affiliate
Property Owners, and upon any such transfer the Additional Property so
transferred shall cease to be an Additional Property.
6.12 Unsecured and Subordinate Financing. Borrower shall not
obtain any unsecured or subordinate secured financing, except for current debt
incurred in the ordinary course of Borrower's business which would be
characterized as an unsecured trade account payable, and for these purposes
Lenders agree that tenant buildout expenses and leasing costs are unsecured
trade accounts payable. Any unsecured debt of Borrower owing to the general
partner of Borrower on account of such expenses and costs is hereby permitted;
provided, however, that in no event may any such unsecured debt owing to the
general partner exceed $3,000,000. If requested by Agent, Borrower will cause
the general partner to execute and deliver a subordination agreement reasonably
satisfactory to Agent and Borrower.
6.13 Single Purpose Entity. Borrower shall at all times remain a
single purpose entity owning only the Projects, any Additional Properties and
any Affiliate Property Owners.
6.14 Property Information. Borrower shall submit to each Lender
the following information:
(a) Audited annual financial statements of Borrower prepared in
accordance with generally accepted accounting principles consistently applied
(including a detailed Balance Sheet, Income Statement and Cash Flow Statement
and financial statement projections for the fiscal year of Borrower immediately
following the fiscal year for which the foregoing audited financial statements
are being delivered), to be submitted to each Lender no later than 150 days
after the end of each fiscal year of Borrower.
(b) Quarterly unaudited financial statements of Borrower prepared
in accordance with generally accepted accounting principles consistently applied
(including a detailed Balance Sheet, Income Statement and Cash Flow Statement,
subject to normal year-end adjustments), to be submitted to each Lender no later
than 60 days after the end of each fiscal quarter of Borrower. Such quarterly
statements shall be certified by a general partner of Borrower to be true,
correct and complete in all material respects.
(c) Upon the request of Agent but not more often than quarterly,
lease-up schedules and/or updated rent rolls and operating statements for the
Projects and any Additional Properties.
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(d) Federal state and/or local tax returns, to be submitted to
each Lender no later than sixty (60) days after the filing of each such tax
return.
(e) Such other information with respect to the Projects and any
Additional Properties as may be reasonably requested from time to time by Agent.
6.15 Operating Accounts. Borrower shall maintain all operating
accounts for the Projects and any Additional Properties at the New York Branch
of Agent; provided, however, that, subject to no Default existing and no event
or circumstance occurring or arising which would constitute a Default but for
any unsatisfied requirement for the giving of notice or passage of time or both,
Borrower shall be permitted to maintain (other than with Agent) accounts for the
initial deposit of rent payments. On or about the twentieth of each month,
Borrower will transfer the collected rents to such operating accounts. If a
Default shall have occurred and be continuing, then disbursements from such
operating accounts may be made only to pay customary and reasonable expenses of
operating the Projects and any Additional Properties, all as set forth in
budgets for each Project and any Additional Properties to be submitted by
Borrower to Agent promptly following the occurrence of such Default. If a
Default shall be continuing, then prior to any disbursements being made from the
operating accounts, the budgets must be approved by Agent, such approval not to
be unreasonably withheld or delayed.
6.16 Limitation on Borrower's Liability. Recoveries against
Borrower under the Loan Documents shall be limited solely to the collateral
given to Agent, for the ratable benefit of Lenders, as security for Borrower's
performance under the Loan Documents and to the other assets of Borrower and is
otherwise non-recourse to all partners (limited and general) in Borrower, and
such recovery shall not be a lien, or the basis of a claim of lien or levy of
execution, against the assets of any partner (general or limited) of Borrower.
Notwithstanding the foregoing, each general partner of Borrower and the assets
of each general partner of Borrower shall be fully liable for amounts payable
pursuant to or by reason of the Loan Documents to the same extent that
Borrower's general partner would be liable absent the foregoing limitation of
this paragraph for and to the extent of any loss or damage suffered by Agent or
any Lender in connection with or as a result of any of the following, but any
such general partner shall only be so liable for his or its own acts and then
only to the extent of any actual loss caused by such acts: (a) fraud and
material misrepresentation; (b) intentional damage to the Projects or Additional
Properties; and (c) misapplication of any insurance or condemnation proceeds or
tenant security deposits or any other funds maintained by Borrower for any
purpose in connection with the Projects or Additional Properties. The
limitations hereof shall not be deemed to limit: (i) any right Agent or any
Lender might otherwise have to obtain injunctive relief against Borrower or
Borrower's general partner; (ii) any suit or action in connection with the
preservation, enforcement or foreclosure of the liens, mortgages, assignments
and security interests now or at any time hereafter securing the payment and
performance of all sums and obligations under this Agreement or any of the other
Loan Documents; or (iii) subject to the Loan Documents, the collection of
amounts which may become owing or payable under or on account of insurance,
condemnation awards or damages for other public actions or surety bonds
maintained or provided by Borrower; provided, however, that the assertion by
Agent or any Lender of any such right, suit, action or collection of amounts
shall not result in any claim, demand or liability against any general partner
of Borrower or any claim or demand upon the assets of any general partner of
Borrower except as otherwise provided herein.
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6.17 Borrower's Distributions. (a) Provided no Default shall exist
and no event or circumstance shall have occurred or arisen which would
constitute a Default but for any unsatisfied requirement for the giving of
notice or passage of time or both, Borrower may distribute to its partners up to
ninety percent (90%) of the sum of its cumulative net income from real estate
operations from the Projects, calculated in accordance with generally accepted
accounting principles, consistently applied, adjusted out for depreciation,
amortization and write-offs of step-rent receivables relative to such Projects
for the period from and including January 1, 2001 through the date such covenant
compliance is being determined. Compliance with this covenant will be tested as
of the last day of each fiscal quarter. The foregoing covenant shall only apply
to properties for such periods as such properties are Projects.
(b) Provided that Agent has agreed to release its liens and
security interests from one or more of the Projects pursuant to SECTION 6.10,
and has so released the same, Borrower, in addition to distributions permitted
under SECTION 6.17(a), may distribute to its partners the net proceeds (except
to the extent such net proceeds constitute income of Borrower, as to which
SECTION 6.17(a) governs) from the sale or refinance of such Project(s).
(c) The preceding provisions of SECTION 6.17 shall apply from and
after January 1, 2001. For the period from the date hereof through December 31,
2000, Borrower shall comply with the provisions of SECTION 6.17 of the Original
Loan Agreement, which provisions and all related provisions and definitions are
hereby incorporated herein.
6.18 Borrower's Covenants. (a) As of the end of each Calculation
Date, (A) the Projects encumbered by the Mortgages must have (i) a Debt Service
Coverage Ratio of not less than 1.50:1.0, and (ii) a Loan to Value Ratio not to
exceed 55% (i.e., the appraised value of the Projects shall equal or exceed one
hundred and eighty-two percent of the then outstanding principal balance of the
Loan), (B) Borrower must have a Liquid Net Worth of not less than $1,000,000,
and (C) Borrower's total liabilities (calculated in a manner consistent with
Borrower's financial statements for the period ending December 31, 1999, and
including accounts payable but excluding current unpaid real estate taxes) may
not exceed 60% of the appraised value of the Projects and the Additional
Properties (based on appraisals by Agent or appraisals by Borrower approved by
Agent). If Borrower fails to comply with any of the foregoing covenants and such
failure continues for sixty (60) days after written notice thereof by Agent to
Borrower, such failure shall, subject (in the case of a failure by Borrower to
comply with a covenant in SECTION 6.18(a)(A)(i) or (ii) or SECTION 6.18(a)(C))
to the provisions of SECTION 6.18 (b), constitute a Default.
(b) Within sixty (60) days after Agent's written notice to
Borrower of non-compliance with the covenants contained in SECTION 6.18
(a)(A)(i) or (ii) or SECTION 6.18(a)(C), Borrower shall have the option (x) in
the case of a default under SECTION 6.18(A)(i) or (ii), to remedy such failure
by reducing the outstanding principal balance of the Loan to a level such that
Borrower is in compliance with such covenants or (y) in the case of a default
under SECTION 6.18(a)(C), to remedy such failure by reducing Borrower's total
liabilities (which may include reducing the outstanding principal balance of the
Loan) to a level such that Borrower is in compliance with such covenant. Within
sixty (60) days after Agent's written notice to Borrower of non-compliance with
the covenants contained in SECTION 6.18(a)(A)(ii) or SECTION 6.18(a)(C),
Borrower shall have the option to remedy such failure by
14
providing cash collateral, a letter of credit and/or additional collateral
acceptable to Agent, in Agent's reasonable discretion, equal to the amount
needed so that Borrower is in compliance with such covenants, with such
additional collateral to be accompanied by such supporting documents, financial
statements and opinions of counsel as Agent may reasonably require; provided,
however, that in order to satisfy the requirements of this SECTION 6.18(b),
Agent must also be satisfied as to the solvency of the person or entity pledging
the additional collateral. If no Default shall exist and no event or
circumstance shall have occurred or arisen which would constitute a Default but
for any unsatisfied requirement for the giving of notice or the passage of time
or both, Borrower shall have the right to obtain a release of all or any portion
of the cash collateral, the letter of credit or other collateral provided
pursuant to this SECTION 6.18 (b), as applicable, upon Agent's receipt of
financial information and/or appraisals evidencing compliance (without the
benefit of such collateral) with the covenants referred to above.
(c) (i) Within sixty (60) days after each Calculation Date,
Borrower shall furnish to each Lender detailed calculations applying the
provisions of SECTION 6.18(a); and such calculations shall be certified as true
and accurate, in a manner reasonably acceptable to Agent, by a general partner
of Borrower as having been prepared under his supervision in accordance with the
provisions hereof and that he knows of no facts inconsistent with such
calculations.
(ii) Compliance with the covenants in SECTION 6.18(a) shall
be tested as of each Calculation Date.
(iii) For the purpose of calculating Borrower's compliance
with SECTION 6.18(a)(A)(i), it shall be assumed that, with respect to all leases
of the Projects which are in Full Force and Effect at the time such compliance
is being calculated, all rent concessions had expired prior to the Calculation
Date; provided, however, that if, as of any Calculation Date, the remaining rent
concession is in excess of six months, then it shall be assumed that the
remaining rent concession is the actual remaining rent concession less six
months.
(iv) Borrower's compliance with SECTION 6.18(a)(A)(i) shall
be determined without regard to extraordinary items of income and of expense.
Each lease, the rental or other income from which was included in the
calculations of Borrower's compliance with SECTION 6.18(a)(A)(i), must be in
Full Force and Effect as of the date Borrower's compliance with SECTION
6.18(a)(A)(i) is being calculated.
6.19 Guaranties. Borrower will not guarantee, endorse, become
surety for, assume or otherwise in any way become or be liable for, any
obligation of any other Person, whether by agreement to purchase the
indebtedness of any other Person or agreement for the furnishing of funds
through the purchase of goods, supplies or services (or by way of stock
purchase, capital contribution, advance or loan) or for the purpose of paying
the indebtedness of any other Person, or otherwise, directly or indirectly,
except for endorsements of negotiable instruments for collection in the ordinary
course of its business. Nothing in this SECTION 6.19 shall be construed to
prevent Borrower from making equity investments in Affiliate Property Owners so
long as Borrower has no continuing obligation which would violate the
prohibitions set forth in this SECTION.
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6.20 Affiliate Properties. Nothing herein shall limit Borrower's
right to acquire an Affiliate Property Owner or the right of any such Affiliate
Property Owner to acquire an Affiliate Property.
6.21 Leasing Standards. Borrower will not enter into any lease of
10,000 or more rentable square feet at any one or more of the Projects unless
Agent has consented, in writing, to such lease, and Agent agrees not to
unreasonably withhold or delay its consent.
ARTICLE VII.
The Agent
7.01 Agent.
(a) Lenders hereby appoint Fleet National Bank as the agent for
the ratable benefit of Lenders (in such capacity, the "Agent") under this
Agreement and the Loan Documents.
(b) Agent is hereby authorized to act as agent for Lenders under
this Agreement and the Loan Documents, and to exercise such powers as are
conferred on Agent by the terms of this Agreement and the other Loan Documents,
together with such powers as are reasonably incidental thereto. Except as
otherwise provided herein, Lenders further authorize Agent to take such other
actions as may be necessary or desirable in the course of routine administration
of the Loan and the Loan Documents. The duties and obligations of Agent shall be
mechanical and administrative in nature and Agent shall not, by reason of this
Agreement, have a fiduciary relationship with regard to the Lenders, or any of
them, and nothing in this Agreement shall be construed so as to impose upon
Agent any obligations except as expressly set forth herein. Each Lender shall
execute and deliver to Agent such additional documents and instruments as Agent
may reasonably require to enable it better and more fully to exercise its powers
hereunder.
(c) Unless otherwise instructed in writing by all Lenders, as to
the following matters Agent shall not exercise any discretion or take any
action, but shall be required to refrain from acting (and shall be fully
protected in so refraining); provided, however, that in no event shall Agent be
required to take or to refrain from taking any action which, in the reasonable
judgment of Agent, exposes Agent to personal liability, or which is contrary to
this Agreement or the Loan Documents or to applicable laws:
(1) release of a material portion of the collateral
from the lien of the Mortgages, except as may be provided in or
required by the Loan Documents; provided, however, Agent may, if the
Majority Lenders consent or if the action to be taken would not
adversely affect any collateral for the Loans (other than to a de
minimis extent), execute, join in and consent to the grant or
reservation of, subordinate the lien of the Mortgages to, and/or
release the lien of the Mortgages with respect to, lot line
adjustments, easements, rights-of-way, licenses, maps, plans,
subdivision documents, declarations of covenants, conditions and
restrictions, street dedications, tract and parcel maps and similar
agreements; or
16
(2) any written amendment or modification of any Loan
Document, except for any amendment or modification which is immaterial
or clarifying in nature.
(d) Except as otherwise provided herein, Agent shall not be
required to exercise any discretion or take any action, but shall be permitted
or required to act or to refrain from acting (and shall be fully protected in so
acting or refraining) only upon the prior written consent or instructions of the
Majority Lenders, and such authorization or instructions shall be binding upon
all Lenders, except that Agent shall not be required (i) to take or refrain from
taking any action which, in the reasonable judgment of Agent, exposes Agent to
personal liability or which is contrary to this Agreement or any of the Loan
Documents or to applicable laws, or (ii) to acquire title to any Project or
Additional Property (or other collateral security for the Loan) or to manage or
operate any property subsequent to the conveyance of Borrower's title thereto,
whether by judicial or non-judicial foreclosure sale, or deed-in-lieu of
foreclosure or otherwise, except upon terms and conditions agreed to by Agent
and the Majority Lenders.
(e) As to any matter referred to in this ARTICLE VII, Agent may
request consents or instructions from all Lenders or the Majority Lenders
(depending upon whether the action to be taken requires the consent of all
Lenders or the Majority Lenders) or all Lenders or the Majority Lenders
(depending upon whether the action to be taken requires the consent of all
Lenders or the Majority Lenders) may, on their own initiative, give instructions
to the Agent, which instructions shall be binding upon Agent, except as
otherwise provided in SECTION 7.1(c) and (d). If Agent requests a consent from
all Lenders or the Majority Lenders, as the case may be, any Lender that does
not in writing refuse its consent within such reasonable time period (determined
in light of the circumstances but, absent extraordinary circumstances, in no
event shall such time period be less than three (3) business days) specified in
such request, or if no such time period is specified, within fifteen (15)
business days after receipt of such request for consent, shall, at Agent's
option, be deemed to have given the consent so requested by Agent. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document that it believes to be genuine and
correct.
(f) Agent may execute and discharge any and all of its duties
under this Agreement or under any Loan Document by or through agents, employees
or attorneys-in-fact.
(g) Neither Agent nor any of its directors, officers, employees,
counsels or agents shall be (i) liable to any Lender for any action taken or
omitted to be taken under or in connection with this Agreement or any Loan
Document or the transactions contemplated hereby and thereby, except for its own
gross negligence or willful misconduct, or (ii) responsible in any manner to any
Lender for (1) any recital, statement, representation or warranty made by
Borrower contained in any Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by Lender or Agent
under or in connection with this Agreement or any Loan Document, (2) the
accuracy of any appraisal of the Projects or any other collateral or of any
information contained within such appraisal, whether or not the appraisal was
prepared by or for said Lender or the Agent, (3) the accuracy of any statement,
oral or written, as to the value of or title to any Project, Additional Property
or any other collateral, (4) the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Loan Document, or (5) the
failure of Borrower to perform its obligations under any Loan Document. Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
17
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or the Loan Documents, or to inspect the
properties, books or records of Borrower.
(h) Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, electronic transmission, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person or persons, and upon advice and statements of legal counsel (including
counsel to Borrower), independent accountants and such other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or under any Loan Document unless it shall first receive
the required instructions or consents of all Lenders or the Majority Lenders, as
the case may be, and, if Agent so requests, it shall first be indemnified to its
satisfaction by Lenders, ratably in accordance with their respective
Percentages, against any and all liability and expense that Agent may incur by
reason of taking or continuing to take any such action, but in the event a
failure to act would likely cause the collateral for the Loans to be forfeited
or materially damaged, Agent may take such action as it deems reasonable in the
circumstances and, with respect to such action, Agent shall fully be indemnified
by Lenders, ratably in accordance with their respective Percentages, against any
and all liability and expense that Agent may incur by reason of taking such
action. Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any Loan Document in accordance with an
instruction or the consent of all Lenders or the Majority Lenders, as the case
may be, and any action taken or not taken pursuant thereto, shall be binding
upon all Lenders.
(i) Agent shall not be deemed to have knowledge or notice of the
occurrence of any default, except with respect to defaults in the payment of
principal, interest or fees required to be paid to Agent for the ratable account
of Lenders, unless Agent shall have received written notice from a Lender
referring to this Agreement, describing such default and stating that such
notice is a "notice of default." Agent shall notify the other Lenders of its
receipt of any such notice. Agent shall only take such action with respect to
such default as is authorized by the Loan Documents and is pursuant to the
required instructions or consent of all Lenders or the Majority Lenders, as
applicable; provided, however, unless and until Agent has received any such
instruction or consent, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such default as it
shall deem advisable or in the best interest of Lenders.
(j) Each Lender acknowledges that neither Agent nor any other
Lender has made any representation or warranty to it, and that no act by Agent
or any other Lender heretofore or hereafter taken, including any review of the
affairs of Borrower, shall be deemed to constitute any representation or
warranty by Agent or any other Lender to any Lender. Each Lender confirms that
it has received a copy of the Loan Documents and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement. Each Lender represents to Agent and the
other Lenders that it has, independently, without reliance upon the Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own appraisal of, and investigation into, the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower, value of and title to the Projects and any
other collateral, and all applicable laws relating to the transactions
contemplated hereby and by the Loan Documents,
18
and made its own decision to enter into this Agreement. Each Lender also
represents that it will, independently, without reliance upon Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the Loan Documents. Each
Lender agrees to make such investigations as it deems necessary to inform itself
as to the business, prospects, operations, property, financial and other
condition and creditworthiness of Borrower. Except for notices, reports and
other documents that Agent is required pursuant to the Loan Documents to furnish
to the Lenders, Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrower.
(k) Lenders shall, upon two (2) days prior written notice (which
notice shall contain a reasonable listing, accounting or explanation as to the
circumstances giving rise to the demand), indemnify Agent (to the extent not
reimbursed by or on behalf of Borrower and without limiting any obligation of
Borrower to do so), ratably in accordance with their respective Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, costs, expenses or disbursements of any kind or
nature whatsoever, including reasonable attorneys' fees and disbursements, which
may be imposed on, incurred by or arise out of this Agreement or any Loan
Document, or any action taken or omitted by Agent hereunder or thereunder,
except as may result from the gross negligence or willful misconduct of Agent.
It is understood that the indemnification provided hereunder shall apply to
Agent in its capacity as Agent only and no Lender is indemnifying any other
Lender for acts or omissions performed or omitted by a Lender in its capacity as
a Lender. In the event of any litigation against Agent in respect of which the
foregoing indemnity may apply, Agent shall keep the Lenders fully informed as to
all material developments in such litigation. Without limiting the foregoing,
each Lender shall reimburse Agent, upon demand and ratably according to their
respective Percentages, for any costs or out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights and responsibilities under,
this Agreement, any Loan Document or any document contemplated by or referred to
herein, to the extent that Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this SECTION 7.01(k) shall survive
the payment of the Loan and the resignation or replacement of Agent.
(l) Agent and Lenders and their respective affiliates may make
loans to, issue letters of credit for the account of, accept deposits from, and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with Borrower and its affiliates, all as though Agent were not
Agent hereunder and Lenders were not parties hereto, and without notice to or
the consent of the other Lenders and/or Agent. Agent and Lenders acknowledge
that, pursuant to such independent activities, Agent and the Lenders and their
respective affiliates may obtain information regarding Borrower or its
affiliates (including information that may be subject to confidentiality
obligations in favor of Borrower or such affiliates), and neither Agent nor any
Lender shall have any obligation to provide such information to the other
Lenders. With respect to its Percentage of the Loan, if any, Agent shall have
the same rights and powers under
19
this Agreement as any other Lender, and may exercise the same as though it
was not Agent, and the terms "Lender" and "Lenders" include Agent in its
individual capacity.
(m) Agent may resign as such at any time by written notice to
Borrower and the Lenders effective on such date as Agent shall designate, which
date shall be not less than thirty (30) days from the date of such notice. In
the event of Agent's malfeasance, the Majority Lenders may remove Agent by
written notice to that effect to be effective on such date as the Majority
Lenders designate. In either event, the Majority Lenders shall appoint a
successor Agent (which need not be a Lender), which successor Agent shall assume
Agent's future obligations hereunder and under the Loan Documents. If no
successor Agent has accepted appointment as Agent on or before the effective
date of the Agent's resignation or removal, then, in the case of a resignation,
the retiring Agent or, in the case of a removal, the Majority Lenders shall
appoint a successor Agent which need not be a Lender, which successor Agent
shall be required to assume Agent's future obligations hereunder and under the
Loan Documents. After any resignation by Agent hereunder, or after removal of
Agent hereunder, the provisions of this Agreement and the Loan Documents shall
continue to inure to its benefit as to any actions that it took or omitted to
take while it was Agent under this Agreement and the Loan Documents and no such
removal or resignation of Agent shall release it from any prior breach of its
obligations under the Loan Documents. No resignation by or removal of Agent
shall have any effect on the resigning or removed Agent's rights, powers,
privileges or remedies as a Lender.
(n) Agent shall notify each Lender of its share of payments of
principal of, interest on and fees paid in connection with the Loan when
received from Borrower and Agent shall remit to Lenders entitled thereto, for
the account of such Lenders, their respective shares of all such payments. If
Agent receives payment from Borrower prior to noon, New York time, Agent shall
remit such payments to Lenders on the same Business Day received by Agent;
payments received from Borrower after such time shall be remitted on the next
Business Day. If payments are received past noon and are not remitted on the
same, Agent shall use reasonable efforts to invest the funds at the overnight
funds rate at the Federal Reserve Bank, and any interest so earned shall be
credited to Lender(s) and distributed to Lender(s) with Lender's other funds.
Agent shall account to each Lender for its share of amounts received and applied
by Agent from the Borrower as reimbursement for expenses with respect to which
such Lender has previously contributed to Agent its Percentage share. To the
extent a Lender has not received the same directly from Borrower, Agent shall,
in a timely manner, transmit to each Lender who so requests copies of documents
received from the Borrower or others pursuant to the requirements of the Loan
Documents.
(o) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Internal Revenue Code, as amended, and such Lender
claims exemption from, or a reduction of, United States withholding tax under
Sections 1441 or 1442 of the Internal Revenue Code, as amended, such Lender
agrees to deliver to Agent:
(1) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
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(2) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement, and IRS Form W-9; and
(3) such other form or forms as may be required under
the Internal Revenue Code or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding
tax.
Such Lender agrees to promptly notify Agent of any change in circumstances that
would modify or render invalid any claimed exemption or reduction.
(p) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Lender (pursuant to and in accordance with the provisions hereof) sells,
assigns or otherwise transfers all or part of the Loans made by it to another,
such Lender agrees to notify Agent of the portion of which it is no longer the
beneficial owner. To the extent of such portion of the Loans made by it so sold,
assigned or otherwise transferred, Agent shall treat such Lender's IRS Form 1001
as no longer valid.
(q) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns or
otherwise transfers (pursuant to and in accordance with the provisions hereof)
all or part of the Loans made by it to another, such Lender agrees to undertake
sole responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Internal Revenue Code, as amended.
(r) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by SECTIONS 7.01
(o) or (p) are not delivered to Agent, then Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.
(s) If the IRS or any other governmental agency asserts a claim
that Agent did not properly withhold tax from amounts paid to or for the account
of any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall indemnify Agent
fully for all amounts paid, directly or indirectly, by Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this SECTION 7.01(s),
together with all costs and expenses (including reasonable attorneys' fees and
disbursements). The obligations of Lenders under this SECTION 7.01(s) shall
survive the payment of Loan and the resignation or replacement of the Agent.
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(t) Agent is authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from Lenders, from time to time to
take any action with respect to the Projects or any other collateral or the Loan
Documents which may be necessary to perfect and maintain perfected the security
interest in and liens upon the Projects or any other collateral granted pursuant
to the Loan Documents.
(u) Notwithstanding any contrary provision of this Agreement,
Lenders irrevocably authorize Agent, at its option and in its discretion, to
release any lien granted to or held by Agent upon the Projects or any other
collateral upon payment in full of the Loan and all other obligations of
Borrower known to Agent and payable under this Agreement or any Loan Document
and to release any lien upon any Project or any collateral if, as and when
required by the Loan Documents. Upon request by Agent at any time, Lenders shall
confirm in writing Agent's authority to deliver a release pursuant to this
SECTION 7.01(u).
7.02 Costs and Expenses. Each Lender shall bear and pay to Agent
upon demand its Percentage share of all payments or advances made and all
claims, losses, liabilities, costs and expenses incurred or suffered by Agent in
connection with the Loans and the performance of its obligations under this
Agreement. If any Lender (herein called a "Defaulting Lender") fails to provide
its Percentage of any such costs and expenses within thirty (30) days after
receipt of written demand therefor by Agent, the other Lenders and/or Agent may,
but shall not be required to, supply an amount equal to the Defaulting Lender's
Percentage of such costs and expenses, and the Defaulting Lender shall, on
demand, repay such amount (together with interest thereon from the date of
advance until the date of payment at a rate per annum equal to the Peg Rate (as
such term is defined in the Note) plus two percent).
7.03 Authority and Investment Purpose. Each Lender represents to
the other Lenders and Agent that the purchase of its interest in the Loans is a
legal investment for such Lender under the laws under which it operates, has
been duly authorized and approved by all necessary action of such Lender's
management, and is made for the purpose of investment, it being understood that
the disposition of such Lender's property at all times shall, subject to the
terms of SECTION 7.04 below, be within such Lender's sole control.
7.04 Transfer of Interests.
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, Lenders, and Agent, and their respective successors and
permitted assigns, except that Borrower may not assign or transfer any of its
rights under this Agreement or any of the other Loan Documents (unless otherwise
permitted pursuant to the terms and provisions of the Loan Documents).
(b) Each Lender may, without the consent of Borrower but only upon
prior written consent of Agent (which Agent may grant or withhold in its sole
discretion), sell, assign or pledge (whether by participation or otherwise) any
of its Percentage interest in the Loan or under the Loan Documents. If
permitted, each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement and the other Loan Documents and the parties to each such assignment
shall (at the time of such assignment) execute and deliver to Agent an
"Assignment and Acceptance" (substantially in the
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form annexed hereto as EXHIBIT F) and a non-refundable processing fee (which
Agent shall retain for its own account) of $2,000. Upon acceptance pursuant to
an Assignment and Acceptance, (A) the assignee thereunder shall be a Lender
hereunder and a party hereto and, to the extent of the interest sold and
assigned pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and the other Loan Documents, and
(B) if the assignee Lender is an Approved Lender (as such term is hereinafter
defined) or otherwise is approved by Borrower, the assigning Lender thereunder
shall, to the extent of the interest sold and assigned pursuant to such
Assignment and Acceptance, (x) be released from its obligations under this
Agreement thereafter arising and (y) thereafter no longer be obligated to make
Advances on account of the Loan; provided, however, that in the case of such an
Assignment and Acceptance (to an Approved Lender or to an assignee otherwise
approved by Borrower) covering all of an assigning Percentage share of Advances
and Lender's rights and obligations under this Agreement and the other Loan
Documents, such assigning Lender shall thereafter cease to be a party hereto and
to the Loan Documents. However, no such assignment shall release or relieve any
assigning Lender from any liability on account of its default or breach, if any,
under this Agreement or under the Loan Documents. If the assignee Lender is an
Approved Lender or Borrower otherwise agrees, then to the extent of the interest
sold and assigned pursuant to an Assignment and Acceptance, Borrower hereby
consents to and acknowledges the reduction of the obligations of any such
assigning Lender from and after the date such Assignment and Acceptance is
executed and delivered and accepted in accordance with the terms hereof as if
Borrower were a party to such Assignment and Acceptance. Each assignee Lender
hereby agrees that, to the extent of the interest acquired by it pursuant to any
Assignment and Acceptance, it shall directly be liable to Borrower as if such
Lender had, to the extent of such interest, become a "Lender" under the Loan
Documents as of the Effective Date (as such term is defined in the Assignment
and Acceptance pursuant to which such Lender acquired such interest). "Approved
Lender" shall mean any commercial or savings bank, savings and loan association,
insurance company, credit corporation, real estate investment trust, pension,
welfare or endowment fund or any combination of any of the foregoing having net
assets of not less than One Billion Dollars.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the other
Loan Documents, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents, or any other instrument or document furnished pursuant hereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under this
Agreement or any of the other Loan Documents, or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will independently and without reliance upon Agent, such assigning
Lender or any other Lender and based on such documents
23
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to or reserved by Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement and the other Loan
Documents are required to be performed by it as a Lender.
(d) Agent shall maintain at its office in the City of New York (or
at its principal office if not in New York City) a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of Lenders, and the commitment of, and principal amount of the Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and Borrower, Agent and Lenders may treat each person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by Borrower and any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon Agent's receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and assignee Lender, together with
the processing fee referred to in SECTION 7.04(b), and upon Agent's written
consent to such assignment, Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to Borrower and Lenders. In the event one or
more assignees acquire an interest in the Loan from one or more of Lenders
subsequent to the date of this Agreement, upon the consummation of the transfer
of said interest in accordance with the terms of this Agreement, said acquiring
assignee shall be included within the term "Lenders" and said acquiring assignee
shall thereafter have all of the rights and obligations of a Lender hereunder.
(f) Each Lender may, without the consent of Borrower but only upon
the prior written consent of Agent (which the Agent may grant or withhold in its
sole discretion), sell participations to one or more banks or other entities in
all or a portion of its rights and obligations under this Agreement and the Loan
Documents; provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the provisions contained in PARAGRAPHS 6, 7 and 8 of the Note as if such
participant were a Lender (provided, however, that if any amounts are payable to
participants by reason of any of such PARAGRAPHS, only Agent shall have
authority to collect such amounts on behalf of participants), and (iv) Borrower,
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and, to the extent provided herein, such Lender shall retain the
right to enforce the obligations of Borrower relating to the Loans and to
approve any amendment, modification or waiver of any provision of this Agreement
or any of the other Loan Documents.
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(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation, disclose to the assignee
or participant or proposed assignee or participant any information relating to
the Borrower, and its affiliates furnished to such Lender by or on behalf of the
Borrower.
(h) Any attempted sale, assignment, transfer or other disposition
which does not conform to the requirements of this SECTION 7.04 shall be null
and void ab initio.
(i) Notwithstanding anything herein to the contrary, a Lender may
(without the consent of, but on prior notice to, Agent) sell, assign or
participate any of its Percentage interest in the Loans to one or more of its
branches, agencies or commonly-controlled affiliates. Any sale, assignment
and/or participation to such an affiliate shall be made only on the condition
that (i) such affiliate agrees, pursuant to a writing reasonably satisfactory to
Agent, to be bound by the applicable provisions of this Agreement; (ii) with
respect to any participation, Agent shall continue to deal only with the
transferor; (iii) the transferor agrees that such sale, assignment and/or
participation shall not relieve it of its obligations hereunder or under the
other Loan Documents; (iv) the participant shall not have any of the rights of a
Lender; (v) the purchaser, assignee and/or participant shall make the same
confirmations and representations, warranties, and agreements in favor of Agent
and the other Lenders as are contained in SECTION 7.01(j) of this Agreement; and
(vi) any sale or assignment is of an undivided interest in the Loans of
$5,000,000 or more.
7.05 Subordination. If a Lender fails, when required, to fund its
required share of any Loan or to pay any sums payable by such Lender hereunder
or under any of the other Loan Documents or to pay its required share of any
costs, expenses or disbursements payable by such Lender hereunder or under the
Loan Documents, then such defaulting Lender's interest in the Loan and the Loan
Documents and proceeds thereof shall immediately be subordinated to the interest
of the non-defaulting Lenders in the Loan and the Loan Documents, and proceeds
thereof, and such defaulting Lender's right to vote shall be voted by the
non-defaulting Lenders based on a fraction, the numerator of which is each
non-defaulting Lender's interest in the outstanding Loans and the denominator of
which is the aggregate of the outstanding Loans held by all non-defaulting
Lenders, all without necessity for executing any further documents. Upon such a
failure, Agent may withhold and apply any and all amounts payable to such
defaulting Lender pursuant to this Agreement and/or any of the other Loan
Documents in such order of priority as Agent shall determine in its sole
discretion to: (i) fund for such defaulting Lender its share of any Loan that
such defaulting Lender was obligated but failed to fund; and/or (ii) reimburse
Agent for any other sums, costs, expenses or disbursements payable by such
defaulting Lender hereunder or any of the other Loan Documents; and/or (iii)
make payments of amounts due and owing under the Loan Documents to
non-defaulting Lenders.
7.06 Substitute Notes. In connection with the execution and
delivery of an Assignment and Acceptance, at the request of Agent, Borrower
shall issue one or more new promissory notes, as applicable, to any assignee
and, if the assigning Lender has retained any of its rights and obligations
hereunder following such assignment, to such assigning Lender, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the promissory note held by the assigning Lender prior to
such assignment and
25
shall reflect the amount of the respective commitments and loans held by such
assignee and the assigning Lender after giving effect to such assignment and
such new notes shall not affect Borrower's rights or obligations under the Loan
Documents and shall be issued at no cost to Borrower.
ARTICLE VIII.
DEFINITIONS
8.01 Defined Terms. In addition to the terms elsewhere defined in
the Loan Documents, the following terms are used in the Loan Documents with the
following meanings:
"Accounting Period" - shall mean each twelve (12) month period
beginning on each Calculation Date commencing with the twelve (12) month period
beginning September 30, 2000.
"Affiliate" shall mean (a) if with respect to a corporation, (i)
any officer or director thereof and any person, trust, corporation, partnership,
venture or other entity who or which is, directly or indirectly, the legal or
beneficial owner of more than twenty percent (20%) of any class of shares or
other equity security of such corporation, or (ii) any person, trust,
corporation, partnership, venture or other entity who or which, directly or
indirectly, controls or is controlled by or is under common control with such
corporation and (b) if with respect to a partnership, limited liability company
or venture, any (i) general partner or managing member, (ii) general partner or
managing member of a general partner or managing member, (iii) partnership,
limited liability company or venture with a common general partner or managing
member, (iv) coventurer thereof or (v) any person, trust, corporation,
partnership, limited liability company, venture or other entity who or which,
directly or indirectly, controls or is controlled by or is under common control
with such partnership, limited liability company, or venture, and if any general
partner or managing member or general partner or managing member of a general
partner or coventurer is a corporation, any person, trust, corporation,
partnership, venture or other entity which is an Affiliate as defined in clause
(a) above of such corporation. "Controls" (including the correlative meanings of
"controlled by" and "under common control with") means effective power, directly
or indirectly, to direct or cause the direction of the management and policies
of such person, trust, corporation, partnership, venture or other entity.
"Affiliate Property" shall mean an interest in real estate
acquired by an Affiliate Property Owner.
"Affiliate Property Owner" shall mean an Affiliate of Borrower
which acquires an Affiliate Property.
"Appraised Value" - shall mean the appraised value of a Project or
of an Additional Property, as determined by an independent appraiser selected by
Agent and reasonably acceptable to Borrower. Agent may require that such an
appraisal be performed at any time, but not more frequently than once in any
twelve month period. Appraised Value shall be determined utilizing an appraisal
method consistent with that used in determining the Appraised Value for Agent in
connection with this Loan. Borrower shall solely be responsible for the cost of
such appraisals.
26
"Calculation Date" shall mean each March 31, June 30, September 30
and December 31.
"Debt Service Coverage Ratio" shall mean, for the applicable
Accounting Period, projected net income from real estate operations of the
Projects, adjusted for depreciation, amortization, fees paid to Borrower's
general partners and step rent divided by a projected amortization (principal
and interest) payment for the applicable Accounting Period equal to the
amortization based on (i) the then outstanding principal balance of the Loan,
(ii) a 300 month term and (iii) an annual interest rate equal to greater of (x)
the sum of (a) the prevailing yield on the then most recently issued United
States Treasury obligations having a maturity of ten years and (b) 2.0% and (y)
8.5%.
"Full Force and Effect" - shall mean, as to any lease, that such
lease shall be in full force and effect, there shall be no material default by
the tenant thereunder or material default by the landlord thereunder or other
act or condition or circumstance giving or which may give, without the giving of
any further notice, the tenant or the landlord the right to terminate any lease
and, if requested by Agent and required by its lease, the tenant shall have
delivered to Agent an estoppel certificate in the form required by such lease
or, if such lease does not provide a form of estoppel that the tenant is
required to deliver, then in form and substance reasonably satisfactory to
Agent.
"Liquid Net Worth" shall mean "cash and short term investments at
cost" and "investments in marketable securities" (which shall be marked to
market) as shown by Borrower's financial statements (calculated in a manner
consistent with the Borrower's statements for the period ending December 31,
1999) and/or Loan availability (i.e., the amount of the then undisbursed Loan
which Borrower would be entitled to receive upon its request for an Advance).
"Loan to Value Ratio" shall mean the ratio of (i) the outstanding
principal balance of the Loan to (ii) the Appraised Value of the Projects
encumbered by the Mortgages at the time compliance with the covenant is being
tested (based on appraisals by Agent or appraisals by Borrower approved by
Agent).
"Majority Lenders" means any combination of Lenders individually
or collectively owning undivided ownership interests in the outstanding Loan of
more than fifty percent (50%).
"Percentage" shall mean, with respect to a Lender, such Lender's
percentage in the Loan and the Loan Documents as set forth on EXHIBIT E hereto.
"Person" shall mean and include an individual, a partnership, a
limited liability company, a corporation, a trust, an unincorporated
association, a joint venture or any other entity or a government or any agency
or political subdivision thereof.
"Projects" shall mean each of the properties listed on EXHIBIT C
hereto, unless and until released from the lien of the Mortgage pursuant to
SECTION 6.10(b), and any Additional Property, unless and until released from the
lien of the Mortgage pursuant to SECTION 6.10(b), which Agent agrees is to be
treated as a "Project."
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8.02 Index of Defined Terms. The following is a listing of defined
terms used in this Agreement but not defined in SECTION 7.01, together with an
index of where such terms are defined.
Additional Property 6.11
Advances 6.04
Agent 7.01
Agreement Recital
Approved Lender 7.04(b)
Assignment and Acceptance 7.04(b)
Bankruptcy Code 5.01(f)
Borrower Recital
Debtor Relief Law 5.01(f)
Default 5.01
FABT Recital
Initial Maturity Date 6.03
Lenders Recital
Loan 1.01
Loan Commitment 1.01
Loan Documents 1.01
Maturity Date 6.03
Mortgages Exhibit A
Note 6.01
Original Loan Agreement Recital
Register 7.04(d)
Travelers Recital
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ARTICLE IX.
MISCELLANEOUS
9.01 Expenses. Borrower shall pay, within five (5) days of Agent's
demand, all reasonable expenses and charges of Agent incidental to making the
Loan, including, without limitation, attorneys' fees, appraisal fees, fees and
charges for surveys, examination of title to the Projects and mortgage title
insurance thereon, and hazard insurance.
9.02 Amendments to Loan Documents. Except as otherwise required by
this SECTION or where Agent is, pursuant to any of the Loan Documents,
authorized to act without the consent of Lenders, no modification, termination
or waiver of any provisions of this Agreement or of any of the other Loan
Documents, nor consent to any departure by Borrower therefrom, shall in any
event be effective, irrespective of any course of dealing between the parties,
unless the same shall be in a writing executed by Majority Lenders; provided,
however, that, notwithstanding anything to the contrary in any of the Loan
Documents, Agent may amend any of the Loan Documents or waive any condition or
provision thereof if such amendment or waiver is of a technical nature and will
not adversely affect in any material respect the interest of any Lender.
Borrower shall be entitled to rely upon Agent's representation or other
statement concerning whether waivers, consents or other matters have been
approved by Majority Lenders. Any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in the same, similar or other circumstances, except to
the extent expressly required by the Loan Documents. In the case of any waiver,
Borrower and Lenders shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon. No
disbursement or conversion of a Loan or of a portion thereof shall constitute a
waiver of any Default or condition to disbursement or conversion, nor shall such
disbursement or conversion preclude Agent and/or Lenders from declaring a
Default and pursuing its and their remedies hereunder in the event Borrower
fails to satisfy such condition or cure such Default. Any advance by Lenders of
Loan proceeds hereunder made prior to or without the fulfillment by Borrower of
all of the conditions precedent thereto, whether or not known to Agent and/or
Lenders, shall not constitute a waiver by Agent and/or Lenders of the
requirement that all conditions, including the non-performed conditions, shall
be satisfied with respect to all future advances. Except as may be expressly
provided for in the Loan Documents, Majority Lenders shall not, without the
prior written consent of all Lenders, (i) increase the maximum principal amount
of the Loans, (ii) in writing, waive or postpone any date fixed for payment of
principal, interest, prepayment premium or extension fee payable on or with
respect to the Loans, (iii) reduce the amount of any principal, interest,
prepayment premium or extension fee payable on or with respect to the Loans,
(iv) release any collateral security for the Loans, release Borrower or forgive
or discharge all or any part of the Loans, in each event whether or not with
consideration or (v) change the definition of Majority Lenders or the provisions
of this sentence.
9.03 Notices. All written notices and demands under the Loan
Documents shall be deemed served upon delivery (if given by hand or by overnight
courier) or, if mailed, upon the first to occur of receipt or the expiration of
seventy-two (72) hours after deposit in
29
United States Postal Service, certified mail, postage prepaid and addressed to
the address of (i) Borrower, Lender or Agent appearing on the signature page
below or (ii) any Lender appearing in the supplemental signature pages hereof.
Notice of change of address may be given in the same manner, provided Borrower's
address is in the State of New York or the State where Borrower's principal
place of business is located.
9.04 Relationship of Parties. The relationship of Borrower, on the
one hand, and Agent and Lenders, on the other hand, under the Loan Documents is,
and shall at all times remain, solely that of borrower and lender. No person
other than Agent, Lenders and Borrower and their permitted successors and
assigns shall have any rights or right of action hereunder.
9.05 Attorneys' Fees; Enforcement. If any attorney is engaged by
Agent to enforce or defend any provision of the Loan Documents, or as a
consequence of any Default under the Loan Documents, Borrower shall pay to
Agent, immediately upon demand, the amount of all reasonable attorneys' fees and
all costs incurred by Agent in connection therewith, together with interest
thereon from the date of such demand until paid at the rate of interest
applicable to the principal balance of the Note as specified therein.
9.06 Disclosure of Information; Participations. Borrower
understands and agrees that Lender may elect, at any time, to sell, assign or
participate all or any part of such Lender's interest in the Loan, and that any
such sale, assignment or participation may, subject to the other provisions of
this Agreement, be to one or more financial institutions, private investors,
and/or other entities, at Lender's sole discretion. Borrower further agrees that
Agent or any Lender may disseminate to any such potential purchaser(s),
assignee(s) or participant(s) all documents and information (including without
limitation all financial information) which has been or is hereafter provided to
or known to Agent or any Lender with respect to: (a) any security for the Loan;
(b) any party connected with the Loan (including, without limitation, Borrower
or any general partner of Borrower); and/or (c) any lending relationship other
than the Loan which Agent or any Lender may have with any party connected with
the Loan.
9.07 Severability. If any provision of the Loan Documents shall be
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed from the Loan Documents and
the remaining parts shall remain in full force as though the invalid, illegal,
or unenforceable portion had never been part thereof.
9.08 No Waiver; Successors. No waiver shall be implied from any
failure of Agent or any Lender to take, or any delay by Agent or any Lender in
taking, action concerning any Default or failure of condition, or from any
previous waiver of any similar or unrelated Default or failure of condition. The
terms and provisions hereof shall be binding upon and inure to the benefit of
the heirs, successors and assigns of the parties.
9.09 Miscellaneous. All headings are for convenience only and
shall be disregarded in construing the Loan Documents. Except as may be
otherwise expressly provided, the Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
applicable to contracts made and to be wholly performed in such State, except to
the extent preempted by Federal laws. Borrower hereby consents to the
jurisdiction of any Federal or State Court within the State of New York having
proper venue, and
30
also consents to service of process by any means authorized by New York or
Federal Law.
9.10 Integration. The Loan Documents contain or expressly
incorporate by reference the entire agreement of the parties with respect to the
matters contemplated therein and supersede all prior negotiations.
9.11 Incorporation. The schedules and exhibits attached hereto are
by this reference incorporated into and made a part of this Agreement.
9.12 Further Assurances. At Agent's request and at Borrower's
expense, Borrower shall execute, acknowledge and deliver any other reasonable
instruments and perform any other acts reasonably necessary, desirable or proper
(as reasonably determined by Agent) to carry out the purposes of the Loan
Documents or to perfect and preserve any liens created by the Loan Documents.
9.13 Brokers. Neither Agent nor any Lender shall be required to
pay any brokerage fees or commissions arising from the execution of this
Agreement or the making of the Loan. Borrower hereby agrees to indemnify and
hold harmless Agent and/or any Lender from all damages, loss, costs and expenses
suffered or incurred by Agent and/or any Lender in connection with any claims
made by a broker or any other person arising out of the execution of this
Agreement by Agent and such Lender or the making of the Loan.
9.14 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (b)
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE LOAN DOCUMENTS (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
31
IN WITNESS WHEREOF, Borrower and Agent (in its capacity as
Agent and Lender) have executed this Agreement as of the date first set forth
above.
"Agent" and "Lender" "Borrower"
FLEET NATIONAL BANK CORPORATE REALTY INCOME FUND, I, L.P.,
a Delaware limited partnership
By: By:
-------------------------------- -----------------------------------
Xxxxx Xxxxxx, Xxxxxx X. Xxxxxxx, Xx.,
Senior Vice President general partner
By: 1345 Realty Corporation,
general partner
Agent's Address: By:
-----------------------------------
Xxxxxx X. Xxxxxxx, Xx.,
President
Fleet National Bank Borrower's Address:
1133 Avenue of the Americas Corporate Realty Income Fund I, L.P.
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxxx Xxxxxx
Xxxx: Xx. Xxxxx X. Xxxxxx, New York, New York 10017
Senior Vice President Attn: Xx. Xxxxxx X. Xxxxxxx, Xx.,
Telecopier: (000) 000-0000 General Partner
Telecopier: (000) 000-0000.
EXHIBIT A
TO
AMENDED AND RESTATED LOAN AGREEMENT
Loan Documents
The documents numbered 1 through 4, inclusive, below and
amendments, modifications and supplements thereto, and any documents executed in
the future in connection with the Loan are collectively referred to as the "Loan
Documents."
1. This Agreement.
2. The Note.
3. The mortgages and deeds of trust securing the Loan
(individually, a "Mortgage" and collectively, the "Mortgages") and encumbering
the Projects referred to on EXHIBIT C to this Agreement.
4. Environmental Compliance and Indemnification Agreement
33
EXHIBIT B
TO
AMENDED AND RESTATED LOAN AGREEMENT
NOTE
34
EXHIBIT C
TO
AMENDED AND RESTATED LOAN AGREEMENT
LOAN ALLOCATIONS FOR PROJECTS
(i) Alamo Towers in San Antonio, Texas -- $6,600,000.
(ii) 2.06 acre site in the Los Angeles Corporate Center, located in
Monterey Park, California -- $1,225,000.
(iii) 6.1 acre site at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx -- $2,250,000.
(iv) 6.75 acre site in the Las Colinas Office Center, Irving,
Texas -- $9,000,000.
(v) 5 acre site at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx,
Xxx Xxxxxx-- $5,925,000.
35
EXHIBIT D
DOCUMENTATION RELATING TO ADDITIONAL PROPERTIES
Prior to or concurrently with the acquisition of an Additional
Property by Borrower, Agent shall have received and approved the following:
(a) An up-to-date survey of the Additional Property reasonably
satisfactory to Agent and its counsel, which survey shall be
certified to the title company insuring the liens of the Mortgages
and to Agent. The surveys shall show dimensions and locations of
any improvements, easements, rights of way, encroachments and the
extent thereof, established building lines and street lines, the
distance to and names of the nearest intersecting streets, and
such other details as Agent may reasonably request.
(b) An endorsement to the policies of mortgage title insurance in
the amount of the Loan insuring the lien of the Mortgage on the
Additional Property, subject only to those exceptions to title as
are approved by Agent and its counsel, and with affirmative
insurance on such matters as Agent may reasonably require.
(c) Executed copies of all agreements whatsoever affecting or
relating to the use, occupancy, operation, development or
construction of the Additional Property as Agent may reasonably
request (including, without limitation, certificates of
occupancy), which agreements shall be reasonably satisfactory in
all respects to Agent and its counsel.
(d) Copies of all instruments and documents referred to in the
title reports delivered with respect to the Additional Property.
(e) Opinions by Borrower's counsel reasonably satisfactory to Agent
and Agent's counsel stating that the Loan Documents relating to
the Additional Property have been duly authorized and executed
and are legal, binding and enforceable in accordance with their
terms. In addition, the opinions of counsel shall state that the
execution and delivery of the Loan Documents relating to the
Additional Property do not contravene the terms and conditions of
any agreement to which Borrower is bound; that there are no
judicial or administrative actions, suits or proceedings pending
or threatened against or affecting Borrower or the Additional
Property; and such other opinions as Agent and its counsel may
reasonably request. Such opinions shall be issued by counsel
licensed in the State of New York and, if different, Borrower's
state of formation. Opinions with respect to the enforceability of
the security documents and other state matters may be required
from Borrower's counsel in each state in which the Additional
Property is located.
(f) Current financial statements of those tenants (and of any
guarantor of a tenant's obligations) of the Additional Property as
are publicly available or available to Borrower, and a rent roll
for the Additional Property.
(g) Evidence that the Additional Property is in compliance with
the requirements of all zoning, environmental and other laws,
ordinances, rules, regulations and restrictions affecting the
Additional Property and the use thereof (but Agent shall not
require a zoning endorsement from the title company or zoning
opinions from Borrower's counsel).
(h) Evidence reasonably satisfactory to Agent that the Additional
Property does not, and will not, contain (i) asbestos in any form;
(ii) urea formaldehyde foam insulation; (iii) transformers or
other equipment which contain dielectric fluid containing levels
of polychlorinated biphenyls in excess of 50 parts per million;
(iv) any other chemical, material or substance to which exposure
is prohibited, limited or regulated by any federal, state,
country, regional or local authority or which, even if not so
regulated, is known to pose a hazard to the health or safety of
the occupants of the Additional Property or of property adjacent
to the Additional Property.
(i) At Borrower's expense, a report (a Phase I Environmental
Assessment, and a Phase II Environmental Assessment if Agent
determines that the same is necessary), satisfactory to Agent,
prepared by a consultant selected by Agent, must be received at
least fifteen (15) days prior to the acquisition of the Additional
Property. The report must certify to Agent that the Additional
Property is not being used and has never been used for any
activities involving, directly or indirectly, the use, generation,
treatment, storage (except for normal and customary office
supplies used by tenants in accordance with applicable law) or
disposal of any hazardous or toxic chemical, material, substance
or waste; whether any relevant adjacent property has ever been
used for any of the aforementioned activities; that no tanks for
the storage of gasoline, kerosene, oil or other hazardous
substances are located on, under or about the Additional Property;
and if there are any heating oil storage tanks on the Additional
Property, the same are installed, maintained and in use in
compliance with all laws, codes, rules and regulations applicable
thereto. Subject to the rights of tenants and the owner of the
Additional Property, Borrower shall seek permission for Agent, its
agents, employees, consultants, and contractors to enter (at
reasonable times and upon reasonable notice) upon the Additional
Property and to perform such tests on the Additional Property as
are reasonably necessary to conduct such a review and/or
investigation. No action taken pursuant to the preceding sentence
shall, except to a de minimis extent, interfere with the use or
operation of the Additional Property.
(j) Original policies of insurance, or such other evidence of
insurance
coverage as Agent shall find satisfactory, evidencing the
insurance coverage required by the Mortgage which is to encumber
the Additional Property.
(k) Such security agreements as Agent's counsel shall prepare in
order to give Agent a first lien on all of the items of personal
property to be placed upon the Additional Property, and such
financing statements and other documents as are required to comply
with the Uniform Commercial Code of the state in which the
Additional Property is located.
(l) Operating agreements and leases and subordination and
attornment agreements, as reasonably required by Agent, and
estoppel certificates, in form and substance reasonably
satisfactory to Agent, from such tenants of the Additional
Property as Agent shall reasonably request.
(m) Such other documents, instruments, certificates, opinions,
assurances, consents and approvals as Agent and its counsel may
reasonably request.
EXHIBIT E
PERCENTAGES
Lender Percentage
------------------- ----------
Fleet National Bank 100%
AMENDED AND RESTATED
LOAN AGREEMENT
among
CORPORATE REALTY INCOME FUND I, L.P.,
as Borrower,
FLEET NATIONAL BANK,
as Agent for itself and the other Lenders,
and
The Lenders from Time to Time Parties Hereto
TABLE OF CONTENTS
Page
ARTICLE I. THE LOAN.............................................................................1
1.01 Loan..........................................................................................1
ARTICLE II. REPRESENTATIONS AND WARRANTIES.......................................................2
2.01 Authority.....................................................................................2
2.02 Enforceability................................................................................2
2.03 No Violation..................................................................................2
2.04 Financial Information.........................................................................2
2.05 Accuracy......................................................................................2
2.06 Taxes.........................................................................................3
2.07 No Subordination..............................................................................3
2.08 Permits, Franchises...........................................................................3
2.09 ERISA.........................................................................................3
2.10 Outstanding Loans.............................................................................3
2.11 Other Obligations.............................................................................3
ARTICLE III. CONDITIONS PRECEDENT.................................................................3
3.01 Appraisal.....................................................................................3
3.02 Environmental.................................................................................3
3.03 Expenses......................................................................................3
3.04 Compliance....................................................................................4
3.05 Documentation.................................................................................4
3.06 Approval of Agent's Counsel...................................................................4
3.07 Certain Covenants.............................................................................4
3.08 Loan Facility Fee.............................................................................4
i
Page(s)
ARTICLE IV. COVENANTS............................................................................4
4.01 Existence.....................................................................................4
4.02 Taxes and Other Liabilities...................................................................4
4.03 Notice........................................................................................4
4.04 Accounting Records............................................................................5
4.05 Facilities....................................................................................5
ARTICLE V. DEFAULT..............................................................................5
5.01 Default.......................................................................................5
5.02 Remedies......................................................................................7
5.03 Right of Contest..............................................................................7
ARTICLE VI. ADDITIONAL PROVISIONS................................................................7
6.01 Note..........................................................................................7
6.02 Purpose.......................................................................................7
6.03 Maturity; Extension Options...................................................................8
6.04 Advances......................................................................................8
6.05 Requests for Advances.........................................................................8
6.06 Borrowing and Repayment.......................................................................9
6.07 Interest and Amortization....................................................................10
6.08 ACM Report...................................................................................10
6.09 Expenses.....................................................................................10
6.10 Collateral; Release of Collateral............................................................11
6.11 Additional Properties........................................................................11
6.12 Unsecured and Subordinate Financing..........................................................12
6.13 Single Purpose Entity........................................................................12
6.14 Property Information.........................................................................12
ii
Page(s)
6.15 Operating Accounts...........................................................................13
6.16 Limitation on Borrower's Liability...........................................................13
6.17 Borrower's Distributions.....................................................................14
6.18 Borrower's Covenants.........................................................................14
6.19 Guaranties...................................................................................15
6.20 Affiliate Properties.........................................................................16
6.21 Leasing Standards............................................................................16
ARTICLE VII. The Agent...........................................................................16
7.01 Agent........................................................................................16
7.02 Costs and Expenses...........................................................................22
7.03 Authority and Investment Purpose.............................................................22
7.04 Transfer of Interests........................................................................22
7.05 Subordination................................................................................25
7.06 Substitute Notes. ...........................................................................25
ARTICLE VIII. DEFINITIONS.........................................................................26
8.01 Defined Terms................................................................................26
8.02 Index of Defined Terms.......................................................................28
ARTICLE IX. MISCELLANEOUS.......................................................................29
9.01 Expenses.....................................................................................29
9.02 Amendments to Loan Documents.................................................................29
9.03 Notices......................................................................................29
9.04 Relationship of Parties......................................................................30
9.05 Attorneys' Fees; Enforcement.................................................................30
9.06 Disclosure of Information; Participations....................................................30
9.07 Severability.................................................................................30
iii
Page(s)
9.08 No Waiver; Successors........................................................................30
9.09 Miscellaneous................................................................................30
9.10 Integration..................................................................................31
9.11 Incorporation................................................................................31
9.12 Further Assurances...........................................................................31
9.13 Brokers......................................................................................31
9.14 WAIVER OF RIGHT TO TRIAL BY JURY.............................................................31
9.15 Counterparts.................................................................................31
Exhibits:
A - Loan Documents
B - Note
C - Loan Allocations for Projects
D - Documentation Relating to Additional Properties
E - Percentages
F - Assignment and Acceptance
iv
