Exhibit 10(i)B(3)
AMENDED AND RESTATED CREDIT LINE AGREEMENT
dated as of July 3, 2002
among
ALEXANDER'S INC.,
as Borrower
and
VORNADO LENDING L.L.C.,
as Lender
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.......................................................... 1
SECTION 1.01. Certain Defined Terms................................................................ 1
SECTION 1.02. Computation of Time Periods.......................................................... 9
SECTION 1.03. Accounting Terms..................................................................... 9
ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES......................................................... 9
SECTION 2.01. The Loan............................................................................. 9
SECTION 2.02. Repayment............................................................................ 10
SECTION 2.03. Prepayments.......................................................................... 10
SECTION 2.04. Interest............................................................................. 10
SECTION 2.05. Increased Costs...................................................................... 10
SECTION 2.06. Payments and Computations............................................................ 10
SECTION 2.07. Taxes................................................................................ 12
SECTION 2.08. Payment of Certain Costs and Expenses................................................ 13
SECTION 2.09. Use of Proceeds...................................................................... 13
ARTICLE III. CONDITIONS OF LENDING..................................................................... 13
SECTION 3.01. Conditions Precedent to Funding Loan................................................. 13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................................................ 14
SECTION 4.01. Representations and Warranties of the Borrower....................................... 14
ARTICLE V. COVENANTS................................................................................. 17
SECTION 5.01. Affirmative Covenants of the Borrower................................................ 17
SECTION 5.02. Negative Covenants................................................................... 20
SECTION 5.03. Reporting Requirements............................................................... 23
SECTION 5.04. Covenants of the Lender.............................................................. 25
ARTICLE VI. SPECIAL PROVISIONS........................................................................ 26
SECTION 6.01. Condemnation and Casualty............................................................ 26
SECTION 6.02. Payment of REIT Dividends............................................................ 27
ARTICLE VII. EVENTS OF DEFAULT......................................................................... 27
SECTION 7.01. Events of Default.................................................................... 27
ARTICLE VIII. MISCELLANEOUS............................................................................. 29
SECTION 8.01. Amendments, Etc...................................................................... 29
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SECTION 8.02. Notices, Etc......................................................................... 29
SECTION 8.03. No Waiver; Remedies.................................................................. 30
SECTION 8.04. Costs, Expenses...................................................................... 30
SECTION 8.05. Merger............................................................................... 32
SECTION 8.06. Binding Effect....................................................................... 32
SECTION 8.07. Lender's Discretion.................................................................. 32
SECTION 8.08. Participations....................................................................... 32
SECTION 8.09. Governing Law........................................................................ 33
SECTION 8.10. Execution in Counterparts............................................................ 33
SECTION 8.11. Waiver of Jury Trial................................................................. 33
SECTION 8.12. Jurisdiction......................................................................... 33
SECTION 8.13. Continuing Enforcement............................................................... 33
Schedule I - Properties
Schedule II - Conflicts under Loan Documents
Schedule III - Required Authorizations
Schedule IV - Disclosed Litigation
Schedule V(a) - Environmental Non-Compliance
Schedule V(b) - Environmental Reports
Schedule VI - Defaults under Material Agreements
Schedule VII - Non-compliance with Laws
Exhibit A - Form of Note
Exhibit B-1 - Form of Guaranty
Exhibit B-2 - Form of Guaranty
Exhibit C - Form of Non-Disturbance Agreement
Exhibit D - Form of Mortgage
Exhibit E - Form of Assignment of Collateral Account and Security Agreement
Exhibit F - Form of Deposit Account Control Agreement
Exhibit G - Form of Pledge Agreement
Exhibit H - Form of Borrowing Request
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AMENDED AND RESTATED CREDIT LINE AGREEMENT dated as of July 3, 2002 by
and between Alexander's Inc., a Delaware corporation ("Alexander's" or the
"Borrower"), as borrower, and Vornado Lending L.L.C., a New Jersey limited
liability company (the "Lender"), as lender.
(1) WHEREAS, Borrower and Lender previously entered into that certain
Credit Line Agreement, dated as of August 2, 2000 (the "ORIGINAL CREDIT
AGREEMENT"), pursuant to which Lender offered a line of credit to Borrower in
the aggregate principal amount of Fifty Million and 00/100 Dollars
($50,000,000.00); and
(2) WHEREAS, Lender and Borrower desire to amend and restate the
Original Credit Agreement in its entirety in accordance with the terms and
provisions hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows:
A. Effective as of the date hereof, the Original Credit Agreement is
hereby restated and amended in its entirety as set forth below.
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Credit Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"59th Street Property" means the Property designated on Schedule I to
this Credit Agreement as the "59th Street Property."
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 20% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of Voting Stock, by contract or otherwise.
"Assignment of Collateral Account and Security Agreement" means the
Assignment of Collateral Account and Security Agreement, substantially
in the form of Exhibit E hereto.
"Borrower" has the meaning specified in the recital of parties to this
Credit Agreement.
"Borrower Request" shall have the meaning set forth in Section 2.01.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday on which banks are not required or authorized to close in New
York City.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of Debt.
"Cash Collateral Account" has the meaning specified in Section 6.01.
"Cash Collateral Agreement" has the meaning specified in Section 6.01.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as the same may be amended from time to
time.
"Closing Date" means July 3, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is subject to any Lien in favor
of the Lender.
"Collateral Documents" means collectively each Guaranty, Mortgage,
Pledge Agreement, the Lockbox Documents and any documents given to
secure the Loan.
"Confidential Information" means information that the Borrower
furnishes to the Lender on a confidential basis, but does not include
any such information that is or becomes generally available to the
public other than as a result of a breach by the Lender of its
obligations hereunder or that is or becomes available to the Lender
from a source other than the Borrower that is not, to the best of the
Lender's knowledge, acting in violation of a confidentiality agreement
with the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Construction Loan" shall have the meaning given to such term in
Section 5.01(m) hereof.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person
for the deferred purchase price of property or services (other than
trade payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business), (c) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or
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sale of such property), (e) all Obligations of such Person as lessee
under leases that have been or should be, in accordance with GAAP,
recorded as capital leases ("Capitalized Leases"), (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities, (g) all Debt of others referred to in
clauses (a) through (f) above guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly
by such Person through an agreement (i) to pay or purchase such Debt or
to advance or supply funds for the payment or purchase of such Debt,
(ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor against
loss, and (h) all Debt referred to in clauses (a) through (f) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both.
"Default Rate" means 4% per annum above the rate per annum required to
be paid on the Loan pursuant to Section 2.04(a).
"Deposit Account Control Agreement" means the Control Agreement for
Notification and Acknowledgement of Security Interest in Deposit
Accounts substantially in the form of Exhibit F hereto.
"Disbursement Date" shall have the meaning set forth in Section 2.01.
"Disclosed Litigation" means the matters described on Schedule IV
hereto.
"Environmental Action" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law or any
Environmental Permit including, without limitation, (a) any written
claim by any governmental or regulatory authority for enforcement,
cleanup, removal, response, remedial or other actions or damages
pursuant to any Environmental Law and (b) any written claim by any
third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
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"Environmental Law" means any applicable federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award relating to the environment, health, safety or
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Events of Default" has the meaning specified in Section 7.01.
"Existing Debt" means Debt of the Borrower outstanding immediately
before the time of execution of this Credit Agreement.
"Flushing Property" means the ground leasehold estate on the Property
designated on Schedule I to this Credit Agreement as the "Flushing
Property."
"GAAP" has the meaning specified in Section 1.03.
"Guarantor" means each of Alexander's of Xxxx Park II, Inc.,
Alexander's of Xxxx Park III, Inc., Alexander's of Third Avenue, Inc.,
and Alexander's of Flushing, Inc. and subsequent assignees thereof and
any other Person who shall execute a Guaranty after the date hereof.
"Guaranty" means the Guaranty substantially in the form of Exhibit B to
this Credit Agreement, as amended from time to time, duly executed as
of the Closing Date by each Guarantor.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is friable, urea
formaldehyde foam insulation and radon gas, (b) any substances defined
as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any
Environmental Law and (c) any other substance exposure to which is
regulated under any Environmental Law.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Interest Payment Date" has the meaning specified in Section 2.04(a).
"Interest Rate" means a rate equal to the one-year treasury xxxx rate
(the "Base Rate") as of March 15, 2002 plus 9.48%, such rate to be
reset quarterly (i.e., on June 15, September 15, December 15 and March
15) to equal the Base Rate as of the reset date plus 9.48%; provided,
however, that if the one-year treasury xxxx rate as of any reset date
is less than 3%, the Base Rate for purposes of such reset shall be 3%.
"Leasing Agreement" means (a) that certain 59th Street Real Estate
Retention Agreement, dated the date hereof, among Vornado Realty Trust
and the Borrower
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as amended from time to time, and (b) that certain Real Estate
Retention Agreement dated July, 1992 between Vornado, Inc.,
Alexander's, and certain other parties as amended by Amendment to Real
Estate Retention Agreement dated as of the date hereof.
"Lender's Account" means an account of or specified by the Lender and,
until the Lender shall notify the Borrower of a change in such account,
shall mean the account of Vornado Lending L.L.C. maintained at Fleet
Bank (Account No. 9403934589).
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including,
without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property and any easement, right of way or other
encumbrance on title to real property.
"Line of Credit" has the meaning specified in the Recitals.
"Loan" has the meaning specified in Section 2.01.
"Loan Documents" means this Credit Agreement, the Note, the Collateral
Documents and the Guaranty and any other documents executed by any Loan
Party in connection with the Loan.
"Loan Obligations" means all amounts due payable to the Lender under
the Loan Documents.
"Loan Parties" means the Borrower, each Guarantor and each Mortgagor.
"Lockbox Documents" means collectively, that certain Assignment of
Collateral Account and Security Agreement and that certain Deposit
Account Control Agreement, each dated on or about the date hereof.
"Major Lease" means any lease at Property (i) for an entire
free-standing building, including without limitation a building to be
constructed, (ii) for over 10,000 rentable square feet, or (iii) with
an anchor tenant.
"Management Agreement" means (a) that certain Management and
Development Agreement, dated as the date hereof, between the Borrower
and Vornado Management Corp., as amended from time to time and (b) that
certain 00xx Xxxxxx Management and Development Agreement dated as of
the date hereof between 731 Residential LLC, 731 Commercial LLC and
Vornado Management Corp., as amended from time to time.
"Material Adverse Change" means any material adverse change in the
business, financial condition, operations, performance or properties of
the Borrower and the Loan Parties taken as a whole.
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"Material Adverse Effect" means a material adverse effect on (a) the
business, financial condition, operations, performance or properties of
the Borrower and the Loan Parties taken as a whole, (b) the rights and
remedies of the Lender under any Loan Document or (c) the ability of
any Loan Party to perform its Obligations under any Loan Document to
which it is or is to be a party.
"Maturity Date" means the earlier of (i) January 3, 2006 and (ii) the
date on which the Construction Loan is paid in full.
"Mortgage" or "Mortgages" means one or more mortgages, in substantially
the form of Exhibit D to this Credit Agreement and covering all or any
of the Properties, as the same may be amended from time to time, duly
executed by the applicable Mortgagor in favor of Lender.
"Mortgagor" means the Alexander's of Xxxx Park II, Inc., Alexander's of
Xxxx Park III, Inc., Alexander's of Third Avenue, Inc. or other
mortgagor under a Mortgage, provided that any Mortgagor shall cease to
be a Mortgagor upon the release or satisfaction of that Mortgagor's
mortgage.
"Note" or "Notes" means, collectively, the promissory notes of the
Borrower payable to the order of the Lender, in substantially the form
of Exhibit A hereto, as amended from time to time, evidencing the
indebtedness of the Borrower to the Lender resulting from the Loan made
by the Lender.
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to
in Section 7.01(f). Without limiting the generality of the foregoing,
the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation to reimburse any amount in respect of any of the foregoing
that the Lender, in accordance with the terms of the applicable Loan
Document, may elect to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.07(b).
"Other Vornado Loans" means, collectively (i) that certain loan in the
principal amount of $20,000,000 evidenced by a Credit Agreement dated
as of even date herewith from Lender, as lender to Alexander's, as
borrower; (ii) that certain loan in the principal amount of $40,000,000
evidenced by an Amended and Restated Credit Agreement dated as of even
date herewith from Lender, as lender, to 00xx Xxxxxx Corporation, as
borrower; (iii) that certain loan in the principal amount of
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$35,000,000 evidenced by a Credit Agreement dated as of even date
herewith, from Lender, as lender, to Alexander's, as borrower; and (iv)
the Reimbursement Facility.
"Participant" has the meaning set forth in Section 8.08.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies not yet due and payable; (b) Permitted
Encumbrances; (c) with respect to any real property acquired by
Borrower or any Subsidiary or Affiliate of Borrower after the date
hereof, liens to which such property is subject as of the date of such
acquisition, purchase money mortgages or other similar purchase liens
and liens in favor of lenders providing construction or development
financing in connection with such property provided, that all proceeds
of such financings are used for construction or development of such
property or the retirement of Existing Debt secured by one or more
liens on such property; (d) Liens permitted to be incurred by Borrower
pursuant to the terms of this Credit Agreement; (e) Liens in connection
with taxes being contested in good faith in compliance with this Credit
Agreement; (f) Liens securing the Construction Loan; and (g) any
renewal or replacement of any Lien permitted pursuant to the foregoing
clauses (a) through (g), inclusive, provided that any such renewal or
replacement Lien secures Debt in an amount not in excess of the Debt
secured by the Lien so renewed or replaced, provided, however, that
notwithstanding the foregoing, the Lender shall not be required to
subordinate to any Lien pursuant to this clause except as otherwise
provided in this Credit Agreement.
"Permitted Related Owner" means any of (a) any Subsidiary now existing
or hereafter created all shares of issued and outstanding capital stock
of which are owned by the Borrower, (b) a corporation (x) 90% or more
of the economic interests of which shall be held by the Borrower
through the ownership of shares of preferred and/or common stock of
such corporation and (y) 10% or less of the economic interests of which
shall be held by an entity reasonably satisfactory to the Lender
through the ownership of shares of common and/or preferred stock of
such corporation; provided that such Subsidiary or corporation enters
into a guaranty substantially in the form of the Guaranty pursuant to
which it guarantees the obligations of the Borrower under the Notes, or
(c) 731 Commercial LLC, 731 Residential LLC, 731 Commercial Holding LLC
and 731 Residential Holding LLC. The conditions regarding share
ownership set forth in clauses (x) and (y) above may be varied to the
extent necessary for any income received by the Borrower to be
described in Section 856(c)(2) of the Code or for the Borrower to
continue to qualify as a REIT.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated
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association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Pledge Agreement" means that certain Pledge Agreement substantially in
the form of Exhibit G hereto.
"Prepayment Date" has the meaning specified in Section 2.03.
"Properties" means the properties listed on Schedule I to this Credit
Agreement and any real property acquired by the Borrower or any
Mortgagor after the Closing Date.
"Xxxx Park II Property" means the Property designated on Schedule I to
this Credit Agreement as the "Xxxx Park II Property".
"Xxxx Park III Property" means the Property designated on Schedule I to
this Credit Agreement as the "Xxxx Park III Property".
"Reimbursement Facility" means the credit facility evidenced by the
Reimbursement Agreement, dated the date hereof, by and among
Alexander's, Inc., 731 Commercial LLC and 731 Residential LLC, as
Obligors, and Vornado Realty, L.P.
"REIT" means an entity described in Section 856(a) of the Code and
entitled to the benefits of Section 857(a) of the Code.
"Secured Debt" means any Debt of the Borrower incurred after the
Closing Date that is secured by any of the Properties and/or the
Collateral and that otherwise contains terms and conditions
satisfactory to the Lender.
"Subordinate Debt" means any Debt of the Borrower that is subordinated
to the Loan Obligations under the Loan Documents on, and that otherwise
contains, terms and conditions satisfactory to the Lender.
"Subsidiary" means, with respect to the Borrower, (i) in any
corporation of which more than 50% of the issued and outstanding
capital stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled
by the Borrower, by the Borrower and one or more of its other
Subsidiaries or by one or more of the Borrower's other Subsidiaries and
(ii) 731 Commercial LLC, 731 Residential LLC, 731 Commercial Holding
LLC and 731 Residential Holding LLC
"Taxes" has the meaning specified in Section 2.07(a).
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"Third Avenue Property" means the Property designated in Schedule I to
this Credit Agreement as the "Third Avenue Property".
"Unused Line Fee" has the meaning specified in Section 2.11.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the
happening of such a contingency.
SECTION 1.02. Computation of Time Periods. In this Credit Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II.
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Loan. The Lender agrees, on the terms and conditions
hereinafter set forth, to make advances, upon the request of the Borrower, on or
after the Closing Date, with the aggregate amount of such advances, regardless
of any repayment or prepayment thereof, being no more than Fifty Million and
00/100 Dollars ($50,000,000.00) (such sum being the Line of Credit and each
advance thereunder being referred to both individually and collectively as the
"Loan"). Amounts borrowed under this Section 2.01 shall be debited from the Line
of Credit in determining the credit available for any further Loans, and amounts
repaid or prepaid may not reborrowed. Borrower shall provide Lender with a
borrowing request substantially in the form attached hereto as Exhibit H (a
"Borrowing Request") not later than 11:00 a.m., New York time, on the requested
date of advance of each Loan (each date of each advance, a "Disbursement Date"),
specifying (i) the aggregate principal amount of such Loan; and (ii) the
proposed Disbursement Date of such Loan, which shall be a Business Day. If the
Lender agrees to make a requested Loan, bearing interest at the rate determined
in accordance with Section 2.04, then on the Disbursement Date of a Loan, the
Lender shall make such Loan to the Borrower by crediting the principal amount
thereof to the Borrower's account at First Union National Bank 002030267849959
(or to such account as the Borrower may specify in its Borrowing Request), in
immediately available funds. The principal amount shall be noted in the
transaction records of the Lender and, absent manifest error, such records shall
be conclusive as to the matters noted. Notwithstanding the foregoing, Lender's
failure to note the principal amount of the Loan shall not affect the Borrower's
obligations under the Loan Documents. Lender and Borrower acknowledge that as of
the date hereof, $24,000,000.00 of the Loan has been advanced and remains
outstanding.
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SECTION 2.02. Repayment. The Borrower shall repay to the Lender the
aggregate principal amount of the Loan and all other Loan Obligations on the
Maturity Date or on such earlier date as the Loan Obligations become due as
provided in the Loan Documents.
SECTION 2.03. Prepayments. The Borrower may, upon at least two (2)
days' notice to the Lender prepay all or any portion of the outstanding
principal amount of the Loan, together with (i) accrued interest to the date of
such prepayment on the principal amount prepaid and (ii) if the entire
outstanding principal amount of the Loan is repaid, all other accrued and unpaid
amounts due hereunder or under any other Loan Document.
SECTION 2.04. Interest. (a) Ordinary Interest. The Borrower shall pay
interest on the unpaid principal amount of the Loan owing to the Lender from the
Closing Date, until such principal amount shall be paid in full, payable in
arrears on the fifteenth day f each month (each an "Interest Payment Date") at a
rate per annum equal to the Interest Rate, but in no event shall the Loan be
repaid later than the Maturity Date.
(b) Default Interest. From and after the Maturity Date and upon the
occurrence and during the continuance of an Event of Default specified in
Section 7.01 of this Credit Agreement, the Borrower shall pay interest on (i)
the unpaid principal amount of the Loan and (ii) the amount of any interest, fee
or other amount due and payable hereunder which is not paid when due, from the
date such amount shall be due until such amount shall be paid in full, in either
clause (i) or (ii) payable immediately on the Maturity Date or on demand after
such occurrence and during such continuance, at a rate per annum equal at all
times to the Default Rate.
(c) Late Charges. In the event any payment of principal or any interest
is not made within five (5) days after the date on which such amount first
becomes due and payable, the Lender may, at its option, require the Borrower to
make an additional payment to the Lender as a late charge in an amount equal to
5% of such overdue amount.
SECTION 2.05. Increased Costs. If, with respect to any assignee of the
Lender or a Participant that is a bank (a "Bank Lender"), due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation (other than a law or regulation relating to taxes) or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the amount of capital required by such Bank Lender or authority
to be maintained by such Bank Lender or any corporation controlling Bank Lender
as a result of or based upon the existence of Bank Lender's commitment to lend
hereunder then, upon demand by Bank Lender, the Borrower shall pay to Bank
Lender, from time to time as reasonably specified by Bank Lender, additional
amounts sufficient to compensate Bank Lender in the light of such circumstances,
to the extent that Bank Lender reasonably determines such increase in capital to
be allocable to the existence of the Loan.
SECTION 2.06. Payments and Computations. (a) The Borrower shall make
each payment required to be made hereunder and under the Notes not later than
11:00 A.M., New York City time, on the day when due in U.S. dollars to the
Lender at the Lender's Account in immediately available (same day) funds.
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(b) All computations of interest and fees shall be made by the Lender
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Lender of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
(d) The Borrower covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury or similar law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Credit Agreement, the Notes or the other Loan Documents;
and the Borrower (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the Lender,
but will suffer and permit the execution of every such power as though no such
law had been enacted. It is the intent of the Lender and the Borrower in the
execution of the Notes, this Credit Agreement and all other instruments now or
hereafter securing the Notes or executed in connection therewith or under any
other written or oral agreement by the Borrower in favor of the Lender to
contract in strict compliance with applicable usury law. In furtherance thereof,
the Lender and the Borrower stipulate and agree that none of the terms and
provisions contained in the Notes, this Credit Agreement or any other instrument
securing the Notes or executed in connection herewith, or in any other written
or oral agreement by the Borrower in favor of the Lender, shall ever be
construed to create a contract to pay for the use, forbearance or detention of
money, interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law. Neither the Borrower nor any guarantors, endorsers or
other parties now or hereafter becoming liable for payment of the Notes shall
ever be required to pay interest on the Notes or on indebtedness arising under
any instrument securing the Notes or executed in connection therewith, or in any
other written or oral agreement by the Borrower in favor of the Lender, at a
rate in excess of the maximum interest that may be lawfully charged under
applicable law, and the provisions of this Section 2.06(d) shall control over
all other provisions of the Notes, this Credit Agreement and any other
instruments now or hereafter securing the Notes or executed in connection
herewith or any other oral or written agreements that may be in apparent
conflict herewith. The Lender expressly disavows any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of the Notes is accelerated. If the maturity of the Notes shall be accelerated
for any reason or if the principal of the Notes is paid prior to the end of the
term of the Notes, and as a result thereof the interest received for the actual
period of existence of the Loan exceeds the applicable maximum lawful rate, the
Lender shall, at its option, either refund to the Borrower the amount of such
excess or credit the amount of such excess against the principal balance of the
Notes then outstanding and thereby shall render inapplicable any and all
penalties of any kind provided by applicable law as a result of such excess
interest. In the event that the Lender shall collect monies and/or any other
thing of value that are then or at any time deemed to constitute interest that
would increase the effective interest rate on the Notes to a rate in excess of
that permitted to be charged by applicable law, an amount equal to interest in
excess of the
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lawful rate shall, upon such determination, at the option of the Lender, be
either immediately returned to the Borrower or credited against the principal
balance of the Notes then outstanding, in which event any and all penalties of
any kind under applicable law as a result of such excess interest shall be
inapplicable. By execution of this Credit Agreement, the Borrower acknowledges
that it believes the Loan to be non-usurious and agrees that if, at any time,
the Borrower should have reason to believe, that the Loan is in fact usurious,
it will give the Lender notice of such condition and the Borrower agrees that
the Lender shall have ninety (90) days after receipt of such notice in which to
make appropriate refund or other adjustment in order to correct such condition
if in fact such exists.
SECTION 2.07. Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with this Section 2.07, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings other than (i) net income taxes,
franchise taxes and similar taxes imposed on the Lender or a Participant, (ii)
any tax, assessment or other governmental charge that would not have been
imposed but for the failure of the Lender or a purchaser of all or a portion of
the Lender's or a Participant's rights and obligations under this Credit
Agreement to comply with any certification, identification or other reporting
requirements concerning the nationality, residence, identity or connection with
the United States of the Lender or a Participant, if compliance is required by
statute or by regulation of the United States Treasury Department as a
precondition to exemption from such tax, assessment or other governmental
charge, (iii) any tax, assessment or other governmental charge that would not
have been imposed but for either (a) a sale or other transfer of all or a
portion of the Lender's or a Participant's rights and obligations under this
Credit Agreement to a Person that is not an entity that is treated as a
corporation organized or created under the laws of the United States or of any
State for U.S. federal tax purposes or (b) Lender's merger or consolidation
with, or transfer of substantially all of its assets to, another entity, and
(iv) any tax, assessment or other governmental charge that would not have been
imposed but for any present or former connection between the Lender or a
Participant (or a shareholder of the Lender or a Participant) and the
jurisdiction imposing such tax, assessment or other governmental charge,
including, without limitation, the Lender or a Participant's being or having
been a citizen or resident of, present or engaged in a trade or business in,
such jurisdiction, but excluding a connection arising solely as a result of the
Lender's having entered into, received payments under and enforced this Credit
Agreement (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Notes to the Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions for Taxes (including deductions ("Additional Taxes") applicable to
additional sums payable pursuant to this sentence), the Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Credit Agreement
or the Notes (hereinafter referred to as "Other Taxes").
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(c) The Borrower shall indemnify the Lender for the full amount of
Taxes, and Other Taxes, paid by the Lender and any liability (including
penalties, additions to tax, Additional Taxes, interest and expenses) arising
therefrom or with respect thereto except as may arise as a result of the
Lender's gross negligence or willful misconduct.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Lender, at its address referred to in Section 8.02, the
original receipt of payment thereof or a certified copy of such receipt.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.07 shall survive the payment in full of principal and interest
hereunder and under the Note.
SECTION 2.08. Payment of Certain Costs and Expenses. The Borrower shall
pay to the Lender within five (5) days after demand therefor all reasonable
costs and expenses (including reasonable attorneys' fees and disbursements)
incurred by the Lender in connection with (i) the approval of any lease, (ii)
the preparation, negotiation and execution of any non-disturbance agreement
requested for any lease, (iii) review and approval of any plans, construction
contracts or any other documents relating to construction or development of a
Property; and (iv) the assignment of any liens of the Mortgages pursuant to
Section 7.08.
SECTION 2.09. Use of Proceeds. The proceeds of the Loan shall be
available (and the Borrower agrees that it shall use such proceeds) only to
provide working capital for the Borrower and its Subsidiaries.
SECTION 2.10. Unused Line of Credit Facility Fee. In the event that the
average daily principal amount of the Loans outstanding under the Line of Credit
during any calendar month, or part thereof, is less than the maximum amount
which may be borrowed under the Line of Credit (the "Maximum Loan Amount"),
Borrower shall pay Lender an unused line of credit fee (the "Unused Line Fee")
on the shortfall at a rate equal to one percent (1%) per annum. The Unused Line
Fee shall be calculated as of the last day of each calendar month for the
shortfall in average daily usage during said calendar month and shall be 1/12th
of what the annual fee would be if the shortfall existed for an entire year. On
or around March 1st of each year, Lender shall xxxx Borrower for the aggregate
Unused Line Fees, if any, then due, for the preceding 12 month period and
Borrower shall pay such Unused Line Fees within 10 days after the receipt of
such xxxx.
ARTICLE III.
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Funding Loan. The Loan shall be
advanced by the Lender on or about the date hereof, or such later date as the
Borrower and the Lender may otherwise agree, provided that the following
conditions shall be conditions precedent to the obligations of the Lender
hereunder to make the Loan:
(1) the representations and warranties of the Borrower contained herein
shall be true and correct as of the Closing Date as if made on such date;
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(2) all costs and fees of the Lender (including attorney's fees and
expenses) in connection with the Loan shall have been paid; and
(3) no Default or Event of Default remains uncured or outstanding.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party that is a corporation (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed is not reasonably likely
to have a Material Adverse Effect and (iii) has all requisite corporate power
and authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Each Loan Party that is a partnership or a limited liability
company (i) is a partnership or a limited liability company duly formed and
validly existing under the laws of the State of its formation, (ii) is duly
qualified in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed is not reasonably likely
to have a Material Adverse Effect and (iii) has all requisite partnership or a
limited liability company power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.
(c) The execution, delivery and performance by each Loan Party of this
Credit Agreement, the Notes, each other Loan Document and each related document
to which it is or is to be a party, and the consummation of the transactions
contemplated herein and therein, are within such Loan Party's corporate,
partnership or limited liability company powers, have been duly authorized by
all necessary corporate, partnership or limited liability company action, and,
to each such Loan Party's knowledge, do not (i) contravene such Loan Party's
organizational documents, (ii) violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award, except where such
violation is not reasonably likely to have a Material Adverse Effect except as
set forth on Schedule II hereof, (iii) except as set forth on Schedule II
hereof, conflict with or result in the breach of, or constitute a default under,
any contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its Subsidiaries or
any of their properties, except where such conflict, breach or default is not
reasonably likely to have a Material Adverse Effect or (iv) except for the Liens
created by the Collateral Documents result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries.
(d) Other than as set forth on Schedule III hereof, no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or
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any other third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of this Credit Agreement,
the Notes, any other Loan Document or any related document to which it is or is
to be a party, or for the consummation of the transactions contemplated hereby,
(ii) the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens created
by the Collateral Documents or (iv) the exercise by the Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents.
(e) This Credit Agreement has been, and the Notes, each other Loan
Document and each related document when delivered hereunder will have been, duly
executed and delivered by each Loan Party thereto. This Credit Agreement is, and
the Notes, each other Loan Document and each related document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan Party
thereto, enforceable against such Loan Party in accordance with its terms.
(f) The Consolidated balance sheet of the Borrower and its Subsidiaries
as of March 31, 2002, and the related Consolidated statement of income and cash
flows of the Borrower and its Subsidiaries for the fiscal year then ended, and
the Consolidated balance sheet of the Borrower and its Subsidiaries as at March
31, 2002, and the related Consolidated statement of income and cash flows of the
Borrower and its Subsidiaries for the nine months then ended, duly certified by
the Chairman of the Board of Borrower or any other officer of Borrower, copies
of which have been furnished to the Lender, fairly present, subject, in the case
of said balance sheet as at March 31, 2002, and said statement of income and
cash flows for the nine months then ended, to year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis. Since
March 31, 2002, there has been no Material Adverse Change.
(g) All financial statements delivered by any Loan Party to the Lender,
are true, correct and complete in all material respects, fairly represent such
Loan Party's financial condition as of the date hereof and thereof, and no
information has been omitted that would make the information previously
furnished misleading or incorrect in any material respect.
(h) To such Loan Party's knowledge, there is no action, suit,
investigation, litigation or proceeding affecting any Loan Party not covered by
insurance (subject to reasonable deductibles), including any Environmental
Action, pending before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) purports to affect the legality, validity or
enforceability of this Credit Agreement, the Notes, any other Loan Document or
the consummation of the transactions contemplated hereby, and there has been no
adverse change in the status or financial effect on any Loan Party of the
Disclosed Litigation from that described on Schedule IV hereof.
(i) Except as set forth on Schedule V(a) hereof to such Loan Party's
knowledge, the operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all Environmental Laws, all
necessary Environmental Permits have been obtained and are in effect for the
operations and properties of each Loan Party and its Subsidiaries, each
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Loan Party and its Subsidiaries are in compliance in all material respects with
all such Environmental Permits, and, no circumstances exist that would be
reasonably likely to (i) form the basis of an Environmental Action against any
Loan Party or any of its Subsidiaries or any properties described in the
Mortgages or the 00xx Xxxxxx Property that could have a Material Adverse Effect
or (ii) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(j) Except as set forth in the environmental reports heretofore
delivered to the Lender as set forth on Schedule V(b) hereof, none of the
operations and properties of each Loan Party is listed or, to the knowledge of
any Loan Party, proposed for listing on the National Priorities List under
CERCLA or on the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the Environmental Protection Agency
or any analogous state list of sites requiring investigation or cleanup or is
adjacent to any such property. Except as would not have a Material Adverse
Effect, no underground storage tanks, as such term is defined in 42
U.S.C.Section 6991, are located on any property in violation of applicable
Environmental Laws. Except as set forth on the environmental reports heretofore
provided to the Lender, the Borrower has no knowledge of any underground storage
tank located on any Property adjoining any Property.
(k) Each Loan Party and each of its Subsidiaries has filed or has
caused to be filed all income tax returns (Federal, state and local) required to
be filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties. The Borrower is not aware of any material
unasserted claims for prior taxes against it for which adequate reserves
satisfactory to the Lender have not been established.
(l) Each Mortgagor, and each of 731 Commercial LLC and 731 Residential
LLC has good, marketable and insurable fee simple title to the real property
described in the Mortgage executed and delivered by such Mortgagor and 00xx
Xxxxxx Property, as applicable, free and clear of all Liens, other than those
disclosed on such Schedule and Liens created or permitted by the Loan Documents.
(m) Except as set forth on Schedule VI hereof, no Loan Party is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained herein or in any material agreement or
instrument to which it is a party or by which it or any of its properties is
bound.
(n) As of the date hereof, there has been no Material Adverse Change
since the date of the most recent financial statements provided by the Borrower
or such Loan Party to the Lender.
(o) No Loan Document or other document, certificate or statement
furnished to the Lender by or on behalf of the Borrower or any other Loan Party
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. It is specifically understood by the Borrower that all such
statements, representations and warranties shall be deemed to have been relied
upon by the Lender as an inducement to make the Loan to the Borrower.
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ARTICLE V.
COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower. So long as any
portion of the Loan shall remain unpaid, the Borrower will, unless the Lender
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each Mortgagor, 731
Commercial LLC and 731 Residential LLC, to comply, in all respects, with all
applicable laws, rules, regulations and orders, except as set forth on Schedule
VII hereof, or except where such non-compliance is not likely to have a Material
Adverse Effect; and keep, and cause each Mortgagor, 731 Commercial LLC and 731
Residential LLC to keep, at all times in full force and effect all
authorizations required for the continued use and operation of the properties of
the Borrower and of each Mortgagor, 731 Commercial LLC and 731 Residential LLC,
except as set forth on such Schedule.
(b) Payment of Taxes, Etc. Prepare and timely file all federal, state
and local tax returns required to be filed by the Borrower and promptly pay and
discharge all taxes, assessments and other governmental charges, imposed upon
the Borrower or its income or any of its property, and cause each Subsidiary to
do so, with respect to real estate taxes, before interest and penalties commence
to accrue thereon and, with respect to all other taxes, before they become a
Lien upon such property, except for those taxes, assessments and other
governmental charges then being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary has maintained
adequate reserves and with respect to which (i) there is a not a reasonable
likelihood, in the judgment of the Lender, that the Borrower or the Lender shall
be subject to any risk of criminal or material civil liability and (ii) there is
not a reasonable likelihood, in the judgment of the Lender, that the Borrower's
or any of its Subsidiaries' properties or the lien of the Mortgages shall be
subject to the risk, respectively, of forfeiture or impairment, provided,
however, that all real estate taxes must be paid when due. The Borrower shall
submit to the Lender, upon request, an affidavit signed by the Borrower
certifying that all federal, state and local income tax returns have been filed
to date and all real property taxes, assessments and other governmental charges
with respect to the Borrower's or any Subsidiary's properties have been paid to
date.
(c) Compliance with Environmental Laws. Except as set forth on Schedule
V(a) hereof, comply, and cause each of its Subsidiaries and all lessees and
other Persons occupying its properties to comply, in all material respects, with
all Environmental Laws and Environmental Permits applicable to its operations
and properties, except where the non-compliance with such laws or the absence or
non-renewal of such permits is not likely to have a Material Adverse Effect;
obtain and renew all Environmental Permits necessary for its operations and
properties, except where such non-compliance is not likely to have a Material
Adverse Effect; and to the extent and in the timeframe required by applicable
Environmental Law conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required
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to undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and with respect to which (i) there is no reasonable likelihood of
any risk of criminal or material civil liability to the Lender, (ii) there is no
reasonable likelihood that the Borrower's or any of its Subsidiaries' properties
or the lien of the Mortgages shall be subject to the risk, respectively, of
forfeiture or impairment and (iii) appropriate reserves are being maintained
with respect to such circumstances.
(d) Maintenance of Insurance. Maintain and cause each Mortgagor, 731
Commercial LLC and 731 Residential LLC, to maintain, insurance with responsible
and reputable insurance companies or associations in such amounts (subject to
reasonable deductibles) and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates and as
otherwise required by the Mortgages, provided, however, that Borrower shall
cause the Mortgagors to maintain the insurance required by the Mortgages and
shall cause 731 Commercial LLC and 731 Residential LLC to maintain the insurance
required by the Loan Agreements.
(e) Preservation of Corporate, Partnership or Limited Liability Company
Existence, Etc. Preserve and maintain, in full force and effect, and cause each
Mortgagor and each other Subsidiary, where applicable, to preserve and maintain
its corporate, partnership or limited liability company existence, rights
(charter and statutory) and franchises and all authorizations and rights
material to its business; provided, however, that neither the Borrower nor any
Mortgagor or other Subsidiary shall be required to preserve any right or
franchise if the Board of Directors or general partners of the Borrower or such
Mortgagor or other Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Borrower or such or
other Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower, such Mortgagor or other
Subsidiary or the Lender.
(f) Inspection Rights. At any reasonable time and from time to time, in
each case upon reasonable prior notice, and at such times as shall not
unreasonably disrupt tenants, permit the Lender or any agents or representatives
thereof, to examine, audit and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and the
Mortgagor, or other Subsidiary, and to discuss the affairs, finances and
accounts of, the Borrower and any Mortgagor, or other Subsidiary, with any of
their officers or directors and with their independent certified public
accountants.
(g) Keeping of Books. Keep, and cause each Mortgagor and other
Subsidiary to keep proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time consistently applied.
(h) Compliance with Terms of Lease Agreements. Perform, and cause each
Subsidiary to perform, timely all of the obligations, covenants and agreements
of the landlord contained in any lease now or hereafter affecting any of the
Properties and require the timely
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performance by the tenant of all of the obligations, covenants and agreements to
be performed by such tenant.
(i) Approval of Leases. The Borrower shall not, and shall cause
each Mortgagor and other Subsidiary not to, lease space at any of the Properties
without the Lender's consent, which consent shall not unreasonably be withheld,
provided, however, that no such consent of Lender shall be required for any
lease of 10,000 square feet or less unless (i) such lease requires the Lender to
provide a non-disturbance agreement to the lessee or (ii) such lease is not on
commercially reasonable terms. It is hereby expressly acknowledged and agreed by
the Lender that all leases at any Property identified on the certified rent roll
delivered to the Lender prior to the date hereof are and shall be deemed to be
approved.
(j) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates or any Permitted Related Owners on terms
that are fair and reasonable and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate. Transactions with the Lender, Vornado Realty Trust and
any of its Affiliates pursuant to agreements existing as of the date hereof
among Borrower or its Subsidiaries and Vornado Realty Trust and its Affiliates
are approved.
(k) Maintenance of Properties. Maintain or cause to be maintained
the Properties and all other items constituting Collateral.
(l) Compliance with Loan Documents. Comply and cause each Loan
Party to comply with all of its covenants set forth in each of the Loan
Documents.
(m) After Acquired Properties. Subject to the requirements of (i)
liens existing at the time of acquisition, (ii) purchase money mortgage liens
and (iii) liens in connection with construction or development financing which
construction or development financing is reasonably acceptable to the Lender,
grant to the Lender a valid mortgage lien on, or spread the lien of a Mortgage
to encumber, any real property acquired by Borrower or any Subsidiary after the
date hereof. Reference is made to that certain Building Loan Agreement, dated as
of July 3, 2002 (the "Building Loan Agreement"), by and among 731 Commercial LLC
and 731 Residential LLC and Bayerische Hypo-und Vereinsbank, AG (the "Bank"),
that certain Project Loan Agreement, dated as of July 3, 2002 (the "Project Loan
Agreement"), and that certain Supplemental Loan Agreement, dated as of July 3,
2002 (the "Supplemental Loan Agreement" and together with the Building Loan
Agreement and the Project Loan Agreement, the "Loan Agreements") pursuant to
which the Bank will lend to 731 Commercial LLC and 731 Residential LLC a maximum
of $_____ million (the "Construction Loan") for the purposes of funding the cost
of constructing a ___ square foot mixed residential/office/retail building at
the property known as 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Project").
It is understood and agreed that so long as the Construction Loan (and any
refinancing thereof that has been approved by Lender and that does not permit a
mortgage in favor of Lender to be granted with respect to the 00xx Xxxxxx
Property) shall remain outstanding, no such mortgage shall be required with
respect to the 00xx Xxxxxx Property.
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(n) Trust Fund. In compliance with Section 13 and Article 3-A of
the Lien Law of the State of New York, receive all proceeds of the Loan and hold
the right to receive all such proceeds as a trust fund to be used first for the
purpose of paying the cost of improvement, and apply all such proceeds first to
the payment of the cost of improvement before using any part of such proceeds
for any other purpose.
(o) Flushing Property. To keep at all times the ground lease
covering the Flushing Property in full force and effect.
(p) Compliance with Terms of Loan Agreements and Other Contracts.
Cause 731 Commercial LLC and 731 Residential LLC, as applicable, to timely
perform all of the obligations, covenants and agreements of (i) the borrower in
the Loan Agreements and the other Loan Documents (as such term is defined in the
Loan Agreements), (ii) the owner under the Architect's Contract, the
Construction Management Agreement and the Major Trade Contracts (as those terms
are defined in the Loan Agreements) and (iii) the landlord under the Bloomberg
Lease (as such term is defined in the Loan Agreements).
For purposes of this Section 5.01, the term "cause 731
Commercial LLC and/or 731 Residential LLC" (or any variation of such term) and
the term "cause any Subsidiary" (or any variation of such term, but only as it
relates to 731 Commercial LLC and/or 731 Residential LLC) shall mean for
Borrower to take action in its capacity as the sole member of 731 Commercial
Holdings LLC and the sole regular member of 731 Residential Holdings LLC, as the
case may be, which entities are the sole members of 731 Commercial LLC and 731
Residential LLC, respectively.
SECTION 5.02. Negative Covenants. So long as any portion of the Loan
Obligations shall remain unpaid, the Borrower (in its capacity as the sole
member of 731 Commercial Holding LLC and the sole regular member of 731
Residential Holding LLC, which entities are the sole members of 731 Commercial
LLC and 731 Residential LLC) will not, or permit any other Loan Party or
Subsidiary that is the direct or indirect owner of a Property to, at any time,
without the written consent of the Lender:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any Loan Party or Subsidiary to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file, or permit any Loan Party or Subsidiary to sign or
file, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any Mortgagor or any Subsidiary as debtor,
or sign, or permit any Loan Party or Subsidiary to sign, any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign or permit any Mortgagor or Subsidiary to assign, any accounts or other
right to receive income, excluding, however, from the operation of the foregoing
restrictions the following:
(i) Liens created by the Loan Documents or the Other
Vornado Loan Documents;
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(ii) Permitted Liens;
(iii) Liens otherwise consented to by the Lender in
writing; and
(iv) Liens created by the Loan Agreements or the other
documents entered into in connection with the Loan Agreements (and any
refinancings of the Construction Loan approved by Lender or any workouts or
additional financings by the holders of the Construction Loan to 731 Residential
LLC and/or 731 Commercial LLC).
(b) Debt. Create, incur, assume or suffer to exist, or permit any
Mortgagor or Subsidiary to create, incur, assume or suffer to exist, any Debt
other than:
(i) Debt under the Loan Documents, or the Other Vornado
Loan Documents;
(ii) Subordinate Debt or subordinated indebtedness
approved by the Lender;
(iii) Debt secured by Permitted Liens; and
(iv) The Construction Loan and any other Debt incurred
pursuant to the Loan Agreements (and any refinancings of the Construction Loan
approved by Lender or any workouts or additional financings by the holders of
the Construction Loan to 731 Residential LLC and/or 731 Commercial LLC).
(c) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any Loan Party or Subsidiary to do
so, except that (i) any Loan Party may merge into or consolidate with any other
Loan Party; provided that, in the case of any such consolidation, the Person
formed by such consolidation shall be a wholly owned Subsidiary of the Borrower;
provided further, that the Borrower shall pledge and grant to Lender a first
priority perfected lien in and security interest on the capital stock or other
equity interests of such Subsidiary owned by the Borrower to the Lender as
further collateral for the Loan Obligations, and (ii) any Subsidiary or
Permitted Related Owner that is not a Loan Party may merge into or consolidate
with any Subsidiary or Permitted Related Owner which is not a Loan Party.
(d) Investments in Other Persons. Purchase or acquire the
obligations or stock of, or any other interest in, any Person (other than a
Permitted Related Owner), except such investments as are made with surplus cash
and do not expose the Borrower to any risk of loss in excess of the amount of
cash invested.
(e) Loans, etc. Make, or permit any Mortgagor or Subsidiary to
make, loans to any Person, other than to the Borrower, a wholly owned Subsidiary
or a Permitted Related Owner.
(f) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital stock
or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding (except that Permitted Related Owners may pay dividends to
the Borrower) return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock (except for capital
stock issued by Permitted Related Owners), or permit any of its
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Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of the Borrower or any warrants, rights or options to acquire
such capital stock or to issue or sell any capital stock or any warrants, rights
or options to acquire such capital stock; provided, however, that nothing
contained in this Section shall prohibit Borrower from (i) paying a dividend or
making a distribution in the form of, or from the proceeds of an issuance of,
subordinated indebtedness or otherwise (including, without limitation, payment
in cash) as may reasonably be required, based upon the advice of counsel, to
enable the Borrower to qualify as a REIT under the Code or (ii) paying a
dividend or making a distribution from the proceeds of the issuance by the
Borrower of equity securities.
(g) Change in Nature of Business. Make, or permit any Mortgagor to
make, any material change in the nature of its business as carried on at the
date hereof and will not, nor permit any Mortgagor or Subsidiary to, remove,
demolish, materially alter, discontinue the use of, sell, transfer, assign,
hypothecate, pledge or otherwise dispose of, except as permitted hereunder and
for sales, transfers, assignments and pledges to Subsidiaries or Permitted
Related Owners, any part of its assets necessary for the continuance of its
business, as presently conducted and as presently contemplated, except in the
normal course of business. Notwithstanding the foregoing, no Mortgagor or
Subsidiary shall transfer any Property except to a Permitted Related Owner.
(h) Charter Amendments. Amend, or permit any Mortgagor or
Subsidiary to amend, its certificate of incorporation or bylaws, partnership
agreement, certificate of limited partnership, operating agreement or
certificate of limited liability company.
(i) Accounting Changes. Make, or permit any Mortgagor to make or
permit, any change in accounting policies or reporting practices, except as
required by generally accepted accounting principles.
(j) Amendment, Etc. of Related Documents. Except as may be
required in order for the Borrower to qualify as a REIT under the Code, with
respect to (i) the Management Agreement, (ii) the Leasing Agreement, (iii) Major
Leases, (iv) the Architect's Contract (as defined in the Loan Agreements to be
executed in connection with the Construction Loan), (v) the Bloomberg Lease (as
defined in the Loan Agreements), (vi) the Construction Management Agreement (as
defined in the Loan Agreements), (vii) the Loan Agreements and other Loan
Documents and (ix) the Major Trade Contracts (as defined in the Loan
Agreements), cancel or terminate or consent to or accept any cancellation or
termination thereof, amend, modify or change in any material manner any term or
condition thereof, waive any material default under or any material breach of
any material term or condition thereof, agree in any manner to any other
amendment, modification or change of any material term or condition thereof or
take any other action in connection therewith that would impair the value of the
interest or rights of the Borrower or other Subsidiary thereunder or that would
impair the rights or interests of the Lender, or permit any Mortgagor or other
Subsidiary to do any of the foregoing.
(k) Future Speculative Development. Develop, or permit any
Mortgagor or Subsidiary to develop, any undeveloped real property owned by the
Borrower or such Mortgagor or Subsidiary in the absence of executed leases
approved by Lender for more than 50% of the
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projected leasable space on such property; provided, that development of the
Project shall be permitted.
(l) Negative Pledge. Except in connection with (i) Existing Debt,
(ii) Secured Debt permitted hereby, (iii) Subordinate Debt permitted hereby, and
(iv) Permitted Liens, but only to the extent expressly permitted herein, the
Borrower shall not enter into any covenant or other agreement that prevents it
or could prevent it in the future from pledging, granting a security interest
in, mortgaging, assigning, encumbering or otherwise creating a lien on any of
its property (whether real or personal, tangible or intangible, and now owned or
hereafter acquired) in favor of the Lender, or that would be breached if the
Borrower were to pledge, grant a security interest in, mortgage, assign,
encumber or otherwise create a lien on any of its property (whether real or
personal, tangible or intangible, and now owned or hereafter acquired) in favor
of the Lender.
(m) Future Property Acquisition. Except as permitted in Section
6.01, acquire, or permit any Mortgagor or Subsidiary to acquire, any real
property without the consent of the Lender and without executing and delivering
or causing such Mortgagor or Subsidiary to execute and deliver any instrument
the Lender may deem necessary or desirable to effectuate such real property
becoming additional security for the Loan.
(n) Payments Under Subordinate Loan Documents. Make any payment in
respect of any Subordinate Debt (i) at any time while any amount shall be due
and owing under any of the Loan Documents or (ii) after the Loan shall have
matured or the Lender shall have accelerated payment of the Loan pursuant to
Section 7.01 or prepay any Subordinate Debt while at any time that any Loan
Obligation remains unpaid.
(o) Transfer of Properties. Transfer title to any of the
Properties except to (i) any Mortgagor, (ii) any Person described in clause (a)
of the definition of Permitted Related Owner, (iii) any Person described in
clause (b) of the definition of Permitted Related Owner or (iv) with respect to
the 00xx Xxxxxx Property, 731 Commercial LLC and 731 Residential LLC, or to the
holders of the construction loan (or their nominee or nominees) as part of a
deed in lien transaction, provided that, (x) in the case of clause (iii), a
receiver of a Property sought to be transferred to such Permitted Related Owner
has proposed to enter into a lease at such Property or take any other action
which would materially adversely affect the Borrower's qualification as a REIT
and the Borrower has given ten (10) days' notice to the Lender of its intention
to transfer such Property to such Permitted Related Owner and (y) in the case of
the 00xx Xxxxxx Property, residential condominium units may be sold.
(p) Issuance of Shares. Issue, or permit any Subsidiary (other
than a Permitted Related Owner) to issue any shares of stock that are not issued
as of the date hereof, except that notwithstanding this paragraph the Borrower
shall be permitted to issue shares of stock at any time so long as, taking into
account such issuance, Vornado Realty Trust and its Affiliates (including for
this purpose Interstate Properties) shall continue to own in the aggregate not
less than 20% of the outstanding shares of common stock of the Borrower, and,
provided further, with respect to Borrower only, that an automatic exchange
involving Excess Stock as defined in and pursuant to Borrower's Amended and
Restated Certificate of Incorporation shall not be treated as an issuance of
shares for the purposes of this Section.
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Reporting Requirements. So long as any portion of the Loan shall remain unpaid,
the Borrower will, unless the Lender shall otherwise consent in writing, furnish
to the Lender:
(q) Quarterly Financials. (i) As soon as available and in any
event within 45 days after the end of each of the first three quarters of each
fiscal year of the Borrower, Borrower's Quarterly Report on Form 10-Q for the
preceding quarter as filed with the Securities and Exchange Commission (the
"Commission"), containing unaudited financial statements as required by law; and
(ii) as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year, an unaudited consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of such quarter
and consolidating statement of operations and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and represented to be true and
correct (subject to year-end audit adjustments) by the Chairman of the Board of
the Borrower or other officer of the Borrower.
(r) Annual Financials. (i) As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower, a copy of the
Borrower's Annual Report on Form 10-K for such fiscal year as filed with the
Commission; and (ii) as soon as available and in any event within 120 days after
the end of each fiscal year, an unaudited consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and an unaudited
consolidating statement of operations and cash flows of the Borrower and its
Subsidiaries for such fiscal year, represented to be true and correct by the
Chairman of the Board of the Borrower or other officer of the Borrower.
(s) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party of the type
described in Section 4.01(h), and promptly after the occurrence thereof, notice
of any material adverse change in the status of the Disclosed Litigation from
that described on Schedule IV hereof.
(t) Environmental Conditions. Promptly after the occurrence
thereof, notice of any condition or occurrence on any Property that results in a
material noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit or would be reasonably likely to (i)
form the basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any Property that could have a Material Adverse Effect or (ii)
cause any Property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law.
(u) Financial Data for Each Property. Not later than 120 days
after the end of each fiscal year, and not later than sixty (60) days after the
end of each fiscal quarter, financial data in form reasonably satisfactory to
the Lender relating to the operation of each of the Properties, including,
without limitation, certified rent roll and summary of leases represented as
true and correct by the Chairman of the Board of the Borrower or other officer
of the Borrower.
-24-
(v) Budget. To the extent required and received under the
Management Agreement, not less than 30 days prior to the commencement of each
fiscal year, an annual operating budget relating to the Properties for the
upcoming fiscal year including, without limitation, the projected gross rental
income and projected operating expenses on a line item basis, provided, however,
nothing herein contained shall be deemed to require the Borrower to comply with
such budgets.
(w) Other Information. Such other information respecting the
business, financial condition, operations, performance or properties of any Loan
Party as the Lender may from time to time reasonably request.
SECTION 5.03. Covenants of the Lender. (a) The Lender hereby covenants
to Borrower that it will not exercise any rights, including rights exercisable
upon the occurrence of an Event of Default, that it has arising from or as a
result of this Credit Agreement or any related agreement to cause Borrower or
any Subsidiary of Borrower or any Permitted Related Owner to (i) enter into a
lease or lease amendment that either (A) provides for payments that are based,
directly or indirectly (including through sub-leasing), upon the net "income or
profits" of any person (as defined in Section 856(d) (2) of the Code) or (B)
requires Borrower or any Subsidiary of Borrower or any Permitted Related Owner
to provide a service to a tenant, other than through an independent contractor
(as defined in Section 856(d)(2) of the Code), where the provision of such
service by Borrower or any of its Subsidiaries or any Permitted Related Owner
would cause rents received by the Borrower or any of its Subsidiaries to fail to
be "rents from real property" under Section 856(d)(2) of the Code, (ii) engage
in a new line of business which (A) is unrelated to the development or leasing
of real property and (B) would create a substantial risk, as a result of its
generation of income not described in Section 856(c)(2) or (c)(3) of the Code,
that Borrower would fail to qualify as a REIT under the Code or (iii) acquire an
asset that would cause Borrower to fail to satisfy the asset test of Section
856(c)(5) of the Code; provided, however, that the foregoing covenants of this
Section 5.04(a) shall not (x) preclude the Lender from collecting amounts due to
the Lender under this Credit Agreement or from foreclosing on any property
securing such indebtedness or (y) be deemed to have been breached or violated by
the Lender as a result of any act or action (including, without limitation, the
execution of a lease) made, done or taken by any receiver for any property of
any Loan Party (including a receiver appointed at the request of the Lender)
unless a motion to compel such act or action was made by the Lender to the court
which appointed such receiver.
(b) The Lender agrees to use reasonable efforts to preserve the
confidentiality of any Confidential Information received by it from the Borrower
except as required by law or court order.
(c) The Lender shall execute and deliver a non-disturbance
agreement substantially in the form of Exhibit C hereto (with such changes as
the Lender may reasonably request) in connection with any lease approved by the
Lender pursuant to Section 5.01(i) where the tenant is a nationally recognized
credit-worthy retail tenant, provided that the tenant under such Lease shall
require such non-disturbance agreement.
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ARTICLE VI.
SPECIAL PROVISIONS
SECTION 6.01. Condemnation and Casualty. (a) In the event of any
condemnation or casualty of any Property in part or in the entirety, the
proceeds of such condemnation or casualty, to the extent not retained or
otherwise applied by the holder of any mortgage securing Senior Debt on such
Property, or by the holder of the Construction Loan, applied as required
pursuant to any Major Lease approved by the Lender at the Property or applied by
such mortgagee or in accordance with such Major Lease either to restore the
improvements on such Property or to reduce such Senior Debt or the Construction
Loan, as applicable, applied as required pursuant to any condominium declaration
and/or related by-laws affecting any Property that has previously been approved
by Lender to restore the improvements on such Property or applied in accordance
with the Loan Documents, shall be immediately deposited by Borrower in a cash
collateral account to be maintained by Borrower at a depository designated by
Lender and under the sole dominion and control of Lender (the "Cash Collateral
Account") pursuant to a cash collateral agreement to be entered into between
Borrower, Lender and such Depository (the "Cash Collateral Agreement"); (such
proceeds of condemnation so deposited being herein called "Condemnation
Proceeds"; such proceeds of casualty so deposited being herein called "Casualty
Proceeds"; and Condemnation Proceeds and/or Casualty Proceeds being herein
called "Proceeds") and shall constitute additional collateral for the Loan
Obligations.
(b) Provided that no Default or Event of Default shall have
occurred and be continuing, the Borrower shall be entitled to withdraw any
Condemnation Proceeds from the Cash Collateral Account for the purpose of
acquiring additional real estate assets with the consent of the Lender, which
consent shall not be unreasonably withheld, provided that, subject to the Loan
Documents, the Loan Agreements and the Other Vornado Loans (i) Borrower shall
have delivered to Lender an appraisal for such real estate (x) for an amount at
least equal to the amount of the Condemnation Proceeds sought to be withdrawn by
the Borrower to purchase such real estate and (y) issued by an appraisal company
and in form and substance reasonably satisfactory to the Lender; (ii) the
Borrower shall have delivered to Lender environmental, engineering and such
other studies, reports, documents, title reports, violation searches and other
information relating to such real estate as would be generally required by the
Lender in accordance with good institutional lending practices, all of which
studies, reports, documents and other information shall be in form and substance
reasonably satisfactory to the Lender; (iii) the Lender shall be granted a
priority lien mortgage on said real estate to further secure the Guaranty (the
"Additional Mortgage"); (iv) the Borrower shall have delivered to Lender a
paid-up mortgage title insurance policy in favor of Lender, insuring the
Additional Mortgage as a second priority mortgage on such real estate, subject
to no encumbrances or other title exceptions except those title exceptions which
Lender reasonably determines are acceptable based on good institutional lending
practices; and (v) the Borrower shall have paid all reasonable costs and
expenses of the Lender (including reasonable attorneys' fees and expenses)
incurred by the Lender in connection with the review of any of the foregoing
conditions.
(c) The Borrower shall also have the right to withdraw the
Condemnation Proceeds remaining in the Cash Collateral Account to pay for the
cost of constructing improvements on
-26-
any Property covered by any Mortgage, and the Borrower shall have the right to
withdraw any Casualty Proceeds in the Cash Collateral Account to pay for the
repair and restoration of improvements whose damage or destruction generated
such Casualty Proceeds, provided that, in all cases, subject to the Loan
Documents, the Loan Agreements and any condominium declaration and/or related
by-laws affecting such Property that has previously been approved by Lender and
the Other Vornado Loans: (i) no Default or Event of Default shall be continuing;
(ii) the Lender shall have approved the plans and specifications for the
construction of such improvements as well as the general contract and other
major contracts to be entered into by the Borrower in connection with such
construction, which approval will not unreasonably be withheld; (iii) the Lender
shall have received such certification and assurances as Lender shall reasonably
request to assure it that the cost of constructing the improvements as shown on
the plans approved by Lender does not exceed the amount of the Proceeds sought
to be withdrawn by the Borrower to pay for such improvements; and (iv) the
Lender may impose such further conditions and restrictions upon the disbursement
of such Proceeds as the Lender deems necessary or desirable, consistent with
prudent institutional construction lending practices, to assure the completion
of the proposed improvements subject to no liens or encumbrances (except
Permitted Liens) and in accordance with the aforesaid approved plans and all
applicable laws.
SECTION 6.02. Payment of REIT Dividends. In the event that the Borrower
shall determine, upon the advice of counsel then generally used by Borrower for
tax advice, that it shall be required to pay a dividend or make a distribution
to stockholders in order to preserve its qualification as a REIT, whether or not
the Proceeds shall have been applied as contemplated pursuant to Section 6.01
(b) or (c), then, anything herein to the contrary notwithstanding, the Borrower
may, with the consent of the Lender (i) incur unsecured subordinated
indebtedness for the purpose of paying such dividend or making such distribution
or to pay such dividend or make such distribution in the form of subordinated
indebtedness and/or (ii) withdraw Proceeds from the Cash Collateral Account to
pay such dividend or make such distribution.
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay (i) any principal of the Loan,
when the same becomes due and payable or (ii) any other payment under any Loan
Document, in each case under this clause (ii) within five days after notice of
the same becoming due and payable; or
(b) any representation or warranty made by any Loan Party (or any
of its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe, in any material
respect, any term, covenant or agreement contained in Section 5.02; or
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(d) except as otherwise specified in such Loan Document, any Loan
Party shall fail to perform any other term, covenant or agreement contained in
any Loan Document on its part to be performed or observed if such failure shall
remain unremedied for 30 days after written notice (or such longer period, if
any, as may be set forth in the applicable covenant or agreement) thereof shall
have been given to the Borrower by the Lender; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in respect
of or any Subordinated Debt of such Loan Party or such Subsidiary (as the case
may be), when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable notice and grace period, if any, specified in the
agreement or instrument relating to such Subordinated Debt; or any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Subordinated Debt and shall continue after the applicable notice and
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate the maturity of such Subordinated
Debt or otherwise to cause such Subordinated Debt to mature; or any such
Subordinated Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Subordinated Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any Loan Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain undismissed
or unstayed for a period of 60 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur; or any
Loan Party shall take any corporate action to authorize any of the actions set
forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$500,000 shall be rendered against any Loan Party, and either (i) enforcement
proceedings shall have been commenced and be continuing by any creditor upon
such judgment or order or (ii) there shall be any period of 20 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against
any Loan Party that is reasonably likely to have a Material Adverse Effect, and
there shall be any period of 20 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
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(i) any material provision of any Loan Document after delivery
thereof shall for any reason cease to be valid and binding on or enforceable
against any Loan Party to it, or any such Loan Party shall so state in writing;
or
(j) except as otherwise permitted under Section 5.02(a), any
Collateral Document after delivery thereof shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected Lien on the
Collateral purported to be covered thereby with the priority of liens set forth
therein;
(k) any Event of Default (as such term is defined in any Loan
Document) shall occur and be continuing;
(l) any Event of Default (as such term is defined in any loan
document of the Other Vornado Loans) shall occur and be continuing; or
(m) any Event of Default (as such term is defined in the Loan
Agreements of the Construction Loan) shall occur and be continuing;
then, and in any such event, the Lender may, by notice to the Borrower, declare
the Loan Obligations, together with all interest thereon and all other amounts
payable under this Credit Agreement and the other Loan Documents, to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan Party under the
United States Bankruptcy Code, the Notes, all such interest and all such amounts
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Credit Agreement or the Note, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Lender, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 8.02. Notices, Etc. All notices and communications under this
Credit Agreement shall be in writing and shall be given by either (a)
hand-delivery, (b) facsimile transmission, (c) first class mail (postage
prepaid), or (d) reliable overnight commercial courier (charges prepaid)
(i) if to the Borrower, to:
Alexander's Inc.
c/o Vornado Realty Trust
000 Xxxxx 0 Xxxx
-00-
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxxxx
and Vornado Realty Trust
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
(ii) if to the Lender, to:
Vornado Lending L.L.C.
c/o Vornado Realty Trust
000 Xxxxx 0 Xxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
Notice shall be deemed to have been given and received: (i) if by hand delivery,
upon delivery; (ii) if by facsimile, upon transmission; (iii) if by mail, three
(3) calendar days after the date first deposited in the United States mail; and
(iv) if by overnight courier, on the date scheduled for delivery. A party may
change its address by giving written notice to the other party as specified
herein.
SECTION 8.03. No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, any right hereunder or under the Notes
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 8.04. Costs, Expenses. (a) The Borrower agrees to pay on demand
(i) all reasonable costs and expenses of the Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, the reasonable fees and
expenses of counsel for the Lender with respect thereto) and (ii) all reasonable
costs and expenses of the Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally or otherwise
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(including, without limitation, the reasonable fees and expenses of counsel for
the Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Lender
and each of their Affiliates and their officers, directors, employees, agents
and advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related
to or in connection with (i) the transactions contemplated hereby, (ii) the
actual or alleged presence of Hazardous Materials on any property or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, (iii) disputes with any architect, general contractor,
subcontractor, materialman or supplier, or on account of any act or omission to
act by the Lender in connection with any Property, (iv) any untrue statement of
a material fact contained in information submitted to the Lender by the Borrower
or the omission of any material fact necessary to be stated therein in order to
make such statement not misleading or incomplete, (v) the failure of the
Borrower or any Loan Party to perform any obligations required to be performed
by the Borrower or any Loan Party under any Loan Document and (vi) the
ownership, construction, occupancy, operation, use or maintenance of any of the
Properties, in each case whether or not the transactions contemplated hereby are
consummated, except (i) to the extent such claim, damage, loss, liability or
expense is found to have resulted from any Indemnified Party's gross negligence
or willful misconduct. Notwithstanding the foregoing provisions of this Section
8.04(b), the Borrower shall have no obligation to indemnify any Indemnified
Party against, or hold it harmless from, (i) any judgment rendered by a court of
competent jurisdiction against any Indemnified Party and in favor of the
Borrower, or (ii) any legal fees and expenses incurred by the Indemnified Party
in defending the action brought by the Borrower which resulted in such judgment
in favor of the Borrower, but the foregoing provisions of this sentence shall
not diminish or otherwise affect the Borrower's liability for payment of all
legal fees and expenses incurred by the Lender in enforcing the Lender's rights
and remedies under any of the Loan Documents.
(c) In case any action shall be brought against the Lender or any
other Indemnified Party in respect of which indemnity may be sought against the
Borrower, the Lender or such other Indemnified Party shall promptly notify the
Borrower and the Borrower shall assume the defense thereof, including the
employment of counsel selected by the Borrower and reasonably satisfactory to
the Lender, the payment of all costs and expenses and the right to negotiate and
consent to settlement. The failure of the Lender to so notify the Borrower shall
not relieve the Borrower of any liability it may have under the foregoing
indemnification provisions or from any liability which it may otherwise have to
the Lender or any of the other Indemnified Parties except to the extent that the
Borrower incurs actual expenses or suffers actual monetary loss as a result of
such failure to give notice. The Lender shall have the right, at its sole
option, to employ separate counsel and as long as Borrower is complying with its
indemnification obligations hereunder, the fees and disbursements of such
separate counsel shall be paid by Lender. The Borrower shall not be liable for
any settlement of any such action effected without its consent, but if settled
with the Borrower's consent, or if there be a final judgment for the claimant in
any such action, the Borrower agrees to indemnify and save harmless the Lender
from and against any loss or liability by reason of such settlement or judgment.
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(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Lender, in its sole discretion.
(e) The provisions of this Section 8.04 shall survive the
repayment or other satisfaction of the Borrower's Obligations hereunder.
SECTION 8.05. Merger. This Credit Agreement and the other Loan
Documents constitute the sole agreement of the parties with respect to the
transactions contemplated herein and therein and supersede all oral negotiations
and prior writings with respect thereto.
SECTION 8.06. Binding Effect. This Credit Agreement shall become
effective when it shall have been executed by the Borrower and the Lender and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lender.
SECTION 8.07. Lender's Discretion. Except as otherwise specified in
this Credit Agreement, whenever this Credit Agreement provides that the Lender's
consent or approval is required, or that any action may be taken or not taken at
the Lender's option, such consent or approval may be given or not, and such
action may be taken or not, in the Lender's sole discretion. Any reference in
this Credit Agreement to Lender's consent or approval being required shall be
deemed to refer to Lender's prior consent or approval given in writing.
SECTION 8.08. Participations. (a) The Lender may sell participations in
up to one-third of its rights and obligations under this Credit Agreement
(including, without limitation, of its Loan and the Notes held by it) (the
purchaser of any rights and obligations being referred to herein as a
"Participant"); provided, however, that (i) the obligations of the Borrower and
the Lender under this Credit Agreement and the other Loan Documents shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower shall
continue to deliver all notices, communications and payments solely to the
Lender and any such notice, communication or payment shall be valid and
effective for all purposes hereunder notwithstanding any such sale of
participations. Upon the sale of any participation permitted hereunder, the
Borrower shall cooperate with such reasonable requests of the Lender, at the
sole expense of the Lender, to sever and split the note issued hereunder among
the Lender and any Participants.
(b) The Lender may, in connection with any participation or
proposed participation pursuant to this Section 8.08, disclose to the
Participant or proposed Participant, any information relating to the Borrower
furnished to the Lender by or on behalf of the Borrower; provided, however,
that, prior to any such disclosure, the Participant or proposed Participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from the Lender.
(c) Notwithstanding any other provision set forth in this Credit
Agreement, the Lender may at any time create a security interest in all or any
portion of its rights under this Credit Agreement (including, without
limitation, the Loan and the Notes held by it) in favor of
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any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 8.09. Governing Law. This Credit Agreement and the Note shall
be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Credit Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Credit Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Credit Agreement.
SECTION 8.11. Waiver of Jury Trial. Each of the Borrower and the Lender
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Loan or the actions of the Lender in
the negotiation, administration, performance or enforcement thereof. The
Borrower acknowledges and agrees that this section is a specific and material
aspect of this Credit Agreement and that the Lender would not extend credit to
the Borrower if the waiver set forth in this section were not a part of this
Credit Agreement.
SECTION 8.12. Jurisdiction. The Borrower irrevocably appoints each and
every owner, partner and/or officer of the Borrower as its attorneys upon whom
may be served, by regular or certified mail at the address set forth herein, any
notice, process or pleading in any action or proceeding against it arising out
of or in connection with this Credit Agreement or any other Loan Document; and
the Borrower hereby consents that any action or proceeding against it may be
commenced and maintained in any court within the State of New Jersey or the
State of New York or in the United States District Court for the District of New
Jersey or the United States District Court for the Southern District of New York
by service of process on any such owner, partner and/or officer; and the
Borrower agrees that the courts of the State of New Jersey and the courts for
the State of New York and the courts for the United States District Court for
the District of New Jersey and the courts for the United States District Court
for the Southern District of New York shall have jurisdiction with respect to
the subject matter hereof and the person of the Borrower and all collateral
securing the obligations of the Borrower. The Borrower agrees not to assert any
defense to any proceeding initiated by the Lender in such court based upon
improper venue or inconvenient forum. The foregoing shall not limit, restrict or
otherwise affect the right of the Borrower or the Lender to commence any action
on this Credit Agreement or any other Loan Document in any other courts having
jurisdiction.
SECTION 8.13. Continuing Enforcement. If, after receipt of any payment
of all or any part of the Borrower's Obligations hereunder, the Lender is
required by law in connection with insolvency, fraudulent conveyance, bankruptcy
or similar proceedings to surrender such payment then this Credit Agreement and
the other Loan Documents shall continue in full force and effect, and the
Borrower shall be liable for, and shall indemnify defend and hold harmless the
Lender with respect to the full amount so surrendered. The provisions of this
Section 8.13 shall survive the termination of this Credit Agreement and the
other Loan Documents and shall remain effective notwithstanding the payment of
the Borrower's Obligations hereunder, the
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cancellation of the Notes or any other Loan Document, the release of any
security interest, lien or encumbrance securing the Borrower's Obligations
hereunder or any other action which the Lender may have taken in reliance upon
its receipt of such payment. Any cancellation, release or other such action by
the Lender shall be deemed to have been conditioned upon any payment of the
Borrower's Obligations hereunder having become final and irrevocable.
* * *
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ALEXANDER'S, INC.
By: /s/Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
----------------------------
Title: Assistant Secretary
---------------------------
VORNADO LENDING L.L.C.
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
----------------------------
Title: Executive Vice President
---------------------------
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SCHEDULE I
PROPERTIES
FLUSHING PROPERTY
Address: 136-20 through 000-00 Xxxxxxxxx Xxxxxx, a/k/a 00-00-00
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
Tax Map Designation:
Block: 5019 Lot: 5
City: New York County: Queens State: Xxx Xxxx
00XX XXXXXX PROPERTY
Address: 000-00 Xxxx 00xx Xx. a/k/a 000-00 Xxxxx Xxx.
000-00 Xxxx 00xx Xx. a/k/a 000-00 Xxxxxxxxx Xxx.
000-00 Xxxx 00xx Xx. a/k/a 000-00 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx
Tax Map Designation:
Block: 1313 Lots: 40, 42, 43, 50
City: New York County: New York State: New York
XXXX PARK II PROPERTY
Address: Junction Boulevard
Xxxx Park, New York
Tax Map Designation:
Block: 2080 Lot: 101
XXXX PARK III PROPERTY
Address: Junction Boulevard
Xxxx Park, New York
Tax Map Designation:
Block: 2077 Lot: 90 and 98
Block: 2076 Lot: 50 and 00
XXXXX XXXXXX PROPERTY
Address: 0000-00 Xxxxx Xxxxxx
633 Bergen Avenue
0000 Xxxxx Xxxxxx; and
0000 Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx
Tax Map Designation:
Section: 9 Block: 2362 Lots: 44, 72, 71, 52 & 53
City: New York County: Bronx State: New York
SCHEDULE II
CONFLICTS UNDER LOAN DOCUMENTS
1. Completing recordation and filing of the Mortgages and other documents.
SCHEDULE III
REQUIRED AUTHORIZATIONS
1. Recording Mortgages and making other security filings.
SCHEDULE IV
DISCLOSED LITIGATION
1. Claims in process in the Bankruptcy Proceeding as set forth in attached
Schedule IV-A.
SCHEDULE V(a)
ENVIRONMENTAL NON-COMPLIANCE
1. Environmental matters disclosed in Alexander's, Inc. quarterly report on
Form 10-Q for the quarter ended September 30, 1994, et. seq.
SCHEDULE V(b)
ENVIRONMENTAL REPORTS
Phase I Environmental Site Assessments prepared for Alexander's, Inc., 00 Xxxx
00xx Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxx, XX 00000 and prepared by Certified
Engineering & Testing Company, Inc., 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx,
XX 00000:
0. Xxxxxxxxx Xxxxxx & Xxxx Xxxxxx, 000-00 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000 (December 1, 1993)
2. Alexander's Department Store, 00-00 Xxxxxx Xxxxxxxxx, Xxxx Xxxx, Xxx Xxxx
00000 (December 1, 1993)
3. Xxxxx Xxxxxx & 000xx Xxxxxx, Xxxxx, Xxx Xxxx (December 1, 1993)
4. Xxxx 00xx Xxxxxx & Xxxxxxxxx Xxx., 731-733 & 000-000 Xxxxxxxxx Xxx.,
982-988 & 000-000 Xxxxx Xxx., Xxx Xxxx, Xxx Xxxx 00000 (December 1, 1993)
SCHEDULE VI
DEFAULTS UNDER MATERIAL AGREEMENTS
(None)
SCHEDULE VII
NON-COMPLIANCE WITH LAWS
(None)
EXHIBIT A
FORM OF NOTE
EXHIBIT B
FORM OF GUARANTY
EXHIBIT C
FORM OF NON-DISTURBANCE AGREEMENT
EXHIBIT D
FORM OF MORTGAGE
EXHIBIT E
FORM OF ASSIGNMENT OF COLLATERAL ACCOUNT AND SECURITY AGREEMENT
EXHIBIT F
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
EXHIBIT G
FORM OF PLEDGE AGREEMENT
EXHIBIT H
FORM OF BORROWING REQUEST
STATE OF New York )
---------------------
) ss.:
COUNTY OF New York )
--------------------
On the 2nd day of July, in the year 2002, before me, the undersigned, personally
appeared Xxxxxx Xxxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
/s/ Xxxx Xxxxxxx
---------------------------------------
Notary Public Xxxx Xxxxxxx
My commission expires: Nov. 30, 2002
