Exhibit 10.69
JHREF Loan No.3212525
REPLACEMENT RESERVE AGREEMENT
THIS REPLACEMENT RESERVE AGREEMENT (the "AGREEMENT") is made as of the
1st day of March, 1999 by and between BIRCH POND REALTY CORPORATION, a
Delaware corporation (doing business in the State of New Hampshire as BPRC)
("BORROWER") and XXXX XXXXXXX REAL ESTATE FINANCE, INC., a Delaware corporation
("LENDER").
W I T N E S S E T H
WHEREAS, Borrower is the owner of a certain property (the "MORTGAGED
PROPERTY") located in Tilton, Xxxxxxx County, New Hampshire, more particularly
described in the Loan Documents (as hereinafter defined), and in connection
therewith, Lender has loaned Borrower the principal sum of TWELVE MILLION AND
00/100 DOLLARS ($12,000,000.00) (the "LOAN"); and
WHEREAS, the Loan is evidenced by a Note executed by Borrower as of
even date herewith in the principal amount of $12,000,000.00 payable to the
order of Lender (the "NOTE"); and
WHEREAS, the Note is secured by a Mortgage dated as of even date
herewith, which encumbers the Mortgaged Property, and by the other "LOAN
DOCUMENTS" (as such term is defined in the Note); and
WHEREAS, Borrower is required to complete certain capital replacements
to the Mortgaged Property, which are listed in SCHEDULE 1 attached hereto (the
"REPLACEMENTS"); and
WHEREAS, Lender requires, as a condition precedent to Lender's
acceptance of the Note, that Borrower make certain deposits with Lender of
certain funds, to be held, released and used as provided in this Agreement to
reimburse Borrower for the cost of completing the Replacements as hereinafter
described.
NOW, THEREFORE, in consideration of the foregoing, the covenants and
conditions contained in this Agreement and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. DEFINITIONS. Any capitalized term utilized herein shall have
the meaning as specified in the Mortgage, unless such term is otherwise
specifically defined herein.
2. THE DEPOSIT(S).
(A) INITIAL DEPOSIT. Concurrently with its execution of this
Agreement, Borrower has deposited with Lender the cash sum of $0.00
("INITIAL DEPOSIT").
(B) MONTHLY DEPOSITS. In addition, on each date that a
regularly scheduled payment of principal and/or interest is due under
the Note, Borrower shall deposit with
1
JHREF Loan No.3212525
Lender the applicable monthly deposit ("Monthly Deposit") required as
set forth in SCHEDULE 2, attached hereto. The Initial Deposit, if any,
and the Monthly Deposits, if any, and all other funds deposited by
Borrower pursuant to this Agreement shall hereinafter be collectively
referred to as the "Replacement Reserve".
(c) LIMITATION ON MONTHLY DEPOSITS. Provided that (i) Birch
Pond Realty Corporation is the owner of the Mortgaged Property, (ii)
there is no default by Borrower under the Loan Documents or this
Agreement, and (iii) the Mortgaged Property is being properly
maintained by Borrower, then Monthly Deposits may be suspended so long
as the balance of the Replacement Reserve is at least $80,952.00 (it
being understood that if any disbursements hereunder from such
Replacement Reserve shall cause the balance to be less than $80,952, or
if such balance shall for any other reason be less than $80,952,
Monthly Deposits shall resume until the Replacement Reserve balance is
again at least $80,952).
The Replacement Reserve shall be held and released by Lender, and used
by Borrower, in accordance with the terms and conditions of this Agreement.
Lender (or a designated representative of Lender) shall have the sole right to
make withdrawal of the Replacement Reserve in accordance with the terms and
conditions of this Agreement.
3. USE OF THE REPLACEMENT RESERVE. Except as otherwise
expressly set forth herein, and provided there then exists no Event of
Default under the Loan Documents, the Replacement Reserve shall be
used to reimburse Borrower as provided herein for the reasonable costs
and expenses incurred by Borrower in completing the Replacements. This
Agreement does not constitute a guaranty of payment or performance by
Lender. Lender shall have no obligation to pay any amounts to Borrower
to the extent that any request exceeds the amount in the Replacement
Reserve. Lender shall have no obligation to authorize any disbursement
or withdrawals from the Replacement Reserve after an Event of Default.
4. PERFORMANCE OF REPLACEMENTS.
(a) Borrower shall make each Replacement when required in
order to keep the Mortgaged Property in good order and repair and in a
good, marketable condition and to keep the Mortgaged Property or any
portion thereof from deteriorating. Borrower shall complete all such
Replacements as soon as practicable following commencement of each such
Replacement.
(b) Borrower shall pay for and obtain or cause to be paid for
and obtained all permits, licenses and approvals required by all
applicable laws with regard to the Replacements, whether necessary for
commencement, completion, use or otherwise.
(c) Borrower shall perform or cause to be performed all work
in connection with the Replacements in a good and workmanlike manner,
in compliance with all applicable laws, ordinances, rules and
regulations (including, without limitation, any and all environmental
laws and laws for the handicapped and/or disabled), and with all
applicable insurance
2
JHREF Loan No.3212525
requirements, which performance by Borrower shall be without regard to
the sufficiency of the Replacement Reserve to cover the cost of any
Replacement or the Replacements as a whole.
(d) If requested by Lender, in addition to any insurance
required under the Loan Documents, Borrower shall provide or cause to
be provided workers' compensation, builder's risk (if required by
Lender), and public liability insurance and other insurance required
under applicable laws in connection with any of the Replacements. All
such policies shall be in form and amount satisfactory to Lender. All
such policies which can be endorsed with standard mortgage clauses
making losses payable to Lender or its assigns shall be so endorsed.
(e) Borrower covenants and agrees that the Replacements shall
be constructed, installed or completed, as applicable, free and clear
of any and all liens (including mechanic's, materialman's or other
liens), claims and encumbrances whatsoever, subject to Borrower's right
to contest as specified in the Mortgage (as defined in the Note).
(f) If at any time during the term of the Loan, Lender
reasonably determines that Replacements not listed on SCHEDULE 1 are
needed to keep the Mortgaged Property in good order and repair and in a
good, marketable condition or to prevent deterioration of the Mortgaged
Property ("Additional Replacements"), Lender may send Borrower written
notice of the need for making such Additional Replacements. Borrower
shall promptly, but in no event later than thirty (30) days after the
date of such notice, commence making such Additional Replacements in
accordance with the requirements of this Agreement. Additional
Replacements shall be deemed Replacements for all purposes of this
Agreement.
5. RELEASE OF REPLACEMENT RESERVE. The following condition shall
apply to any release of the Replacement Reserve to Borrower:
(a) If Borrower shall not then be in breach of any provision
of this Agreement nor shall an Event of Default then exist under any of
the Loan Documents (and no act, event or condition shall then exist
that, with the giving of notice or the passage of time, or both, would
constitute a breach hereunder or an Event of Default under any of the
Loan Documents), then Lender, within ten (10) business days of receipt
of a disbursement request ("Disbursement Request") specifying the
amount requested and the Replacement for which reimbursement is
requested in the form attached hereto as EXHIBIT "A" shall, subject to
the terms and conditions set forth below, release to Borrower the
reimbursement requested in the Disbursement Request. It is understood
and agreed that releases of the Replacement Reserve will be permitted
on a quarterly basis, in minimum amounts of Ten Thousand Dollars
($10,000.00);
(b) Borrower shall provide evidence satisfactory to Lender
(including, without limitation, access to the Mortgaged Property to
Lender, Lender's representatives, an architect and/or engineer
specified by Lender for the purpose of an inspection of work done, at
3
JHREF Loan No.3212525
Borrower's expense, if requested by Lender) that the Replacement for
which the reimbursement is being requested has been completed in
accordance with this Agreement.
(c) Borrower shall submit to Lender copies of paid invoices
for the Replacements for which the reimbursement has been requested and
unconditional final lien waivers and releases conforming to the
requirements of local law from all parties furnishing materials and/or
services in connection with the Disbursement Request;
(d) Borrower shall reimburse Lender all out-of-pocket
inspection fees and/or reasonable attorney's fees and expenses incurred
by Lender in connection with the Disbursement Request;
(e) Borrower shall provide Lender with such additional
documents, certificates and affidavits as Lender may reasonably
request, including but not limited to a "date-down" endorsement to the
mortgagee's title insurance policy showing that no mechanic's or
materialman's liens or other liens (that have not been bonded off to
Lender's satisfaction) have been placed against the Mortgaged Property
since the date of recordation of the Mortgage and that the title to the
Mortgaged Property is free and clear of all liens (other than the lien
of the Mortgage and any other liens previously approved in writing by
the Lender, if any), provided, however, Lender shall not request such
"date down" endorsements more often than two (2) times per any twelve
month period, unless Lender reasonably believes that additional liens
may have been placed on the Mortgaged Property; and if required by
Lender, Borrower shall execute and deliver to Lender a certificate (in
form and substance satisfactory to Lender) that the Replacements
covered by the applicable Disbursement Request comply with, and
Borrower has fully satisfied, the terms and provisions of SECTION 4
above, that the Replacements for which a Disbursement Request has been
submitted have been fully paid for, and that no claim or claims exist
against the Borrower or against the Mortgaged Property out of which a
lien based on furnishing labor or material exists or might ripen;
(f) Except as set forth in SECTION 5(G) below, Lender shall
not be obligated to release any portion of the Replacement Reserve (i)
for the payment of the cost of an improvement or other item other than
a Replacement as set forth on SCHEDULE 1 hereto or for an Additional
Replacement, or (ii) for costs of a Replacement in excess of the costs
approved by Lender;
(g) The Replacement Reserve shall remain with Lender in
accordance with the terms of this Agreement for as long as any sums
remain due and payable to Lender under the Loan Documents. Upon the
full and final payment to Lender of all such sums, Lender shall return
to Borrower the portion of the Reserve then being held by Lender.
(h) In addition to the conditions set forth above, Lender
shall not be obligated to honor any Disbursement Request (i) in the
event of Borrower's breach of any provision of this Agreement or upon
the occurrence of an Event of Default under any of the other Loan
Documents which breach or occurrence shall be continuing, nor (ii) upon
the occurrence and
4
JHREF Loan No.3212525
during the continuation of any act, event or condition then existing
that, with the giving of notice or the passage of time, or both, would
constitute a breach hereunder or an Event of Default under any of the
Loan Documents.
6. INSPECTIONS. Borrower shall permit Lender or Lender's
representatives (including an independent person such as an engineer,
architect, or inspector) to enter onto the Mortgaged Property during
normal business hours (subject to the rights of tenants under their
leases), and inspect the progress of any Replacements and all
materials being used in connection with the Replacements. Borrower
agrees to cause all contractors and subcontractors to cooperate with
Lender, Lender's representatives and such other persons described
above in connection with such inspections.
7. REMEDIES.
(a) In order to secure Borrower's repayment of the Note and
performance of all other covenants and conditions required on the part
of Borrower to be observed or performed hereunder and under the Loan
Documents, Borrower, to the extent Borrower possesses any interest in
the Replacement Reserve, hereby pledges, assigns and grants to Lender a
continuing first lien security interest in the Replacement Reserve, and
Lender is hereby given a lien upon, security title to, and a security
interest in the Replacement Reserve and all documents evidencing the
Replacement Reserve. Borrower hereby acknowledges that Lender has
complete dominion and control over the Replacement Reserve, and
Borrower shall not, without the express written consent of Lender, have
any access to or right to draw against any of the Replacement Reserve.
(b) Upon the occurrence of an Event of Default or in the event
and during the continuation of Borrower's breach of any provision of
this Agreement, Lender may terminate this Agreement and shall have all
remedies available under Article 9 of the Uniform Commercial Code,
under common law, and under any other applicable laws and, in addition,
may retain the Replacement Reserve then being held pursuant to this
Agreement and apply such Replacement Reserve in such order and in such
amounts as Lender shall elect, in its sole and absolute discretion: (i)
to repayment of the indebtedness evidenced by the Note and the Loan
Documents; (ii) toward reimbursement of Lender for any losses or
expenses (including, without limitation, legal fees) suffered or
incurred by Lender as a result of such default; and/or (iii) in order
to proceed under existing contracts or enter into contracts with third
parties to make or complete the Replacements.
In the Event of Default, Lender shall have the right, but not
the obligation, to enter onto the Mortgaged Property and perform any
and all work and labor necessary to make or complete the Replacements
and/or employ watchmen to protect the Mortgaged Property from damage.
All sums so expended by Lender shall be construed to have been paid to
Borrower and shall be secured by the Mortgage. Borrower hereby
constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake the
Replacements in the name of the Borrower, enter into contracts for the
completion of the Replacements, incur such obligations, enforce any
contracts or agreements made by or on
5
JHREF Loan No.3212525
behalf of Borrower (including the prosecution and defense of all
actions or proceedings in connection with the Replacements and the
payment, settlement, or compromise of all claims for materials and work
performed in connection with the Replacements) and do any and all
things necessary or proper to complete the Replacements. This power of
attorney shall be construed to be a power coupled with an interest
which cannot be revoked. Borrower hereby assigns to Lender all rights,
claims and causes of action Borrower may have against any person or
entities supplying labor or materials in connection with the
Replacements; provided, however, that Lender may not pursue any such
right, claim or cause of action unless an Event of Default shall have
occurred under the Loan Documents or Borrower shall have otherwise
breached any provision in this Agreement.
8. INDEMNIFICATION. Borrower shall hold harmless, indemnify and
defend Lender from and against any and all liabilities, obligations,
claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including without limitation reasonable
attorneys' fees and expenses) imposed upon or incurred by Lender
arising from, or in connection with, directly or indirectly, this
Agreement, except to the extent arising solely out of the willful
misconduct or gross negligence of Lender. This indemnity is in
addition to any other indemnity agreements made by Borrower to
Lender in the Mortgage, the Note or in any of the other Loan
Documents. Borrower covenants and agrees that, in performing any of
its duties under this Agreement, neither Lender nor any of its
successors or assigns shall be liable for any losses, costs or
damages which may be incurred by any of them as a result thereof,
except for any losses, costs or damages arising out of the willful
misconduct or gross negligence of such party.
9. MISCELLANEOUS.
(a) Except as otherwise expressly provided herein, in any
instance where the consent or approval of Lender is required or may be
given or where any determination, judgment or decision is to be
rendered by Lender under this Agreement, such approval and consent
shall be given or withheld in Lender's sole and absolute discretion.
(b) All notices hereunder shall be given in accordance with
the provisions of the Mortgage, except all notices hereunder to Lender
shall be given to the following address: Xxxx Xxxxxxx Real Estate
Finance, Inc., Xxxx Xxxxxxx Place, 000 Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attn: Xxxx Xxx Xxxxxxx, Loan Number 3212525.
(c) This Agreement shall be binding upon Borrower and its
heirs, devisees, representatives, successors and assigns, including
successors in interest of Borrower in and to all or any part of the
Mortgaged Property, and shall inure to the benefit of and may be
enforced by Lender and its heirs, successors, legal representatives,
substitutes and assigns. Borrower shall not assign any of its rights or
obligations under this Agreement.
(d) This Agreement is intended solely for the benefit of
Borrower and Lender, and no third party shall have any right or
interest in this Agreement, nor any right to enforce this Agreement
against any party hereto.
6
JHREF Loan No.3212525
(e) This Agreement contains the complete and entire
understanding of the parties with respect to the matters covered and
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of
Borrower and Lender, but only by an agreement in writing signed by the
party against whom the enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.
(f) No provision of this Agreement or action taken by Lender
pursuant hereto shall be construed as acceptance or approval by Lender
of any Replacement or an acknowledgment that any Replacement has been
completed in accordance with applicable building, zoning or other
codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority. Each and every provision for the consent,
approval, inspection, review or verification by Lender hereunder is for
Lender's own purpose and benefit only, and no other party may require
that the same be given or be entitled to assume that Lender shall
refuse to make or give the same. In addition, in no event shall any
term hereof, or any action taken by Lender contemplated hereby, be
deemed to be or construed as a warranty or representation by Lender as
to the adequacy of any Replacement, nor that the same complies with
applicable laws (including, without limitation, any and all
environmental laws and laws for the handicapped and/or disabled).
(g) Borrower hereby covenants that Borrower shall not further
pledge, assign or grant a security interest or any other interest in or
to, the Replacement Reserve, or any proceeds, replacement or
substitutes thereto.
(h) No right or remedy conferred upon or reserved to Lender
under this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right and remedy shall be cumulative
and concurrent and may be enforced separately, successively or
together, and may be exercised from time to time as often as may be
deemed necessary by Lender.
(i) Nothing herein or in the Loan Documents is intended to
create, nor creates, nor shall be deemed to create, a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender, nor to grant Lender any interest in the Mortgaged
Property other than that of creditor or mortgagee.
(j) If any provisions of this Agreement shall conflict with
any provisions of the other Loan Documents regarding the Replacement
Reserve, the provisions contained in this Agreement shall control.
(k) If any term, covenant or condition of this Agreement is
held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such provision.
7
JHREF Loan No.3212525
(l) This Agreement shall be governed by and construed in
accordance with the laws of the State of New Hampshire and the
applicable laws of the United States of America.
(m) This Agreement may be executed in multiple counterparts,
each of which when taken together shall constitute one and the same
original.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as
of the date first above written.
BORROWER:
BIRCH POND REALTY CORPORATION, A
DELAWARE CORPORATION
(doing business in the State of New Hampshire
as BPRC)
By: /s/ Xxxx X. Xxxxxx
----------------------------------------------
Name: XXXX X. XXXXXX
Title: TREASURER
LENDER:
XXXX XXXXXXX REAL ESTATE FINANCE,
INC., A DELAWARE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: XXXXXXX X. XXXXXX
Title: VICE PRESIDENT
8
JHREF Loan No.3212525
LIST OF SCHEDULES AND EXHIBITS
Schedule 1 - Replacements
Schedule 2 - Monthly Deposits
Schedule 3 - Modified Monthly Deposits
Exhibit "A" - Disbursement Request (with Annex 1)
9
JHREF Loan No.3212525
SCHEDULE 1
REPLACEMENTS
UNSPECIFIED
Schedule 1-1
JHREF Loan No.3212525
SCHEDULE 2
MONTHLY DEPOSITS
The amount of each monthly deposit is Three Thousand Three Hundred Seventy-Three
Dollars ($3,373.00).
Schedule 2-1
JHREF Loan No.3212525
SCHEDULE 3
MODIFIED MONTHLY DEPOSITS
NONE
Schedule 3-1
JHREF Loan No.3212525
EXHIBIT "A"
DISBURSEMENT REQUEST (NO. )
JHREF LOAN NO. 3212525
TO: XXXX XXXXXXX REAL ESTATE FINANCE, INC. ("LENDER")
FROM: BIRCH POND REALTY CORPORATION ("BORROWER")
This Disbursement Request is submitted by Borrower in accordance with
the Replacement Reserve Agreement dated as of ___________, 199__, between
Borrower and Lender (the "AGREEMENT"). Terms used with initial capital letters
and not defined in this Disbursement Request have the meanings given them in the
Agreement.
1. Borrower hereby requests disbursement for the payment of the
Replacements (or a portion thereof) in the amounts specified below:
COST OF REPLACEMENTS (include quantity, materials AMOUNT/PRICE
and labor)
TOTAL DISBURSEMENT REQUESTED $_____________
2. Borrower certifies, represents and warrants to Lender that all
statements, invoices, bills, costs, expenses and any other sums of money owing
with respect to the Replacements incurred on or before this date have been paid
in full in the amounts, if any, described on a line item basis on ANNEX 1
hereto. The estimated costs of completing the uncompleted Replacements as of
this date are as described on a line item basis on ANNEX 1.
3. Borrower certifies, represents and warrants to Lender that (a)
Borrower is entitled to a disbursement of the Replacement Reserve for the items
and amounts requested in Section 1 above pursuant to the Agreement; (b)
Borrower's representations and warranties made in the Loan Documents and the
Agreement are true and correct on and as of this date; (c) no Event of Default
nor any event which with the giving of notice or the lapse of time, or both,
would become an Event of Default, has occurred and (d) the Replacements listed
in Section 1 above have been fully paid for,
Exhibit A-1
JHREF Loan No.3212525
and no claim or claims exist against the Borrower or against the Mortgaged
Property out of which a lien based on furnishing labor or material exists or
might ripen.
Date: ______________, 199__.
BORROWER:
By:
Name:
Title:
SWORN TO AND SUBSCRIBED BEFORE ME by ______________________, this
_______ day of ____________, 199__.
Notary Public (Seal)
Name (Print):
My Commission Expires:
Initial Approval -- Name:___________________ Date: __________________
Disbursement Approval -- Name:______________ Date: __________________
Exhibit A-2
JHREF Loan No.3212525
ANNEX 1
REPLACEMENTS AMOUNTS PAID
------------ ------------
Annex 1-1
