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MASTER LOAN AND SECURITY AGREEMENT
FOR A CREDIT FACILITY
IN AN AMOUNT UP TO $225,000,000
Dated as of July 16, 2001
CTMP II FUNDING CORP. (MS)
as Borrower
and
XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE CAPITAL INC.
as Lender
TABLE OF CONTENTS Page
RECITALS .............................................................................................1
Section 1. Definitions and Accounting Matters...........................................................1
1.01 "Certain Defined Terms.......................................................................1
1.02 Accounting Terms and Determinations.........................................................13
Section 2. Loans, Note and Prepayments.................................................................13
2.01 Loans.......................................................................................13
2.02 Notes.......................................................................................13
2.03 Procedures for Borrowing....................................................................14
2.04 Mandatory Prepayments or Pledge.............................................................18
Section 3. Payments; Computations; Etc.................................................................18
3.01 Repayment of Loans; Interest................................................................18
3.02 Payments....................................................................................19
3.03 Computations................................................................................20
3.04 U.S. Taxes..................................................................................20
3.05 Booking of Loans............................................................................21
3.06 Lender's Funding of Eurodollar Rate Loans...................................................21
3.07 Funding Costs...............................................................................21
3.08 Compensation for Increased Costs............................................................22
3.09 Limitation on Types of Loans; Illegality....................................................22
Section 4. Collateral Security.........................................................................22
4.01 Collateral; Security Interest...............................................................22
4.02 Further Assurances..........................................................................23
4.03 Changes in Locations, Name, etc.............................................................24
4.04 Lender's Appointment as Attorney-in-Fact....................................................24
4.05 Performance by Lender of Borrower's Obligations.............................................25
4.06 Proceeds....................................................................................25
4.07 Remedies....................................................................................25
4.08 Limitation on Duties Regarding Preservation of Collateral...................................26
4.09 Powers Coupled with an Interest.............................................................26
4.10 Release of Security Interest................................................................26
4.11 Release of Collateral.......................................................................26
4.12 Substitution of Eligible Collateral.........................................................26
Section 5. Conditions Precedent........................................................................27
5.01 Initial Loan................................................................................27
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TABLE OF CONTENTS Page
5.02 Initial and Subsequent Loans................................................................28
5.03 Additional Requirements.....................................................................29
Section 6. Representations and Warranties..............................................................30
6.01 Existence...................................................................................30
6.02 Action......................................................................................30
6.03 Litigation..................................................................................30
6.04 No Breach...................................................................................30
6.05 Approvals...................................................................................30
6.06 Use of Proceeds; Margin Regulations.........................................................31
6.07 Taxes.......................................................................................31
6.08 Investment Company Act......................................................................31
6.09 Collateral; Collateral Security.............................................................31
6.10 Chief Executive Office......................................................................32
6.11 Location of Books and Records...............................................................32
6.12 True and Complete Disclosure................................................................32
6.13 ERISA.......................................................................................32
6.14 Income Tax..................................................................................32
Section 7. Covenants of Borrower.......................................................................32
7.01 Financial Statements, Reports, etc..........................................................32
7.02 Litigation..................................................................................33
7.03 Existence, etc,.............................................................................33
7.04 Prohibition of Fundamental Changes..........................................................34
7.05 Borrowing Base Deficiency...................................................................34
7.06 Notices.....................................................................................34
7.07 Reports.....................................................................................35
7.08 Transactions with Affiliates................................................................35
7.09 Foreclosure or Other Remediation by Borrower................................................35
7.10 Limitation on Liens.........................................................................35
7.11 Limitation on Distributions.................................................................35
7.12 Maintenance of Ratio of Earnings Before Interest, Taxes, Depreciation and
Amortization to Interest and Preferred Dividends............................................35
7.13 Maintenance of Ratio of Total Indebtedness to Tangible Net Worth............................36
7.14 Servicer; Servicing Tape....................................................................36
7.15 Remittance of Prepayments...................................................................36
7.16 Income Tax..................................................................................36
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TABLE OF CONTENTS Page
Section 8. Events of Default...........................................................................36
Section 9. Remedies Upon Default.......................................................................38
Section 10. No Duty of Lender...........................................................................38
Section 11. Miscellaneous...............................................................................38
11.01 Waiver......................................................................................38
11.02 Notices.....................................................................................39
11.03 Indemnification and Expenses................................................................39
11.04 Amendments..................................................................................40
11.05 Successors and Assigns......................................................................40
11.06 Survival....................................................................................40
11.07 Captions....................................................................................40
11.08 Counterparts................................................................................40
11.09 Loan Agreement Constitutes Security Agreement; Governing Law................................40
11.10 SUBMISSION TO JURISDICTION; WAIVERS.........................................................40
11.11 WAIVER OF JURY TRIAL........................................................................41
11.12 Acknowledgments.............................................................................41
11.13 Hypothecation or Pledge of Loans............................................................41
11.14 Servicing...................................................................................41
11.15 Periodic Due Diligence Review...............................................................42
11.16 Intent......................................................................................43
11.17 Change of Borrower's State of Formation.....................................................43
11.18 Set-Off.....................................................................................43
11.19 Xxxxxx Xxxxxxx Downgrade....................................................................43
11.20 Special Purpose Entity......................................................................43
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TABLE OF CONTENTS
SCHEDULES
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SCHEDULE 1 Filing Jurisdictions and Offices
SCHEDULE 2 Approved Appraisers
SCHEDULE 3 Approved Engineers
SCHEDULE 4 Approved Environmental Consultants
EXHIBITS
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EXHIBIT A Form of Promissory Note
EXHIBIT B Form of Custodial Agreement
EXHIBIT C Form of Opinion of Counsel to Borrower
EXHIBIT D Form of Request for Borrowing
EXHIBIT E Form of Lender's Release Letter
EXHIBIT F Form of Bailee Agreement
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MASTER LOAN AND SECURITY AGREEMENT
MASTER LOAN AND SECURITY AGREEMENT, dated as of July 16, 2001, between
CTMP II FUNDING CORP. (MS), a company incorporated under the laws of the Cayman
Islands ("Initial Borrower"), and XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE CAPITAL
INC., a New York corporation ("Lender").
RECITALS
Initial Borrower has requested that Lender from time to time make
revolving credit loans to it to finance certain conduit loans, multifamily and
commercial mortgage loans, mezzanine loans, equity interests, and other approved
collateral owned by Initial Borrower and certain Wholly-Owned Subsidiaries, and
Lender is prepared to make such loans upon the terms and conditions hereof. In
addition, Initial Borrower has requested that Lender from time to time make
revolving credit loans to it to finance certain commercial mortgage-backed
securities owned by Initial Borrower and certain Wholly-Owned Subsidiaries and
Lender is prepared to make such loans pursuant to the terms and conditions of
that certain CMBS Loan Agreement dated as of July 16, 2001 between Initial
Borrower and Xxxxxx Xxxxxxx International Limited Inc. ("MSIL") (as amended,
supplemented, or otherwise modified and in effect from time to time, the "CMBS
Loan Agreement"). References herein to commercial mortgage backed securities and
related terms are solely to set forth the definitions of Eurodollar Rate Spread,
Advance Rate and Maximum Advance Rate for such collateral and the CMBS Loan
Agreement shall govern as to all other matters.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
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1.01 "Certain Defined Terms." As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Loan Agreement in the singular will have the same meanings
when used in the plural and vice versa):
"Advance Rate" means, for any item of Eligible Collateral, the ratio,
expressed as a percentage, set forth opposite the collateral type in the chart
provided in the definition of Eurodollar Rate Spread or as otherwise defined or
limited herein.
"Affiliate" shall mean (i) with respect to Lender, any entity which
controls, is controlled by, or is under common control with Lender, and (ii)
with respect to Borrower, any affiliate of Borrower as such term is defined in
the Bankruptcy Code.
"Additional Borrower" has the meaning provided in Section 2.03 (a)
(iii) hereof.
"Affiliate Credit Facility" shall mean any one or more agreements
between Lender, or an Affiliate of Lender, and Affiliates of Borrower
(including, without limitation, that certain (i) Amended and Restated Master
Loan and Security Agreement dated as of February 8, 2001 between Capital Trust,
Inc. and Lender as amended pursuant to that certain First Amendment to Amended
and Restated Master Loan and Security Agreement dated as of July 16, 2001, (ii)
that certain Amended and Restated CMBS Loan Agreement dated as of February 8,
2001 between Capital Trust, Inc. and MSIL as amended pursuant to that certain
First Amendment to Amended and Restated CMBS Loan Agreement dated as of July 16,
2001, (iii) Master Loan and Security Agreement dated as of September 19, 2000
between CT Mezzanine Partners I LLC and Lender as amended pursuant to that
certain First Amendment to Master Loan and Security Agreement dated December 29,
2000 and as further amended pursuant to that certain Second Amendment to Master
Loan and Security Agreement dated February 8, 2001 and as further amended
pursuant to that certain Third Amendment to Master Loan and Security Agreement
dated as of July 16, 2001, and (iv) CMBS Loan Agreement dated as of September
19, 2000 between CT Mezzanine Partners I
LLC as amended by that certain First Amendment to CMBS Loan Agreement dated
February 8, 2001 and as further amended pursuant to that certain Second
Amendment to CMBS Loan Agreement dated as of July 16, 2001), pursuant to which
such Affiliate of Borrower shall incur Indebtedness to Lender or such Affiliate
of Lender and including, without limitation, any other loan agreement or
repurchase agreement between Lender, or an Affiliate of Lender, and an Affiliate
of Borrower.
"Aggregate Imbedded First Mortgage Component" shall mean the aggregate
of each Imbedded First Mortgage Component as of the date of such calculation.
"Amortization Period" shall mean, if the Termination Date shall be
extended in accordance with the terms hereof, the period from and after the
First Anniversary to, but not including, the date that is nine (9) months after
the First Anniversary.
"Appraisal" means an appraisal of any Property prepared by a licensed
appraiser listed on Schedule 3 attached hereto, as such schedule may be amended
from time to time by Borrower or Lender upon approval by Lender in its
reasonable discretion, in accordance with the Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation, in compliance with the
requirements of Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act and utilizing customary valuation methods such as the income,
sales/market or cost approaches, as any of the same may be updated by
recertification from time to time by the appraiser performing such Appraisal.
"Asset-Specific Loan Balance" means a portion of the Loan allocable to
each item of the Eligible Collateral. Such portion initially consists of the sum
of all advances of the Loan made on account of such Eligible Collateral, without
subtracting from such advances the Drawdown Fee, Lender's Transaction Costs and
other advance costs and fees to the extent borrowed by Borrower hereunder.
Wherever this Loan Agreement states that principal payments on account of the
Loan are to be allocated or applied to or against the Asset-Specific Loan
Balance of a specific item of Eligible Collateral, the Asset-Specific Loan
Balance of such item of Eligible Collateral shall be deemed reduced accordingly
by the amount of the principal payments so applied.
"Asset Value" shall mean, as of any date in respect of an item of
Eligible Collateral, the price at which such Eligible Collateral could readily
be sold as determined in the sole good faith of Lender, which price may be
determined to be zero. Lender's determination of Asset Value, which may be made
at any time and from time to time, shall be conclusive upon the parties.
Whenever an Asset Value determination is required under this Loan Agreement,
Borrower shall cooperate with Lender in its determination of the Asset Value of
each item of Eligible Collateral (including, without limitation, providing all
information and documentation in the possession of Borrower regarding such item
of Eligible Collateral or otherwise required by Lender in its sole good faith
business discretion).
"Bailee" shall mean Paul, Hastings, Xxxxxxxx & Xxxxxx LLP or such other
third party as Lender may approve.
"Bailee Agreement" shall mean the Bailee Agreement among Borrower,
Lender and Bailee in the form of Exhibit F hereto.
"Bailee's Trust Receipt and Certification" shall mean a Trust Receipt
and Certification in the form annexed to the Bailee Agreement as Attachment 2.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.
"Base Rate" means, as determined by Lender on a daily basis, the higher
of (a) the rate per annum established by The Chase Manhattan Bank from time to
time as its "Prime" Rate or "reference" rate (which Borrower acknowledges is not
necessarily such bank's lowest rate) and (b) one-half percentage point (0.5%)
(50 basis points) over the Federal Funds Rate, as determined by Lender in its
sole discretion.
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"Borrower" shall mean the Initial Borrower together with any Additional
Borrower, to the extent applicable.
"Borrower By-Laws" shall mean the Memorandum and Articles of
Association of Borrower adopted on incorporation thereof, as amended
supplemented or replaced from time to time with the approval of Lender.
"Borrowing Base" shall mean the aggregate Collateral Value of all
Eligible Collateral pledged to secure the amounts from time to time outstanding
under this Loan Agreement.
"Borrowing Base Deficiency" shall have the meaning provided in Section
2.04 hereof.
"Business Day" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of
New York or Custodian is authorized or obligated by law or executive order to be
closed.
"Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Loan Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CIG" shall mean Citigroup Investments Inc., a Delaware corporation, an
Affiliate of Citigroup Inc.
"CMBS" shall mean, in the singular or plural as the context requires,
securities backed by mortgages and other liens on commercial real estate and
related collateral or by securities, interests or other obligations backed
directly or indirectly by such mortgages.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning provided in Section 4.01(b) hereof.
"Collateral Assignment" shall mean all documents pursuant to which
Borrower shall have collaterally assigned all of its right, title and interest
in, to and under an item of Collateral to secure a Loan made hereunder.
"Collateral Documents" shall mean with respect to any Collateral Loan,
Equity Interest, or Other Approved Collateral, the documents comprising the
Collateral File for such item of Collateral.
"Collateral File" shall mean, as to each item of Collateral, those
documents set forth in a schedule to be delivered by Lender to Custodian and
which are delivered to the Custodian pursuant to the terms of this Loan
Agreement or the Custodial Agreement including, without limitation, all
documents required by Lender to grant and perfect a first priority security
interest in such item of Collateral.
"Collateral Loan" shall mean, as applicable, a Mortgage Loan or a
Mezzanine Loan.
"Collateral Obligor" shall mean any obligor under any Collateral Loan,
any issuer of any security comprising any portion of the Collateral and any
entity in which an Equity Interest comprises any portion of the Collateral.
"Collateral Report" shall mean the collateral schedule and exception
report prepared by Custodian pursuant to the Custodial Agreement.
"Collateral Schedule" shall mean a list of Eligible Collateral to be
pledged pursuant to this Loan Agreement, attached to a Custodial Identification
Certificate setting forth, as to each item of Eligible Collateral, the
applicable information for such Collateral Type specified on Annex 1 to the
Custodial Agreement.
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"Collateral Type" shall mean a Mortgage Loan, Mezzanine Loan, Equity
Interest and Other Approved Collateral.
"Collateral Value" shall mean, with respect to each item of Eligible
Collateral, the Asset Value of such Eligible Collateral multiplied by the
applicable Advance Rate set forth in the definition of "Eurodollar Rate Spread"
set forth herein or as otherwise defined or limited herein; provided, that, the
Collateral Value shall be deemed to be zero or such greater amount as determined
by Lender in respect of each item of Eligible Collateral (1) in respect of which
there is a breach of a representation or warranty by a Collateral Obligor, (2)
in respect of which there is a delinquency in the payment of principal and/or
interest which continues for a period in excess of 30 days (such period to
include any applicable grace periods) unless otherwise approved by Lender, or
(3) which has been released from the possession of Custodian under the Custodial
Agreement to Borrower for a period in excess of 14 days.
"Collection Account" shall mean one or more accounts established by the
Servicer subject to a security interest in favor of Lender, into which all
Collections shall be deposited by the Servicer.
"Collections" shall mean, collectively, all collections and proceeds on
or in respect of the Collateral, excluding collections required to be paid to
the Servicer or a borrower on the Collateral.
"Conduit Loan" shall mean a Mortgage Loan, secured by a first mortgage
on a real property, that in Lender's determination, satisfies the following
criteria: (i) principal balance not exceeding $40,000,000.00; (ii) interest at a
fixed rate with prepayment protection satisfactory to Lender; (iii)
single-asset, bankruptcy remote property owner complying with all nationally
recognized statistical rating agency requirements; (iv) no subordinate financing
and mortgage and organizational documents prohibiting subordinate financing or
unsecured financing not otherwise subject to intercreditor agreements
satisfactory to rating agencies; (v) debt service coverage ratio (as determined
by Lender in its sole discretion) of not less than 1.25:1 or such higher debt
service coverage ratio as may be required by rating agencies; (vi) not having
any characteristics that would impair the rating of any securities issued
pursuant to a securitization that included a substantial component of mortgages
similar to such mortgage; and (vii) in full compliance with such other "conduit"
underwriting and structuring requirements as Lender shall establish from time to
time.
"Control" shall mean possession of the power, directly or indirectly,
to (a) vote more than fifty percent (50%) of the voting securities having
ordinary power for the election of directors of an entity, or (b) direct or
cause the direction of the management and policies of such entity, whether by
contract or otherwise.
"CT-F2" shall mean CT-F2-GP, LLC, a Delaware limited liability company
and a member of the general partner of CT Mezz II.
"CT Mezz II" shall mean CT Mezzanine Partners II LP, a Delaware limited
partnership, the sole shareholder of CTMP II.
"CTMP II" shall mean CTMP II Funding Corp., a company incorporated
under the laws of the Cayman Islands, the sole shareholder of Borrower.
"CTI" shall mean Capital Trust, Inc., a Maryland corporation and the
sole member of CT-F2.
"CTIMCO" shall mean CT Investment Management Co., LLC, a Delaware
limited liability company and the investment manager of Borrower pursuant to the
Investment Management Agreement.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
the date hereof, among Borrower, Custodian and Lender, substantially in the form
of Exhibit B hereto, as the same shall be modified and supplemented and in
effect from time to time.
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"Custodial Identification Certificate" shall mean the certificate
executed by Borrower in connection with the pledge of Eligible Collateral to
Lender in the form of Annex 3 to the Custodial Agreement.
"Custodian" shall mean Bankers Trust Company as custodian under the
Custodial Agreement, and its successors and permitted assigns thereunder.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Diligence Materials" means the Preliminary Due Diligence Package
together with the materials requested in the Supplemental Due Diligence List.
"Direct Mortgage" means a recorded mortgage or deed of trust in favor
of Lender on real property.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Drawdown Fee" shall mean, for each Loan with respect to any particular
item of Eligible Collateral, an amount equal to the product of 0.25% and the
principal amount of such Loan; provided, however, that (a) the Drawdown Fee
shall be equal to zero to the extent that such Loan is to be made with respect
to a Conduit Loan as Collateral and (b) with respect to any other such item of
Eligible Collateral, borrowings which are repaid and subsequently reborrowed
will not be charged a subsequent Drawdown Fee.
"Due Diligence Review" shall mean the performance by Lender of any or
all of the reviews permitted under Section 11.15 hereof with respect to any or
all of the Collateral, as desired by Lender from time to time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.
"Eligible Collateral" shall mean Mortgage Loans, Mezzanine Loans,
Equity Interests and Other Approved Collateral as to which the representations
and warranties in Section 6.09 hereof are correct.
"Equity Interest" shall mean any interest in a Person constituting a
share of stock or a partnership or membership interest or other right or
interest in a Person not characterized as indebtedness under GAAP (including,
without limitation, a preferred equity interest).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which Borrower is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which Borrower is
a member.
"Eurocurrency Reserve Requirements" shall mean, for any day as applied
to a Loan, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
without limitation basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto), dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such Governmental Authority.
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"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Contract Period, the rate per annum equal to the rate appearing at page 3750 of
the Telerate Screen as 30 day LIBOR on such date, and if such rate shall not be
so quoted, the rate per annum at which Lender is offered Dollar deposits at or
about 10:00 A.M., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency exchange
operations in respect of its Loans are then being conducted for delivery on such
day for a period of 30 days and in an amount comparable to the amount of the
Loans to be outstanding on such day.
"Eurodollar Contract Period" means, with respect to each Loan, an
interest rate contract period which shall commence on the first Business Day of
each calendar month during the term of this Agreement and which shall terminate
on the day that immediately precedes the first Business Day of the following
month; provided, that: (a) Eurodollar quotations for the period requested are
reasonably available to Lender in the Eurodollar market for such Eurodollar
Contract Period; (b) in no event shall a Eurodollar Contract Period extend
beyond the Termination Date; and (c) the initial Eurodollar Contract Period with
respect to each Asset-Specific Loan Balance shall commence on the related
Funding Date and shall terminate on the day that immediately precedes the first
Business Day of the following month.
"Eurodollar Rate" shall mean, with respect to each day a Loan is
outstanding, a rate per annum determined by Lender in its sole discretion in
accordance with the following formula (rounded upwards to the nearest 1/100th of
one percent), which rate as determined by Lender shall be conclusive absent
manifest error by Lender:
Eurodollar Base Rate
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1.00 minus Eurocurrency Reserve
Requirements
"Eurodollar Rate Spread" means (A) as to each Advance Rate the
applicable Eurodollar Rate Spread set forth below opposite such Advance Rate for
the applicable Collateral type, or such other Eurodollar Rate Spread as may be
mutually agreed to by Borrower and Lender:
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Eurodollar Rate Spread (expressed as
percentage points per annum and as
Collateral Type Advance Rate basis points)
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Conduit Loan 90% 1.25% 125bp
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Non-Conduit Loans (limited to 90% LTV maximum)
First Mortgage (75% LTV maximum) 85% 1.75% 175bp
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Subordinate Mortgage Loans, Mezzanine
Loans, CMBS and Equity Interests* 70% 2.25% 225bp
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* Solely for illustrative purposes, Borrower and Lender agree that the
following example of a transaction illustrates their intent: with respect
to an item of Collateral that is a First Mortgage Loan for which the
appraised value of the underlying real property is $100,000,000, on which
a First Mortgage Loan has been made in the aggregate amount of
$80,000,000, with Lender advancing hereunder 85% of a 75% LTV
($63,750,000), plus 70% of the remaining 5% LTV (70% of $15,000,000 equals
$3,500,000), the aggregate loans from Lender to Borrower would equal
$67,250,000, resulting in a 84.06% underlying loan-to-loan value. In
addition, Lender will finance non-conduit loans originated by Borrower
with an aggregate underlying LTV up to 90% and above 90% on a case-by-case
basis. The Eurodollar Rate Spread may exceed the levels set forth above on
loans with underlying LTVs in excess of 90%.
and (B) notwithstanding anything set forth in clause (A) to the contrary, in the
event the Termination Date shall be extended pursuant to the terms hereof, for
the period from and after the First Anniversary to, and including, the date the
Loans are repaid in full, as to each Advance Rate the sum of (x) the applicable
Eurodollar Rate Spread set forth opposite such Advance Rate for the applicable
Collateral type in clause (A) above, plus (y) .25 percent, or 25 basis points,
per annum.
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"Eurodollar Substitute Rate" means a rate of interest equal to (a) the
Base Rate minus (b) Two and eighty-five hundredths percent (2.85%) per annum
(285 basis points).
"Event of Default" shall have the meaning provided in Section 8 hereof.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by Lender from three
federal funds brokers of recognized standing selected by Lender.
"First Anniversary" shall mean the date that is the first anniversary
of the date hereof.
"First Mortgage Exclusion" shall mean 87% of the Aggregate Imbedded
First Mortgage Component.
"Funding Costs" shall mean, collectively, the actual costs to Lender of
breaking a Eurodollar contract (or costs that would have been incurred if Lender
had entered into and broken a Eurodollar contract for a Eurodollar Contract
Period as requested by Borrower) prior to the expiration of the Eurodollar
Contract Period applicable thereto in connection with (a) any prepayment
(whether voluntary or involuntary) of all or any portion of an Asset-Specific
Loan Balance or other principal repayments required or permitted under the
Security Documents, that is made at any time other than at the expiration of the
related Eurodollar Contract Period, (b) any voluntary or involuntary
acceleration of the Termination Date, such that the Termination Date occurs on
any date that is not the expiration date of the Eurodollar Contract Period with
respect to any Asset-Specific Loan Balance, and (c) any other set of
circumstances not attributable solely to Lender's acts. Subject to the
foregoing, Funding Costs shall not include any diminution in yield suffered by
Lender upon re-lending or re-investing the principal of the Loan after any
prepayment of the Loan.
"Funding Date" shall mean the date on which a Loan is made hereunder.
"GAAP" shall mean generally accepted accounting principles consistently
applied as in effect from time to time in the United States.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over any obligor
on any underlying loan, Borrower, any of its Subsidiaries or any of its
properties.
"GREMII" shall mean Travelers General Real Estate Mezzanine Investments
II, LLC, a Delaware limited liability company and a member of the general
partner of CT Mezz II.
"Guarantee" shall mean, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness against loss (whether by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided
that the term "Guarantee" shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) obligations to make
servicing advances for delinquent taxes and insurance or other obligations in
respect of a Mortgaged Property, to the extent required by Lender. The amount of
any Guarantee of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith. The
terms "Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
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"Imbedded First Mortgage Component" shall mean 75% of the Asset Value
of the Eligible Collateral pledged to Lender in connection with each Loan as of
the date of such calculation, which calculation shall be made on an individual
Loan by Loan basis.
"Initial Borrower" has the meaning set forth in the heading hereto.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
Indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; and (i) Indebtedness of general partnerships of which such
Person is a general partner.
"Interest Rate Protection Agreement" shall mean, with respect to any or
all of the Mortgage Loans and Mezzanine Loans, any short sale of US Treasury
Securities, or futures contract, or mortgage related security, or Eurodollar
futures contract, or options related contract, or interest rate swap, cap or
collar agreement or similar arrangements providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by any obligor on
any underlying loan or Borrower (specifically with respect to such items of
Collateral) and acceptable to Lender.
"Investment Management Agreement" shall mean that certain Fund II
Investment Management Agreement dated as of April 9, 2001 between CTIMCO and
Initial Borrower, as may be amended from time to time with the approval of
Lender.
"Lender" shall have the meaning provided in the heading hereto.
"Lien" shall mean any mortgage, lien, pledge, charge, encumbrance,
security interest or adverse claim.
"Loan" and "Loans" shall have the meanings provided in Section 2.01(a)
hereof.
"Loan Agreement" shall mean this Master Loan and Security Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.
"Loan Documents" shall mean, collectively, this Loan Agreement, the
Note, The Parent Guaranty and the Custodial Agreement.
"LTV" shall mean, as to any Eligible Collateral, the ratio that (x) the
aggregate outstanding principal balances of all loans (including Loans
hereunder) and preferred equity interests secured in whole or in part by real
property or direct or indirect beneficial interests therein relating to such
Eligible Collateral bears to (y) the value, determined by an Appraisal
reasonably acceptable to Lender, of the real property (together with all
applicable appurtenant interests and subject to all applicable liens,
encumbrances and tenancies), or direct or indirect beneficial interests which
form the basis of such Eligible Collateral.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, operations, financial condition or prospects of Borrower
taken as a whole, (b) the ability of
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Borrower to perform its obligations under any of the Loan Documents to which it
is a party, (c) the validity or enforceability of any of the Loan Documents, (d)
the rights and remedies of Lender under any of the Loan Documents, (e) the
timely payment of the principal of or interest on the Loans or other amounts
payable in connection therewith or (f) the aggregate value of the Collateral.
"Maximum Advance Rate" shall mean, as to any item of Eligible
Collateral, the maximum Advance Rate that shall be determined by Lender in
Lender's sole and absolute discretion; provided, that, with respect to the
specific categories of Eligible Collateral referred to in the definition of
Eurodollar Rate Spread, the Maximum Advance Rate shall not exceed the respective
Advance Rates set forth in such definition.
"Maximum Credit" shall mean Two Hundred Twenty-Five Million Dollars
($225,000,000.00) or such increased or decreased amount as may be permitted, or
otherwise required, pursuant to Section 2.02 (a).
"Mezzanine Loan" shall mean a loan secured by a pledge of Equity
Interests in one or more entities holding direct or indirect beneficial
interests in an entity owning (or having a ground lease interest in) a
commercial or multi-family residential property, preferred equity interests or a
second mortgage.
"Monthly Statement" shall mean, for each calendar month during which
this Loan Agreement shall be in effect, Borrower's reconciliation in arrears of
beginning balances, interest, principal, paid-to-date and ending balances for
each asset constituting the Collateral, together with (a) an Officer's
Certificate with respect to all Collateral pledged to Lender as at the end of
such month, (b) a written report of any developments or events that are
reasonably likely to have a Material Adverse Effect, (c) a written report of any
and all written modifications to any documents underlying any items of
Collateral and (d) such other internally prepared reports as mutually agreed by
Borrower and Lender which reconciliation, Officer's Certificate and reports
shall be delivered to Lender for each calendar month during the term of this
Loan Agreement within ten (10) days following the end of each such calendar
month.
"Mortgage" shall mean the mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a valid lien on the fee or leasehold
interest in real property securing the Mortgage Note and the assignment of rents
and leases related thereto.
"Mortgage Loan" shall mean a mortgage loan (including, without
limitation, a Conduit Loan) which Custodian has been instructed to hold for
Lender pursuant to the Custodial Agreement, and which Mortgage Loan includes,
without limitation, (i) the indebtedness evidenced by a Mortgage Note and
secured by a related Mortgage and (ii) all right, title and interest of Borrower
in and to the Mortgaged Property covered by such Mortgage.
"Mortgage Note" shall mean the original executed promissory note or
other evidence of the indebtedness of a mortgagor with respect to a Mortgage
Loan.
"Mortgaged Property" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other Collateral securing repayment of the
debt evidenced by a Mortgage Note.
"MS & Co." shall mean Xxxxxx Xxxxxxx & Co. Incorporated, a registered
broker-dealer.
"MS Indebtedness" shall mean all Indebtedness from time to time owed by
Borrower to Lender or any Affiliate of Lender including, without limitation,
under this Loan Agreement, the CMBS Loan Agreement, or any repurchase or other
agreement between Lender, or an Affiliate of Lender, and Borrower.
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"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"'Non-Table' Funded Eligible Collateral" shall mean the items of
Eligible Collateral as described in Section 2.03(e) of this Loan Agreement.
"Note" shall mean the promissory note provided for by Section 2.02(a)
hereof for Loans and any promissory note delivered in substitution or exchange
therefor, in each case as the same shall be modified, amended, supplemented or
extended and in effect from time to time.
"Officer's Certificate" shall mean the certificate of a Responsible
Officer as set forth in Section 5.02(b) hereof.
"Other Approved Collateral" shall mean such other Property of Borrower
as Lender shall accept as Collateral for the Loans.
"Parent Guaranty" shall mean that certain Parent Guaranty dated of even
date herewith executed by the CT Mezz II for the benefit of Lender.
"Payment Date" shall mean, with respect to each Loan, the first
Business Day of each calendar month following the related Funding Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate during the five-year period ended
immediately before the date of this Loan Agreement or to which Borrower or any
ERISA Affiliate makes, is obligated to make or has, within the five-year period
before the date of this Loan Agreement, been required to make contributions and
that is covered Title IV of ERISA or Section 302 of ERISA or Section 412 of the
Code, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount under this Loan Agreement, the Note or any other Loan
Document that is not paid when due to Lender (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to 4% per annum plus the Base
Rate.
"Preliminary Due Diligence Package" means with respect to any proposed
Collateral, the following due diligence information relating to such proposed
Collateral to be provided by Borrower to Lender pursuant to this Loan Agreement:
(i) a summary memorandum outlining the proposed transaction,
including potential transaction benefits and all material
underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a prudent lender
would consider material;
(ii) current rent roll, if applicable;
(iii) cash flow pro-forma, plus historical information, if available;
(iv) description of the property (real property, pledged loan or other
Collateral);
(v) indicative debt service coverage ratios;
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(vi) indicative loan-to-value ratio;
(vii) Borrower's or any affiliate's relationship with its potential
underlying borrower or any affiliate;
(viii)if applicable, Phase I environmental report (including asbestos
and lead paint report);
(ix) if applicable, engineering and structural reports;
(x) third party reports, to the extent available and applicable,
including:
(a) current Appraisal;
(b) Phase II or other follow-up environmental report if
recommended in Phase I;
(c) seismic reports; and
(d) operations and maintenance plan with respect to asbestos
containing materials;
(xi) analyses and reports with respect to such other matters
concerning the Collateral as Lender may in its sole discretion
require;
(xii) documents comprising such Collateral, or current drafts thereof,
including, without limitation, underlying debt and security
documents, guaranties, underlying borrower's organizational
documents, warrant agreements, and loan and collateral pledge
agreements, as applicable; and
(xiii)a list that specifically and expressly identifies any Collateral
Documents that relate to such Collateral but are not in
Borrower's possession.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Regulations T, U and X" shall mean Regulations T, U and X of the Board
of Governors of the Federal Reserve System (or any successor), as the same may
be modified and supplemented and in effect from time to time.
"Responsible Officer" shall mean, as to any Person, the chief executive
officer, any vice chairman and the chief financial officer of such Person or,
for the purpose of executing certificates, the president, the vice president and
counsel responsible therefor.
"Secured Obligations" shall have the meaning provided in Section
4.01(a) hereof.
"Security Documents" means this Loan Agreement, the Note, and all other
agreements, instruments, certificates and documents delivered by or on behalf of
Borrower to evidence or secure the Loan(s) or otherwise in satisfaction of the
requirements of this Loan Agreement, or the other documents listed above as same
may be amended or modified from time to time.
"Servicer" shall have the meaning provided in Section 11.14(c) hereof.
"Servicing Agreement" shall have the meaning provided in Section
11.14(c) hereof.
"Servicing Records" shall have the meaning provided in Section 11.14(b)
hereof.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the
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time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
"Supplemental Due Diligence List" means, with respect to any proposed
Collateral, information or deliveries concerning such proposed Collateral, such
items that Lender shall request in addition to the Preliminary Due Diligence
Package including, without limitation, a credit approval memorandum representing
the final terms of the underlying transaction, a final LTV ratio computation and
a final debt service coverage ratio computation for such proposed Collateral.
"'Table Funded' Eligible Collateral" shall mean the items of Eligible
Collateral as described in Section 2.03(e) of this Loan Agreement.
"Termination Date" shall mean the First Anniversary or such earlier
date on which this Loan Agreement shall terminate in accordance with the
provisions hereof or by operation of law; provided, however, that in the event
that (i) this Agreement shall not have been earlier terminated and (ii) no
Default shall have occurred and be continuing on the First Anniversary, the
Termination Date shall be automatically extended to the date that is nine (9)
months after the First Anniversary.
"Title Insurance Policy" shall mean, with respect to any real property
underlying a Collateral Loan, a mortgagee's title insurance policy or policies
issued to Lender and Lender's successors and assigns (or, subject to the prior
written approval of Lender, an endorsement to Borrower's title insurance policy
insuring the collateral assignment to Lender of the applicable mortgage) by one
or more title companies reasonably satisfactory to Lender, which policy or
policies shall be in form and substance reasonably acceptable to Lender, with
such endorsements as Lender shall reasonably require and, with respect to any
Collateral Loan, a mortgagee's title insurance policy or policies issued to
Lender and Lender's successors and/or assigns by one or more title companies
reasonably satisfactory to Lender reflecting Lender's interest in such
Collateral Loan.
"Total Adjusted Indebtedness" shall mean, for any period, the aggregate
Indebtedness of Borrower during such period less (i) the amount of any
nonspecific balance sheet reserves maintained in accordance with GAAP and (ii)
the First Mortgage Exclusion.
"Total Indebtedness" shall mean, for any period, the aggregate
Indebtedness of Borrower during such period less the amount of any nonspecific
balance sheet reserves maintained in accordance with GAAP.
"Transaction Costs" shall mean, with respect to any Loan, all actual
out-of-pocket reasonable costs and expenses paid or incurred by Lender and
payable by Borrower relating to the making of such Loan (including legal fees
and other fees described in Section 11.03 hereof). Lender shall endeavor to
limit the Transaction Costs associated with such Loan (excluding the initial
Loan) to $5,000, but the foregoing shall not limit Borrower's obligations with
respect to Transaction Costs or constitute a "cap" on Transaction Costs for any
Loan. Transaction Costs shall not include costs incurred by Lender for overhead
and general administrative expenses.
"Treasury Regulations" shall mean the regulations prescribed by the
Secretary of the Department of the Treasury with the authority granted under the
Code, as may be necessary to carry out the purposes of the Code, as amended from
time to time.
"Trust Receipt" shall mean the receipt delivered by Custodian pursuant
to the provisions of Section 4 of the Custodial Agreement acknowledging receipt
of a Collateral File in connection with a Loan hereunder in the form of Annex 2
to the Custodial Agreement.
"Underwriting Issues" means with respect to any Collateral as to which
Borrower intends to request a Loan, all information that has come to Borrower's
attention, based on the making of reasonable inquiries and the exercise of
reasonable care and diligence under the circumstances, which would be considered
a materially "negative" factor (either separately or in the aggregate with other
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information), or a material defect in loan documentation or closing deliveries
(such as any absence of any material Collateral Document(s)), to a reasonable
institutional lender in determining whether to originate or acquire the
Collateral in question.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which 100% of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
1.02 Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to Lender hereunder shall be prepared, in accordance
with GAAP.
Section 2. Loans, Note and Prepayments.
---------------------------
2.01 Loans.
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(a) Lender agrees to consider, as provided herein, from time to time
Borrower's requests that Lender make, on the terms and conditions of this Loan
Agreement, loans (each, individually, a "Loan" and, collectively, the "Loans")
to Borrower in Dollars, from and including the Effective Date to and including
the First Anniversary, in an aggregate principal amount at any one time
outstanding up to but not exceeding the Maximum Credit as in effect from time to
time. Nothing in this Loan Agreement shall be interpreted as a commitment by
Lender to make any Loans, but rather sets forth the procedures to be used in
connection with periodic requests for Loans and the conditions to the making of
any Loans. Borrower hereby acknowledges that Lender is under no obligation to
agree to make, or to make, any Loan pursuant to this Loan Agreement.
(b) Subject to the terms and conditions of this Loan Agreement, during
such period Borrower may borrow, prepay and reborrow hereunder.
2.02 Notes.
-----
The Loans made by Lender shall be evidenced by a single promissory note
of Borrower substantially in the form of Exhibit A hereto, dated the date
hereof, payable to Lender in the principal amount of Two Hundred Twenty-Five
Million Dollars ($225,000,000.00), as otherwise duly completed. Notwithstanding
the foregoing, provided that no Default or Event of Default shall have occurred
and be continuing hereunder or under any Affiliate Credit Facility, Borrower may
request, on no less than ten (10) Business Days prior written notice delivered
to Lender, that the aggregate credit available to Borrower hereunder, under the
CMBS Loan Agreement and under any Affiliate Credit Facility be reallocated among
such credit agreements; provided, however, that in no event shall the Maximum
Credit plus (i) the Maximum Credit (as such term is defined in the CMBS Loan
Agreement) under the CMBS Loan Agreement plus (ii) the aggregate Maximum Credit
(as such term is defined in any Affiliate Credit Facility) under any existing
Affiliate Credit Facility, exceed Four Hundred Million Dollars
($400,000,000.00). In the event (i) that the Maximum Credit is increased or
decreased as a result of a reallocation of the Maximum Credit available under
any Affiliate Credit Facility or (ii) of the existence of an Additional
Borrower, Borrower shall deliver to Lender a substitute Note evidencing such
increase, decrease or addition of an Additional Borrower. Lender shall have the
right to have its Note subdivided,
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by exchange for promissory notes of lesser denominations or otherwise and shall
have the right to sell participating interests in such Note; provided, however,
that Lender must retain (i) in excess of fifty percent (50%) ownership interest
in the Note and (ii) control over all decisions with respect to loan pricing and
the exercise of remedies with respect to each item of Collateral; and provided,
further, however, that Lender may subject up to one hundred percent (100%) of
the Loans made hereunder to a repurchase agreement.
(a) The date, amount and interest rate of each Loan made by Lender to
Borrower, and each payment made on account of the principal thereof, shall be
recorded by Lender on its books and, prior to any transfer of the Note, endorsed
by Lender on the schedule attached to the Note or any continuation thereof;
provided that the failure of Lender to make any such recordation or endorsement
shall not affect the obligations of Borrower to make a payment when due of any
amount owing hereunder or under the Note in respect of the Loans.
2.03 Procedures for Borrowing.
------------------------
(a) Preliminary Approval of Proposed Collateral.
(i) Borrower may, from time to time, submit to Lender a Preliminary
Due Diligence Package for Lender's review and approval in order to request
a borrowing hereunder with respect to any proposed Collateral that Borrower
proposes to pledge to Lender and to be included in the Borrowing Base in
connection with such borrowing.
(ii) Upon Lender's receipt of a complete Preliminary Due Diligence
Package, Lender within two (2) Business Days shall have the right to
request, in Lender's sole and absolute discretion, additional diligence
materials and deliveries that Lender shall specify on a Supplemental Due
Diligence List. Upon Lender's receipt of all of the Diligence Materials or
Lender's waiver thereof, Lender, within five (5) Business Days, shall
either (i) notify Borrower of the Maximum Advance Rate (which may be less
than the Advance Rate set forth in the definition of Eurodollar Rate
Spread) and the Asset Value for the proposed Collateral or (ii) deny, in
Lender's sole and absolute discretion, Borrower's request for an advance.
Lender's failure to respond to Borrower within five (5) Business Days
following receipt of all Diligence Materials or Lender's written waiver
thereof shall be deemed to be a denial of Borrower's request for an
advance, unless Lender and Borrower have agreed otherwise in writing.
Nothing in this Section 2.03(a)(ii) or elsewhere in this Loan Agreement
shall, or be deemed to, prohibit Lender from determining in its sole
discretion the adequacy, correctness and appropriateness of, or from
disapproving, any and all financial and other underwriting data required to
be supplied by Borrower under this Loan Agreement.
(iii) Notwithstanding anything to the contrary contained herein, in
the event that any Preliminary Due Diligence Package submitted to Lender
pursuant to this Section 2.03 shall pertain to Collateral owned by a
Wholly-Owned Subsidiary of Borrower, Lender may condition any determination
of the Asset Value and any approval of the applicable advance upon the
modification of the Loan Documents to include such Wholly-Owned Subsidiary
(each, an "Additional Borrower") as an Additional Borrower under the
applicable Loan Documents.
(b) Final Approval of Proposed Collateral. Upon Lender's notification
to Borrower of the Maximum Advance Rate and the Asset Value for any proposed
Collateral, Borrower shall, if Borrower desires to obtain one or more advances
secured by such proposed Collateral, satisfy the conditions set forth below (in
addition to satisfying the conditions precedent to obtaining each advance, as
set forth in Section 5 of this Loan Agreement) as conditions precedent to
Lender's approval of such proposed Collateral as Collateral, all in a manner,
and pursuant to documentation, satisfactory in all respects to Lender and its
counsel:
(i) Environmental and Engineering. If applicable, Lender shall have
received an Environmental Report and an Engineering Report, each in form
and substance
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satisfactory to Lender, by an Engineer and Environmental Consultant listed
on Schedules 3 and 4 attached hereto, respectively, as each such schedule
may be amended from time to time by Lender in its reasonable discretion.
(ii) Appraisal. If applicable, Lender shall have received an
Appraisal.
(iii) Insurance. With respect to proposed Collateral that is real
property, Lender shall have received certificates or other evidence of
insurance demonstrating insurance coverage in respect of such real property
of types, in amounts, with insurers and otherwise in compliance with the
terms, provisions and conditions set forth in the Collateral Documents or
the Security Documents. Such certificates or other evidence shall indicate
Borrower, as lender, will be named as an additional insured as its interest
may appear and shall contain a loss payee endorsement in favor of such
additional insured with respect to the property policies required to be
maintained under the Collateral Documents.
(iv) Survey. With respect to a Mortgage Loan, a Mezzanine Loan or
an Equity Interest, to the extent obtained by Borrower from the Collateral
Obligor with respect to any item of Collateral at the origination of the
underlying loan or equity interest, as the case may be, relating thereto,
Lender shall have received with respect to proposed Collateral that is real
property, a current Survey of such real property in a form satisfactory to
Lender.
(v) Lien Search Reports. Lender or Lender's counsel shall have
received, as reasonably requested by Lender, satisfactory reports of UCC,
tax lien, judgment and litigation searches and title reports and updates,
as applicable, conducted by search firms and/or title companies acceptable
to Lender with respect to the Collateral, Borrower and the related
underlying obligor, such searches to be conducted in each location Lender
shall reasonably designate.
(vi) Title Insurance Policy.
(A) With respect to a Mortgage Loan, Borrower shall have
delivered to Lender (1) an unconditional commitment to issue title
insurance policies in favor of Lender and Lender's successors
and/or assigns with respect to Lender's interest in the related
real property with an amount of insurance that shall be not less
than the related Asset-Specific Loan Balance (taking into account
the proposed advance) or such other amount as Lender shall require
in its sole discretion or (2) an endorsement or confirmatory letter
from the existing title company to the existing Title Insurance
Policy in favor of Lender and Lender's successors and/or assigns
that amends the existing title insurance policy by stating that the
amount of the insurance is no less than the related Asset-Specific
Loan Balance (taking into account the proposed advance) or such
other amount of title coverage as Lender shall require in its sole
discretion.
(B) With respect to a Mezzanine Loan or an Equity Interest,
Borrower shall have delivered to Lender such evidence as Lender on
a case-by-case basis, in its sole discretion, shall require of the
ownership of the real property underlying such item of Collateral
including, without limitation, a copy of a title insurance policy
dated a date, and by a title insurer, in each case acceptable to
Lender in its sole discretion, showing that title is vested in the
related Collateral Obligor or in an entity in whom such Collateral
Obligor holds a beneficial interest.
(vii) Security Documents. Borrower shall have executed and
delivered to Lender, in form and substance satisfactory to Lender and its
counsel, all security documents perfecting Lender's security interest in
the proposed Collateral (and in any Interest Rate Protection Agreements
held by Borrower with respect thereto) which shall be subject to no Liens
except as expressly permitted by Lender. Each of the security documents
shall contain such
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representations and warranties concerning the proposed Collateral and such
other terms as shall be reasonably satisfactory to Lender.
(viii) Opinions of Counsel. Lender shall have received from counsel
to Borrower its legal opinion as to enforceability of this Loan Agreement,
the substitute Note (if applicable), the matters that are the subject of
the opinion delivered pursuant to Section 5.04 hereof and all documents
executed and delivered hereunder in connection with such Loan, (at Lender's
option) an opinion from local counsel where the applicable property is
located and an opinion to Borrower and its successors and assigns from
counsel to the underlying obligor on the underlying loan transaction, as
applicable, as to enforceability of the loan documents governing such
transaction and such other matters as Lender shall require (including,
without limitation, opinions as to due formation, authority, choice of law
and perfection of security interests). Such legal opinions shall be
addressed to Lender and its successors and assigns, dated the related
Funding Date, and in form and substance reasonably satisfactory to Lender.
(ix) Additional Real Estate Matters. To the extent obtained by
Borrower from the Collateral Obligor relating to any item of Collateral at
the origination of the underlying loan or equity interest relating thereto,
Borrower shall have delivered to Lender such other real estate related
certificates and documentation as may have been requested by Lender, such
as (i) certificates of occupancy and letters certifying that the property
is in compliance with all applicable zoning laws, each issued by
appropriate Governmental Authority and (ii) abstracts of all Leases in
effect at the real property relating to such Collateral.
(x) Additional Borrower. Lender shall have received a substitute
Note evidencing the addition of any Additional Borrower owning the proposed
Collateral and naming Additional Borrower as obligor thereunder, and such
modifications to the other Loan Documents as Lender shall require. In
addition, each of the conditions precedent contained in Section 5 hereof
shall have been satisfied with respect to each Additional Borrower, the
addition of each applicable Additional Borrower shall not cause a default
by Borrower under any term, covenant, condition, representation or warranty
hereunder, and Lender shall have received such other representations,
warranties, certificates, documents and opinions with respect to each
Additional Borrower as Lender shall, in its sole discretion, deem
satisfactory.
(xi) Other Documents. Lender shall have received such other
documents as Lender or its counsel shall request with respect to each or
any item of Collateral.
(c) Collateral Approval or Disapproval. Within two (2) Business Days
following the date upon which Borrower has tendered performance of the
conditions enumerated in Sections 2.03(b)(i) through (xi), or has delivered such
items or documents fully executed, if applicable, in final form, Lender shall
either (i) if the Collateral Documents or the Security Documents with respect to
the proposed Collateral are not reasonably satisfactory in form and substance to
Lender, notify Borrower that Lender has not approved the proposed Collateral as
Collateral or (ii) notify Borrower and Bailee that Lender has approved the
proposed Collateral as Collateral and such notice shall identify the documents
to be delivered to Custodian in connection with such proposed Collateral
pursuant to Sections 2.03 and 5 of this Loan Agreement and shall identify the
party whom Lender shall designate to record and/or file, as the case may be, any
security documents necessary to perfect Lender's security interest in the
Eligible Collateral. The terms of delivery and filing and/or recordation of such
security documents shall be set forth in a separate agreement between Lender and
its designee. Lender's failure to respond to Borrower within two (2) Business
Days shall be deemed to be a denial of Borrower's request that Lender approve
the proposed Collateral, unless Lender and Borrower have agreed otherwise in
writing.
(d) Procedure for Borrowing with Respect to Eligible Collateral. Once
Lender has approved the Collateral in accordance with Section 2.03(c) above,
Borrower may request a Loan hereunder, on any Business Day during the period
from and including the Effective Date to and including the Termination Date, by
delivering to Lender, with a copy to Custodian, an irrevocable written request
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for borrowing, substantially in the form of Exhibit D attached hereto, which
request must be received by Lender prior to 11:00 a.m., New York City time, one
(l) Business Day prior to the requested Funding Date. Such request for borrowing
shall (1) attach a schedule identifying the Eligible Collateral that Borrower
proposes to pledge to Lender and to be included in the Borrowing Base in
connection with such borrowing, (2) specify the requested Funding Date, and (3)
attach an Officer's Certificate signed by a Responsible Officer of Borrower as
required by Section 5.02(b) hereof. Contemporaneously with the delivery of the
request for borrowing, Borrower shall deliver to Lender with a copy to
Custodian, a Custodial Identification Certificate along with the accompanying
Collateral Schedule with respect to all proposed Eligible Collateral to be
pledged to Lender on the applicable Funding Date.
(e) Delivery of Collateral Files and Security Documents.
"Non-Table Funded" Eligible Collateral:
-------------------------------------
1) By no later than 1:00 p.m., New York City time, one (1) Business
Day prior to any Funding Date, the Borrower and/or the Bailee shall
deliver to the Custodian as to any Eligible Collateral on a
case-by-case basis, (i) original counterparts of all Collateral
Documents comprising the Collateral File, (ii) the security documents
described in Section 2.03(b)(vii) above, and (iii) to the extent
applicable, any other documents, reports or updated information as
Lender shall request pursuant to Section 2.03(b)(i)-(x) and Section
5.03(b) not heretofore finally approved by Lender.
"Table Funded" Eligible Collateral:
---------------------------------
1) By no later than 1:00 p.m., New York City time, on the Funding
Date, the Borrower shall cause the Bailee to deliver to the Custodian
by facsimile (i) as to each item of Eligible Collateral, the note, if
applicable, evidencing the making of a loan secured by such Eligible
Collateral, a fully executed Bailee Agreement and Bailee's Trust
Receipt and Certification issued by the Bailee thereunder, (ii) as to
all other categories of Eligible Collateral on a case-by-case basis,
the delivery of all fully executed documents and instruments required
by Lender to comprise the Collateral File and (iii) evidence
satisfactory to Lender that all documents necessary to perfect
Borrower's interest in the Eligible Collateral have been delivered to
a party acceptable to Lender for recordation and filing.
2) By no later than 1:00 p.m., New York City time, on the third
Business Day following the applicable Funding Date, the Borrower shall
cause the Bailee to deliver to the Custodian the Collateral File.
(f) No later than 1:00 p.m., New York City time, on each Funding Date,
Borrower shall provide Custodian with a final Custodial Identification
Certificate and related Collateral Schedule with respect to the Eligible
Collateral to be pledged to the Lender on such Funding Date, indicating any
changes, if any, from the Custodial Identification Certificate and related
Collateral Schedule heretofore delivered to Lender and Custodian pursuant to
Section 2.03(d) above.
(g) If Borrower shall deliver a request for a borrowing pursuant to
Section 2.03(d) hereof and all conditions precedent set forth in Sections
2.03(a), 2.03(b), 2.03(c), 5.01 and 5.02 have been met, and provided no Default
or Event of Default shall have occurred and be continuing, Lender shall make a
Loan to Borrower on the requested Funding Date, in the amount so requested and
approved by Lender.
(h) Subject to the delivery by Custodian to Borrower and Lender of a
Trust Receipt with a Collateral Schedule in respect to all Collateral pledged to
Lender on such Funding Date by no later then 3:00 p.m. on such date, and subject
further to the provisions of Section 5 hereof, such borrowing will then be made
available to Borrower by Lender transferring, via wire transfer, to the
following account of Borrower: Bank of New York, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, Account No. 630-0000000 for
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the benefit of Capital Trust, ABA# 021-000018, Attn: Xxxxxx Xxxx ((212)
852-4219), in the aggregate amount of such borrowing in funds immediately
available to Borrower. Lender may consider on a case-by-case basis in its sole,
absolute discretion alternative funding arrangements requested by Borrower.
(i) From time to time, the Borrower shall forward to the Custodian
additional original documents or additional documents evidencing any (i)
assumption, modification, consolidation or extension of a Collateral Loan, or
(iii) any amendment to the operative documents with respect to an Equity
Interest, in each case approved by the Lender in accordance with the terms of
this Loan Agreement and upon receipt of any such other documents, the Custodian
shall hold such other documents as the Lender shall request from time to time.
(j) With respect to any documents which have been delivered or are
being delivered to recording offices for recording and have not been returned to
the Borrower in time to permit their delivery hereunder at the time required, in
lieu of delivering such original documents, Borrower shall deliver to Lender a
true copy thereof with an Officer's Certificate certifying that such copy is a
true, correct and complete copy of the original, which has been transmitted for
recordation. The Borrower shall deliver such original documents to the Custodian
promptly when they are received.
2.04 Mandatory Prepayments or Pledge.
-------------------------------
(a) Lender may determine and re-determine the Borrowing Base on any
Business Day and on as many Business Days as it may elect. If at any time (i)
the aggregate outstanding principal amount of Loans exceeds the Borrowing Base
(a "Borrowing Base Deficiency"), as determined by Lender in its sole discretion
and notified to Borrower on any Business Day, Borrower shall no later than one
Business Day after receipt of such notice, or (ii) Borrower shall have received
a prepayment of the principal of any loan or preferred equity interest
comprising a portion of the Collateral (including, without limitation, the
payment of casualty or condemnation proceeds), Borrower shall, not later than
one (1) Business Day after receipt of such prepayment, either prepay the Loans
in part or in whole or pledge additional Collateral (which Collateral shall be
in all respects acceptable to Lender) to Lender, such that after giving effect
to such prepayment or pledge the aggregate outstanding principal amount of the
Loans does not exceed the Borrowing Base as re-determined by Lender after the
addition of Collateral. So long as no Default or Event of Default has occurred
and is then continuing, all partial repayments shall be applied against the
Asset-Specific Loan Balance relating to the Loan being repaid.
(b) If at any time under any Collateral Document evidencing Eligible
Collateral (x) there is an Event of Default, or event with which the giving of
notice or lapse of time or both would become an Event of Default, or (y) any
representation or warranty made by or on behalf of the relevant Collateral
Obligor becomes false or misleading in any material respect or (z) the relevant
Collateral Obligor fails to perform or observe any material covenant or other
obligation, Lender may, in its sole discretion and without regard to any
determination of the Asset Value of such Eligible Collateral, notify Borrower of
such occurrence and may require that the Asset-Specific Loan Balance related to
the relevant Eligible Collateral be prepaid in whole or in part in the
determination of Lender. Not later than one (1) Business Day after the receipt
of such notice, Borrower shall prepay the Asset-Specific Loan Balance related to
such Eligible Collateral. Lender may, in its sole discretion, determine and
re-determine the amount to be prepaid irrespective of whether or not any
statement of fact contained in any Officer's Certificate delivered pursuant to
Section 5.02(b) or (ii) any representation of Borrower set forth in Section 6.12
was true to Borrower's actual knowledge.
Section 3. Payments; Computations; Etc.
----------------------------
3.01 Repayment of Loans; Interest.
----------------------------
(a) Borrower hereby promises to repay in full on the Termination Date
the aggregate outstanding principal amount of the Loans; provided, however, in
the event the Termination Date shall be extended to the date that is nine (9)
months after the First Anniversary pursuant to the terms hereof, Borrower
promises to repay such aggregate principal amount of the Loans outstanding on
the First
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Anniversary by the payment on the first Business Day of each calendar month
during the Amortization Period beginning with the first Business day of the
first calendar month following the First Anniversary and on the Termination
Date, as extended (each, an "Installment Date") of an amount equal to the
quotient of (x) the aggregate principal amount of the Loans outstanding as at
the First Anniversary divided by (y) nine (9) (such schedule of payments, the
"Amortization Schedule"); provided, further, that in the event that Borrower
shall repay any portion of the outstanding principal in an amount in excess of
the amount then due and payable in accordance with the Amortization Schedule,
the Amortization Schedule shall be recalculated such that Borrower shall repay
the principal amount of the Loans outstanding on the date of such repayment
(after taking such repayment into account) by the payment on each Installment
Date remaining in the Amortization Period of an amount equal to the quotient of
(x) the aggregate principal amount of the Loans outstanding on the date of such
repayment (after taking such repayment into account) divided by (y) the number
of Installment Dates remaining during the Amortization Period. Any repayment of
the principal of the Loans made by Borrower to Lender subsequent to an
Installment Date shall be credited at the time of such payment and applied to
the payment due on next succeeding Installment Date.
(b) Borrower hereby promises to pay to Lender interest on the unpaid
principal amount of each Loan for the period from and including the date of such
Loan to but excluding the date such Loan shall be paid in full, at a rate per
annum equal to the Eurodollar Rate plus the applicable Eurodollar Rate Spread.
Notwithstanding the foregoing, Borrower hereby promises to pay to Lender, to the
extent permitted by applicable law, interest at the applicable Post-Default Rate
on any principal of any Loan and on any other amount payable by Borrower
hereunder or under the Note that shall not be paid in full when due (whether at
stated maturity, by acceleration or by mandatory prepayment or otherwise) for
the period from and including the due date thereof to but excluding the date the
same is paid in full. Payment and acceptance of interest pursuant to this
subsection shall not constitute a waiver of any Default and shall not otherwise
limit or prejudice any right of Lender hereunder. In no event shall Lender be
entitled to receive any proceeds received from any Collateral Obligor in
connection with the refinancing and/or final distribution to Lender with respect
to any Eligible Collateral to the extent same exceeds the sums provided to be
paid to Lender under Section 7.l5 of this Loan Agreement.
(c) Accrued interest on each Loan shall be payable monthly in arrears
on the first Business Day of each month and for the last month of the Loan
Agreement on the first Business Day of such last month and on the Termination
Date, except that interest payable at the Post-Default Rate shall accrue daily
and shall be payable upon such accrual.
(d) The Loans may be prepaid in whole or in part at any time upon two
(2) Business Days prior written notice, without any penalty or premium;
provided, however, that any such prepayment shall be accompanied by an amount
representing accrued interest on the principal amount being prepaid and all
other amounts then due under the Loan Documents (including, without limitation,
all amounts due under Section 3 hereof). Each partial prepayment that is
voluntary (as opposed to mandatory under the terms of this Loan Agreement) shall
be in an amount of not less than One Hundred Thousand Dollars ($100,000). So
long as no Default or Event of Default has occurred and is then continuing, each
voluntary prepayment shall be applied to reduce any Asset-Specific Loan Balance
as designated by Borrower to Lender in writing.
(e) With respect to any item of Collateral, Borrower shall repay to
Lender an amount equal to the amount of casualty or condemnation proceeds paid
to, or for the benefit of, Borrower or any underlying obligor in respect of such
item of Collateral to the extent that Borrower is not required under the
underlying loan documents with Borrower's obligor to reserve, escrow, readvance
or apply such proceeds for the benefit of such obligor or the underlying real
property. So long as no Default or Event of Default has occurred and is then
continuing, such amounts paid to Lender shall be applied in reduction of the
Asset-Specific Loan Balance relating to such item of Collateral.
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3.02 Payments.
--------
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by Borrower under this Loan
Agreement and the Note shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to Lender at the following account
maintained by Lender: Account No. 00000000, for the account of MSMCI, Citibank,
N.A., ABA No. 000000000, Attn: Whole Loan Operations, Mortgage-Backed Securities
Department, Fixed Income Division, not later than 1:00 p.m., New York City time,
on the date on which such payment shall become due (and each such payment made
after such time on such due date shall be deemed to have been made on the next
succeeding Business Day). Borrower acknowledges that it has no rights of
withdrawal from the foregoing account. Lender shall endeavor to send Borrower a
detailed xxxx on the date which is two (2) Business Days prior to the date on
which payment is due; provided, however, that the failure of Lender to send, or
of Borrower to receive, such xxxx shall in no way affect Borrower's obligation
to pay amounts due under this Loan Agreement.
(b) Except to the extent otherwise expressly provided herein, if the
due date of any payment under this Loan Agreement or the Note would otherwise
fall on a day that is not a Business Day, such date shall be extended to the
next succeeding Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
3.03 Computations. Interest on the Loans shall be computed on the basis
of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. Lender shall
determine any rate of interest payable on Loans hereunder, and such
determination shall be conclusive and binding, absent manifest error.
3.04 U.S. Taxes.
----------
(a) Borrower agrees to pay to Lender such additional amounts as are
necessary in order that the net payment of any amount due to Lender hereunder
after deduction for or withholding in respect of any U.S. Tax (as defined below)
imposed with respect to such payment (or in lieu thereof, payment of such U.S.
Tax by Lender) or any other tax, imposition, levy or similar charge or
assessment against or otherwise applicable to Borrower (whether imposed by a
political subdivision or agency of the United States Government, under any law
or treaty in force or subsequently enacted under the laws of the Cayman Islands)
or otherwise, will not be less than the amount stated herein to be then due and
payable; provided that the foregoing obligation to pay such additional amounts,
to the extent attributable to a U.S. Tax, shall not apply:
(i) to any payment to Lender hereunder unless Lender is entitled to
submit a Form W-8BEN (relating to Lender and entitling it to a complete
exemption from withholding on all interest to be received by it hereunder
in respect of the Loans) or Form W-8ECI (relating to all interest to be
received by Lender hereunder in respect of the Loans), or
(ii) to any U.S. Tax imposed solely by reason of the failure by
Lender to comply with applicable certification, information, documentation
or other reporting requirements concerning the nationality, residence,
identity or connections with the United States of America of Lender if such
compliance is required by statute or regulation of the United States of
America as a precondition to relief or exemption from such U.S. Tax.
For the purposes of this Section 3.04, (x) "Form W-8BEN" shall mean Form W-8BEN
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (y) "Form W-8ECI" shall mean Form
W-8ECI (Exemption from Withholding of Tax on Income Effectively Connected with
the Conduct of a Trade or Business in the United States) of the Department of
the Treasury of the United States of America (or in relation to either such Form
such successor and related form as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), and (z) "U.S. Taxes" shall mean any present or
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future tax, assessment or other charge or levy imposed by or on behalf of the
United States of America, any political subdivision of the United States of
America or any taxing authority thereof or therein.
(b) Within 30 days after paying any such amount to Lender, and within
30 days after it is required by law to remit such deduction or withholding to
any relevant taxing or other authority, Borrower shall deliver to Lender
evidence satisfactory to Lender of such deduction, withholding or payment (as
the case may be).
(c) Lender represents and warrants to Borrower that on the date hereof
Lender is either incorporated under the laws of the United States or a State
thereof or is entitled to submit a Form W-8BEN (relating to Lender and entitling
it to a complete exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form W-8ECI (relating to all interest to
be received by Lender hereunder in respect of the Loans). Lender shall not
assign or sell participation interests in the Loans made or to be made hereunder
to a foreign bank if as a result thereof Lender shall be unable to make the
representations set forth in this Section 3.04(c).
3.05 Booking of Loans. Without limitation of Lender's rights to sell,
assign or transfer a Loan or any interest therein, including any participation
interest therein, at any time and from time to time, Lender may make, carry or
transfer such Loan at, to, or for the account of any of its branch offices or
the office of an Affiliate of Lender; provided, however, that the representation
in Section 3.04(c) shall remain true throughout the term of such Loan.
3.06 Lender's Funding of Eurodollar Rate Loans. Borrower hereby
expressly acknowledges and agrees that Lender may fund a Loan in any manner it
sees fit, including (i) through the actual purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of Eurodollar
Rate in an amount equal to the principal amount of such Loan and having a
maturity comparable to the relevant interest period or (ii) through Lender's
entering into or purchase of repurchase agreements, interest rate agreements,
swap agreements or other arrangements in such amounts as Lender shall determine
(and which amounts may or may not, in Lender's sole discretion, be "match
funded" to such Loan). Calculation of all amounts payable to Lender under this
Section 3.06 and under Section 3.07 shall be made as though Lender had actually
funded such Loan through the purchase of a Eurodollar deposit bearing interest
at the rate obtained pursuant to the definition of Eurodollar Rate in an amount
equal to the amount of such Loan and having a maturity comparable to the
relevant interest period and through the transfer of such Eurodollar deposit
from an off-shore office of Lender to a domestic office of Lender in the United
States of America; provided, however, that Lender may fund such Loan in any
manner it sees fit and the foregoing assumptions shall be utilized only for
purposes of calculating amounts payable under this Section 3.06 and under
Section 3.07, if any.
3.07 Funding Costs.
-------------
(a) Borrower shall compensate Lender, upon written request by Lender
(which request shall set forth the basis for requesting such amounts), for all
Funding Costs.
(b) Lender shall deliver to Borrower a statement setting forth the
amount and basis of determination of any Funding Cost, it being agreed that such
statement and the method of calculation shall be conclusive and binding on
Borrower, absent manifest error. In addition, in the event Borrower provides
Lender not less than five (5) Business Days prior written notice of a proposed
voluntary prepayment hereunder, Lender shall deliver to Borrower a non-binding
good faith estimate of the applicable components and amount of Funding Costs
which would be incurred by Borrower if Borrower were to make a voluntary
prepayment hereunder; provided, however, that Borrower shall remain liable for
all Funding Costs shown on the statement referred to in the first sentence of
this subsection (b), notwithstanding such good faith estimate.
(c) In lieu of prepaying the Loan when and as otherwise required or
permitted by this Loan Agreement, Borrower may on any Business Day (a "Deposit
Funding Date") instead deposit with Lender an amount equal to the applicable
prepayment, to be held by Lender (the "Prepayment Deposit")
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until such date as application of the Prepayment Deposit on account of the Loan
would not cause Lender to suffer Funding Costs (the "Deposit Application Date").
Any Prepayment Deposit held by Lender shall: (a) constitute additional security
for the Loan, for which the parties shall enter into such security documents
(and account establishment and administration documents) as Lender shall
require; (b) be held by Lender in an interest-bearing account selected and
controlled solely by Lender, interest on which shall be added to principal and
applied in the same manner as principal; (c) at Lender's option, be accompanied
by a payment (as estimated by Lender) equal to the difference between the
interest to be earned on the Prepayment Deposit and the interest that will
accrue on a portion of the Loan equal to the Prepayment Deposit during the
period from the Deposit Funding Date to the Deposit Application Date; (d) with
respect to the Collateral, entitle Borrower to the same rights and benefits
(including the right to releases, if any) that would have been available to
Borrower if Borrower had prepaid the Loan (and designated Asset-Specific Loan
Balance(s)) by an amount equal to the Prepayment Deposit; and (e) be applied on
account of the Loan (principal and interest) on the Deposit Application Date.
3.08 Compensation for Increased Costs. If Lender shall in good faith
determine that any change in any law, treaty or governmental rule, regulation or
order, or in the interpretation, administration or application thereof, or any
determination of a court or governmental authority, or compliance with any
guideline, request or directive issued or made by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(a) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of Lender; or
(b) imposes any other condition on or affecting Lender or its
obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to Lender of
agreeing to make, making or maintaining the Loan hereunder or to reduce any
amount received or receivable by Lender with respect thereto; then, in any such
case, Borrower shall promptly (but in any event no later than five (5) Business
Days following any notice from Lender of the same) pay to Lender, upon receipt
of the statement referred to in the next sentence, such additional amount or
amounts as may be necessary to compensate Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Lender shall deliver to
Borrower a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 3.08, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
3.09 Limitation on Types of Loans; Illegality. Anything herein to the
contrary notwithstanding, if:
(a) Lender determines, which determination shall be conclusive, that
quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Loans as provided herein; or
(b) Lender determines, which determination shall be conclusive, that
the relevant rate of interest referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof upon the basis of which the rate of interest for
Loans is to be determined is not likely adequate to cover the cost to Lender of
making or maintaining Loans; or
(c) Lender determines, which determination shall be conclusive, that it
is or will be unlawful for Lender to honor its obligation to make or maintain
Loans hereunder using a Eurodollar Rate as a result of compliance by Lender in
good faith with any law, treaty, governmental rule, regulation,
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guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful);
then Lender shall give Borrower prompt notice thereof and, so long as
such condition remains in effect, Lender shall be under no obligation to make
additional Loans, and Borrower shall, either prepay all such Loans as may be
outstanding or pay interest on such Loans at a rate per annum equal to the
Eurodollar Substitute Rate.
Section 4. Collateral Security.
-------------------
4.01 Collateral; Security Interest.
-----------------------------
(a) Borrower hereby assigns, pledges and grants a security interest in
all of its right, title and interest in, to and under the Collateral described
in Section 4.01(b) below to Lender to secure the repayment of principal of and
interest on all Loans and all other amounts owing to Lender hereunder, under the
Note, under the other Loan Documents and any and all MS Indebtedness from time
to time outstanding (collectively, the "Secured Obligations"). Borrower agrees
to xxxx its computer records to evidence the interests granted to Lender
hereunder.
(b) All of Borrower's right, title and interest in, to and under each
of the following items of property pledged by Borrower to Lender from time to
time and whether now owned or hereafter acquired, now existing or hereafter
created and wherever located, is hereinafter individually and collectively
referred to as the "Collateral":
(i) all Mortgage Loans, Mezzanine Loans, Equity Interests and Other
Approved Collateral;
(ii) all Collateral Documents, including without limitation all
promissory notes, any collateral pledged or otherwise relating to such
Collateral, all representations and warranties made to, or for the benefit
of, Borrower by any Collateral Obligor, all Servicing Records (as defined
in Section 11.14(b) below) and servicing agreements, together with all
files, documents, instruments, surveys, certificates, correspondence,
appraisals, computer programs, computer storage media, accounting records
and other books and records relating thereto, in each case subject to prior
liens and encumbrances permitted by Lender;
(iii) all guaranties and insurance (issued by governmental agencies
or otherwise) and any insurance certificate or other document evidencing
such guaranties or insurance relating to any Collateral and all claims and
payments thereunder;
(iv) all other insurance policies and insurance proceeds relating
to any Collateral or the related Property;
(v) all Interest Rate Protection Agreements;
(vi) the Collection Account and all monies from time to time on
deposit in the Collection Account;
(vii) all "general intangibles", "accounts" and "chattel paper" as
defined in the Uniform Commercial Code relating to or constituting any and
all of the foregoing; and
(viii) any and all replacements, substitutions, distributions on,
or proceeds (including, without limitation, condemnation proceeds) of, any
and all of the foregoing set forth in items (i) through (vii) of this
Section 4.01(b), whether now owned or hereafter acquired, now existing or
hereafter created and wherever located.
(c) Pursuant to the Custodial Agreement, Custodian shall hold the
Collateral Documents as exclusive bailee and agent for Lender pursuant to terms
of the Custodial Agreement and shall deliver to Lender Trust Receipts each to
the effect that it has reviewed such Collateral Documents in
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the manner and to the extent required by the Custodial Agreement and identifying
any deficiencies in such Collateral Documents as so reviewed.
4.02 Further Assurances.
------------------
(a) Borrower shall undertake, with respect to each item of Collateral
pledged hereunder as security for a Loan, any and all actions deemed necessary
by Lender for the granting by Borrower to Lender of a valid first priority
security interest in such Collateral. Without limiting the generality of the
foregoing, Borrower shall take such steps as are necessary for the granting and
perfection of a first priority security interest in Securities and related
Collateral.
(b) At any time and from time to time, upon the written request of
Lender, and at the sole expense of Borrower, Borrower will promptly and duly
execute and deliver, or will promptly cause to be executed and delivered, such
further instruments and documents and take such further action as Lender may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Loan Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
Liens created hereby. Borrower also hereby authorizes Lender to file any such
financing or continuation statement without the signature of Borrower to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Loan Agreement shall be sufficient as a financing statement for filing
in any jurisdiction.
4.03 Changes in Locations, Name, etc. Borrower shall not (i) change the
location of its chief executive office/chief place of business from that
specified in Section 6 hereof or (ii) change its name, identity or corporate
structure (or the equivalent) or change the location where it maintains its
records with respect to the Collateral unless it shall have given Lender at
least ten (10) days prior written notice thereof and shall have delivered to
Lender all Uniform Commercial Code financing statements and amendments thereto
as Lender shall request and taken all other actions deemed necessary by Lender
to continue its perfected status in the Collateral with the same or better
priority.
4.04 Lender's Appointment as Attorney-in-Fact.
----------------------------------------
(a) Borrower hereby irrevocably constitutes and appoints Lender and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name, from time
to time in Lender's discretion, for the purpose of carrying out the terms of
this Loan Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Loan Agreement, and, without limiting the
generality of the foregoing, Borrower hereby gives Lender the power and right,
on behalf of Borrower, without assent by, but with notice to, Borrower, if an
Event of Default shall have occurred and be continuing, to do the following:
(i) in the name of Borrower or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
mortgage insurance or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by Lender for the purpose of
collecting any and all such moneys due under any such mortgage insurance or
with respect to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment under any
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Lender or as Lender shall direct; (B) to ask or
demand for, collect, receive payment of and receipt for, any and
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all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of any Collateral; (E) to defend any suit,
action or proceeding brought against Borrower with respect to any
Collateral; (F) to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection therewith, to
give such discharges or releases as Lender may deem appropriate; and (G)
generally, to sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though Lender were the absolute owner thereof for all purposes, and to do,
at Lender's option and Borrower's expense, at any time, and from time to
time, all acts and things which Lender deems reasonably necessary to
protect, preserve or realize upon the Collateral and Lender's Liens thereon
and to effect the intent of this Loan Agreement, all as fully and
effectively as Borrower might do.
Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the repayment in full of all Secured
Obligations hereunder.
(b) Borrower also authorizes Lender, at any time and from time to time,
to execute, in connection with any sale provided for in Section 4.07 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
(c) The powers conferred on Lender are solely to protect Lender's
interests in the Collateral and shall not impose any duty upon Lender to
exercise any such powers. Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither Lender
nor any of its officers, directors, or employees shall be responsible to
Borrower for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.
4.05 Performance by Lender of Borrower's Obligations. If Borrower fails
to perform or comply with any of its agreements contained in the Loan Documents
to which it is a party and Lender may itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of Lender
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to the Post-Default Rate, shall be
payable by Borrower to Lender on demand and shall constitute Secured
Obligations.
4.06 Proceeds. If an Event of Default shall occur and be continuing,
(a) all proceeds of Collateral received by Borrower consisting of cash, checks
and other near-cash items shall be held by Borrower in trust for Lender,
segregated from other funds of Borrower, and, within two (2) Business Days of
receipt by Borrower, shall be turned over to Lender in the exact form received
by Borrower (duly endorsed by Borrower to Lender, if required, in order to be
negotiated by Lender) and (b) any and all such proceeds received by Lender
(whether from Borrower or otherwise) may, in the sole discretion of Lender, be
held by Lender as collateral security for, and/or then or at any time thereafter
may be applied by Lender against, the Secured Obligations (whether matured or
unmatured), such application to be in such order as Lender shall elect. Any
balance of such proceeds remaining after the Secured Obligations shall have been
paid in full and this Loan Agreement shall have been terminated shall be paid
over to Borrower or to whomsoever may be lawfully entitled to receive the same.
For purposes hereof, proceeds shall include, but not be limited to, all
principal and interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.
4.07 Remedies. If an Event of Default shall occur and be continuing,
Lender may, at its option, enter into one or more Interest Rate Protection
Agreements covering all or a portion of the Mortgage Loans or Mezzanine Loans
pledged to Lender hereunder, and Borrower shall be responsible for all damages,
judgment costs and expenses of any kind which may be imposed on, incurred by or
asserted
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against Lender relating to or arising out of such Interest Rate Protection
Agreements; including without limitation any losses resulting from such Interest
Rate Protection Agreements. If an Event of Default shall occur and be
continuing, Lender may exercise, in addition to all other rights and remedies
granted to it in this Loan Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code. Without limiting
the generality of the foregoing, Lender without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon Borrower or any other
Person (each and all of which demands, presentments, protests, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels or as an entirety at public
or private sale or sales, at any exchange, broker's board or office of Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in Borrower, which right or equity is hereby
waived or released. Borrower further agrees, at Lender's request, to assemble
the Collateral and make it available to Lender at places which Lender shall
reasonably select, whether at Borrower's premises or elsewhere. Lender shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of Lender
hereunder, including without limitation reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations, in
such order as Lender may elect, and only after such application and after the
payment by Lender of any other amount required or permitted by any provision of
law, including without limitation Section 9-608(a)(1)(c) of the Uniform
Commercial Code, need Lender account for the surplus, if any, to Borrower. To
the extent permitted by applicable law, Borrower waives all claims, damages and
demands it may acquire against Lender arising out of the exercise by Lender of
any of its rights hereunder, other than those claims, damages and demands
arising from the gross negligence or willful misconduct of Lender. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. Borrower shall remain liable for any
deficiency (plus accrued interest thereon as contemplated pursuant to Section
3.01(b) hereof) if the proceeds of any sale or other disposition of the
Collateral (net of costs incurred in connection with such sale or other
disposition) are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorneys employed by Lender to collect such deficiency.
4.08 Limitation on Duties Regarding Preservation of Collateral.
Lender's duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code or otherwise, shall be to deal with it in the same manner as
Lender deals with similar property for its own account. Neither Lender nor any
of its directors, officers or employees shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of Borrower or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
4.10 Release of Security Interest. Upon termination of this Loan
Agreement and the CMBS Loan Agreement and repayment to Lender of all Secured
Obligations and the performance of all obligations under the Loan Documents and
under the CMBS Loan Agreement, Lender shall release its security interest in any
remaining Collateral.
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4.11 Release of Collateral. Provided that no Default or Event of
Default shall exist (other than one that (a) relates solely to the Collateral to
be released and (b) will be cured simultaneously with such release) and that
Borrower shall have paid all sums then due under the Loan relating thereto, upon
(i) Borrower's payment in full of the Asset-Specific Loan Balance with respect
to a portion of the Collateral and (ii) receipt by Lender of a written request
from Borrower for the release of such Collateral, Lender shall as soon as
practicable release (and Lender shall reasonably cooperate with Borrower to
facilitate reasonable escrow arrangements to facilitate a simultaneous release
of) the related Collateral Documents and the related Collateral and any liens
related thereto to Borrower or, to the extent necessary to facilitate future
savings of mortgage tax in states that impose mortgage taxes, assign such liens
as Borrower shall request; provided, that any such assignments shall be without
recourse, representation or warranty of any kind except that Lender shall
represent and warrant that such Collateral has not been previously assigned by
Lender. Lender shall with reasonable promptness, after a written request from
Borrower, execute any document or instrument necessary to effectuate such
release or assignment.
4.12 Substitution of Eligible Collateral. From time to time until the
Custodian is otherwise notified by the Lender, which notice shall be given by
the Lender only during the existence of an Event of Default, and with the prior
written consent of the Lender, the Borrower may substitute for one or more items
of Eligible Collateral constituting the Collateral with one or more substitute
items of Eligible Collateral having aggregate Collateral Value equal to or
greater than the Collateral Value of the Collateral being substituted for, or
obtain the release of one or more items of Collateral constituting Collateral
hereunder: provided that, after giving effect to such substitution or release,
the Secured Obligations then outstanding shall not exceed the Borrowing Base,
which determination shall be made solely by the Lender. In connection with any
such requested substitution or release, the Borrower will provide notice to the
Custodian and the Lender no later than 3:00 p.m. New York City time, on the date
of such request, specifying the items of Collateral to be substituted for or
released and the items of substitute Collateral to be pledged hereunder in
substitution thereof, if any, and shall deliver with such notice a Custodial
Identification Certificate and a revised Collateral Schedule indicating any
substitute Collateral.
Section 5. Conditions Precedent.
--------------------
5.01 Initial Loan. The obligation of Lender to make its initial Loan
hereunder is subject to the satisfaction, immediately prior to or concurrently
with the making of such Loan, of the condition precedent that Lender shall have
received all of the following items and documents, each of which shall be
satisfactory to Lender and its counsel in form and substance:
(a) Loan Documents.
(i) This Loan Agreement, duly completed and executed;
(ii) The Note, duly completed and executed, together with a fee in
the amount of $675,000.00;
(iii) The Custodial Agreement, duly executed and delivered by
Borrower and Custodian. In addition, Borrower shall have taken such other
action as Lender shall have requested in order to perfect the security
interests created pursuant to the Loan Agreement; and
(iv) The Parent Guaranty, duly completed and executed.
(b) Organizational Documents. Certified copies of the Borrower By-Laws
(or equivalent documents), certificate of incorporation of Borrower and of all
requisite authority for Borrower and CT Mezz II with respect to the execution,
delivery and performance of the Loan Documents to which it is a party and each
other document to be delivered by Borrower and CT Mezz II from time to time in
connection herewith (and Lender may conclusively rely on such certifications
until it receives notice in writing from Borrower to the contrary);
(c) Legal Opinion and Certificate as to Substantive Non-Consolidation.
A legal opinion of counsel to Borrower CTMP II, CT Mezz II, substantially in the
form attached hereto as Exhibit
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C and a certificate of Borrower, CTMP II, CT Mezz II, CT-F2, GREMII, TINDY RE
Investments, Inc, The Travelers Insurance Company and CTI in form and substance
satisfactory to Lender in its sole discretion as to the separate existence of
Borrower, CTMP II, CT Mezz II, CT-F2, GREMII, TINDY RE Investments, Inc., The
Travelers Insurance Company and CTI and certain factual matters which would be
determinative of the probability that, in the event that any of CTMP II, CT Mezz
II, CT-F2, GREMII, TINDY RE Investments, The Travelers Insurance Company or CTI
were to become a debtor under 11 U.S.C. ss. 101 et seq., a federal bankruptcy
court would not disregard such separate existence and consolidate the assets and
liabilities of Borrower, CTMP II, CT Mezz II, GREMII or CTI with any such debtor
entity;
(d) Trust Receipt and Collateral Schedule and Exception Report. A Trust
Receipt, substantially in the form of Annex 2 of the Custodial Agreement, dated
the Effective Date, from Custodian, duly completed, with a Collateral Schedule
and Exception Report attached thereto;
(e) Servicing Agreement(s). Any Servicing Agreement, certified as a
true, correct and complete copy of the original, with the letter of the
applicable Servicer (i) consenting to termination of such Servicing Agreement
upon the occurrence of an Event of Default and (ii) agreeing to hold all moneys
received in respect of each item of Collateral for the benefit of Lender,
attached; and
(f) Other Documents. Such other documents as Lender may reasonably
request.
5.02 Initial and Subsequent Loans. The making of each Loan to Borrower
(including the initial Loan) on any Business Day is subject to the delivery of
all Collateral Documents pertaining to the Eligible Collateral to be pledged for
such Loan, together with all documents set forth in Section 2.03(b)(i)-(x) and
the satisfaction of the following further conditions precedent, both immediately
prior to the making of such Loan and also after giving effect thereto and to the
intended use thereof:
(a) no Event of Default or Default shall have occurred and be
continuing on such date either before or after giving effect to the making of
the advance;
(b) Lender shall have received from Borrower and CT Mezz II, and
Borrower shall have received from each Collateral Obligor such representations
and warranties as Lender shall, in its sole discretion, deem satisfactory. The
representations and warranties made by Borrower in Section 6 hereof, elsewhere
in each of the Loan Documents and by CT Mezz II in the Guaranty, shall be true
and complete on and as of the date of the making of such Loan in all material
respects (in the case of the representations and warranties in Section 6.09,
solely with respect to Eligible Collateral included in the Borrowing Base) with
the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date). Lender shall have received an
officer's certificate signed by a Responsible Officer of Borrower certifying as
to the truth and accuracy of the above, which certificate shall also include a
representation that (i) Borrower is in compliance with all governmental licenses
and authorizations, (ii) Borrower is qualified to do business, validly existing
and, to the extent determinable, in good standing, in all required
jurisdictions, (iii) the facts set forth in the Diligence Materials related to
the Collateral for such Loan are, to the best knowledge of Borrower after
diligent inquiry, true and correct (or shall fully explain all adverse changes
from the information previously supplied to Lender), (iv) there has been no
change in the organizational and authority documents provided to Lender pursuant
to Section 5.01(b) hereof since the date of the most recent certification
thereof to Lender, and (v) there has been no Material Adverse Effect since the
date of the last advance to Borrower hereunder. If required, Lender shall also
receive a similar Certificate executed by a Responsible Officer of CT Mezz II.
(c) the aggregate outstanding principal amount of the Loans shall not
exceed the Borrowing Base;
(d) subject to Lender's right to perform one or more Due Diligence
Reviews pursuant to Section 11.15 hereof, Lender shall have completed its due
diligence review of the Collateral Documents for each item of Collateral and
such other documents, records, agreements, instruments,
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mortgaged properties or information relating to such item of Collateral as
Lender in its sole discretion deems appropriate to review and such review shall
be satisfactory to Lender in its sole discretion;
(e) Lender shall have received from Custodian a Trust Receipt, together
with a Collateral Schedule and Exception Report with Exceptions (as defined in
the Custodial Agreement) as are acceptable to Lender in its sole discretion, in
respect of the Eligible Collateral to be pledged hereunder on such Business Day;
(f) Lender shall have received from Borrower a Lender's Release Letter
substantially in the form of Exhibit E hereto (or such other form acceptable to
Lender) covering each item of Collateral to be pledged to Lender to the extent
such Collateral is subject to a lender's lien;
(g) none of the following shall have occurred and/or be continuing:
(i) an event or events shall have occurred resulting in the
effective absence of a "repo market" or comparable "lending market" for
financing debt obligations secured by mortgage loans or securities for a
period of (or reasonably expected to be) at least 30 consecutive days or an
event or events shall have occurred resulting in Lender not being able to
finance any Loans through the "repo market" or "lending market" with
traditional counterparties at rates which would have been reasonable prior
to the occurrence of such event or events;
(ii) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities backed by
mortgage loans for a period of (or reasonably expected to be) at least 30
consecutive days or an event or events shall have occurred resulting in
Lender not being able to sell securities backed by mortgage loans at prices
which would have been reasonable prior to such event or events; or
(iii) there shall have occurred a material adverse change in the
financial condition of Lender which effects (or can reasonably be expected
to effect) materially and adversely the ability of Lender to fund its
obligations under this Loan Agreement;
(h) Drawdown Fee. Borrower shall have paid Lender from the proceeds of
the advance to be made in connection with such Loan, a Drawdown Fee calculated
on the amount of such Loan then being disbursed.
(i) Transaction Costs. Borrower shall have paid Lender from the
proceeds of the advance to be made in connection with such Loan, all Transaction
Costs for which bills have been submitted; provided, however, that nothing
herein shall be deemed to waive Borrower's obligation to pay all Transaction
Costs whether billed before or after the making of a Loan pursuant to which such
Transaction Costs were incurred.
(j) Other Documents. Lender shall have received such other documents,
and Borrower shall have taken such other action in order to perfect the security
interests created hereunder, as Lender or its counsel shall deem necessary.
(k) No Xxxxxx Xxxxxxx Downgrade. Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.'s
corporate bond rating as calculated by S&P or Xxxxx'x shall not have been
lowered or downgraded to a rating below A- as indicated by S&P or below A3 as
indicated by Xxxxx'x.
Each request for a borrowing by Borrower hereunder shall constitute a
certification by Borrower that all the conditions set forth in this Section 5
have been satisfied (both as of the date of such notice, request or confirmation
and as of the date of such borrowing).
5.03 Additional Requirements.
-----------------------
(a) Borrower and Lender recognize and agree that the categories of
Collateral set forth in the Recital paragraph hereof and defined herein as
categories of assets which may be submitted by Borrower to Lender for review by
Lender as Eligible Collateral hereunder are general in nature and
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that the full scope of such Collateral categories may be unknown. Consequently,
the appropriate requirements are not fully known for (i) the documents to be
provided by Borrower for underwriting and due diligence review by Lender and
(ii) submittals by Borrower in order to create and perfect a first priority
security interest in the Collateral. Therefore, Borrower and Lender agree that,
as a further condition precedent to funding a Loan in respect of any Collateral
hereunder, Borrower shall have delivered to Lender all information and documents
determined by Lender in good faith to be required for its underwriting and
examination of such Collateral and for the granting and perfection of a first
priority security interest therein.
(b) Without limiting the generality of the foregoing Section 5.03(a),
Borrower shall execute and deliver all documents necessary for the granting of a
first priority security interest in any Collateral determined by Lender to be
Eligible Collateral hereunder, including without limitation (i) all instruments
evidencing indebtedness payable to Borrower or pledged to Borrower as security
for a loan, (ii) all instruments granting or perfecting a security interest for
the benefit of Borrower or pledged to Borrower as security for a loan
(including, without limitation, collateral assignments, pledge agreements and
UCC financing statements), (iii) all instruments evidencing an interest in an
entity pledged to Borrower as security for a loan (including, without
limitation, partnership interests, shares of corporate stock, participation
interests, and other beneficial interests of any kind), (iv) all instruments
guaranteeing the repayment of indebtedness owed to Borrower, or pledged to
Borrower for the repayment of a Loan and (v) all agreements among holders of
debt or equity interests providing for a priority among such parties of
interests in related assets forming the basis of an item of Collateral.
5.04 Tax Opinion. Notwithstanding anything to the contrary contained
herein, Borrower hereby covenants and agrees to deliver to Lender no later than
August 3, 2001, "Tax Opinion" of Borrower's counsel, in such form as is
reasonably acceptable to Lender concluding that no Borrower will be treated as
engaged in a trade or business within the United States.
Section 6. Representations and Warranties.
-------------------------------
Borrower represents and warrants to Lender that from and after the
First Anniversary and throughout the term of this Loan Agreement:
6.01 Existence. Borrower (a) is a company duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation, (b) has all
requisite power, and has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect on its Property, business or financial condition or
prospects; and (c) is qualified to do business, validly existing and is, to the
extent determinable, in good standing, in all other jurisdictions in which the
nature of the business conducted by it makes such qualification necessary,
except where failure so to qualify would not be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect on its
Property, business or financial condition or prospects.
6.02 Action. Borrower has all necessary power, authority and legal
right to execute, deliver and perform its obligations under each of the Loan
Documents to which it is a party; the execution, delivery and performance by
Borrower of each of the Loan Documents to which it is a party have been duly
authorized by all necessary action on its part; and each Loan Document to which
it is a party has been duly and validly executed and delivered by Borrower and
constitutes a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms.
6.03 Litigation. There are no actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or threatened) or other legal or arbitrable proceedings affecting
Borrower or any of its Subsidiaries or affecting any of the Property of any of
them before any Governmental Authority that (i) questions or challenges the
validity or enforceability of any of the Loan Documents or any action to be
taken in connection with the transactions contemplated hereby, (ii) makes a
claim or claims in an aggregate amount greater than $5,000,000, (iii) which,
individually or
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in the aggregate, if adversely determined, could reasonably be
likely to have a Material Adverse Effect, or (iv) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder.
6.04 No Breach. Neither (a) the execution and delivery of the Loan
Documents to which it is a party nor (b) the consummation of the transactions
therein contemplated in compliance with the terms and provisions thereof will
conflict with or result in a breach of the Borrower By-Laws or the certificate
of incorporation of Borrower, or any applicable law, rule or regulation, or any
order, writ, injunction or decree of any Governmental Authority, or any
Servicing Agreement or other material agreement or instrument to which Borrower
or any of its Subsidiaries is a party or by which any of them or any of their
Property is bound or to which any of them is subject, or constitute a default
under any such material agreement or instrument or result in the creation or
imposition of any Lien (except for the Liens created pursuant to this Loan
Agreement) upon any Collateral pursuant to the terms of any such agreement or
instrument.
6.05 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority or any securities
exchange are necessary for the execution, delivery or performance by Borrower of
the Loan Documents to which it is a party or for the legality, validity or
enforceability thereof, except for filings and recordings in respect of the
Liens created pursuant to this Loan Agreement.
6.06 Use of Proceeds; Margin Regulations. Neither the making of any
Loan hereunder, nor the use of the proceeds thereof, will violate or be
inconsistent with any provisions of Regulation T, U or X. In addition, no part
of the proceeds of any Loan will be used, whether directly, indirectly,
immediately, incidentally or ultimately (i) to purchase or carry any "margin
stock" within the meaning of Regulation U or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or is inconsistent with, such Regulation U or any other regulations of the Board
of Governors of the Federal Reserve System, or (iii) for any purposes prohibited
by any applicable law, order, rule, regulation, ordinance or similar code or
restriction. If requested by Lender, the Borrower, any applicable Affiliate or
Subsidiary of Borrower and the recipient of any portion of the proceeds all or
any portion of any Loan shall furnish to Lender a statement on Federal Reserve
Form G-3 referred to in Regulation U.
6.07 Taxes. Borrower and its Subsidiaries have filed all Federal income
tax returns and all other material tax returns that are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by any of them, except for any such taxes as are being
appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves have been provided. The
charges, accruals and reserves on the books of Borrower and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of Borrower,
adequate.
6.08 Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
6.09 Collateral; Collateral Security.
-------------------------------
(a) Borrower has not assigned, pledged, or otherwise conveyed or
encumbered any Collateral to any other Person other than an Additional Borrower,
and immediately prior to the pledge of such Collateral to Lender, unless
otherwise approved by Lender in writing, either Initial Borrower or the
applicable Additional Borrower, as the case may be, was the sole owner of such
Collateral and had good and marketable title thereto, free and clear of all
Liens, in each case except for Liens to be released simultaneously with the
Liens granted in favor of Lender hereunder. No Collateral pledged to Lender
hereunder was acquired by Borrower from an Affiliate of Borrower unless
otherwise approved by Lender in writing.
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(b) The provisions of this Loan Agreement are effective to create in
favor of Lender a valid security interest in all right, title and interest of
Borrower in, to and under the Collateral.
(c) Upon (x) receipt by Custodian of each Mortgage Note evidencing a
Mortgage Loan, endorsed in blank by a duly authorized officer of Borrower, (y)
the recordation of the mortgage to Lender securing such Mortgage Loan and an
assignment of such mortgage and (z) the filing of a UCC-1 financing statement
with respect to such assignment of mortgage, Lender shall have a fully perfected
first priority security interest therein, subject only to prior liens and
encumbrances permitted by Lender, in the Mortgage Loan evidenced thereby and in
Borrower's interest in the related Property.
(i) Upon (x) receipt by Custodian of each note evidencing a Mezzanine
Loan, endorsed in blank by a duly authorized officer of Borrower,
(y) the delivery of a duly executed pledge to Borrower of direct
or indirect beneficial interests in the underlying property and
the filing of UCC-1 financing statements with respect thereto,
and (z) the delivery by Borrower of a duly executed pledge of
such pledged interests and the filing of UCC-3 assignment
statements with respect thereto, Lender shall have a fully
perfected first priority security interest therein, in the
Mezzanine Loan evidenced thereby, and in Borrower's interest in
the related Property.
(ii) As to all other Collateral, upon receipt by Custodian of all
documents set forth in Lender's notice to Borrower and Custodian
pursuant to Section 2.03(b)(x) hereof, Lender shall have a fully
perfected first priority security interest therein and in
Borrower's interest in the related Property.
(d) Upon the filing of financing statements on Form UCC-1 naming Lender
as "Secured Party" and Borrower as "Debtor", and describing the Collateral, in
the jurisdictions and recording offices for which security interests may be
perfected in the Collateral by the filing of UCC financing statements, the
security interests granted hereunder in the Collateral will constitute fully
perfected first priority security interests under the Uniform Commercial Code in
all right, title and interest of Borrower in, to and under such Collateral which
can be perfected by filing under the Uniform Commercial Code.
6.10 Chief Executive Office. Borrower's registered office is c/o
Caledonian Bank & Trust Limited, XX Xxx 0000 GT, Xxxxxxxxxx Xxxxx 00 Xx. Xxxx
Xxxxx, Xxxxxx Xxxxxxx.
6.11 Location of Books and Records. The location where Borrower keeps
its books and records, including all computer tapes and records relating to the
Collateral is its "Address for Notices" specified below its name on the
signature pages hereof.
6.12 True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of
Borrower to Lender in connection with the negotiation, preparation or delivery
of this Loan Agreement and the other Loan Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole, (x) do
not contain any untrue statement of material fact and (y) contain all statements
of material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, true. All written information
furnished after the date hereof by or on behalf of Borrower to Lender in
connection with this Loan Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby, will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact known to the actual knowledge of a Responsible
Officer of Borrower, after due inquiry, that could reasonably be expected to
have a Material Adverse Effect that has not been disclosed herein, in the other
Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to Lender for use in connection
with the transactions contemplated hereby or thereby.
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6.13 ERISA. Each Plan to which Borrower or its Subsidiaries make direct
contributions, and, to the knowledge of Borrower, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No event or
condition has occurred and is continuing as to which Borrower would be under an
obligation to furnish a report to Lender under Section 7.01(e) hereof assuming a
request therefor has been made by Lender.
6.14 Income Tax. Borrower is not and will not at any time prior to the
Termination Date (i) be considered to be engaged in a trade or business within
the United States, or (ii) enter into any transaction which may give rise to
gain that is taxable to Borrower under Section 897 of the Code.
Section 7. Covenants of Borrower. Borrower covenants and agrees with
Lender that, so long as any Loan is outstanding and until payment in full of all
Secured Obligations:
7.01 Financial Statements, Reports, etc. Borrower shall deliver to
Lender for itself and on behalf of CT Mezz II:
(a) the Monthly Statement;
(b) as soon as available and in any event within forty-five (45) days
after the end of each of the first three quarterly fiscal periods of each fiscal
year of Borrower and CT Mezz II, the unaudited (consolidated, if applicable)
balance sheets of Borrower and CT Mezz II (and its consolidated Subsidiaries, if
applicable) as at the end of such period and the related unaudited
(consolidated, if applicable) statements of income and retained earnings and of
cash flows for Borrower and CT Mezz II (and its consolidated Subsidiaries, if
applicable) for such period and the portion of the fiscal year through the end
of such period, setting forth in each case in comparative form the figures for
the previous year, accompanied by a certificate of a Responsible Officer of
Borrower and CT Mezz II, which certificate shall state that said consolidated
financial statements fairly present the consolidated financial condition and
results of operations of Borrower and CT Mezz II (and its consolidated
Subsidiaries, if applicable) in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end audit
adjustments);
(c) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of Borrower and CT Mezz II, the consolidated balance
sheets of Borrower and CT Mezz II (and its consolidated Subsidiaries, if
applicable) as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows for Borrower and CT
Mezz II (and its consolidated Subsidiaries, if applicable) for such year,
setting forth in each case in comparative form the figures for the previous
year, accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall not be
qualified as to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Borrower and CT Mezz II (and its
consolidated Subsidiaries, if applicable) as at the end of, and for, such fiscal
year in accordance with GAAP, and a certificate of such accountants stating
that, in making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default or Event of Default;
(d) within forty-five (45) days following the end of each quarter, or
within ninety (90) days following the end of each fiscal year, as the case may
be, a certificate from a Responsible Officer of Borrower in form and substance
reasonably satisfactory to Lender that Borrower and CT Mezz II during such
fiscal period or year has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Loan Agreement and
the other Loan Documents to be observed, performed or satisfied by it, and that
there has been no Event of Default and no Material Adverse Effect;
(e) within fifteen (15) Business Days after Lender's request, such
further information with respect to the operation of any real property, the
Collateral, the financial affairs of Borrower, CT Mezz II and any Plan and
Multiemployer Plan as may be requested by Lender, including all business
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plans prepared by or for Borrower and CT Mezz II; provided, however, that with
respect to information not previously known to, or in the possession of,
Borrower relating to any Multiemployer Plan, Borrower shall only be required to
provide such information as may be obtained through good faith efforts;
(f) upon Lender's request, a copy of any financial or other report
Borrower shall receive from any underlying obligor with respect to an item of
Collateral within fifteen (15) days after Borrower's receipt thereof; and
(g) such other reports as Lender shall reasonably require.
7.02 Litigation. Borrower will promptly, and in any event within 10
days after service of process on any of the following, give to Lender notice of
all litigation, actions suits, arbitrations, investigations (including, without
limitation, any of the foregoing which are pending or threatened) or other legal
or arbitrable proceedings affecting Borrower or any of its Subsidiaries or
affecting any of the Property of any of them before any Governmental Authority
that (i) questions or challenges the validity or enforceability of any of the
Loan Documents or any action to be taken in connection with the transactions
contemplated hereby, (ii) makes a claim or claims in an aggregate amount greater
than $1,000,000.00, or (iii) which, individually or in the aggregate, if
adversely determined could reasonably be likely to have a Material Adverse
Effect.
7.03 Existence, etc,. Borrower will:
----------------
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (provided that nothing in this
Section 7.03(a) shall prohibit any transaction expressly permitted under Section
7.04 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect on its Property, business or financial condition, or
prospects;
(c) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;
(d) not move its chief executive office from the address referred to in
Section 6.10 unless it shall have provided Lender 10 days' prior written notice
of such change;
(e) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained; and
(f) permit representatives of Lender, during normal business hours, to
examine, copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by Lender.
7.04 Prohibition of Fundamental Changes. Borrower shall not enter into
any transaction of merger or consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation, winding up or dissolution) or
sell all or substantially all of its assets; provided, that Borrower may enter
into a merger or consolidation if (a) the surviving or resulting entity shall be
a corporation or partnership organized under the laws of the United States or
any state thereof; (b) such entity shall expressly assume by written agreement,
in form and substance satisfactory to Lender in Lender's sole discretion, the
performance of all of Borrower's duties and obligations under this Loan
Agreement, the Note and the Loan Documents; and (c) such entity shall be at
least as creditworthy as Borrower, as determined by Lender in Lender's sole and
absolute discretion; and, provided, further, that if after giving effect
thereto, no Default would exist hereunder.
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7.05 Borrowing Base Deficiency. If at any time there exists a Borrowing
Base Deficiency, Borrower shall cure same in accordance with Section 2.04
hereof.
7.06 Notices. Borrower shall give notice to Lender:
(a) promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default;
(b) with respect to any Collateral pledged to Lender hereunder,
immediately upon receipt of any principal payment (in full or partial) or
payment in respect of an Equity Interest;
(c) with respect to any Collateral pledged to Lender hereunder,
immediately upon receipt of notice or knowledge that the underlying Property has
been damaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty, or otherwise damaged so as to affect adversely the
Asset Value of such pledged Collateral;
(d) promptly upon receipt of notice or knowledge of (i) any default
related to any Collateral unless otherwise specifically approved by Lender in
writing, (ii) any Lien or security interest (other than security interests
created hereby or by the other Loan Documents) on, or claim asserted against,
any of the Collateral, (iii) any event or change in circumstances has or could
reasonably be expected to have an adverse affect on the Collateral Value of the
Collateral for a Loan or (iv) any event or change in circumstances which could
reasonably be expected to have a Material Adverse Effect;
(e) with respect to any item of Collateral pledged to Lender hereunder,
promptly upon entering into a modification of any documents pertaining to such
item of Collateral which would have a material adverse effect on such item of
Collateral; and
(f) with respect to any Collateral pledged to Lender hereunder,
immediately upon the acquisition or receipt by Borrower or any Affiliate of
Borrower of any interest of any kind in respect of such Collateral which
interest has not been pledged to Lender as Collateral under this Loan Agreement.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action Borrower has taken or
proposes to take with respect thereto.
7.07 Reports. Borrower shall provide Lender with a quarterly report,
which report shall include, among other items, a summary of Borrower's
delinquency and loss experience with respect to any Collateral serviced by
Borrower, any Servicer or any designee of either, plus any such additional
reports as Lender may reasonably request with respect to Borrower's or any
Servicer's servicing portfolio or pending originations of Collateral.
7.08 Transactions with Affiliates. Borrower will not, except as
approved by Lender in writing, enter into any transaction in any manner relating
to any item of Collateral hereunder, including without limitation any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate; provided, however, that Lender may consider for approval any such
transaction which is (a) otherwise permitted under this Loan Agreement, (b) in
the ordinary course of Borrower's business and (c) upon fair and reasonable
terms no less favorable to Borrower than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate, or make a payment
under such transactions that is not otherwise permitted by this Section 7.08 to
any Affiliate. In no event shall Borrower pledge to Lender hereunder any items
of Collateral acquired by Borrower from an Affiliate of Borrower other than an
Additional Borrower.
7.09 Foreclosure or Other Remediation by Borrower. Borrower may
propose, and Lender will consider but shall be under no obligation to approve,
strategies for the foreclosure or other realization upon the security for
underlying loans held by Borrower relating to items of Collateral hereunder.
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7.10 Limitation on Liens. Borrower will defend the Collateral against,
and will take such other action as is necessary to remove, any Lien, security
interest or claim on or to the Collateral, other than the security interests
created, or otherwise specifically permitted in writing by Lender under this
Loan Agreement, and Borrower will defend the right, title and interest of
Lender's in and to any of the Collateral against the claims and demands of all
persons whomsoever. Borrower may request from time to time, subject to Lender's
approval in Lender's sole determination, to sell participation interests in its
interests in items of Collateral, the sale of which participation interests
shall be arm's length transactions and subject to such terms and conditions as
Lender in its sole discretion shall require.
7.11 Limitation on Distributions. After the occurrence and during the
continuation of any Event of Default, Borrower shall not make any payment on
account of, or set apart assets for, a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of any equity
or partnership interest of Borrower, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Borrower.
7.12 Maintenance of Ratio of Earnings Before Interest, Taxes,
Depreciation and Amortization to Interest and Preferred Dividends. Borrower
shall not permit the ratio of (a) earnings before interest, taxes, depreciation
and amortization (excluding dividends) to (b) the sum of (i) interest expense
and (ii) preferred dividends (specifically excluding any convertible trust
preferred dividends) to be less than 1.20:1.
7.13 (a) Maintenance of Ratio of Total Indebtedness to Tangible Net
Worth. Borrower shall not permit the ratio of Total Indebtedness to Tangible Net
Worth at any time to be greater than 3:1. Lender may consider waiving the
foregoing requirements under certain circumstances if requested by Borrower;
however, Lender shall be under no obligation to do so.
(b) Maintenance of Ratio of Total Adjusted Indebtedness to
Tangible Net Worth. In addition, Borrower shall not permit the ratio of Total
Adjusted Indebtedness to Tangible Net Worth to be greater than 2:1. Lender may
consider waiving the foregoing requirements under certain circumstances if
requested by Borrower; however, Lender shall be under no obligation to do so.
7.14 Servicer; Servicing Tape. Borrower shall provide to Lender on the
fifteenth calendar day of each month, or if such day is not a Business Day then
on the first Business Day immediately following such day, a computer readable
file containing servicing information, including without limitation those fields
specified by Lender from time to time, on a loan-by-loan basis and in the
aggregate, with respect to the Mortgage Loans, Mezzanine Loans and Equity
Interests serviced hereunder by Borrower or any Servicer. Borrower shall not
cause any Collateral to be serviced by any servicer other than a servicer
expressly approved in writing by Lender.
7.15 Remittance of Prepayments. Borrower shall remit, with sufficient
detail to enable Lender to appropriately identify the Loan, or Loans, to which
any amount remitted applies, to Lender on each Business Day all principal
prepayments that Borrower has received during the previous Business Day in an
amount equal to the sum of the Asset-Specific Loan Balances being prepaid,
together with all interest due thereon through the date of such remittance, any
and all charges due with respect to such Loans and any and all costs and
expenses incurred by Lender (as provided in this Loan Agreement) in connection
with such Loans and the prepayment thereof.
Section 8. Events of Default. Each of the following events shall
constitute an event of default (an "Event of Default") hereunder:
(a) (i) Borrower shall default in the payment of any principal of or
interest on any Loan when due (whether at stated maturity, upon acceleration or
at mandatory or optional prepayment); or (ii) CT Mezz II shall default in the
payment of any amount due under the Parent Guaranty when due.
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(b) Borrower shall default in the payment of any principal of or
interest on any MS Indebtedness when due (whether at stated maturity, upon
acceleration or at mandatory or optional prepayment) or
(c) Borrower shall default in the payment of any other amount payable
by it hereunder or under any other Loan Document after notification by Lender of
such default, and such default shall have continued unremedied for seven (7)
Business Days; or
(d) any representation, warranty or certification made or deemed made
herein, or in any other Loan Document by Borrower or CT Mezz II or any
certificate furnished to Lender pursuant to the provisions hereof or thereof
shall prove to have been false or misleading in any material respect as of the
time made or furnished (other than the representations and warranties set forth
in Section 6 hereof which shall be considered solely for the purpose of Section
2.04(b) hereof; unless Borrower shall have made any such representations and
warranties with knowledge that they were materially false or misleading at the
time made); or
(e) Borrower shall fail to comply with the requirements of Section
6.14, Section 7.03(a), Section 7.04, Section 7.05, Section 7.06, or Sections
7.08 through 7.15 hereof; or Borrower shall otherwise fail to comply with the
requirements of Section 7.03 hereof and such default shall continue unremedied
for a period of ten (10) Business Days; or Borrower shall fail to observe or
perform any other covenant or agreement contained in this Loan Agreement or any
other Loan Document and such failure to observe or perform shall continue
unremedied for a period of ten (10) Business Days; or CT Mezz II shall fail to
observe or perform any covenant or agreement contained in the Parent Guaranty
and such failure to observe or perform shall continue unremedied for a period of
ten (10) Business Days; or
(f) a final judgment or judgments for the payment of money in excess of
$5,000,000.00 in the aggregate shall be rendered against Borrower or CT Mezz II
or any of their respective Subsidiaries by one or more courts, administrative
tribunals or other bodies having jurisdiction and the same shall not be
satisfied, discharged (or provision shall not be made for such discharge) or
bonded, or a stay of execution thereof shall not be procured, within thirty (30)
days from the date of entry thereof, and Borrower or any such Subsidiary shall
not, within said period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed or bonded, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(g) Borrower or CT Mezz II shall admit in writing its inability to pay
its debts as such debts become due; or
(h) Borrower or CT Mezz II or any of their respective Subsidiaries
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or liquidator or the
like of itself or of all or a substantial part of its property, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a voluntary
case under the Bankruptcy Code, (iv) file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or (vi) take any corporate or other
action for the purpose of effecting any of the foregoing; or
(i) a proceeding or case shall be commenced, without the application or
consent of Borrower or CT Mezz II or any of their respective Subsidiaries, in
any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner, liquidator or the like of Borrower
or CT Mezz II or any such Subsidiary or of all or any substantial part of its
property, or (iii) similar relief in respect of Borrower or CT Mezz II or any
such Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be
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entered and continue unstayed and in effect, for a period of thirty (30) or more
days; or an order for relief against Borrower or CT Mezz II or any such
Subsidiary shall be entered in an involuntary case under the Bankruptcy Code; or
(j) the Custodial Agreement or any Loan Document shall for whatever
reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by Borrower; or
(k) Borrower shall grant, or suffer to exist, any Lien on any
Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral in
favor of Lender or shall be Liens in favor of any Person other than Lender; or
(l) Borrower or CT Mezz II or any of their respective Subsidiaries
shall be in default under any note, indenture, loan agreement, guaranty, swap
agreement or any other contract to which it is a party (other than MS
Indebtedness), which default (i) involves the failure to pay a matured
obligation, or (ii) permits the acceleration of the maturity of obligations by
any other party to or beneficiary of such note, indenture, loan agreement,
guaranty, swap agreement or other contract, in any such case in which the amount
of such obligation or obligations, in the aggregate, exceed $10,000,000.00;
(m) any materially adverse change in the Property, business, financial
condition or prospects of Borrower or CT Mezz II or any of their respective
Subsidiaries shall occur, in each case as determined by Lender in its sole
discretion, or any other condition shall exist which, in Lender's sole
discretion, constitutes a material impairment of Borrower's ability to perform
its obligations under this Loan Agreement, the Note or any other Loan Document
or the ability of CT Mezz II to perform their obligations under the Parent
Guaranty;
(n) MS & Co.'s corporate bond rating has been lowered or downgraded to
a rating below A- by S&P or A3 by Xxxxx'x and Borrower shall have failed to
repay all amounts owing to Lender under this Agreement, the Note and the other
Loan Documents within 90 days following such downgrade;
(o) either CTIMCO or a wholly-owned Subsidiary of CIG shall not be the
investment manager of Borrower pursuant to the Investment Management Agreement;
or
(p) the matters set forth in the certificate delivered by Borrower,
CTMP II, CT Mezz II, CT-F2, GREM II and CTI pursuant to paragraph 5.01(c) shall
at any time cease to be true.
Section 9. Remedies Upon Default.
---------------------
(a) Upon the occurrence of one or more Events of Default other than
those referred to in Section 8(g) or (h), Lender may immediately declare the
principal amount of the Loans then outstanding under the Note to be immediately
due and payable, together with all interest thereon and fees and expenses
accruing under this Loan Agreement. Upon the occurrence of an Event of Default
referred to in Sections 8(g) or (h), such amounts shall immediately and
automatically become due and payable without any further action by any Person.
Upon such declaration or such automatic acceleration, the balance then
outstanding on the Note shall become immediately due and payable, without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower.
(b) Upon the occurrence of one or more Events of Default, Lender shall
have the right to obtain physical possession of the Servicing Records and all
other files of Borrower relating to the Collateral and all documents relating to
the Collateral which are then or may thereafter come in to the possession of
Borrower or any third party acting for Borrower and Borrower shall deliver to
Lender such assignments as Lender shall request. Lender shall be entitled to
specific performance of all agreements of Borrower contained in this Loan
Agreement.
(c) Upon the occurrence of an Event of Default, without limiting any
other rights or remedies of Lender, Lender shall have the right to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by or for account of Lender or Lender's
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Affiliates to any indebtedness at any time owing to Lender to the credit or for
the account of Borrower against any and all of the Indebtedness of Borrower,
irrespective of whether Lender shall have made any demand under this Loan
Agreement, the Note, any other Security Document or any other document executed
in connection with any other MS Indebtedness.
Section 10. No Duty of Lender. The powers conferred on Lender hereunder
are solely to protect Lender's interests in the Collateral and shall not impose
any duty upon it to exercise any such powers. Lender shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
shall be responsible to Borrower for any act or failure to act hereunder, except
for its or their own gross negligence or willful misconduct.
Section 11. Miscellaneous.
-------------
11.01 Waiver. No failure on the part of Lender to exercise and no delay
in exercising, and no course of dealing with respect to, any right, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
11.02 Notices. Except as otherwise expressly permitted by this Loan
Agreement, all notices, requests and other communications provided for herein
and under the Custodial Agreement (including without limitation any
modifications of, or waivers, requests or consents under, this Loan Agreement)
shall be given or made in writing (including without limitation by telex or
telecopy) delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof or thereof; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. Except as otherwise provided in this Loan Agreement
and except for notices given under Section 2 (which shall be effective only on
receipt), all such communications shall be deemed to have been duly given when
transmitted by telex or telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
11.03 Indemnification and Expenses. (a) Borrower agrees to hold Lender,
and its Affiliates and their officers, directors, employees, agents and advisors
(each an "Indemnified Party") harmless from and indemnify any Indemnified Party
against all liabilities, losses, damages, judgments, costs and expenses of any
kind which may be imposed on, incurred by or asserted against such Indemnified
Party (collectively, the "Costs") relating to or arising out of this Loan
Agreement, the Note, any other Loan Document or any transaction contemplated
hereby or thereby, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Loan Agreement, the Note, any
other Loan Document or any transaction contemplated hereby or thereby, that, in
each case, results from anything other than any Indemnified Party's gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Borrower agrees to hold any Indemnified Party harmless from and
indemnify such Indemnified Party against all Costs with respect to all
Collateral Loans and Equity Interests relating to or arising out of any
violation or alleged violation of any environmental law, rule or regulation or
any consumer credit laws, including without limitation the Truth in Lending Act
and/or the Real Estate Settlement Procedures Act, that, in each case, results
from anything other than such Indemnified Party's gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Collateral for any sum owing thereunder, or to enforce any
provisions of any Collateral Documents, Borrower will save, indemnify and hold
such Indemnified Party harmless from and against all expense, loss or damage
suffered by reason of any defense, set-off, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by Borrower of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing to or in
favor of such account debtor or obligor or its successors from Borrower.
Borrower also agrees to reimburse an Indemnified Party as and when billed by
such Indemnified Party for all such Indemnified Party's costs and expenses
incurred in connection with
-39-
the enforcement or the preservation of such Indemnified Party's rights under
this Loan Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel. Borrower hereby acknowledges that,
notwithstanding the fact that the Note is secured by the Collateral, the
obligation of Borrower under the Note is a recourse obligation of the Borrower.
(b) Borrower agrees to pay as and when billed by Lender all of the
out-of-pocket costs and expenses incurred by Lender in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Loan Agreement, the Note, any other Loan Document or any
other documents prepared in connection herewith or therewith. Borrower agrees to
pay as and when billed by Lender all of the out-of-pocket costs and expenses
incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation (i)
all the reasonable fees, disbursements and expenses of counsel to Lender and
(ii) all the due diligence, inspection, testing and review costs and expenses
incurred by Lender with respect to Collateral under this Loan Agreement,
including, but not limited to, those costs and expenses incurred by Lender
pursuant to Sections 11.03(a), 11.14 and 11.15 hereof.
11.04 Amendments. Except as otherwise expressly provided in this Loan
Agreement, any provision of this Loan Agreement may be modified or supplemented
only by an instrument in writing signed by Borrower and Lender and any provision
of this Loan Agreement may be waived by Lender.
11.05 Successors and Assigns. This Loan Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Survival. The obligations of Borrower under Sections 3.03 and
11.03 hereof shall survive the repayment of the Loans and the termination of
this Loan Agreement. In addition, each representation and warranty made or
deemed to be made by a request for a borrowing, herein or pursuant hereto shall
survive the making of such representation and warranty, and Lender shall not be
deemed to have waived, by reason of making any Loan, any Default that may arise
because any such representation or warranty shall have proved to be false or
misleading, notwithstanding that Lender may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such Loan was made.
11.07 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Loan Agreement.
11.08 Counterparts. This Loan Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Loan Agreement by
signing any such counterpart.
11.09 Loan Agreement Constitutes Security Agreement; Governing Law.
This Loan Agreement shall be governed by New York law without reference to
choice of law doctrine, and shall constitute a security agreement within the
meaning of the Uniform Commercial Code.
11.10 SUBMISSION TO JURISDICTION; WAIVERS. BORROWER HEREBY IRREVOCABLY
AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
-40-
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE
SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH LENDER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
11.11 WAIVER OF JURY TRIAL. EACH OF BORROWER AND LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
11.12 Acknowledgments. Borrower hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Loan Agreement, the Note and the other Loan Documents;
(b) Lender has no fiduciary relationship to Borrower, and the
relationship between Borrower and Lender is solely that of debtor and creditor;
and
(c) no joint venture exists between Lender and Borrower.
11.13 Hypothecation or Pledge of Loans. Lender shall have free and
unrestricted use of all Collateral and nothing in this Loan Agreement shall
preclude Lender from engaging in repurchase transactions with the Collateral or
otherwise pledging, repledging, transferring, hypothecating, or rehypothecating
the Collateral or pledging or otherwise transferring its rights to payment
hereunder in respect of any Loan made hereunder; provided, that no action by
Lender referred to in this sentence shall confer on any Person other than Lender
any right against Borrower to require any prepayment under Section 2.04 hereof
or any right to enforce against Borrower any other provision of this Loan
Agreement, but may grant to any Person the right to require Lender to enforce
any such provisions. Nothing contained in this Loan Agreement shall obligate
Lender to segregate any Collateral delivered to Lender by Borrower.
11.14 Servicing.
---------
(a) Borrower covenants to maintain or cause the servicing of the
Collateral to be maintained with respect to each type of Collateral pledged to
Lender hereunder in conformity with accepted and prudent servicing practices in
the industry for such same type of Collateral and in a manner at least equal in
quality to the servicing Borrower provides for assets similar to such Collateral
which it owns. In the event that the preceding language is interpreted as
constituting one or more servicing
-41-
contracts, each such servicing contract shall terminate automatically upon the
earliest of (i) an Event of Default, (ii) the date on which all the Secured
Obligations have been paid in full or (iii) the transfer of servicing approved
by Borrower and Lender, which Lender's consent shall not be unreasonably
withheld. Midland Loan Services, Inc. ("Midland") shall be the initial servicer.
(b) If the Collateral, or any portion thereof, is serviced by Borrower,
(i) Borrower agrees that Lender is the collateral assignee of all servicing
records, including but not limited to any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof
of insurance coverage, insurance policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of such Collateral (the "Servicing Records"), and (ii)
Borrower grants Lender a security interest in all servicing fees and rights
relating to such Collateral and all Servicing Records to secure the obligation
of Borrower or its designee to service in conformity with this Section and any
other obligation of Borrower to Lender. Borrower covenants to safeguard such
Servicing Records and to deliver them promptly to Lender or its designee
(including Custodian) at Lender's request.
(c) If the Collateral, or any portion thereof, is serviced by a third
party servicer (such third party servicer, the "Servicer"), Borrower (i) shall
provide a copy of the servicing agreement to Lender, which shall be in form and
substance acceptable to Lender (the "Servicing Agreement"); and (ii) hereby
irrevocably assigns to Lender and Lender's successors and assigns all right,
title, interest of Borrower in, to and under, and the benefits of, any Servicing
Agreement with respect to such Collateral. Any successor to the Servicer shall
be approved in writing by Lender prior to such successor's assumption of
servicing obligations with respect to such Collateral. The Travelers Real Estate
Investment Group ("Travelers") is hereby approved as a Servicer, subject to (x)
there having occurred no materially adverse change in Travelers' ability to
perform as Servicer prior to the date of Lender's approval hereunder of any
servicing agreement between Borrower and Travelers and (y) the satisfaction by
Borrower of clause (i) hereof and the delivery by Borrower to Lender of such
additional documentation as Lender may require to further evidence the security
interest granted to Lender by Borrower in Borrower's interest in any servicing
agreement entered into between Borrower and Travelers.
(d) Borrower shall provide to Lender a letter from Borrower (if
Borrower is the Servicer) or the Servicer, as the case may be, to the effect
that upon the occurrence of an Event of Default, Lender may terminate any
Servicing Agreement and transfer servicing to its designee, at no cost or
expense to Lender, it being agreed that Borrower will pay any and all fees
required to terminate the Servicing Agreement and to effectuate the transfer of
servicing to the designee of Lender.
(e) After the Funding Date, until the pledge of any Collateral is
relinquished by Custodian, Borrower will have no right to modify or alter the
terms of any of the documents pertaining to such Collateral and Borrower will
have no obligation or right to repossess such Collateral or substitute other
Collateral, except as provided in the Custodial Agreement; provided, however,
that so long as no Default or Event of Default has occurred and is continuing,
Borrower may enter into such modifications of the terms of such documents as do
not, as to any individual item of Collateral, (i) result in a negative monetary
effect or (ii) constitute a material adverse effect.
(f) In the event Borrower or its Affiliate is servicing any Collateral,
Borrower shall permit Lender to inspect Borrower's or its Affiliate's servicing
facilities, as the case may be, for the purpose of satisfying Lender that
Borrower or its Affiliate, as the case may be, has the ability to service such
Collateral as provided in this Loan Agreement.
(g) Borrower shall cause the Servicer to provide a copy of each report
and notice sent to Borrower to be sent to Lender concurrently therewith.
11.15 Periodic Due Diligence Review. Borrower acknowledges that Lender
has the right to perform continuing due diligence reviews with respect to the
Collateral, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or determining and re-determining
the Borrowing Base under Section 2.04(a) hereof, or otherwise, and Borrower
agrees that
-42-
Lender, at its option, has the right at any time to conduct a partial or
complete due diligence review on any or all of the Collateral securing the
Loans, including, without limitation, ordering new credit reports and Appraisals
on the applicable Collateral and otherwise regenerating the information used to
originate such Eligible Collateral. Upon reasonable (but no less than one (1)
Business Day) prior notice to Borrower, Lender or its authorized representatives
will be permitted during normal business hours to examine, inspect, and make
copies and extracts of, the Collateral Files and any and all documents, records,
agreements, instruments or information relating to such Collateral in the
possession or under the control of Borrower and/or Custodian. Borrower also
shall make available to Lender a knowledgeable financial or accounting officer
for the purpose of answering questions respecting the Collateral Files and the
Collateral. Borrower agrees to cooperate with Lender and any third party
underwriter designated by Lender in connection with such underwriting,
including, but not limited to, providing Lender and any third party underwriter
with access to any and all documents, records, agreements, instruments or
information relating to such Collateral in the possession, or under the control,
of Borrower. Borrower further agrees that Borrower shall reimburse Lender for
any and all out-of-pocket costs and expenses incurred by Lender in connection
with Lender's activities pursuant to this Section 11.15.
11.16 Intent. The parties recognize that each Loan is a "securities
contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended.
11.17 Change of Borrower's State of Formation. If Borrower shall change
the State or Country under whose laws Borrower shall be incorporated and
organized, Borrower shall promptly provide Lender with a copy of its new
Declaration of Trust, Articles of Incorporation or similar document, certified
by the Secretary of State or other appropriate official of Borrower's new State
or Country of formation, if applicable, together with such opinions of counsel
regarding such change as Lender, in its sole discretion, shall require.
11.18 Set-Off. In addition to any rights and remedies of Lender
provided by this Loan Agreement and by law, Lender shall have the right, without
prior notice to Borrower, any such notice being expressly waived by Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
11.19 Xxxxxx Xxxxxxx Downgrade. In the event (a) Xxxxxx Xxxxxxx Xxxx
Xxxxxx & Co.'s corporate bond rating as calculated by S&P or Xxxxx'x shall have
been lowered or downgraded to a rating below A- as indicated by S&P or below A3
as indicated by Xxxxx'x and (b) Borrower shall have repaid all amounts owing to
Lender under this agreement written ninety (90) days following such downgrade,
Lender shall refund to Borrower a portion of the sum of (i) the fee paid to
Lender pursuant to Section 5.01(a)(ii) hereof and (ii) the Maximum Credit
Increase Fee paid to Lender hereunder, if any, in an amount equal to the product
of (1) such sum multiplied by (2) 30 basis points (0.30%) multiplied by (3) the
quotient of (x) the number of days remaining to, and including, the Termination
Date divided by (y) the number of days from and after the date hereof to, and
including, the Termination Date.
11.20 Special Purpose Entity. Borrower shall: (a) not own any assets
nor engage in any business other than owning the assets and engaging in the
transactions specifically contemplated hereunder and under every other document
to be executed pursuant to this Loan Agreement; (b) not incur any indebtedness
or obligation, secured or unsecured, direct or indirect, absolute or contingent
(including any guarantee thereof), other than pursuant hereto; (c) not make any
loans or advances to any third party, and shall not acquire obligations or
securities of any of its Affiliates; (d) pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) only from its
own assets; (e) comply
-43-
with the provisions of its organizational documents; (f) do all things necessary
to observe organizational formalities and to preserve its existence, and will
not amend, modify or otherwise change its organizational documents, or suffer
same to be amended, modified or otherwise changed without the prior written
consent of Lender which shall not be unreasonably withheld; (g) maintain all of
its books, records, financial statements and bank accounts separate from those
of its Affiliates; (h) be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other entity (including any of
its Affiliates), shall correct any known misunderstanding regarding its status
as a separate entity, shall conduct business in its own name, shall not identify
itself or any of its Affiliates as a division or part of the other and shall
maintain and utilize separate stationary, invoices and checks; (i) maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations;
(j) not engage in or suffer any change of ownership, dissolution, winding up,
liquidation, consolidation or merger in whole or in part; (k) not commingle its
funds or other assets with those of any of its Affiliates or any other Person;
(l) maintain its assets in such a manner that it will not be costly or difficult
to segregate, ascertain or identify its individual assets from those of any of
its Affiliates or any other Person; and (n) cause each of its direct and
indirect owners to agree not to (i) file or consent to the filing of any
bankruptcy, insolvency or reorganization case or proceeding with respect to
Borrower; institute any proceedings under any applicable insolvency law or
otherwise seek any relief under any laws relating to the relief from debts or
the protection of debtors generally with respect to Borrower; (ii) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequester, custodian or any similar official for Borrower or a substantial
portion of its properties; or (iii) make any assignment for the benefit of
Borrower's creditors.
11.21 Joint and Several Liability. In the event of the existence of an
Additional Borrower, Initial Borrower and each Additional Borrower hereby
acknowledge and agree that each entity shall be jointly and severally liable to
Lender for all representations, warranties, covenants, obligations and
indemnities of Borrower hereunder.
[SIGNATURE PAGE FOLLOWS]
-44-
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed and delivered as a deed as of the day and year first above
written.
BORROWER
CTMP II FUNDING CORP. (MS),
a Cayman Islands exempt company
By: /s/ Xxxxxx X. Xxxxxxx, III
------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
Address for Notices:
-------------------
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, III
Chief Financial Officer
Telecopier No.:(000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
LENDER
XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE CAPITAL INC.
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
Address for Notices:
-------------------
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxxx, Whole Loan Operations
Mortgage-Backed Securities Department,
Fixed-Income Division
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxx, III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-45-
SCHEDULE 1
FILING JURISDICTIONS AND OFFICES
S-1
SCHEDULE 2
APPROVED APPRAISERS
1. KTR Appraisal Services
2. Xxxxxxx & Xxxxxxxxx, Inc.
3. Xxxxxxxx Real Estate Counselors
4. CB Commercial
5. The Weitzman Group
6. Greenwich Group
7. Xxxxxx Xxxxxxxx
8. Xxxxxx Xxxxx
S-2
SCHEDULE 3
APPROVED ENGINEERS
1. EMG
2. KTR Realty Services
3. Xxxxxxx & Xxxxxx, Inc.
4. C.A. Rich, Inc.
5. IVI
6. Dames & Xxxxx
7. Law
8. Echland
9. EM&CA
10. Acqua Terra
11. ATC (BCM Engineers)
12. Horn Chandler & Xxxxxx
S-3
SCHEDULE 4
APPROVED ENVIRONMENTAL CONSULTANTS
1. Acqua Terra
2. Law Environmental
3. KTR Realty Services
4. EMG
5. Xxxxxxx
6. Dames & Xxxxx
7. Xxxxx & Root
8. C.A. Rich, Inc.
9. Echland
10. EM&CA
11. ATC (BCM Engineers)
12. Front Royal
13. IVI
S-4
EXHIBIT A
---------
[FORM OF PROMISSORY NOTE]
$ 225,000,000.00 As of July 16, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, CTMP II FUNDING CORP. (MS), a company incorporated
under the laws of the Cayman Islands (the "Borrower"), hereby promises to pay to
the order of XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE CAPITAL INC. (the "Lender"), at
the principal office of Lender at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, in
lawful money of the United States, and in immediately available funds, the
principal sum of TWO HUNDRED TWENTY-FIVE MILLION DOLLARS ($225,000,000.00) (or
such lesser amount as shall equal the aggregate unpaid principal amount of the
Loans made by Lender to Borrower under the Loan Agreement), on the dates and in
the principal amounts provided in the Loan Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Loan
Agreement.
The date, amount and interest rate of each Loan made by Lender to
Borrower, and each payment made on account of the principal thereof, shall be
recorded by Lender on its books and, prior to any transfer of this Note,
endorsed by Lender on the schedule attached hereto or any continuation thereof;
provided, that the failure of Lender to make any such recordation or endorsement
shall not affect the obligations of Borrower to make a payment when due of any
amount owing under the Loan Agreement or hereunder in respect of the Loans made
by Lender.
This Note is the Note referred to in the Master Loan and Security
Agreement dated as of July 16, 2001 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Loan Agreement") between Borrower
and Lender, and evidences Loans made by Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the Loan
Agreement.
Borrower agrees to pay all Lender's costs of collection and enforcement
(including reasonable attorneys' fees and disbursements of Lender's counsel) in
respect of this Note when incurred, including, without limitation, reasonable
attorneys' fees through appellate proceedings.
Notwithstanding the pledge of the Collateral, Borrower hereby
acknowledges, admits and agrees that Borrower's obligations under this Note are
recourse obligations of Borrower to which Borrower pledges its full faith and
credit.
Borrower, and any endorsers or guarantors hereof, (a) severally waive
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayment of this Note, (b) expressly agree that this Note, or any
payment hereunder, may be extended from time to time, and consent to the
acceptance of further Collateral, the release of any Collateral for this Note,
the release of any party primarily or secondarily liable hereon, and (c)
expressly agree that it will not be necessary for Lender, in order to enforce
payment of this Note, to first institute or exhaust Lender's remedies against
Borrower or any other party liable hereon or against any Collateral for this
Note. No extension of time for the payment of this Note, or any installment
hereof, made by agreement by Lender with any person now or hereafter liable for
the payment of this Note, shall affect the liability under this Note of
Borrower, even if Borrower is not a party to such agreement; provided, however,
that Lender and Borrower, by written agreement between them, may affect the
liability of Borrower.
A-1
Any reference herein to Lender shall be deemed to include and apply to
every subsequent holder of this Note. Reference is made to the Loan Agreement
for provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.
This Note shall be governed by and construed under the laws of the
State of New York (without reference to choice of law doctrine) whose laws
Borrower expressly elects to apply to this Note. Borrower agrees that any action
or proceeding brought to enforce or arising out of this Note may be commenced in
the Supreme Court of the State of New York, Borough of Manhattan, or in the
District Court of the United States for the Southern District of New York.
CTMP II FUNDING CORP. (MS),
a Cayman Islands exempt company
By: _______________________
Name: Xxxxxx X. Xxxxxxx III
Title: Chief Financial Officer
A-2
SCHEDULE OF LOANS
This Promissory Note evidences Loans made under the within-described Loan
Agreement to Borrower, on the dates, in the principal amounts and bearing
interest at the rates set forth below, and subject to the payments and
prepayments of principal set forth below.
-----------------------------------------------------------------------------------------------------------
Name of Date Principal Interest Amount Unpaid Cumulative Total Notation
Collateral Made Amount Rate Paid or Principal Unpaid Principal Made by
of Loan Prepaid Amount Amount
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
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-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
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-----------------------------------------------------------------------------------------------------------
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A-3
EXHIBIT B
---------
[FORM OF CUSTODIAL AGREEMENT]
[STORED AS A SEPARATE DOCUMENT]
B-1
EXHIBIT C
---------
[FORM OF OPINION OF COUNSEL OF BORROWER]
C-1
EXHIBIT D
---------
[FORM OF REQUEST FOR BORROWING]
Master Loan and Security Agreement, dated as of July 16, 2001 (the
"Loan and Security Agreement"), by and between Borrower and Xxxxxx Xxxxxxx Xxxx
Xxxxxx Mortgage Capital Inc. (the "Lender"),
Lender: Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.
Borrower: [NAME OF BORROWER]
Requested Fund Date: ------------------------------------------------
Transmission Date: ------------------------------------------------
Transmission time: ------------------------------------------------
[Type of Funding:
(Wet or Dry) ------------------------------------------------]
[Type of Loan requested:
Committed or Uncommitted ------------------------------------------------]
Number of Mortgage
Loans to be Pledged: ---------------------------------
Unpaid Principal Balance: $
--------------------------------
Requested Wire Amount: $
--------------------------------
Wire Instructions:
Requested by:
[NAME OF BORROWER]
By:
-------------------------
Name:
Title:
D-1
EXHIBIT E
---------
[FORM OF LENDER'S RELEASE LETTER]
(Date)
Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
-------------------------------
Facsimile:
-------------------------------
Re: Certain Collateral Identified on Schedule A hereto and owned by [BORROWER]
The undersigned hereby releases all right, interest, lien or claim of
any kind with respect to the Collateral described in the attached Schedule A,
such release to be effective automatically without any further action by any
party upon payment in one or more installments, in immediately available finds
of $__________, in accordance with the following wire instructions:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Very truly yours,
[LENDER]
By:
------------------------------
Name:
Title:
E-1
EXHIBIT F
---------
[FORM OF BAILEE AGREEMENT]
F-1
