Exhibit 10.1
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of April 7, 1998, is entered into
by and among OAIC XXXX STREET, LLC, a Delaware limited liability company, having
an address at c/o Ocwen Partnership, L.P., The Forum, 0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (the "BORROWER"); each of the
financial institutions signatory hereto that is identified as a "LENDER" on the
signature pages hereto or that, pursuant to SECTION 8.9 hereof, shall become a
"LENDER" hereunder (individually, a "LENDER", and collectively, the "LENDERS");
SALOMON BROTHERS REALTY CORP., a New York corporation, having an address at
Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as agent for the Lenders (in
such capacity together with its successors in such capacity, the "AGENT"); and
LASALLE NATIONAL, BANK, a nationally chartered bank, having an address at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, as collateral agent
for Lenders ("COLLATERAL AGENT").
RECITALS
WHEREAS, Borrower desires to obtain from the initial Lender
the Loan in an amount equal to the Loan Amount to pay a portion of the purchase
price and the Capital Improvement Costs with respect to the Mortgaged Property
and certain other fees and expenses;
WHEREAS, the Lenders are unwilling to make the Loan unless
Borrower joins in the execution and delivery of this Agreement, the Note and the
Loan Documents (each as hereinafter defined), which shall establish the terms
and conditions of the Loan and Guarantor executes and delivers the Guaranty of
Payment;
WHEREAS, Borrower has agreed to establish certain accounts and
to grant to Collateral Agent on behalf of, and for the benefit of the Lenders, a
security interest therein upon the terms and conditions of the security
agreement set forth in SECTION 2.14; and
WHEREAS, LaSalle National Bank, in its capacity as Collateral
Agent, is willing to join in the security agreement set forth in SECTION 2.14 by
execution and delivery of this Agreement in that capacity;
NOW, THEREFORE, in consideration of the making of the Loan by
Lenders and for other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the parties hereby covenant,
agree, represent and warrant as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. DEFINITIONS. For all purposes of this Agreement:
(1) the capitalized terms defined in this ARTICLE I have the meanings assigned
to them in this ARTICLE I, and include the plural as well as the singular; (2)
all accounting terms have the meanings assigned to them in accordance with GAAP;
(3) the words "herein", "hereof", and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, or other subdivision; and (4) the following terms have the following
meanings:
"ACCEPTED PRACTICES" means such customary practices as
commercial mortgage collateral agents or banks would follow in the normal course
of their business in performing administrative and custodial duties with respect
to collateral which is generally similar to the Account Collateral; PROVIDED,
HOWEVER, that "ACCEPTED PRACTICES" shall not be deemed to include any custodial
practices now followed by Collateral Agent for any such collateral held for its
own account to the extent that such practices are more stringent than the
practices followed by commercial collateral agents or banks generally.
"ACCOUNT COLLATERAL" has the meaning set forth in SECTION
2.14(a) hereof.
"ACCOUNTS" means all accounts (as defined in the UCC), now
owned or hereafter acquired by the Borrower, and arising out of or in connection
with, the operation of the Mortgaged Property and all other accounts described
in the Management Agreement and all present and future accounts receivable,
inventory accounts, contract rights, chattel paper, notes, acceptances,
insurance policies, Instruments, Documents or other rights to payment and all
forms of obligations owing at any time to the Borrower thereunder, whether now
existing or hereafter created or otherwise acquired by or on behalf of the
Borrower, and all Proceeds thereof and all liens, security interests,
guaranties, remedies, privileges and other rights pertaining thereto, and all
rights and remedies of any kind forming the subject matter of any of the
foregoing. Without limiting the generality of the foregoing, the term "ACCOUNTS"
shall include:
(i) all income, Rents, issues, profits, revenues, deposits and
other benefits from the Mortgaged Property;
(ii) all receivables and other obligations now existing or
hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of
property or rendering of services by the Borrower or any operator or
manager of the Mortgaged Property (including, without limitation, from
rental of space, halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, health club
membership fees, food and beverage wholesale and retail sales of
merchandise, service
2
charges, vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance);
(iii) all sums of money, and all instruments, documents and
securities held in any accounts in connection therewith, or any demand,
time, savings or other account maintained with any bank or certificate
of deposit issued by any bank with the proceeds of such account;
(iv) all of the records and books of account now or hereafter
maintained by or on behalf of the Borrower or the Manager in connection
with the operation of the Mortgaged Property; and
(v) the Collection Account and the Basic Carrying Costs
Account.
"ACTIVITY STATEMENT" has the meaning set forth in SECTION
2.12(d).
"ACTIVITY STATEMENT DATE" had the meaning set forth in SECTION
2.12(d).
"ACTUAL KNOWLEDGE" means the actual knowledge of those
individuals performing and responsible for due diligence on the Mortgaged
Property on the Borrower's behalf after due inquiry and investigation as and to
the extent reasonably practiced or carried out by a purchaser of similar real
property.
"ADDITIONAL ADVANCE" has the meaning set forth in SECTION
2.1(c).
"ADDITIONAL ADVANCE DATE" has the meaning set forth in SECTION
2.1(c).
"AFFILIATE" of any specified Person means any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise; and the
terms "controlling" and "controlled" have the meanings correlative to the
foregoing.
"AGENT" has the meaning provided in the first paragraph of this
Agreement.
"AGREEMENT" means this Loan Agreement, together with the
Schedules and Exhibits hereto, as the same may from time to time hereafter be
modified, supplemented or amended.
"APPLICATION" means the Application dated March 13, 1998,
prepared by and between Agent and Ocwen Partnership, L.P..
3
"APPLICATION DEPOSIT" has the meaning provided in the
Application.
"APPRAISAL" means or an appraisal with respect to the Mortgaged
Property prepared by an Appraiser in accordance with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation and with the
requirements of Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act (or such other standards and requirements as shall be reasonably
acceptable to the Agent) and utilizing customary valuation methods such as the
income, sales/market or cost approaches and in form acceptable to Agent in its
sole discretion, as any of the same may be updated by recertification from time
to time by the Appraiser performing such Appraisal.
"APPRAISER" means any nationally recognized MAI appraiser
acceptable to Agent in its sole discretion.
"ASSIGNMENT" has the meaning set forth in SECTION 5.1(V)
hereof.
"ASSIGNMENT OF RENTS AND LEASES" means, with respect to the
Mortgaged Property, an Assignment of Rents and Leases, substantially in the form
attached hereto as EXHIBIT J, dated as of the date hereof, granted by the
Borrower to the Agent, for the benefit of the Lenders with respect to the
Leases, as same may hereafter from time to time be supplemented, amended,
modified or extended.
"BASIC CARRYING COSTS" means the following costs with respect
to the Mortgaged Property: (i) Impositions and (ii) insurance premiums for
policies of insurance required to be maintained pursuant to this Agreement or
the other Loan Documents.
"BASIC CARRYING COSTS ACCOUNT" has the meaning set forth in
SECTION 2.13(a).
"BORROWER" has the meaning provided in the first paragraph of
this Agreement.
"BUSINESS DAY" means any day other than a Saturday and a Sunday
and a day on which federally insured depository institutions in the States of
New York, California or Illinois are authorized or obligated by law,
governmental decree or executive order to be closed. When used with respect to
an Interest Determination Date, "BUSINESS DAY" shall mean a day on which banks
are open for dealing in foreign currency and exchange in London and New York
City.
"CAPITAL IMPROVEMENT COSTS" means costs incurred by Borrower in
connection with replacements and capital repairs made or to be made to the
Mortgaged Property (including, without limitation, repairs to the structural
components, roofs, building systems, and parking lots, TI Costs and Leasing
Commissions).
4
"CLOSING DATE" means the date on which this Agreement shall
become effective pursuant to SECTION 3.1, such date being April 7, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended, and
as it may be further amended from time to time, any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"COLLATERAL" means, collectively, the Land, Improvements,
Contracts, Documents, Trademarks, Equipment, Leases, Rents, Accounts, General
Intangibles, Instruments, Inventory, Money and rights to payment from Persons
arising from the operation of the Mortgaged Property and all Proceeds, and (to
the full extent assignable) Permits, all whether now owned or hereafter acquired
and all other property which is or hereafter may become subject to a Lien in
favor of Lender or in favor of Collateral Agent on behalf of the Lenders as
security for the Loan.
"COLLATERAL AGENT" means LaSalle National Bank, or such
Person's successor in interest or other successor.
"COLLATERAL SECURITY INSTRUMENT" means any right, document or
instrument, other than a Mortgage, given as security for the Loan (including,
without limitation, the Pledge Agreement, the Management Subordination and the
Contract Assignment, as same may be amended or modified from time to time).
"COLLECTION ACCOUNT" has the meaning set forth in SECTION
2.12(a) hereof.
"COLLECTION PERIOD" means, with respect to any Payment Date,
the prior calendar month; provided, HOWEVER, that in the case of the first
Payment Date, the "COLLECTION PERIOD" shall be the period from the Closing Date
to the day prior to such Payment Date.
"COMMITMENT FEE" means the fee designated as "Commitment Fee"
in the Application and payable by the Borrower to the Agent on the Closing Date.
"CONDEMNATION PROCEEDS" means, in the event of a Taking with
respect to the Mortgaged Property, the proceeds in respect of such Taking less
any reasonable third party out-of-pocket expenses incurred in connection with
the Taking or in collecting such proceeds thereof.
"CONSUMER PRICE INDEX" means the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, with respect to the area in which the Mortgaged Property is
located; All Items (1982-84=100), or any successor index thereto, appropriately
adjusted and if the Consumer Price Index ceases to be published and there is no
successor thereto, such other index as Borrower and Agent shall agree upon.
5
"CONTINGENT OBLIGATION" means, as used in the definition of
Other Borrowings, without duplication, any obligation of the Borrower
guaranteeing any indebtedness, leases, dividends or other obligations ("PRIMARY
OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly. Without limiting the generality of the foregoing, the
term "CONTINGENT OBLIGATION" shall include any obligation of the Borrower,
whether or not contingent:
(i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor;
(ii) to advance or supply funds (x) for the purchase or payment
of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor;
(iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of
the ability of the primary obligor to make payment of such primary
obligation; or
(iv) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming the
Borrower is required to perform thereunder) as determined by the Agent in good
faith.
"CONTRACT ASSIGNMENT" means, with respect to the Mortgaged
Property, the Assignment of Contracts, Licenses, Permits, Agreements, Warranties
and Approvals, substantially in the form attached hereto as EXHIBIT A, dated as
of the Closing Date and executed by the Borrower.
"CONTRACTS" means the Management Agreement, and all other
agreements to which the Borrower is a party, of which the Borrower is a
beneficiary or which are assigned to the Borrower by the Manager in the
Management Agreement and which are executed in connection with the construction,
operation and management of the Mortgaged Property (including, without
limitation, agreements for the sale, lease or exchange of goods or other
property and/or the performance of services by it, in each case whether now in
existence or hereafter arising or acquired), as any such agreements have been or
may be from time to time amended, supplemented or otherwise modified.
6
"DEFAULT" means the occurrence of any event which, but for the
giving of notice or the passage of time, or both, would be an Event of Default.
"DEFAULT ADMINISTRATION FEE" means an amount equal to the
product of (x) 0.5% and (y) the Principal Indebtedness as of the date the
Default Administration Fee becomes payable; PROVIDED, that the Default
Administration Fee shall not be payable in the circumstance described in Section
7.4 (i.e., if the Refinancing Fee is being paid in connection with a repayment
or prepayment of the Principal Indebtedness after the occurrence of such Event
of Default and prior to its cure).
"DEFAULT RATE" means the per annum interest rate equal to 5.0%
per annum in excess of the rate otherwise applicable hereunder.
"DEFICIENT AMOUNT" has the meaning set forth in SECTION
5.1(X)(iv)(2).
"DOCUMENTS" means all "documents" as defined in the UCC or
other receipts covering, evidencing or representing goods now owned or hereafter
acquired by the Borrower.
"ELIGIBLE ACCOUNT" means a separate and identifiable account
from all other funds held by the holding institution that is: (i) an account
maintained with a federal or state chartered depository institution or trust
company whose (1) commercial paper, short-term debt obligations or other
short-term deposits (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the commercial
paper, short-term debt obligations or other short-term deposits of such holding
company) are rated by the Rating Agencies not less than "A-1" (or the
equivalent), if the deposits are to be held in the account for less than thirty
(30) days or (2) long-term unsecured debt obligations are rated at least "AA-"
(or the equivalent), if the deposits are to be held in the account more than
thirty (30) days, (ii) an account the deposits in which are fully insured by the
FDIC or (iii) a segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company subject to regulations regarding fiduciary funds on deposit similar to
Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either
case, has corporate trust powers, acting in its fiduciary capacity. An Eligible
Account shall not be evidenced by a certificate of deposit, passbook or other
instrument. Following a downgrade, withdrawal, qualification or suspension of
such institution's rating, each account must promptly (and in any case within
not more than thirty (30) calendar days) be moved to a qualifying institution or
to one or more segregated trust accounts in the trust department of such
institution, if permitted.
"ENGINEER" means Teng & Associates, Inc. or such other
Independent Engineer as shall be reasonably approved by the Agent.
"ENGINEERING REPORT" means the structural engineering reports
with respect to the Mortgaged Property prepared by an Engineer and dated March
13, 1998 and delivered to the
7
Agent in connection with the Loan and any amendments or supplements thereto
delivered to the Agent.
"ENVIRONMENTAL AUDITOR" means Tetra Tech, Inc. or such other
Independent environmental auditor as shall be approved by the Agent.
"ENVIRONMENTAL CLAIM" means any notice, notification, request
for information, claim, administrative, regulatory or judicial action, suit,
judgment, demand or other communication (whether written or oral) by any Person
or Governmental Authority alleging or asserting liability with respect to the
Borrower, the Manager in its capacity as Manager of the Mortgaged Property or
the Mortgaged Property (whether for damages, contribution, indemnification, cost
recovery, compensation, injunctive relief, investigatory, response, remedial or
cleanup costs, damages to natural resources, personal injuries, fines or
penalties) arising out of, based on or resulting from (i) the presence, Use or
Release into the environment of any Hazardous Substance at any location (whether
or not owned, managed or operated by the Borrower or the Manager), (ii) any
fact, circumstance, condition or occurrence forming the basis of any violation,
or alleged violation, of any Environmental Law or (iii) any alleged injury or
threat of injury to health, safety or the environment.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means that certain
environmental indemnity agreement relating to Hazardous Substances,
Environmental Laws and environmental conditions with respect to the Mortgaged
Property, dated as of the Closing Date, made by the Borrower and the Guarantor
to the Agent for the benefit of the Lenders, in the form attached hereto as
EXHIBIT K.
"ENVIRONMENTAL LAWS" means any and all present and future
federal, state or local laws, statutes, ordinances or regulations, any judicial
or administrative orders, decrees or judgments thereunder, and any permits,
approvals, licenses, registrations, filings and authorizations, in each case as
now or hereafter in effect, relating to the environment, human health or safety,
or the Release or threatened Release of Hazardous Substances or otherwise
relating to the Use of Hazardous Substances.
"ENVIRONMENTAL REPORTS" means the "Phase I Environmental Site
Assessment" with respect to the Mortgaged Property, prepared by the
Environmental Auditor, dated February, 1998 and any other environmental report
delivered to the Agent pursuant to the provisions hereof and any amendments or
supplements thereto delivered to the Agent.
"EQUIPMENT" means all "equipment" as defined in the UCC, now or
hereafter owned by the Borrower or in which the Borrower has or shall acquire an
interest, now or hereafter located on, attached to or contained in or used or
usable in connection with the Mortgaged Property, and shall also mean and
include all building materials, construction materials, personal property
constituting furniture, fittings, appliances, apparatus, leasehold improvements,
machinery, devices, interior improvements, appurtenances, equipment, plant,
furnishings, fixtures,
8
computers, electronic data processing equipment, telecommunications equipment
and other fixed assets now owned or hereafter acquired by the Borrower and now
or hereafter used in the operation of the business conducted at the Mortgaged
Property, and all Proceeds thereof and as well as all additions to,
substitutions for, replacements of or accessions to any of the items recited as
aforesaid and all attachments, components, parts (including spare parts) and
accessories, whether installed thereon or affixed thereto, and wherever located,
now or hereafter owned by the Borrower and used or intended to be used in
connection with, or with the operation of, the Mortgaged Property or the
buildings, structures, or other improvements now or hereafter located at the
Mortgaged Property, or in connection with any construction being conducted or
which may be conducted thereon, all regardless of whether the same are located
on the Mortgaged Property or are located elsewhere (including, without
limitation, in warehouses or other storage facilities or in the possession of or
on the premises of a bailee, vendor or manufacturer) for purposes of
manufacture, storage, fabrication or transportation and all extensions and
replacements to, and proceeds of, any of the foregoing, but exclusive of those
items which are property of tenants of the Mortgaged Property or owned by the
Manager, a third party contractor or any other third party.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" means 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 the 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 the Borrower is a member.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 7.1
hereof.
"EXTENDED MATURITY DATE" has the meaning set forth in SECTION
2.17(a) hereof.
"EXTENSION CONDITIONS" has the meaning set forth in SECTION
2.17(a) hereof.
"EXTENSION FEE" has the meaning set forth in SECTION 2.17(a)
hereof.
"EXTENSION NOTICE" has the meaning set forth in SECTION 2.17(a)
hereof.
"EXTENSION OPTION" has the meaning set forth in SECTION 2.17(a)
hereof.
9
"FEE LETTER" means the letter dated March 26, 1998, entered
into by and among the Borrower, Agent and Collateral Agent, with respect to the
fees of Collateral Agent under this Agreement.
"FISCAL YEAR" means the 12-month period ending on December 31st
of each year (or, in the case of the first fiscal year, such shorter period from
the Closing Date through such date) or such other fiscal year of Borrower as
Borrower may select from time to time with the prior consent of Agent.
"FUND" has the meaning set forth in the definition of
"Permitted Investments."
"GAAP" means generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"GENERAL INTANGIBLES" means all "general intangibles" as
defined in the UCC, now owned or hereafter acquired by the Borrower. Without
limiting the generality of the foregoing, the term "GENERAL INTANGIBLES" shall
include the Borrower's right, title and interest in and to the following:
(i) all obligations or indebtedness owing to the Borrower from
whatever source arising (other than Accounts, Rents, Instruments,
Inventory, Money, Contracts, Documents, Trademarks and Permits);
(ii) all unearned premiums accrued or to accrue under all
insurance policies for the Mortgaged Property obtained by the Borrower
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims (including, without
limitation, proceeds of insurance, condemnation awards, and all rights
of the Borrower to refunds of real estate taxes and assessments);
(iii) all royalties and license fees;
(iv) all trademark licenses, trademarks, rights in intellectual
property, goodwill, trade names, service marks, trade secrets,
copyrights, permits and licenses, together with the registrations
therefor and the goodwill appurtenant thereto;
(v) all rights or claims in respect of refunds for taxes paid;
and
(vi) all rights in respect of any pension plan or similar
arrangement maintained for employees of the Borrower.
"GOVERNMENTAL AUTHORITY" means any national or federal
government, any state, regional, local or other political subdivision thereof
with jurisdiction and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
00
"XXXXX XXXXXXX" means, for any period, the total dollar amount
of all income and receipts received by, or for the account of, the Borrower in
the ordinary course of business with respect to the Mortgaged Property
(including, without limitation, all Rents, Money and Proceeds of any Accounts),
but excluding Loss Proceeds and Proceeds from any Transfer or refinancing of the
Mortgaged Property.
"GUARANTOR" means Ocwen Partnership, L.P., a Virginia limited
partnership.
"GUARANTY OF PAYMENT" means, with respect to the Loan, the
Guaranty of Payment guaranteeing the repayment of the Loan in the amount of
$9,500,000, from the Guarantor to the Agent for the benefit of the Lenders, in
the form attached hereto as EXHIBIT M.
"GUARANTY OF NONRECOURSE OBLIGATIONS" means, with respect to
the Loan, the Guaranty of Nonrecourse Obligations guaranteeing the exceptions to
the nonrecourse provisions of the Loan Documents for which liability is retained
as described in Section 8.24 hereof, from the Guarantor to the Agent for the
benefit of the Lenders, in the form attached hereto as EXHIBIT G.
"HAZARDOUS SUBSTANCE" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBS"), lead in
drinking water, and lead-based paint, (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definitions of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (iii) any other chemical or any
other hazardous material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"IMPOSITIONS" means all taxes (including, without limitation,
all real estate, ad valorem, sales (including those imposed on lease rentals),
use, single business, gross receipts, value added, intangible transaction
privilege, privilege or license or similar taxes), assessments (including,
without limitation, all assessments for public improvements or benefits, whether
or not commenced or completed within the term of the Mortgage, if any), ground
rents, water, sewer or other rents and charges, excises, levies, governmental
fees (including, without limitation, license, permit, inspection, authorization
and similar fees), and all other governmental charges, in each case whether
general or special, ordinary or extraordinary, foreseen or unforeseen, of every
character in respect of the Mortgaged Property, including any Rents and Accounts
(including all interest and penalties thereon), which at any time prior to,
during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a lien upon (i) the Borrower (including,
11
without limitation, all income, franchise, single business or other taxes
imposed on the Borrower for the privilege of doing business in the jurisdiction
in which the Mortgaged Property, or any other collateral delivered or pledged to
the Lenders in connection with the Loan, is located) or the Lenders, (ii) the
Mortgaged Property, or any other collateral delivered or pledged to the Lenders
in connection with the Loan, or any part thereof or any Rents therefrom or any
estate, right, title or interest therein, or (iii) any occupancy, operation, use
or possession of, or sales from, or activity conducted on, or in connection with
the Mortgaged Property or the leasing or use of the Mortgaged Property or any
part thereof, or the acquisition or financing of the acquisition of the
Mortgaged Property by the Borrower.
"IMPROVEMENTS" means all buildings, structures, fixtures and
improvements of every nature whatsoever situated on the Land on the Closing Date
or thereafter (including, without limitation, all gas and electric fixtures,
radiators, heaters, engines and machinery, boilers, ranges, elevators and
motors, plumbing and heating fixtures, carpeting and other floor coverings,
water heaters, awnings and storm sashes, and cleaning apparatus which are or
shall be attached to the Land or said buildings, structures or improvements and
including any additions, enlargements, extensions, modifications, repairs or
replacements thereto, but exclusive of those items which are the property of the
tenants of the Mortgaged Property or of any other Person other than the
Borrower).
"INDEBTEDNESS" means the Principal Indebtedness, together with
all other obligations and liabilities due or to become due to the Lenders
pursuant hereto, under the Note, the Mortgage or in accordance with any of the
other Loan Documents, and all other amounts, sums and expenses paid by or
payable to the Lenders hereunder or pursuant to the Note or any of the other
Loan Documents, including any Refinancing Fee.
"INDEMNIFIED PARTIES" has the meaning set forth in SECTION
5.1(I).
"INDEPENDENT" means, when used with respect to any Person, a
Person who (i) does not have any direct financial interest or any material
indirect financial interest in the Borrower or in any Affiliate of the Borrower
and (ii) is not connected with the Borrower or any Affiliate of the Borrower as
an officer, employee, trustee, partner, director or person performing similar
functions.
"INDEX MATURITY" has the meaning set forth in the definition of
LIBOR.
"INSTRUMENTS" means (i) all "instruments" as defined in the
UCC, "chattel paper" as defined in the UCC, or letters of credit, evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Collateral (including, without
limitation, promissory notes, drafts, bills of exchange and trade acceptances)
and chattel paper obtained by the Borrower in connection with the Mortgaged
Property (including, without limitation, all ledger sheets, computer records and
printouts, data bases, programs, books
12
of account and files of the Borrower relating thereto), (ii) notes or other
obligations of indebtedness owing to the Borrower from whatever source arising,
in each case now owned or hereafter acquired by the Borrower and (iii) all
material covenants, agreements, restrictions and encumbrances contained in any
instruments, at any time in force affecting the Mortgaged Property or any part
thereof (including, without limitation, any which may (a) require material
repairs, modifications or alterations in or to the Mortgaged Property or any
part thereof, or (b) in any way limit the use and enjoyment thereof).
"INSURANCE PROCEEDS" means, in the event of a casualty with
respect to the Mortgaged Property, the proceeds received under any insurance
policy.
"INSURANCE REQUIREMENTS" means all material terms of any
insurance policy required pursuant to this Agreement or the Mortgage and all
material regulations and then current standards applicable to or affecting the
Mortgaged Property or any part thereof or any use or condition thereof, which
may, at any time, be recommended by the Board of Fire Underwriters, if any,
having jurisdiction over the Mortgaged Property, or such other body exercising
similar functions.
"INSURED CASUALTY" has the meaning set forth in SECTION
5.1(X)(iv)(2).
"INTEREST ACCRUAL PERIOD" means, in connection with the
calculation of interest accrued with respect to any Payment Date, the period
from and including the preceding Payment Date to but excluding such Payment
Date; PROVIDED, HOWEVER, that the first Interest Accrual Period for the Loan
shall be from the Closing Date to but excluding the first Payment Date.
"INTEREST DETERMINATION DATE" means, in connection with the
calculation of interest accrued for any Interest Accrual Period, the second
Business Day preceding the first day of such Interest Accrual Period.
"INVENTORY" means all of the Borrower's right, title and
interest in and to any "inventory" as defined in the UCC, whether now or
hereafter existing or acquired, and which arises out of or is used in connection
with, directly or indirectly, the ownership and operation of the Mortgaged
Property, all Documents representing the same and all Proceeds and products of
such Inventory. Without limiting the generality of the foregoing, the term
"INVENTORY" shall include, without limitation, the Borrower's right, title and
interest in and to:
(i) all goods, merchandise, raw materials, work in process and
other personal property, wherever located, now or hereafter owned or
held by the Borrower for manufacture, processing, the providing of
services or sale, use or consumption in the operation of the Mortgaged
Property (including, without limitation, fuel, supplies and similar
items and all substances commingled therewith or added thereto); and
13
(ii) all rights and claims of the Borrower against anyone who
may store or acquire the Inventory for the account of the Borrower or
from whom the Borrower may purchase the Inventory.
"LAND" has the meaning provided in the Mortgage.
"LEASES" means all leases, subleases, lettings, occupancy
agreements, tenancies and licenses by the Borrower as landlord of the Mortgaged
Property or any part thereof now or hereafter entered into, and all amendments,
extensions, renewals and guarantees thereof, and all security therefor.
"LEASING COMMISSIONS" means leasing commissions incurred by the
Borrower (including, without limitation, under the Management Agreement) in
connection with leasing the commercial or retail space at the Mortgaged Property
or any portion thereof.
"LEGAL REQUIREMENTS" means all governmental statutes, laws,
rules, orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including, without limitation, Environmental Laws)
affecting either the Mortgaged Property or any part thereof or the construction,
use, alteration or operation thereof, or any part thereof (whether now or
hereafter enacted and in force), and all permits, licenses and authorizations
and regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instruments, at any time in force affecting
the Mortgaged Property or any part thereof (including, without limitation, any
which may (i) require repairs, modifications or alterations in or to the
Mortgaged Property or any part thereof, or (ii) in any way limit the use and
enjoyment thereof), but excluding matters which are the responsibility solely of
tenants under Leases.
"LENDER" has the meaning provided in the first paragraph of
this Agreement.
"LENDER'S TERMS" has the meaning provided in SECTION 5.1(W).
"LIBOR" means the rate per annum calculated as set forth below:
(i) On each Interest Determination Date, LIBOR will be
determined on the basis of the offered rate for deposits of not less
than U.S. $1,000,000 for a period of one month (the "INDEX Maturity"),
commencing on such Interest Determination Date, which appears on
Telerate Page 3750 as of 11:00 a.m., London time (or such other page as
may replace the Telerate Page on that service for the purposes of
displaying London interbank offered rates of major banks). If no such
offered rate appears, LIBOR with respect to the relevant Interest
Accrual Period will be determined as described in (ii) below.
14
(ii) With respect to an Interest Determination Date on which no
such offered rate appears on Telerate Page 3750 as described in (i)
above, LIBOR shall be the arithmetic mean, expressed as a percentage,
of the offered rates for deposits in U.S. dollars for the Index
Maturity which appears on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on such date. If, in turn, such rate is not
displayed on the Reuters Screen LIBO Page at such time, then LIBOR for
such date will be obtained from the preceding Business Day for which
the Reuters Screen LIBO Page displayed a rate for the Index Maturity.
(iii) If on any Interest Determination Date the Agent is
required but unable to determine LIBOR in the manner provided in
paragraphs (i) and (ii) above, LIBOR for the next Interest Accrual
Period shall be LIBOR as determined on the previous Interest
Determination Date or, in the case of the first Interest Determination
Date, 5.66%.
All percentages resulting from any calculations referred to in this Agreement
will be rounded upwards, if necessary, to the nearest multiple of 1/100 of 1%
(with one-half of 1/100 of 1% or more being rounded upwards) and all U.S. dollar
amounts used in or resulting from such calculations will be rounded to the
nearest cent (with one-half cent or more being rounded upwards).
"LIEN" means any mortgage, deed of trust, lien (statutory or
other), pledge, hypothecation, assignment, preference, priority, security
interest, or any other encumbrance or charge on or affecting the Mortgaged
Property or any portion thereof or the Borrower, or any interest therein
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement or similar
instrument under the UCC or comparable law of any other jurisdiction, domestic
or foreign, and mechanic's, materialmen's and other similar liens and
encumbrances).
"LOAN" means the loan made by Agent to Borrower pursuant to the
terms of this Agreement.
"LOAN AMOUNT" means an amount equal to the sum of (i)
$75,000,000 and (ii) the total amount of the Additional Advances determined and
funded pursuant to SECTION 2.1(c); PROVIDED, that the maximum principal Loan
Amount shall not exceed $80,000,000.
"LOAN DOCUMENTS" means this Agreement, the Note, the Mortgage,
the Management Agreement, the Management Subordination, the Contract Assignment,
the Assignments of Leases and Rents, the Guaranty of Nonrecourse Obligations,
the Guaranty of Payment, the Pledge Agreement and all other agreements,
instruments, certificates and documents delivered by or on behalf of Borrower,
the Manager or an Affiliate to evidence or secure the Loan or otherwise in
satisfaction of the requirements of this Agreement, the Mortgage or the other
documents listed above as same may be amended or modified from time to time.
15
"LOSS PROCEEDS" means Condemnation Proceeds and/or Insurance
Proceeds.
"LOSSES" has the meaning set forth in SECTION 5.1(J).
"MANAGEMENT AGREEMENT" means, with respect to the Mortgaged
Property, the property management agreement entered into between Borrower and
the Manager, substantially in the form attached hereto as EXHIBIT D, or in such
other form as may be approved by the Agent, as such agreement may be amended,
modified or supplemented and in effect from time to time.
"MANAGEMENT SUBORDINATION" means the Manager's Consent and
Subordination of Management Agreement, substantially in the form attached hereto
as EXHIBIT E, dated as of the Closing Date, executed by the Manager, the
Borrower and the Agent.
"MANAGER" means Compass Management and Leasing, Inc., a
Delaware corporation, or its successor in interest, or any other Manager
approved by Agent.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the business operations, properties, assets or condition (financial or
otherwise) of the Borrower, (ii) the ability of the Borrower to perform, or of
Lenders to enforce, any of the Loan Documents or (iii) the value of the
Mortgaged Property or the operation thereof.
"MATURITY DATE" means the earlier of (a) the Original Maturity
Date, or if such date has been extended pursuant to the provisions of SECTION
2.17 hereof, the Extended Maturity Date, or (b) such earlier date on which the
entire Loan is required to be paid in full, by acceleration or otherwise under
this Agreement or any of the other Loan Documents.
"MONEY" means all moneys, cash, rights to deposit or savings
accounts or other items of legal tender obtained from or for use in connection
with the operation of the Mortgaged Property.
"MONTHLY STATEMENT" has the meaning provided in SECTION
2.12(d).
"MORTGAGE" means, with respect to the Mortgaged Property, a
first priority Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing, substantially in the form attached hereto as EXHIBIT C,
dated as of the date hereof, granted by the Borrower to the Agent on behalf of
the Lenders with respect to the entire Mortgaged Property as security for the
Loan, as same may hereafter from time to time be supplemented, amended, modified
or extended.
"MORTGAGED PROPERTY" individually and in the aggregate means,
at any time, any or all of the Land, the Improvements, the Personalty, the
Leases, the Rents, the Property Agreements
16
and the Equipment (to the extent the same shall be deemed to be fixtures), and
all rights, titles, interests and estates appurtenant thereto, encumbered by,
and more particularly described in, the Mortgage.
"MULTIEMPLOYER PLAN" means a multiemployer benefit plan defined
as such in Section 3(37) of ERISA to which contributions have been, or were
required to have been, made by the Borrower or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"NET PROCEEDS" means either (x) the purchase price (at
foreclosure or otherwise) actually received by the Agent from a third party
purchaser with respect to the Mortgaged Property, as a result of the exercise by
the Agent of its rights, powers, privileges and other remedies after the
occurrence of an Event of Default or (y) in the event that the Agent (or its
nominee) is the purchaser at foreclosure of the Mortgaged Property, the higher
of (i) the amount of the Agent's credit bid or (ii) such amount as shall be
determined in accordance with applicable law (including, if applicable, the fair
market value of the Mortgaged Property), and in either case minus all reasonable
costs and expenses (including, without limitation, all attorneys' fees and
disbursements and any brokerage fees, if applicable) incurred by the Agent (and
its nominee, if applicable) in connection with the exercise of such remedies;
PROVIDED, HOWEVER, that such costs and expenses shall not be deducted to the
extent such amounts previously have been added to the Indebtedness in accordance
with the terms of the Mortgage or applicable law.
"NOTE" means the note, substantially in the form attached
hereto as EXHIBIT B, made by Borrower to the Agent pursuant to this Agreement,
as such note may be modified, amended, supplemented or extended.
"OFFICER'S CERTIFICATE" means a certificate delivered to the
Agent by the Borrower which is signed by an authorized officer of the Borrower.
"OPERATING BUDGET" means, with respect to any Fiscal Year, the
operating budget for the Mortgaged Property reflecting Borrower's projections of
Gross Revenues, operating expenses and Capital Improvement Costs for the
Mortgaged Property for such Fiscal Year and on an annual and monthly basis and
submitted by Borrower to the Agent for its approval in accordance with the
provisions of SECTION 5.1(R)(vi).
"ORGANIZATION AGREEMENT" means the Limited Liability Company
Agreement of the Borrower, dated as of March 26, 1998, as amended and restated
from time to time.
"ORIGINAL MATURITY DATE" has the meaning set forth in SECTION
2.17(a) hereof.
"ORIGINATION FEE" means the fee designated as "Origination Fee"
in the Application and payable by the Borrower to Agent on the Closing Date.
17
"OTHER BORROWINGS" means, with respect to the Borrower without
duplication (but not including the Indebtedness) (i) all indebtedness of the
Borrower for borrowed money or for the deferred purchase price of property or
services, (ii) all indebtedness of the Borrower evidenced by a note, bond,
debenture or similar instrument, (iii) the face amount of all letters of credit
issued for the account of the Borrower and, without duplication, all
unreimbursed amounts drawn thereunder, and obligations evidenced by bankers'
acceptances, (iv) all indebtedness of the Borrower secured by a Lien on any
property owned by the Borrower (whether or not such indebtedness has been
assumed), (v) all Contingent Obligations of the Borrower, (vi) liabilities and
obligations for the payment of money relating to a capitalized lease obligation
or sale/leaseback obligation, (vii) liabilities and obligations representing the
balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of business that would constitute
ordinarily a trade payable to trade creditors, and (viii) all payment
obligations of the Borrower under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
or similar agreements) and similar agreements.
"PARTICIPATION" has the meaning provided in SECTION 5.1(V).
"PAYMENT DATE" has the meaning provided in SECTION 2.5.
"PAYMENT DATE STATEMENT" has the meaning provided in SECTION
2.12(d).
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.
"PERMITS" means all licenses, permits, variances and
certificates used in connection with the ownership, operation, use or occupancy
of the Mortgaged Property issued to or on behalf of Borrower (including, without
limitation, business licenses, state health department licenses, licenses to
conduct business and all such other permits, licenses and rights, obtained from
any Governmental Authority or private Person concerning ownership, operation,
use or occupancy of the Mortgaged Property).
"PERMITTED ENCUMBRANCES" means, with respect to the Mortgaged
Property, collectively, (i) the Liens created by the Mortgage and the other Loan
Documents of record, (ii) all Liens and other matters disclosed on the Title
Insurance Policy concerning the Mortgaged Property, (iii) Liens, if any, for
Impositions imposed by any Governmental Authority not yet delinquent or being
contested in good faith and by appropriate proceedings in accordance with the
Mortgage and (iv) rights of existing and future tenants and residents as tenants
only pursuant to Leases.
"PERMITTED INVESTMENTS" means any one or more of the following
obligations or securities acquired at a purchase price of not greater than par:
18
(i) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States of America;
(ii) obligations of the following United States of America
government sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations), the Farm Credit System (consolidated systemwide bonds and
notes), the Federal Home Loan Banks (consolidated debt obligations),
the Federal National Mortgage Association (debt obligations), the
Student Loan Marketing Association (debt obligations), the Financing
Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations);
(iii) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with
maturities of not more than 365 days of any bank, the short-term
obligations of which are rated in the highest short-term rating
category by the Rating Agencies;
(iv) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof and subject to supervision and examination by federal
and/or state banking authorities, PROVIDED that the commercial paper
and/or debt obligations of such depository institution or trust company
(or in the case of the principal depository institution in a holding
company system, the commercial paper or debt obligations of such
holding company) has the highest short-term rating of the Rating
Agencies or is rated with a long term rating of at least AA- by
Standard & Poor's Ratings Services or at least Aa3 by Xxxxx'x Investors
Service, Inc. for such securities;
(v) debt obligations with maturities of not more than 365 days
and rated by the Rating Agencies in their highest long-term unsecured
rating category;
(vi) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) with maturities of not more than 270 days and that is
rated by the Rating Agencies in their highest short-term unsecured debt
rating;
(vii) the Federated Prime Obligation Money Market Fund (the
"FUND") so long as the Fund is rated "AAA" (or the equivalent) by the
Rating Agencies;
(viii) units of taxable money market funds which funds are
regulated investment companies and seek to maintain a constant net
asset value per share and which are rated in the highest category by
the Rating Agencies; and
19
(ix) any other demand, money market or time deposit, demand
obligation or any other obligation, security or investment, which the
Agent shall have approved in writing;
PROVIDED, HOWEVER, that (A) the investments described in CLAUSES (i) through
(VI) above must have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (C)
such investments must not be subject to liquidation prior to their maturity; and
PROVIDED, FURTHER, that, in the judgment of the Agent, such instrument continues
to qualify as a "cash flow investment" pursuant to Code Section 860G(a)(6)
earning a passive return in the nature of interest and that no instrument or
security shall be a Permitted Investment if such instrument or security
evidences (x) a right to receive only interest payments or (y) the right to
receive principal and interest payments derived from an underlying investment at
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PERSONALTY" means all right, title and interest of the
Borrower in and to all goods, accounts, general intangibles, instruments,
documents, chattel paper and all other personal property of any kind or
character, including such items of personal property as defined in the UCC, now
owned or hereafter acquired by the Borrower and now or hereafter affixed to,
placed upon, used in connection with, arising from or otherwise related to the
Mortgaged Property or which may be used in or relating to the planning,
development, financing or operation of the Mortgaged Property, including,
without limitation, furniture, furnishings, equipment, machinery, money,
insurance proceeds, accounts, contract rights, trademarks, goodwill, chattel
paper, documents, trade names, licenses and/or franchise agreements, rights of
the Borrower under leases of fixtures or other personal property or equipment,
inventory, all refundable, returnable or reimbursable fees, deposits or other
funds or evidences of credit or indebtedness deposited by or on behalf of the
Borrower with any governmental authorities, boards, corporations, providers of
utility services, public or private, including specifically, but without
limitation, all refundable, returnable or reimbursable tap fees, utility
deposits, commitment fees and development costs.
"PLAN" means an employee benefit or other plan (i) established
or maintained by the Borrower or any ERISA Affiliate during the five-year period
ended prior to the date of this Agreement or to which the Borrower or any ERISA
Affiliate makes, is obligated to make or has, within the five-year period ended
prior to the date of this Agreement, been required to make contributions and
(ii) that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412
of the Code, other than a Multiemployer Plan.
20
"PLEDGE AGREEMENT" means that certain Pledge Agreement, in the
form attached hereto as EXHIBIT L, dated as of the Closing Date, by the member
of the Borrower as pledgor, to the Agent, as pledgee, as the same may thereafter
from time to time be supplemented, amended, modified or extended.
"POLICIES" has the meaning set forth in SECTION 5.1(X)(iii).
"PRINCIPAL" means Ocwen Asset Investment Corp., a Virginia
corporation.
"PRINCIPAL INDEBTEDNESS" means the Loan Amount as adjusted by
each increase or decrease in the principal amount of the Loan outstanding,
whether as a result of prepayment or otherwise, from time to time.
"PROCEEDS" shall have the meaning given in the UCC and, in any
event, shall include, without limitation, all of the Borrower's right, title and
interest in and to proceeds, product, rents, profits or receipts, in whatever
form, arising from the Collateral. Without limiting the generality of the
foregoing, the term "PROCEEDS" shall include the Borrower's right, title and
interest in and to:
(i) cash, Instruments and other property received, receivable
or otherwise distributed in respect of or in exchange for any or all of
the Collateral or the Mortgaged Property;
(ii) the collection, sale, lease, sublease, concession,
exchange, assignment, licensing or other disposition of, or realization
upon, any item or portion of the Collateral or the Mortgaged Property
(including, without limitation, all claims of the Borrower against
third parties for loss of, damage to, destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral or the Mortgaged Property now
existing or hereafter arising);
(iii) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to the Borrower from time to time with
respect to any of the Collateral or the Mortgaged Property;
(iv) any and all payments (in any form whatsoever) made or due
and payable to the Borrower from time to time in connection with the
requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Collateral or the Mortgaged Property by any
Governmental Authority (or any Person acting under color of
Governmental Authority); and
(v) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral or the Mortgaged
Property.
21
"RATING AGENCIES" means at least two of Fitch Investors
Service, L.P., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx Credit Rating Co.
and Standard & Poor's Ratings Services.
"REFINANCING FEE" means 0.50% of the outstanding Principal
Indebtedness prepaid or repaid on any Payment Date (including the Maturity Date)
where the Borrower obtains the funds for such prepayment or repayment through a
refinancing of the Loan from a source of funds other than the Lenders; PROVIDED,
HOWEVER, that notwithstanding the foregoing, (i) in the event the initial Lender
provides the funds for such refinancing, then the Refinancing Fee shall be
payable in the amount as hereinbefore described, but shall be credited against
the origination fees payable in connection with the refinancing transaction and
(ii) no Refinancing Fee shall be payable in connection with any prepayment or
repayment of the Principal Indebtedness (1) on any Payment Date out of Loss
Proceeds, (2) if the Borrower shall concurrently be paying the Default
Administration Fee or (3) pursuant to Section 9.1 of the Mortgage.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including, without limitation, the movement
of Hazardous Substances through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata).
"RENTS" means all income, rents, issues, profits, revenues
(including all oil and gas or other mineral royalties and bonuses), deposits
(other than utility and security deposits) and other benefits from the Mortgaged
Property. Without limiting the generality of the foregoing, the "RENTS" shall
include all receivables and other obligations now existing or hereafter arising
or created out of the lease, sublease, license, concession or other grant of the
right of the use and occupancy of property or rendering of services by the
Borrower (including, without limitation, from the rental of any office space,
retail space, warehouse and manufacturing space or other space, halls, and
offices, and deposits securing reservations of such space, exhibit or sales
space of every kind, license, lease, sublease and concession fees and rentals
and proceeds, if any, from business interruption or other loss of income
insurance relating to the use, enjoyment and occupancy of the Mortgaged
Property).
"SINGLE-PURPOSE ENTITY" means a Person, other than an
individual, which (i) is formed or organized solely for the purpose of acquiring
and directly holding an ownership interest in the Mortgaged Property, (ii) does
not engage in any business unrelated to the Mortgaged Property and the financing
thereof, (iii) does not hold or acquire any assets other than those related to
its interest in the Mortgaged Property and the financing thereof or incur any
indebtedness other than as permitted by this Agreement, the Mortgage or the
other Loan Documents, (iv) has its own separate books and records, and accounts,
in each case which are separate and apart from the books and records and
accounts of any other Person, (v) is subject to all of the limitations on powers
set forth in the organizational documentation of Borrower and the [managing
member] as of the Closing Date, (vi) holds itself out as being a Person separate
and apart from any other Person and
22
(vii) has or is controlled, directly or indirectly, by a Person that has at
least one independent director that is not an employee, officer, director, or
paid consultant of any Affiliate of such Person or of any principal or officer
of such Person.
"SURVEY" means an ALTA/ACSM survey of the Mortgaged Property
prepared by a registered Independent surveyor, certified to Agent for the
benefit of Lenders and the Title Companies, and in form and content satisfactory
to Agent and the Title Companies.
"TAKING" means a taking or voluntary conveyance during the term
hereof of all or part of the Mortgaged Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting the Mortgaged Property or any portion thereof whether or not
the same shall have actually been commenced.
"TI COSTS" means tenant improvement costs and allowances
incurred by the Borrower in connection with renewing existing Leases or
executing new Leases on the commercial or retail space at the Mortgaged
Property.
"TITLE COMPANIES" has the meaning set forth in the definition
of "Title Insurance Policy."
"TITLE INSURANCE POLICY" means a mortgagee's title insurance
policy or policies (a) issued by one or more title companies satisfactory to the
Agent (the "TITLE COMPANIES") which policy or policies shall be in form ALTA
1970 (with co-insurance or reinsurance as the Agent may require), naming the
Agent as the insured party, (b) insuring the Mortgage as being a first and prior
lien upon the Mortgaged Property, (c) showing no encumbrances against the
Mortgaged Property (whether junior or superior to the Mortgage) which are not
acceptable to the Agent other than Permitted Encumbrances, (d) in an amount
equal to the maximum Loan Amount, and (e) otherwise in form and content
acceptable to the Agent. Such Title Insurance Policy shall include the following
endorsements or affirmative coverages, to the extent applicable to the Loan, in
form and substance reasonably acceptable to the Agent: variable rate
endorsement; survey endorsement; comprehensive endorsement; first loss, last
dollar and tie-in endorsement; access coverage; separate tax parcel coverage;
contiguity (if applicable) coverage; and such other endorsements as the Agent
shall reasonably require in order to provide insurance against specific risks
identified by the Agent in connection with the Mortgaged Property.
"TRADEMARK" means the trademark licenses, trademarks, rights in
intellectual property, trade names, service marks and copyrights relating to the
Mortgaged Property or the license to use intellectual property such as computer
software owned or licensed by the Borrower or other proprietary business
information relating to the Borrower's policies, procedures, manuals and trade
secrets.
23
"TRANSACTION" means the transaction contemplated by the Loan
Documents.
"TRANSACTION COSTS" means all costs and expenses paid or
payable by the Borrower relating to the Transaction (including, without
limitation, appraisal fees, legal fees and accounting fees and the costs and
expenses described in SECTION 8.23).
"TRANSFER" means the conveyance, assignment, sale, mortgaging,
encumbrance (other than a Permitted Encumbrance), pledging, hypothecation,
granting of a security interest in, granting of options with respect to, or
other disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest (a) in all or any
portion of the Mortgaged Property; (b) in the stock, membership interests or
other beneficial ownership interests in the sole member of the Borrower; (c) in
the Borrower; or (d) in any Person having a direct or indirect legal or
beneficial ownership in the Borrower and shall also include, without limitation
to the foregoing, the following: an installment sales agreement wherein the
Borrower agrees to sell the Mortgaged Property or any part thereof or any
interest therein for a price to be paid in installments; an agreement by the
Borrower leasing all or a substantial part of the Mortgaged Property to one or
more Persons pursuant to a single or related transactions, or a sale, assignment
or other transfer of, or the grant of a security interest in, the Borrower's
right, title and interest in and to any Leases or any Rent; a transaction or
other event pursuant to which the Principal no longer controls (directly or
indirectly) the sole member of the Borrower; any instrument subjecting the
Mortgaged Property to a condominium regime or transferring ownership to a
cooperative corporation; the dissolution or termination of the Borrower or the
merger or consolidation of the Borrower with any other Person; PROVIDED, that
whenever the term "Transfer" is used in this Agreement, such term shall not
include any conveyance, sale, assignment or other disposition of any interest in
the Borrower or the Guarantor or the Principal if, after giving effect to the
proposed transaction, the ownership interests in the Borrower are owned not less
than 51% directly or indirectly by the Guarantor or if the Guarantor does not
own at least such percentage of ownership interests in the Borrower, the
Guarantor exercises a majority of voting rights and operating control with
respect to the Borrower.
"UCC" means with respect to the Mortgaged Property, the Uniform
Commercial Code as in effect on the date hereof in the state where the Mortgaged
Property is located, as amended from time to time; PROVIDED, that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
nonperfection of the security interest in any item or portion of the Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the state where the Mortgaged Property is located, "UCC" 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
nonperfection.
"UCC SEARCHES" has the meaning set forth in SECTION 3.1(K)
hereof.
24
"USE" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance in connection with or affecting the Mortgaged Property.
"WELFARE PLAN" means an employee welfare benefit plan as
defined in Section 3(1) of ERISA established or maintained by the Borrower or
any ERISA Affiliate or that covers any current or former employee of the
Borrower or any ERISA Affiliate.
ARTICLE II
GENERAL TERMS
Section 2.1. THE LOAN. (a) Subject to the terms and conditions
of this Agreement, on the Closing Date the Agent shall lend to the Borrower the
amount referred to in clause (i) of the definition of Loan Amount. The proceeds
of the Loan shall be used solely for the purposes identified in SECTION 2.2
hereof. On the Closing Date, upon the satisfaction of the conditions set forth
in SECTION 3.1, the Agent shall initiate a wire or other transfer of immediately
available funds to an account designated by Borrower in an amount equal to (x)
the Loan Amount, less (y) the sum of (i) the Commitment Fee (giving credit to
the Application Deposit) and the Origination Fee, (ii) the out of pocket
expenses incurred by the initial Lender in connection with the origination and
funding of the Loan and (iii) the fees and expenses of the initial Lender's
counsel and the Collateral Agent's counsel.
(a) The Loan shall constitute one general obligation of
Borrower to the Lenders and shall be secured by the security interest in and
Liens granted upon all of the Collateral, and by all other security interests
and Liens at any time or times hereafter granted by Borrower to the Lenders or
to Collateral Agent on behalf of the Lenders.
(b) After the Closing Date, so long as no Event of Default
shall have occurred and be continuing, the Lenders shall lend to the Borrower
one or more additional advances (each, an "ADDITIONAL Advance"), each in an
amount equal to $250,000 or an integral multiple thereof in accordance with the
procedure set forth below to be applied solely towards Capital Improvement Costs
referred to in the Operating Budget approved by the Agent; PROVIDED, HOWEVER,
that the Lenders shall not have any obligation to make (i) more than one
Additional Advance per month and (ii) an aggregate amount of Additional Advances
in excess of $5,000,000.
(i) the Borrower shall submit to the Agent not less than ten
(10) Business Days prior to the proposed funding date of the Additional
Advance (such date, an "ADDITIONAL ADVANCE DATE") an Officer's
Certificate, substantially in the form of EXHIBIT N, describing (x) the
aggregate Capital Improvement Costs towards which such funds are
intended to be
25
applied and of which such funds equal not more than 65% (attaching the
Operating Budget, invoices, receipts and evidence of work completed)
and (y) the amount of the requested Additional Advance, and certifying
that (i) the representations and warranties of the Borrower set forth
in SECTION 4.1 hereof are true and correct on such date as if made on
such date (subject to any exceptions set forth in a schedule to such
certificate), (ii) no Default with respect to the payment of money or
Event of Default has occurred and is continuing on such date, (iii)
Borrower is in good standing in its jurisdiction of formation and (iv)
there have been no changes in the Organizational Agreement since the
Closing Date (or if there have been changes, certifying as to the
changes);
(ii) the Agent shall have five (5) Business Days from the date
of its receipt of the Officer's Certificate specified in CLAUSE (i)
above and the required attachments to object in writing to the
Additional Advance due to the proposed costs not being referred to in
the Operating Budget;
(iii) in the event the Lenders shall make the Additional
Advance, on the Additional Advance Date, so long as the Borrower shall
have satisfied each of the conditions set forth in SECTIONS 3.1(M) (for
this purpose, such condition being limited to delivery of the
appropriate endorsement to the Title Insurance Policy), (U), (V), and
(AA) (as if the Additional Advance Date were the Closing Date for this
purpose), the Lenders shall wire transfer to an account designated by
Borrower the Additional Advance in immediately available funds minus
(1) an Additional Advance fee equal to 0.25% of the Additional Advance
and (2) any reasonable out-of-pocket expenses incurred by the Agent in
connection with an inspection of the Mortgaged Property prior to the
making of such Additional Advance and reasonable fees and expenses of
the Lenders' counsel relating to issues raised in obtaining the Title
Insurance Policy endorsement referred to above; and
(iv) on the Additional Advance Date, the Agent shall make a
notation on the schedule attached to the Note of the Additional Advance
amount.
Section 2.2. USE OF PROCEEDS. Proceeds of the Loan Amount shall
be used for the following purposes: (a) to pay a portion of the acquisition cost
and Capital Improvement Costs with respect to the Mortgaged Property, (b) to pay
to the initial Lender the Origination Fee and the Commitment Fee, (c) to pay to
the Agent the out-of-pocket expenses incurred by the initial Lender in
connection with the origination and funding of the Loan, and (d) to pay to
counsel to each of the Collateral Agent, the Agent, and the Borrower its
respective fees, expenses and disbursements.
Section 2.3. SECURITY FOR THE LOAN. The Note and Borrower's
obligations hereunder and under the other Loan Documents shall be secured by (a)
the Mortgage, (b) the Contract Assignment, (c) the Management Subordination, (d)
the Assignments of Leases and Rents, (e) the Guaranty of Nonrecourse
Obligations, (f) the Pledge Agreement, (g) the Guaranty of Payment and (h) the
security interest and Liens granted in this Agreement and in the other Loan
documents.
26
Section 2.4. BORROWER'S NOTE. Borrower's obligation to pay the
principal of and interest on the Loan and all other amounts due under the Loan
Documents shall be evidenced by the Note, duly executed and delivered by
Borrower on the Closing Date. The Note shall be payable as to principal,
interest and all other amounts due under the Loan Documents, as specified in
this Agreement, with a final maturity on the Maturity Date. The Agent and the
Collateral Agent are hereby authorized to endorse on the schedule attached to
the Note (or on a continuation of such schedule attached to the Note and made a
part thereof) an appropriate notation evidencing the date and amount of each
payment of principal, interest or other amounts due under the Loan Documents, in
respect thereof. Such schedule shall, absent manifest error, constitute prima
facie evidence of the accuracy of the information contained therein. The failure
of the Agent or the Collateral Agent to make a notation on the schedule to the
Note as aforesaid shall not affect the obligations of Borrower hereunder or
under the Note or any other Loan Document in any respect. The Agent shall have
the right to have the Note subdivided, by exchange for promissory notes of
lesser denominations or otherwise, upon written request to the Borrower and, in
such event, the Borrower shall promptly execute additional or replacement Notes
(the Agent agreeing to return or cause to be returned any superseded original
promissory notes to the Borrower prior to or contemporaneously with the delivery
of the replacement or additional Note); PROVIDED, that the Borrower shall not
incur any additional cost or liability in connection with such subdivision in
excess of that contemplated by the original Note. At no time shall the aggregate
original principal amount of the Note exceed the Loan Amount.
Section 2.5. PRINCIPAL AND INTEREST. (a) Borrower shall pay to
Lenders interest on the Principal Indebtedness of the Loan from the Closing Date
to but excluding the date the Loan shall be paid in full at the interest rate
provided in SECTION 2.5(b) below. Interest on the Loan shall accrue on the
Principal Indebtedness commencing on the Closing Date and shall be payable in
arrears on May 1, 1998, and on the first day of each and every month thereafter
through the month in which the Maturity Date occurs, unless, in any such case,
such day is not a Business Day, in which event such interest shall be payable on
the first Business Day following such date (such date for any particular month,
the "PAYMENT DATE"). The Agent and the Collateral Agent shall calculate LIBOR on
each Interest Determination Date for the related Interest Accrual Period and
communicate to Borrower such rate for such period not less than five (5)
Business Days prior to the related Payment Date. The entire outstanding
Principal Indebtedness of the Loan and the Note, together with all accrued but
unpaid interest thereon and all other amounts due under the Loan Documents
(including, without limitation, the Refinancing Fee) shall be due and payable by
Borrower to the Lenders on the Maturity Date. Interest shall be computed on the
basis of a 360 day year and the actual number of days elapsed.
(a) For each Interest Accrual Period, the Principal
Indebtedness shall bear interest at a rate per annum equal to LIBOR determined
as of the Interest Determination Date immediately preceding such Interest
Accrual Period plus 1.75%.
27
(b) While an Event of Default has occurred and is continuing,
Borrower shall pay to the Lenders interest at the Default Rate on any amount
owing to Lenders not paid when due until such amount is paid in full.
Section 2.6. VOLUNTARY PREPAYMENT. (a) Borrower may voluntarily
prepay the Loan, in whole or in part, on any Payment Date; PROVIDED, HOWEVER,
that, any such prepayment shall be accompanied by an amount representing all
accrued interest on the portion of the Loan being prepaid and other amounts then
due under the Loan Documents (including, without limitation, the Refinancing
Fee).
(a) In the event of any such voluntary prepayment, Borrower
shall give the Agent written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay, which notice shall be given at least thirty
(30) days' prior to the date upon which prepayment is to be made and shall
specify the Payment Date on which such prepayment is to be made and the amount
of such prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein (unless such
notice is revoked by Borrower prior to the date specified therein in which event
Borrower shall immediately reimburse the Agent for any costs incurred in
connection with the giving of such notice and its revocation).
Section 2.7. NO SALE/ENCUMBRANCE; MANDATORY REPAYMENT. (a)
Borrower shall not, without the prior written consent of Agent, which consent
may be withheld in Agent's sole and absolute discretion, Transfer the Mortgaged
Property or any part thereof or interest therein or permit the Mortgaged
Property or any part thereof or interest therein to be the subject of a Transfer
or Transfer or permit to be the subject of a Transfer any direct or indirect
ownership interest in the Borrower. Agent reserves the right to condition any
consent required hereunder upon a modification of the terms hereof and on
assumption of the Note, this Agreement and the Loan Documents as so modified by
the proposed transferee, and all of Lenders' expenses incurred in connection
with such Transfer, the Borrower's continued compliance with the requirement
that the Borrower continue to operate as a Single Purpose Entity, or such other
conditions as Agent shall determine in its sole discretion.
(a) Except as otherwise provided in SECTION 2.12(f) in the
event Loss Proceeds are required to be made available for restoration pursuant
to SECTION 5.1(X) or 5.1(Y) and excluding Loss Proceeds which the Borrower is
obligated to turn over to tenants or other third persons pursuant to applicable
law, in the event of a casualty or a Taking of the Mortgaged Property, in whole
or in part, Borrower shall deposit or cause to be deposited all Loss Proceeds
received by Borrower with respect to the Mortgaged Property into the Collection
Account no later than the Business Day following collection and receipt thereof.
Such Loss Proceeds shall be applied solely to make the payments required
pursuant to CLAUSE FIRST of SECTION 2.12(b)(i) of this Agreement.
28
(b) Upon payment or prepayment of the Loan in full, Borrower
shall pay to the Lenders, in addition to the amounts specified in SECTION 2.6,
SECTION 2.7 and SECTION 2.12, as applicable, all other amounts then due and
payable to the Lenders pursuant to the Loan Documents.
Section 2.8. APPLICATION OF PAYMENTS AFTER EVENT OF DEFAULT.
All proceeds relating to any repayments of the Loan after the Collateral Agent
shall have received written notice of the occurrence of an Event of Default and
the acceleration of the Indebtedness shall be applied to pay: FIRST, any unpaid
fees of the Collateral Agent payable pursuant to the Fee Letter and any
reasonable out-of-pocket costs and expenses of Collateral Agent and the Lenders,
in that order, reimbursable pursuant to the terms of this Agreement arising as a
result of such repayment or in connection with the Mortgaged Property; SECOND,
any accrued and unpaid interest then payable with respect to the Loan or the
portion thereof being repaid; THIRD, the Refinancing Fee and the Default
Administration Fee; and FOURTH, the outstanding Principal Indebtedness or the
portion thereof being repaid.
Section 2.9. METHOD AND PLACE OF PAYMENT FROM THE COLLECTION
ACCOUNT TO THE AGENT. (a) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Note shall be made from
the Collection Account to the Agent not later than 12:00 p.m., New York City
time, on the date when due and shall be made in lawful money of the United
States of America by wire transfer in federal or other immediately available
funds to its account at Mellon Bank, Pittsburgh, Pennsylvania (ABA No.
000000000, Account No. 117-7107, Reference: Ocwen/Xxxx Street) and the Agent
shall disburse such payments to the Person entitled thereto on the Business Day
of receipt of such payments (or the next Business Day if the payments are
received after 12:00 p.m., New York City time on such Business Day) to the
account designated by such Person in writing to the Agent from time to time in
accordance with SECTION 2.12. Any funds received by the Agent after such time
shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day. The Agent shall notify Borrower and the Collateral
Agent in writing of any changes in the account to which payments are to be made.
All payments made by Borrower hereunder, or by Borrower under the other Loan
Documents, shall be made irrespective of, and without any deduction for, any
set-offs or counterclaims.
(a) Except to the extent otherwise provided herein, (i) each
payment or prepayment of principal of the Loan by Borrower shall be made to the
Agent for the account of the Lenders pro rata in accordance with the respective
unpaid portion of the Loan held by such Lenders and (ii) each payment of
interest on the Loan by Borrower shall be made to the Agent for the account of
the Lenders pro rata in accordance with the amounts of interest on the portion
of the Loan held by such Lenders then due and payable to the respective Lenders.
Section 2.10. TAXES. All payments made by Borrower under the
Note and this Agreement shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
29
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority (other than taxes imposed on the income of the
Lenders).
Section 2.11. RELEASE OF COLLATERAL. (a) Notwithstanding any
other provision of this Agreement or any other Loan Document, upon the
occurrence of a Transfer with respect the Mortgaged Property or any portion
thereof in accordance with SECTION 2.7(a) hereof, the Agent, on behalf of the
Lenders, shall, simultaneously with such Transfer, release the Lien of the
Mortgage and UCC-1 financing statements and any other Liens in favor of the
Lenders relating to the Mortgaged Property or the portion thereof affected by
such Transfer.
(a) If (i) the Agent on behalf of the Lenders receives Loss
Proceeds with respect to the Mortgaged Property or any portion thereof in the
event of a Taking affecting the Mortgaged Property or any portion thereof and
(ii) such Loss Proceeds are applied to reduce the Indebtedness in accordance
with SECTIONS 2.7(b) and 2.12(b), the Agent on behalf of the Lenders shall
simultaneously with such application release the Lien of the Mortgage and UCC-1
financing statements and any other Liens in favor of the Lenders relating to the
Mortgaged Property in whole or in part to the extent of such Taking and shall
execute all documentation reasonably requested of the Agent with respect to such
release.
(b) Upon and concurrently with repayment of the Loan and all
other amounts due hereunder and under the Loan Documents in full in accordance
with the terms hereof and thereof, the Lenders shall release all Liens with
respect to all Collateral.
Section 2.12. CENTRAL CASH MANAGEMENT.
(a) COLLECTION ACCOUNT; DEPOSITS TO AND WITHDRAWALS FROM THE
COLLECTION ACCOUNTS.
(i) On or before the Closing Date, Borrower shall establish and
maintain with the Collateral Agent, one collection account for the
Mortgaged Property (the "COLLECTION ACCOUNT"), with a separate and
unique identification number and entitled "LaSalle National Bank (as
Collateral Agent for Salomon Brothers Realty Corp.) pursuant to a Loan
Agreement, dated as of April 7, 1998, among OAIC Xxxx Street, LLC,
Salomon Brothers Realty Corp., as Agent for the Lenders named therein
and LaSalle National Bank, as Collateral Agent." The Collection Account
shall be an Eligible Account. So long as the Collateral Agent has not
received written notice from the Agent that an Event of Default has
occurred and is continuing, all Rents and Money received from Accounts
and under Leases for the Mortgaged Property and all Proceeds thereof
shall be payable directly to the Borrower or the Manager at the
election of Borrower. Borrower and Manager shall not have any right to
withdraw Money from the Collection Account. All payments made to the
Collection Account by or on behalf of Borrower which are payable to
Agent or Collateral
30
Agent shall be deemed received by Agent or Collateral Agent, as
applicable, upon such deposit into the Collection Account.
(ii) So long as no Event of Default shall have occurred and be
continuing, the Borrower shall deposit in the Collection Account: (a)
not later than the close of business on the Business Day prior to each
Payment Date, funds sufficient to pay (1) the interest then due and
payable on the Note for the related Interest Accrual Period, (2) the
fees of the Collateral Agent and (3) any other amounts under this
Agreement, the Note or the Loan Documents due on such Payment Date and
regarding which the Borrower has been notified in writing and (b) as
and when required by SECTION 2.7(b), Loss Proceeds received by the
Borrower.
(iii) In the event that the Agent on behalf of the Lenders has
notified Borrower and the Collateral Agent in writing that an Event of
Default has occurred and is continuing, Borrower shall commence
depositing and shall thereafter deposit (or shall cause the Manager to
deposit) directly into the Collection Account, all Rents and Money
received from Accounts or under Leases for the Mortgaged Property and
all Proceeds thereof. After the Collateral Agent has received written
notice from the Agent on behalf of the Lenders that an Event of Default
has occurred and is continuing and the Indebtedness has been
accelerated,
(w) all Rents and Money received from Accounts or
under Leases and derived from the Mortgaged Property and all
Proceeds thereof shall be payable to Agent for the account of
the Lenders or as otherwise directed by the Agent on behalf of
the Lenders,
(x) the Agent on behalf of the Lenders shall make
deposits, or cause deposits to be made, of such Rents, Money
and Proceeds to the Collection Account, as required by this
Agreement, and the Borrower shall cooperate (and shall cause
the Manager to cooperate) with the Agent on behalf of the
Lenders in the making of such deposits or causing such
deposits to be made,
(y) Borrower shall not have any right to direct any
withdrawals from the Collection Account or the Capital
Expenditure Reserve Account, or to make any withdrawals
therefrom without the prior written consent of the Agent on
behalf of the Lenders, and
(z) Proceeds on deposit in the Collection Account and
the Capital Expenditure Reserve Account may be applied by the
Collateral Agent on behalf of the Lenders for the payment of
the Indebtedness pursuant to SECTION 2.8 of this Agreement.
31
(b) DISTRIBUTION OF CASH. So long as no Event of Default has
occurred and is continuing, on each Payment Date, the Collateral Agent shall
withdraw the funds on deposit in the Collection Account on such Payment Date,
and shall apply such funds, in each case to the extent of the amounts available
in the Collection Account as described above and set forth in the related
Payment Date Statement delivered by Borrower, as follows:
FIRST, to the payment to the Agent of the interest then due and
payable on the Note with respect to the related Interest Accrual
Period;
SECOND, to the payment to the Agent of the Principal
Indebtedness in an amount equal to any amount to which the Agent is
entitled pursuant to SECTION 2.7(b) of this Agreement;
THIRD, to the payment to the Collateral Agent of the fees of
the Collateral Agent then due and payable; and
FOURTH, to the payment of any indemnification to which an
Indemnified Party is entitled pursuant to SECTIONS 5.1(I) and 5.1(J);
FIFTH, to the extent any funds remain in the Collection Account
after payment of the amounts described in CLAUSES FIRST through FOURTH
above, to the Borrower.
(c) PERMITTED INVESTMENTS. Borrower shall direct Collateral
Agent in writing to invest and reinvest any balance in the Collection Account,
from time to time in Permitted Investments; PROVIDED, however, that (i) the
maturity of the Permitted Investments on deposit therein shall be at the
discretion of Borrower, but in any event no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
therefrom pursuant to SECTION 2.12(a) or (b) of this Agreement, (ii) after
Collateral Agent has received written notice from the Agent that an Event of
Default has occurred and is continuing, Borrower shall not have any right to
direct investment of the balance in the Collection Account, (iii) all such
Permitted Investments shall be held in the name of Collateral Agent on behalf of
the Lenders and (iv) if no written investment direction is provided to the
Collateral Agent by Borrower, the Collateral Agent shall invest any balance in
the Collection Account in an investment of the type described in CLAUSE (viii)
of the definition of Permitted Investments. Borrower shall cause all income or
other gain from investments of Money held in the Collection Account to be
deposited in such account immediately upon receipt and any loss resulting from
such investments shall be charged to such account. The Agent, the Lenders and
Collateral Agent shall have no liability for any loss in investments of funds in
the Collection Account that are invested in Permitted Investments (unless, in
the case of Collateral Agent, invested contrary to the Agent's or Borrower's
written direction) and no such loss shall affect Borrower's obligation to fund,
or liability for funding, the Collection Account. Borrower shall include all
earnings on the Collection Account as income of Borrower for federal and
applicable state tax purposes.
32
(d) MONTHLY AND PAYMENT DATE STATEMENTS. With respect to each
Collection Period, the Collateral Agent shall prepare and deliver, or shall
cause to be prepared and delivered, to the Agent a statement (each, a "MONTHLY
STATEMENT") no later than five (5) Business Days after the end of such
Collection Period setting forth the aggregate deposits to and withdrawals from
the Collection Account and the Capital Expenditure Reserve Account and the
opening and closing balances in such accounts. With respect to each Payment Date
and the related Collection Period and Interest Accrual Period, Borrower shall
prepare and deliver, or shall cause to be prepared and delivered to Collateral
Agent and the Agent, a statement (each, a "PAYMENT DATE STATEMENT") no later
than the second Business Day prior to such Payment Date with respect to each of
the items below, setting forth the following:
(i) the aggregate deposits to the Collection Account during the
related Collection Period and the opening and closing balances in the
Collection Account;
(ii) the amount of interest then due and payable on the Note
with respect to the Interest Accrual Period (including the applicable
number of days and interest rate which were applied in determining such
amount);
(iii) the amount of any fees and expenses of Collateral Agent
pursuant to the Fee Letter and any indemnification to which an
Indemnified Party is entitled under this Agreement;
(iv) the following information with respect to the Principal
Indebtedness in a format acceptable to the Agent: (1) the Principal
Indebtedness as of the preceding Payment Date, (2) any principal paid
to the Lenders since the prior Payment Date, (3) the principal payable
to the Lenders pursuant to SECTION 2.12(b) on such Payment Date, and
(4) the Principal Indebtedness on the current Payment Date (taking into
account such payments); and
(v) the amount, if any, payable to Borrower pursuant to SECTION
2.12(b).
In addition, no later than the twentieth (20th) day of each calendar month (the
"ACTIVITY STATEMENT DATE"), commencing in the first full calendar month after
the Closing Date, Borrower shall prepare and deliver, or shall cause to be
prepared and delivered to the Collateral Agent and the Agent, a statement (each,
an "ACTIVITY STATEMENT") in hard copy and on diskette and/or a copy through
electronic mail with respect to the Collection Period and Interest Accrual
Period for the Payment Date immediately preceding such Activity Statement Date
setting forth the following: (x) a cash flow report in a format reasonably
acceptable to the Agent describing with respect to the Mortgaged Property, the
related Gross Revenue, property expenses, Capital Improvement Costs and net
operating income; and (y) a summary report of new Leases, Lease renewals or
extensions
33
or cancellations and Lease modifications and similar proposals with respect to
the Mortgaged Property.
(e) LOSS PROCEEDS. In the event of a casualty or Taking with
respect to the Mortgaged Property, unless pursuant to SECTION 5.1(X) or 5.1(Y)
the Loss Proceeds are to be made available to Borrower for restoration or to the
tenants, all of Borrower's interest in Loss Proceeds shall be paid directly to
the Collection Account to satisfy the requirements of SECTION 2.7(b). If the
Loss Proceeds are to be made available for restoration pursuant to SECTION
5.1(X) or 5.1(Y) or to the tenants, such Loss Proceeds shall be held by
Collateral Agent in a segregated interest-bearing escrow account in the name of
Collateral Agent on behalf of the Lenders to be opened by the Collateral Agent
within three (3) Business Days after the Collateral Agent first receives written
notice of the necessity therefor from the Agent, to be withdrawn by Collateral
Agent for delivery to Borrower or to the tenants from time to time to pay
restoration costs pursuant to a schedule reasonably acceptable to the Agent and
Borrower. If any Loss Proceeds are received by Borrower, such Loss Proceeds
shall be received in trust for the Lenders, shall be segregated from other funds
of Borrower, and shall be forthwith paid to Collateral Agent to the extent
necessary to comply with this Agreement.
(f) COLLATERAL AGENT'S RELIANCE. Collateral Agent may rely and
shall be protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper party or parties.
Collateral Agent may rely on written notice from the Agent as to the occurrence
and continuance of an Event of Default, without further written notice by the
Lenders to the contrary.
Section 2.13. BASIC CARRYING COSTS ACCOUNT.
(a) BASIC CARRYING COSTS ACCOUNT. Not later than the Closing
Date, the Borrower shall establish and maintain with the Collateral Agent an
account which shall be an Eligible Account and shall be designated the Basic
Carrying Costs Account (the "BASIC CARRYING COSTS ACCOUNT") for the benefit of
the Lenders until the Loan is paid in full. On each Payment Date, if the Agent
shall not have notified the Borrower that an Event of Default occurred and is
continuing, the Borrower shall deposit in the Expense Account, an amount equal
to the product of (x) 0.0833, and (y) the annual amount set forth in the
Operating Budget approved by Agent for Basic Carrying Costs. Any and all Moneys
remitted to the Basic Carrying Costs Account together with any Permitted
Investments in which such Moneys are or will be invested or reinvested during
the terms of this Agreement, shall be held in the Basic Carrying Costs Account
and shall be withdrawn by the Collateral Agent within three (3) Business Days of
written request of the Borrower delivered to Agent and Collateral Agent together
with documentation and other evidence (including invoices) with respect to the
use of such funds, to pay or reimburse the Borrower for Basic Carrying Costs. In
the event the Borrower satisfies the outstanding Indebtedness in full, the
Lenders and the Collateral Agent (upon receipt of written notice thereof from
the Agent) shall
34
release any and all amounts on deposit in the Basic Carrying Costs Account to
the Borrower on the Business Day on which the Borrower repays the outstanding
Indebtedness in full. The Collateral Agent shall not be responsible for
confirmation of the application of funds withdrawn from the Basic Carrying Costs
Account to the applicable purposes set forth above.
(b) INVESTMENT OF FUNDS. All or a portion of any Moneys in the
Basic Carrying Costs Account shall be invested and reinvested, so long as
Collateral Agent has not received written notice from the Agent that an Event of
Default has occurred and is continuing, by Collateral Agent in accordance with
written instructions delivered by Borrower, or after Collateral Agent has
received written notice from Agent that an Event of Default has occurred and is
continuing, by Agent, in one or more Permitted Investments. So long as
Collateral Agent has not received written notice from the Agent that an Event of
Default has occurred and is continuing, all such Permitted Investments shall be
made in the name of Borrower, and after Collateral Agent has received written
notice from Agent that an Event of Default has occurred and is continuing, all
such Permitted Investments shall be made in the name of the Agent on behalf of
the Lenders or as otherwise directed by the Agent. Borrower or the Agent, as
applicable, shall cause all income or other gain from investments of Money held
in the Basic Carrying Costs Account to be deposited in the Basic Carrying Costs
Account immediately upon receipt and any loss resulting from such investments
shall be charged to the Basic Carrying Costs Account. Unless and until title to
the funds therein shall have vested in any Person other than Borrower, Borrower
shall include all such income or gain on the Basic Carrying Costs Account as
income of Borrower for federal and applicable state tax purposes.
(c) EVENT OF DEFAULT. After Collateral Agent has received
written notice from the Agent that an Event of Default has occurred and is
continuing and for so long as such Event of Default is continuing, Borrower
shall not be permitted to make any withdrawals from the Basic Carrying Costs
Account and the Collateral Agent at the written direction of the Agent may
liquidate any Permitted Investments of the amount on deposit in the Basic
Carrying Costs Account, withdraw the proceeds of such liquidation and use such
amount on deposit in the Basic Carrying Costs Account to make payments on
account of the Loan in accordance with the priorities set forth in SECTION 2.8.
Section 2.14. SECURITY AGREEMENT.
(a) PLEDGE OF ACCOUNT. To secure the full and punctual payment
and performance of all of the Indebtedness, Borrower hereby assigns, conveys,
pledges and transfers to the Lenders, to be held by Collateral Agent on behalf
of the Lenders as agent/bailee, and grant a first and continuing security
interest in and to, the following property, whether now owned or existing or
hereafter acquired or arising and regardless of where located (collectively, the
"ACCOUNT COLLATERAL"):
35
(i) all of Borrower's right, title and interest in the
Collection Account and the Basic Carrying Costs Account and all Money
and Permitted Investments, if any, from time to time deposited or held
in the Collection Account and the Basic Carrying Costs Account;
(ii) all of Borrower's right, title and interest in interest,
dividends, Money, Instruments and other property from time to time
received, receivable or otherwise payable in respect of, or in exchange
for, any of the foregoing until such time as such items are disbursed
from the Collection Account and the Basic Carrying Costs Account; and
(iii) to the extent not covered by CLAUSE (i) or (ii) above,
all Borrower's right, title and interest in Proceeds of any or all of
the foregoing.
(b) COVENANTS. So long as any portion of the Indebtedness is
outstanding and an Event of Default has occurred and is continuing, Borrower
shall not open (or permit the Manager to open) any account other than the
Collection Account for the deposit of Rents or Money received from Accounts or
under Leases and derived from the Mortgaged Property and all Proceeds to pay
amounts owing hereunder, other than any account for amounts required by law to
be segregated by Borrower. The Account Collateral shall be subject to such
applicable laws, and such applicable regulations of the Board of Governors of
the Federal Reserve System and of any other banking authority or Governmental
Authority, as may now or hereafter be in effect, and to the rules, regulations
and procedures of Collateral Agent relating to demand deposit accounts from time
to time in effect.
(c) FINANCING STATEMENTS; FURTHER ASSURANCES. On the Closing
Date, Borrower shall execute and deliver to the initial Lender for filing a
financing statement or statements in connection with the Account Collateral in
the form required to properly perfect Collateral Agent's security interest on
behalf of the Lenders in the Account Collateral to the extent that it may be
perfected by such a filing. From time to time, at the expense of Borrower,
Borrower shall promptly execute and deliver all further instruments, and take
all further action, that the Agent may reasonably request, in order to perfect
and protect the pledge and security interest granted or purported to be granted
hereby, or to enable Collateral Agent to exercise and enforce Collateral Agent's
rights and remedies hereunder with respect to, any Account Collateral.
Collateral Agent shall not be responsible for the determination of the financing
statements and other instruments necessary to perfect such security interest or
for the filing of such financing statements and other instruments at the
locations necessary to perfect such security interest and shall rely on an
opinion of counsel to the Borrower as to the perfection of such security
interest.
(d) TRANSFERS AND OTHER LIENS. Borrower shall not sell or
otherwise dispose of any of the Account Collateral other than pursuant to the
terms hereof, or create or permit to exist any Lien upon or with respect to all
or any of the Account Collateral, except for the Lien granted to Collateral
Agent under this Agreement.
36
(e) NO WAIVER. Every right and remedy granted to Collateral
Agent and/or the Lenders under this Agreement or by law may be exercised by
Collateral Agent at any time and from time to time, and as often as Collateral
Agent and/or the Lenders may deem expedient. Any and all of Collateral Agent's
and/or the Lenders' rights with respect to the pledge of and security interest
in the Account Collateral granted hereunder shall continue unimpaired, and
Borrower shall be and remain obligated in accordance with the terms hereof,
notwithstanding (i) any proceeding of the Borrower under the United States
Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes
of any state, (ii) the release or substitution of Account Collateral at any
time, or of any rights or interests therein or (iii) any delay, extension of
time, renewal, compromise or other indulgence granted by Collateral Agent in the
event of any Default with respect to the Account Collateral or otherwise
hereunder. No delay or extension of time by Collateral Agent in exercising any
power of sale, option or other right or remedy hereunder, and no notice or
demand which may be given to or made upon Borrower by Collateral Agent, shall
constitute a waiver thereof, or limit, impair or prejudice Collateral Agent's
right, without notice or demand, to take any action against Borrower or to
exercise any other power of sale, option or any other right or remedy.
(f) AGENT APPOINTED ATTORNEY-IN-FACT. Borrower hereby
irrevocably constitutes and appoints Agent as its true and lawful
attorneys-in-fact, with full power of substitution, at any time after the
occurrence and during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of Borrower with respect to the Account
Collateral, and do in the name, place and stead of Borrower, all such acts,
things and deeds for and on behalf of and in the name of Borrower with respect
to the Account Collateral, which Borrower could or might do in the absence of an
Event of Default or which the Agent may deem reasonably necessary or desirable
to more fully vest in Agent the rights and remedies provided for herein with
respect to the Account Collateral and to accomplish the purposes of this
Agreement. The foregoing powers of attorney are irrevocable and coupled with an
interest.
(g) CONTINUING SECURITY INTEREST; TERMINATION. This SECTION
2.14 shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until payment in full by
Borrower of the Indebtedness. Upon payment in full by Borrower of the
Indebtedness, Borrower shall be entitled to the return, upon its request and at
its expense, of such of the Account Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, upon written notification
by the Agent to Collateral Agent that the Indebtedness has been paid in full,
Collateral Agent shall release any funds then held by it in accounts established
by Borrower with Collateral Agent pursuant to this Agreement and shall execute
such instruments and documents as may be reasonably requested by Borrower to
evidence such termination and the release of the pledge and lien hereof;
PROVIDED, HOWEVER, that Borrower shall simultaneously pay on demand upon
presentation of invoices all of Collateral Agent's expenses in connection
therewith (including reasonable attorneys' fees and disbursements).
37
(h) RIGHT OF SET-OFF. Collateral Agent waives any and all
rights it may have at law or otherwise to set off or make any claim against the
Account Collateral, except, with respect to any checks returned for insufficient
funds, the payment of Collateral Agent's fees and expenses (including reasonable
attorney fees and disbursements), and for the maintenance of the Account
Collateral.
Section 2.15. MORTGAGE RECORDING TAXES. The Lien to be created
by the Mortgage is intended to encumber the Mortgaged Property described therein
to the full extent of the Loan Amount. On the Closing Date, Borrower shall pay
all state, county and municipal recording and all other taxes imposed and
required to be paid upon the execution and recordation of the Mortgage.
Section 2.16. GENERAL COLLATERAL AGENT PROVISIONS.
(a) APPOINTMENT. The Lenders hereby designate and appoint
LaSalle National Bank as Collateral Agent of each of the Lenders under this
Agreement, and authorize LaSalle National Bank, as Collateral Agent for Lenders,
to take such action on their behalf under the provisions of this Agreement and
to exercise such powers and perform such duties as are expressly delegated to
Collateral Agent by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, Collateral Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with the Lenders, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Collateral
Agent.
(b) COLLATERAL AGENT'S RIGHT TO PERFORM. If an Event of Default
shall have occurred and be continuing, Collateral Agent may, but shall have no
obligation to, itself perform, or cause performance of, such covenant or
obligation giving rise to such Event of Default after giving Borrower at least
five (5) Business Days prior written notice of such intent, and the reasonable
fees and expenses of Collateral Agent incurred in connection therewith shall be
payable by Borrower to Collateral Agent upon demand. Notwithstanding the
foregoing, Collateral Agent shall have no obligation to send notice to Borrower
of any such failure unless directed to do so by Agent in writing, except that
Collateral Agent shall not have the right set forth in this SECTION 2.16(b) to
perform unless such notice has been sent.
(c) STANDARD OF CARE. Beyond the observance of Accepted
Practices and the exercise of reasonable care in the custody or disbursement
thereof, Collateral Agent shall not have any duty as to any Account Collateral
or any income thereon in its possession or control or in the possession or
control of any agents for, or of Collateral Agent, or the preservation of rights
against any Person or otherwise with respect thereto. Collateral Agent shall be
deemed to have exercised reasonable care in the custody of the Account
Collateral in its possession if the Account Collateral is accorded treatment in
accordance with the Accepted Practices.
38
(d) EXCULPATORY PROVISIONS. Neither Collateral Agent nor any of
its officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates shall be responsible in any manner to the Lenders for any recitals,
statements, representations or warranties made by Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by Collateral Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Note or any other Loan
Document or for any failure of Borrower to perform their obligations hereunder
or thereunder. Collateral Agent shall not be under any obligation to the Lenders
to ascertain or to inquire as to the agreements contained in, or conditions of,
this Loan Agreement or any other Loan Document, or to inspect the properties,
books or records of Borrower. Collateral Agent shall not be required to take any
discretionary actions hereunder except at the written direction of Borrower or
the Agent, it being understood and agreed that Collateral Agent's duties
hereunder shall be wholly ministerial in nature and that the Collateral Agent
shall not be responsible for calculating any financial ratios or generating any
reports for the Lenders or the Borrower. In connection with any discretionary
action which Borrower is permitted hereunder to direct Collateral Agent to take,
if Collateral Agent shall follow the Agent's directions and not Borrower's
directions, it shall have no liability to Borrower (or to any other Person) for
following any such directions of the Agent and for not following such directions
of Borrower (if expressly permitted herein). Collateral Agent shall not be under
any obligation or duty to perform any act which, in Collateral Agent's sole
reasonable judgment, could involve it in expense or liability or to institute or
defend any suit in respect hereof, or to advance any of its own monies, unless
the Agent or Borrower, as the case may be, shall have offered to Collateral
Agent reasonable security or indemnity against such expense, liability, suit or
advance.
(e) INDEMNIFICATION. Borrower shall indemnify and hold
Collateral Agent, and its agents, attorneys, employees and officers harmless
from and against any loss, cost or damage (including, without limitation,
reasonable attorneys' fees and disbursements) incurred by Collateral Agent in
connection with the transactions contemplated hereby, excluding any loss, cost
or damage (including, without limitation, reasonable attorneys' fees and
disbursements) arising as a result of Collateral Agent's failure to adopt and
follow Accepted Practices, bad faith, willful misconduct or violation of
applicable law. The indemnification set forth in this paragraph shall survive
the satisfaction and payment of the Indebtedness and the termination of this
Agreement.
(f) COLLATERAL AGENT'S RELIANCE. Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel and other experts selected by Collateral Agent.
Collateral Agent may deem and treat the payee of the Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
39
thereof shall have been filed with Collateral Agent. Collateral Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of Lender as it deems appropriate or it shall first be indemnified
to its satisfaction by Lender against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Provided that the Collateral Agent acts in accordance with Accepted Practices,
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon Lenders and all future holders of the Note. All
requests to the Collateral Agent for wire transfers of funds, for transfers
between accounts established pursuant to this Agreement or any other transfer
not specifically described in this Agreement shall be in writing.
(g) NOTICE OF DEFAULT. Collateral Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless Collateral Agent has received written notice from the Agent
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." Collateral Agent shall take
such action with respect to such Default or Event of Default as shall be
directed by the Agent, including any action under this Agreement.
(h) NONRELIANCE ON COLLATERAL AGENT. Neither Collateral Agent
nor any of its officers, directors, employees, agents, attorneys,
attorneys-in-fact or Affiliates has made any representations or warranties to
the Lenders and no act by Collateral Agent hereinafter taken (including any
review of the affairs of Borrower) shall be deemed to constitute any
representation or warranty by Collateral Agent to the Lenders. Except for
notices, reports and other documents expressly required to be furnished to the
Agent by Collateral Agent hereunder, Collateral Agent shall not have any duty or
responsibility to provide the Lenders with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower which may come into the
possession of Collateral Agent or any of its officers, directors, employees,
agents, attorneys, attorneys-in-fact or Affiliates.
(i) REMOVAL AND RESIGNATION. Collateral Agent shall have the
right to resign as collateral agent hereunder and Agent shall have the right to
remove Collateral Agent as collateral agent hereunder, in each case upon thirty
(30) days' written notice to the other parties to this Agreement. In the event
of such resignation or removal, the Agent shall appoint a successor Collateral
Agent with the consent of Borrower (such consent not to be unreasonably withheld
or delayed). No such removal of or resignation by Collateral Agent shall become
effective until a successor Collateral Agent shall have accepted such
appointment and executed an instrument by which it shall have assumed all of the
rights and obligations of Collateral Agent hereunder. If no such successor
Collateral Agent is appointed within sixty (60) days (or, if fees payable under
the Fee Letter have not been paid, thirty (30) days) after receipt of the
resigning Collateral Agent's notice of resignation or removal, the resigning
Collateral Agent may petition a court for the appointment of a successor
Collateral Agent. In connection with any removal of or resignation by
40
Collateral Agent, (A) the removed or resigning Collateral Agent shall (at the
sole cost and expense of the Borrower in the case of a removal of the Collateral
Agent without cause) (1) duly assign, transfer and deliver to the successor
Collateral Agent this Agreement and all Money and Permitted Investments held by
it hereunder, (2) execute such financing statements and other instruments as may
be necessary to assign to the successor Collateral Agent the security interests
existing in favor of the retiring Collateral Agent hereunder, and to otherwise
give effect to such succession and (3) take such other actions as may be
reasonably required by Borrower, the Agent or the successor Collateral Agent in
connection with the foregoing and (B) the successor Collateral Agent shall
establish in its name, as agent for the Lenders, as secured party, the
Collection Account and Reserve Account as Borrower is required to maintain
pursuant to the terms of this Agreement.
(j) INDIVIDUAL CAPACITY. Collateral Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Borrower or any Affiliate, as though Collateral Agent were not
Collateral Agent hereunder, or under the other Loan Documents.
Section 2.17. EXTENSION OPTION. (a) Borrower shall have the
option (the "EXTENSION OPTION"), to extend the Maturity Date of the Note from
the Payment Date in April, 2001 (the "ORIGINAL MATURITY DATE"), to the Payment
Date in April, 2002 (the "EXTENDED MATURITY DATE"), upon satisfaction of each of
the following conditions (the "EXTENSION CONDITIONS"):
(i) Borrower shall have given written notice (an "EXTENSION
NOTICE") to the Agent and Collateral Agent not less than sixty (60)
days prior to the Original Maturity Date of its election to exercise
the Extension Option;
(ii) no Default or Event of Default shall have occurred and be
continuing on the Original Maturity Date;
(iii) Borrower shall have paid to the Agent for the benefit of
the Lenders on the Original Maturity Date a fee (an "EXTENSION FEE")
equal to the product of 0.50% and the Principal Indebtedness; and
(iv) Borrower shall have delivered to the Agent such evidence
of corporate and limited liability company authorization and other
documents relating to the Extension Option as the Agent shall
reasonably require.
(b) Borrower may revoke any Extension Notice by written notice
(or telephonic notice promptly confirmed in writing) to the Agent on behalf of
the Lenders and to the Collateral Agent on or prior to the fifteenth (15th)
Business Day prior to the Original Maturity Date; PROVIDED, HOWEVER, that
Borrower shall pay the reasonable costs incurred by the Agent and Collateral
Agent in connection with the giving of any Extension Notice and its revocation.
If the term of the Loan is extended pursuant to the provisions of this SECTION
2.17, then all the terms and
41
conditions of the Loan Documents shall remain in full force and effect and
unmodified, except that the Maturity Date shall be the Extended Maturity Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. CONDITIONS PRECEDENT TO EFFECTIVENESS. This
Agreement shall become effective on the date that all of the following
conditions shall have been satisfied (or waived in accordance with SECTION 8.4)
(the "CLOSING DATE"), it being understood and agreed that the funding of the
Loan on the Closing Date shall be deemed evidence that all such conditions have
been satisfied or waived by the Agent as of the Closing Date:
(A) LOAN AGREEMENT. Borrower shall have executed and delivered
this Agreement to the Agent.
(B) NOTE. Borrower shall have executed and delivered to Agent
the Note.
(C) MORTGAGE; ASSIGNMENT OF LEASES AND RENTS. Borrower shall
have executed and delivered to Agent the duly executed (i) Mortgage and (ii)
Assignment of Leases and Rents in recordable form with respect to the Mortgaged
Property and such Mortgage and Assignment of Leases and Rents shall have been
irrevocably delivered to the title insurance company issuing the Title Insurance
Policy for recordation.
(D) PLEDGE AGREEMENT; ENVIRONMENTAL INDEMNITY AGREEMENT;
GUARANTY OF NONRECOURSE OBLIGATIONS; GUARANTY OF PAYMENT. The member of the
Borrower shall have executed and delivered the Pledge Agreement to the Agent.
Borrower and Guarantor shall have executed and delivered the Environmental
Indemnity Agreement to the Agent. Guarantor shall have executed and delivered to
Agent the Guaranty of Nonrecourse Obligations and the Guaranty of Payment.
(E) MANAGEMENT AGREEMENT AND MANAGEMENT SUBORDINATION. Agent
shall have received the executed Management Agreement. The Manager shall have
executed and delivered the Management Subordination to Agent.
(F) CONTRACT ASSIGNMENT. Borrower shall have executed and
delivered to the Agent a Contract Assignment with respect to the Mortgaged
Property.
(G) OPINIONS OF COUNSEL. Agent and the Collateral Agent shall
have received from (i) counsel to Borrower and the Guarantor, the legal
opinions, substantially in the form attached hereto as EXHIBIT F-1 AND F-2, with
respect to limited liability company and limited
42
partnership matters, taxation of the Borrower for federal income tax purposes,
the enforceability of this Agreement, the Mortgage and the other Loan Documents,
perfection of security interests in personal property and various other matters
as set forth on EXHIBIT F-1 and (ii) counsel to Borrower, the legal opinion,
substantially in the form attached hereto as EXHIBIT F-2, with respect to the
nonconsolidation under applicable bankruptcy laws of Borrower and the Guarantor.
Such legal opinions will be addressed to Agent and Collateral Agent, dated the
Closing Date, and in form and substance satisfactory to Agent and Collateral
Agent and their respective counsel.
(H) ORGANIZATIONAL DOCUMENTS. Agent shall have received with
respect to each of Borrower and the Guarantor its certificate of formation,
certificate of incorporation or certificate of limited partnership, as the case
may be, each as amended, modified or supplemented to the Closing Date, as filed
with the Secretary of State in the jurisdiction of organization and in effect on
the Closing Date and certified to be true, correct and complete by the
appropriate Secretary of State as of a date not more than ten (10) days prior to
the Closing Date, together with a good standing certificate from such Secretary
of State and a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which such Person is required to be
qualified to transact business.
(I) CERTIFIED RESOLUTIONS, ETC. Agent shall have received a
certificate of the member of Borrower and the Guarantor dated the Closing Date,
certifying (i) the names and true signatures of its incumbent officers
authorized to sign the Loan Documents to which Borrower or the Guarantor is each
a party, (ii) the Organization Agreement of Borrower and true and correct copies
of the operating agreements, by-laws, partnership agreements or other applicable
organizational documents of the Guarantor, in each case as in effect on the
Closing Date, (iii) the resolutions of Borrower and the Guarantor, as
applicable, approving and authorizing the execution, delivery and performance of
the Loan Documents to which it is a party, and (iv) with respect to Borrower,
that there have been no changes in the Organization Agreement since the date of
execution thereof.
(J) FINANCING STATEMENTS. Borrower shall have executed and
delivered to Agent all financing statements specified on EXHIBIT H attached
hereto and such financing statements shall be filed of record in the appropriate
filing offices in each of the appropriate jurisdictions or irrevocably delivered
to a title agent for such filing.
(K) LIEN SEARCH REPORTS. Agent shall have received satisfactory
reports of UCC (collectively, the "UCC SEARCHES"), tax lien, judgment and
litigation searches conducted by a search firm acceptable to the Agent with
respect to the Mortgaged Property, Borrower, Guarantor and the member of the
Borrower, such searches to be conducted in each of the locations set forth on
EXHIBIT I attached hereto.
(L) INSURANCE. Agent shall have received certificates of
insurance demonstrating insurance coverage in respect of the Mortgaged Property
of types, in amounts, with
43
insurers and otherwise in compliance with the terms, provisions and conditions
set forth in this Agreement. Such certificates shall indicate that the Agent for
the benefit of the Lenders are named additional insureds as their interests may
appear and shall contain a loss payee endorsement in favor of Agent with respect
to the property policies required to be maintained under this Agreement.
(M) TITLE INSURANCE POLICY. Agent shall have received a marked
paid irrevocable commitment or the equivalent (in form and substance reasonably
satisfactory to Agent) from the Title Companies to issue the Title Insurance
Policy in respect of the Mortgaged Property in the Loan Amount, subject only to
Permitted Encumbrances.
(N) ENVIRONMENTAL MATTERS. Agent shall have received an
Environmental Report with respect to the Mortgaged Property prepared by the
Environmental Auditor, which Environmental Report shall be acceptable to Agent
in its sole discretion.
(O) CASUALTY MATTERS. The Improvements and the Equipment shall
not have been materially injured or damaged by fire or other casualty.
(P) CONSENTS, LICENSES, APPROVALS, ETC. Agent shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Borrower and the
validity and enforceability, of the Loan Documents, and all consents, licenses
and approvals required in connection with the Mortgaged Property and such
consents, licenses and approvals shall be in full force and effect.
(Q) SURVEY. Agent shall have received the Survey with respect
to the Mortgaged Property which shall be in form and substance satisfactory to
Agent.
(R) ENGINEERING REPORT. Agent shall have received an
Engineering Report with respect to the Mortgaged Property in form and substance
acceptable to Agent in its sole discretion.
(S) CLOSING STATEMENT. Agent shall have received a detailed
closing statement from Borrower in a form acceptable to Agent, which includes a
complete description of sources and uses of funds.
(T) SITE INSPECTION. Agent shall have performed, or caused to
be performed on its behalf, an on-site due diligence review of the Mortgaged
Property satisfactory to Agent in its sole discretion.
(U) NO DEFAULT OR EVENT OF DEFAULT. No Default with respect to
the payment of money or Event of Default shall have occurred and be continuing.
44
(V) NO INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any Governmental Authority shall have
been issued, and no litigation shall be pending or threatened, which in the good
faith judgment of Agent would enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.
(W) REPRESENTATIONS AND WARRANTIES. The representations and
warranties herein and in the other Loan Documents shall be true and correct in
all material respects on the Closing Date.
(X) FINANCIAL INFORMATION. Agent shall have received acceptable
financial information relating to the Mortgaged Property. Such information shall
include the following, to the extent reasonably available and in the possession
of or capable of delivery by Borrower:
(i) operating statements for the current year (including actual
to date information, an annual budget and trailing twelve month data in
hard copy) and for not less than the two preceding years (including
tenant improvements costs, leasing commissions, capital reserves, major
repairs, replacement items and occupancy rates in hard copy),
(ii) copies of Leases with respect to commercial tenants
occupying the Mortgaged Property,
(iii) current property rent roll data on a tenant by tenant
basis in hard copy (including name, square footage, lease term,
expiration date, renewal options, base rent per square foot, additional
rent clauses (including stops, offsets, and other special provisions),
escalation clauses for increase in operating expense, maintenance,
insurance, real estate taxes and utilities, assignment, sublet and
cancellation provisions and purchase options),
(iv) current prospective property leasing information
(including asking rent rates for available retail/office space, amount
of current vacant commercial space out for signature and under
negotiation, typical retail and office tenant improvement cost per
square foot (new versus renewal) and leasing concessions (free rent),
leasing commissions (new versus renewal),
(v) current real estate tax bills,
(vi) insurance certificates indicating the type and amount of
coverage, and
(vii) the most recent annual consolidated financial statements
and unaudited quarterly consolidated financial statements.
45
(Y) PRO-FORMA FINANCIAL STATEMENT. The Agent shall have
received the initial pro forma financial statement for the Mortgaged Property
for the following twelve months (including on an annual and monthly basis a
break-down of projected Gross Revenues, Property Expenses, Capital Improvement
Costs, and replacement reserve costs).
(Z) ADDITIONAL REAL ESTATE MATTERS. The Agent shall have
received such other real estate related certificates and documentation relating
to the Mortgaged Property as may have been reasonably requested by the Agent all
of which shall be in form and substance acceptable to Agent. Such documentation
shall include the following, to the extent reasonably available:
(i) certificates of occupancy issued by the appropriate local
Governmental Authority of the jurisdiction in which the Mortgaged
Property is located reflecting the use of the Mortgaged Property as of
the Closing Date,
(ii) a zoning endorsement to the applicable Title Insurance
Policy with respect to the Mortgaged Property,
(iii) abstracts of the Leases in effect at the Mortgaged
Property,
(iv) tenant estoppel certificates from the tenants at the
Mortgaged Property,
(v) certification by Borrower satisfactory to initial Lender
that the Mortgaged Property is served by adequate utilities (including
but not limited to electricity, heat and hot water),
(vi) copies of major service contracts, and
(vii) graphics (including interior and exterior photographs,
rental brochures and a competitive properties map).
(AA) TRANSACTION COSTS. Borrower shall have paid all
Transaction Costs for which bills have been submitted in accordance with the
provisions of SECTION 8.23.
(BB) ADDITIONAL MATTERS. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the Loan as
may have been reasonably requested by the Agent. All corporate and other
organizational proceedings, all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits hereto) and all
legal matters in connection with the Loan shall be reasonably satisfactory in
form and substance to the Agent.
Section 3.2. FORM OF LOAN DOCUMENTS AND RELATED MATTERS. All of
the Loan Documents, whether or not referred to in this ARTICLE III, unless
otherwise specified, shall be delivered to the
46
Agent, and shall be satisfactory
in form and substance to the Agent in its sole discretion (unless the form
thereof is prescribed herein).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants as of the Closing Date:
(A) ORGANIZATION. Borrower (i) is a duly organized and validly
existing limited liability company in good standing under the laws of the State
of Delaware, (ii) has the requisite limited liability company power and
authority to own its properties (including, without limitation, the Mortgaged
Property) and to carry on its business as now being conducted and is qualified
to do business in the jurisdiction in which the Mortgaged Property is located,
and (iii) has the requisite limited liability company power to execute and
deliver, and perform its obligations under, this Agreement, the Note, the
Mortgage, the Assignment of Leases and Rents and all of the other Loan Documents
to which it is a party.
(B) AUTHORIZATION; NO CONFLICT; CONSENTS AND APPROVALS. The
execution and delivery by the Borrower of this Agreement, the Note, the
Mortgage, the Assignment of Leases and Rents and each of the other Loan
Documents to which it is a party, performance of its obligations hereunder and
thereunder and the creation of the security interests and liens provided for in
this Agreement and the other Loan Documents to which it is a party (i) have been
duly authorized by all requisite limited liability company action, (ii) will not
violate any provision of any Legal Requirements, any order of any court or other
Governmental Authority, the Organization Agreement or other comparable
organizational document of the Borrower or any indenture or material agreement
or other instrument to which the Borrower is a party or by which the Borrower is
bound, and (iii) will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, or result
in the creation or imposition of any Lien of any nature whatsoever upon any of
the property or assets of the Borrower pursuant to, any such indenture or
material agreement or instrument. Other than those previously obtained or filed,
Borrower is not required to obtain any consent, approval or authorization from,
or to file any declaration or statement with, any Governmental Authority or
other agency in connection with or as a condition to the execution, delivery or
performance of this Agreement, the Note, the Mortgage or the other Loan
Documents executed and delivered by it on or prior to the Closing Date.
(C) ENFORCEABILITY. This Agreement, the Note, the Mortgage and
each other Loan Document executed by the Borrower in connection with the Loan
(including, without limitation, any Collateral Security Instrument), is the
legal, valid and binding obligation of the
47
Borrower, enforceable against the Borrower in accordance with its terms, subject
to bankruptcy, insolvency, and other limitations on creditors' rights generally
and to equitable principles. This Agreement, the Note, the Mortgage and such
other Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by the Borrower (including the defense of usury), nor
will the operation of any of the terms of this Agreement, the Note, the Mortgage
and such other Loan Documents, or the exercise of any right thereunder, render
the Mortgage unenforceable against the Borrower, in whole or in part, or subject
to any right of rescission, set-off, counterclaim or defense by the Borrower,
including the defense of usury, and no right of rescission, set-off,
counterclaim or defense with respect thereto has been asserted.
(D) LITIGATION. To the Actual Knowledge of Borrower, there are
no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending and served or threatened
against the Borrower or the Mortgaged Property, which actions, suits or
proceedings, if determined adversely, are reasonably likely to result in a
Material Adverse Effect.
(E) AGREEMENTS. Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which such
Person or the Mortgaged Property is bound which is reasonably likely to have a
Material Adverse Effect. Borrower is not a party to any agreement or instrument
or subject to any restriction which is reasonably likely to have a Material
Adverse Effect.
(F) TITLE TO THE MORTGAGED PROPERTY. Borrower owns good,
marketable and insurable fee simple title to the Mortgaged Property, free and
clear of all Liens, other than the Permitted Encumbrances applicable to the
Mortgaged Property. There are no outstanding options to purchase or rights of
first refusal or restrictions on transferability affecting the Mortgaged
Property.
(G) NO BANKRUPTCY FILING. Borrower is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property. To the best knowledge of Borrower, no Person is contemplating the
filing of any such petition against it.
(H) SOLVENCY. Giving effect to the transactions contemplated
hereby, the fair saleable value of Borrower's assets, exceeds and will,
immediately following the making of the Loan, exceed Borrower's total
liabilities (including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities). The fair saleable value of Borrower's assets is and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities (including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured). Borrower's assets do
not and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as
48
proposed to be conducted. Borrower does not intend to, and does not believe that
it will, incur debts and liabilities (including, without limitation, Contingent
Obligations and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower).
(I) OTHER DEBT. Except for the debt permitted under SECTION
6.1(C), Borrower has not borrowed or received other debt financing whether
unsecured or secured by the Mortgaged Property or any part thereof.
(J) FULL AND ACCURATE DISCLOSURE. No statement of fact made by
or on behalf of Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading. To
the Actual Knowledge of Borrower, there is no fact which has not been disclosed
to the Agent which is likely to result in a Material Adverse Effect.
(K) FINANCIAL INFORMATION. All financial data concerning
Borrower and Mortgaged Property that has been delivered by Borrower to the Agent
is true, complete and correct in all material respects; provided, that the
foregoing representation is made to the Actual Knowledge of Borrower with
respect to any data provided to the Borrower by a third party (including, but
not limited to, the seller) and subsequently delivered to the Agent. Since the
delivery of such data, except as otherwise disclosed in writing to the Agent,
there has been no change in the financial position of Borrower or, to the Actual
Knowledge of Borrower, the Mortgaged Property, or in the results of operations
of Borrower, which change is reasonably likely to result in a Material Adverse
Effect. Borrower has not incurred any obligation or liability, contingent or
otherwise, not reflected in such financial data which is reasonably likely to
have a Material Adverse Effect upon its business operations or the Mortgaged
Property.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
Borrower is not (i) an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money in accordance
with this Agreement.
(M) COMPLIANCE. To the Actual Knowledge of the Borrower,
Borrower, the Mortgaged Property and Borrower's use thereof and operations
thereat comply with all applicable Legal Requirements (including, without
limitation, building and zoning ordinances and codes) and all applicable
Insurance Requirements, except for noncompliance which is not reasonably likely
to have a Material Adverse Effect. Borrower is not in default or violation of
any order, writ, injunction, decree or demand of any Governmental Authority
except for defaults or violations which are not reasonably likely to have a
Material Adverse Effect.
49
(N) CONDEMNATION. No Taking has been commenced or, to
Borrower's knowledge, is contemplated with respect to all or any portion of the
Mortgaged Property or for the relocation of roadways providing access to the
Mortgaged Property.
(O) USE OF PROCEEDS; MARGIN REGULATIONS. Borrower will use the
proceeds of the Loan for the purposes described in SECTION 2.2. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements.
(P) UTILITIES AND PUBLIC ACCESS. To the Actual Knowledge of the
Borrower, the Mortgaged Property has adequate rights of access to public ways
and is served by water, electric, sewer, sanitary sewer and storm drain
facilities, all public utilities necessary to the continued use and enjoyment of
the Mortgaged Property as presently used and enjoyed are located in the public
right-of-way abutting the premises, and all such utilities are connected so as
to serve the Mortgaged Property without passing over other property except for
land of the utility company providing such utility service. To the Actual
Knowledge of the Borrower, all roads necessary for the full utilization of the
Mortgaged Property for its current purpose have been completed and dedicated to
public use and accepted by all Governmental Authorities or are the subject of
access easements for the benefit of the Mortgaged Property.
(Q) ENVIRONMENTAL COMPLIANCE. Except for matters set forth in
the Environmental Reports delivered to the Agent in connection with the Loan
(true, correct and complete copies of which have been provided to the Agent by
Borrower):
(i) To the Actual Knowledge of the Borrower, Borrower and the
Mortgaged Property are each in compliance with all applicable
Environmental Laws (which compliance includes, but is not limited to,
the possession of all environmental, health and safety permits,
licenses and other governmental authorizations required in connection
with the ownership and operation of the Mortgaged Property under all
Environmental Laws), except for noncompliance which is not reasonably
likely to have a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to the Actual
Knowledge of Borrower, threatened, and no penalties arising under
Environmental Laws have been assessed with respect to the Mortgaged
Property against the Borrower or, to the Actual Knowledge of Borrower,
against any Person whose liability for any Environmental Claim the
Borrower has or may have retained or assumed either contractually or by
operation of law, and no investigation or review is pending or, to the
Actual Knowledge of Borrower, threatened by any Governmental Authority,
citizens group, employee or other Person with respect to the Mortgaged
Property or any alleged failure by the Borrower or the Mortgaged
50
Property to have any environmental, health or safety permit, license or
other authorization required under, or to otherwise comply with, any
Environmental Law or with respect to any alleged liability of Borrower
for any Use or Release of any Hazardous Substances.
(iii) There are no present and, to the Actual Knowledge of the
Borrower, have been no past Releases of any Hazardous Substance that
are reasonably likely to form the basis of any Environmental Claim
against the Borrower or against any Person whose liability for any
Environmental Claim the Borrower has or may have retained or assumed
either contractually or by operation of law.
(iv) Without limiting the generality of the foregoing, to the
Actual Knowledge of the Borrower there is not present at, on, in or
under the Mortgaged Property, PCB-containing equipment, asbestos or
asbestos containing materials, underground storage tanks or surface
impoundments for Hazardous Substances, lead in drinking water (except
in concentrations that comply with all Environmental Laws), or
lead-based paint.
(v) No liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Law with respect to the
Mortgaged Property and no Governmental Authority has taken or is in the
process of taking any action that could subject the Mortgaged Property
to Liens under any Environmental Law.
(vi) There have been no environmental investigations, studies,
audits, reviews or other analyses conducted by or that are in the
possession of Borrower in relation to the Mortgaged Property which have
not been made available to the Agent.
(R) SINGLE-PURPOSE ENTITY.
(i) Borrower at all times since its formation has been a duly
formed and existing limited liability company and a Single-Purpose
Entity. Borrower is duly qualified, if required, as a foreign limited
liability company or limited partnership in the jurisdiction in which
the Mortgaged Property is located.
(ii) Borrower at all times since its formation has complied
with the provisions of its Organization Agreement and the laws of the
State of Borrower's formation relating to limited liability companies.
(iii) All customary formalities regarding the limited liability
company existence of Borrower have been observed at all times since the
Organization Agreement was executed and delivered.
(iv) Borrower has at all times since it began maintaining such
items accurately maintained its financial statements, accounting
records and other documents separate from
51
those of its members, Affiliates of its members and any other Person.
Borrower has not at any time since its formation commingled its assets
with those of its members, any Affiliates of its members, or any other
Person. Borrower has at all times since establishing its own bank
accounts accurately maintained its own bank accounts and separate books
of account.
(v) Borrower has at all times since receiving funds paid its
own liabilities from its own separate assets.
(vi) Borrower has at all times since its formation identified
itself in all dealings with the public, under its own name and as a
separate and distinct entity and has not at any time since its
formation identified itself as being a division or a part of any other
entity. Borrower has not at any time since its formation identified its
member or partners or any Affiliates of its members or partners as
being a division or part of the Borrower.
(vii) Borrower is as of the date hereof adequately capitalized
in light of the nature of its business.
(viii) Borrower has not at any time since its formation assumed
or guaranteed the liabilities of its member (or any predecessor
corporation, partnership or limited liability company), any Affiliates
of its member, or any other Persons, except for liabilities relating to
the Mortgaged Property and except as permitted by or pursuant to this
Agreement. Borrower has not at any time since its formation acquired
obligations or securities of its member (or any predecessor
corporation, partnership or limited liability company), or any
Affiliates of its member. Borrower has not at any time since its
formation made loans to its member (or any predecessor corporation,
partnership or limited liability company), or any Affiliates of its
member.
(ix) Borrower has not at any time since its formation entered
into and was not a party to any transaction with its member (or any
predecessor corporation, partnership or limited liability company) or
any Affiliates of its member except in the ordinary course of business
on terms which are no less favorable than would be obtained in a
comparable arm's length transaction with an unrelated third party.
(S) MORTGAGE AND OTHER LIENS. The Mortgage creates a valid and
enforceable first priority Lien on the Mortgaged Property, as security for the
repayment of the Indebtedness, subject only to the Permitted Encumbrances. Each
Collateral Security Instrument establishes and creates a valid, subsisting and
enforceable Lien on and a security interest in, or claim to, the Borrower's
interest in the rights and property described therein. All property covered by
any Collateral Security Instrument is subject to a UCC financing statement filed
and/or recorded, as appropriate (or irrevocably delivered to an agent for such
recordation or filing) in all places necessary to perfect a valid first priority
Lien with respect to the rights and property that are the subject of such
Collateral Security Instrument to the extent governed by the UCC.
52
(T) ASSESSMENTS. There are no pending or, to the best knowledge of the
Borrower, proposed special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor, to the best knowledge of the
Borrower, are there any contemplated improvements to the Mortgaged Property that
may result in such special or other assessments.
(U) NO JOINT ASSESSMENT; SEPARATE LOTS. Borrower has not suffered,
permitted or initiated the joint assessment of all or any portion of the
Mortgaged Property (i) with any other real property constituting a separate tax
lot, and (ii) with any portion of the Mortgaged Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Mortgaged Property as a single lien. The Mortgaged
Property is comprised of one or more parcels, each of which constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot.
(V) NO PRIOR ASSIGNMENT. The Agent is the assignee of Borrower's
interest under the applicable Leases pursuant to the Assignment of Rents and
Leases. There are no prior assignments of the Leases or any portion of the Rent
due and payable or to become due and payable which are presently outstanding.
(W) PERMITS; CERTIFICATE OF OCCUPANCY. To the Actual Knowledge of
Borrower, all Permits necessary to the use and operation of the Mortgaged
Property have been obtained, the use being made of the Mortgaged Property is in
conformity with the certificate of occupancy and/or Permits for the Mortgaged
Property and any other restrictions, covenants or conditions affecting the
Mortgaged Property, and the Mortgaged Property is zoned as a matter of right for
its current use.
(X) FLOOD ZONE. To the Actual Knowledge of Borrower, except as shown on
the Survey, the Mortgaged Property is not located in a flood hazard area as
defined by the Federal Insurance Administration.
(Y) PHYSICAL CONDITION. To the Actual Knowledge of Borrower, the
Mortgaged Property is free of structural defects and all building systems
contained therein are in good working order subject to ordinary wear and tear.
(Z) SECURITY DEPOSITS. To the Actual Knowledge of Borrower, Borrower is
in compliance with all Legal Requirements relating to all security deposits with
respect to the Mortgaged Property, except for noncompliance which is not
reasonably likely to have a Material Adverse Effect.
(AA) NO DEFAULTS. No Default or Event of Default exists under or with
respect to any Loan Document.
53
(BB) PRE-CLOSING DATE ACTIVITIES. Borrower has not conducted any
business or other activity, other than in connection with the acquisition,
management and ownership of the Mortgaged Property.
(CC) NO ENCROACHMENTS. To the Actual Knowledge of the Borrower, except
as shown on the Survey, (i) all of the Improvements lie wholly within the
boundaries and building restriction lines of the Mortgaged Property, (ii) no
improvements on adjoining properties encroach upon the Mortgaged Property, (iii)
no easements or other encumbrances upon the Mortgaged Property encroach upon any
of the Improvements, so as to affect the value or marketability of the Mortgaged
Property except those which are insured against by title insurance; and (iv) all
of the Improvements comply with all material requirements of any applicable
zoning and subdivision laws and ordinances.
(DD) PLANS AND WELFARE PLANS. The assets of Borrower are not treated as
"plan assets" under U.S. Department of Labor regulations Section 2510.3-101
currently promulgated under ERISA. Each Plan, and, to the Actual Knowledge of
Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, its
terms and the applicable provisions of ERISA, the Code and any other federal or
state law, and no event or condition has occurred and is continuing as to which
the Borrower would be under an obligation to furnish a report to Agent under
SECTION 5.1(U)(i). Other than an application for a favorable determination
letter with respect to a Plan, there are no pending issues or claims before the
Internal Revenue Service, the United States Department of Labor or any court of
competent jurisdiction related to any Plan or Welfare Plan. No event has
occurred, and there exists no condition or set of circumstances, in connection
with any Plan or Welfare Plan under which the Borrower or, to the best knowledge
of Borrower, any ERISA Affiliate, directly or indirectly (through an
indemnification agreement or otherwise), is reasonably likely to be subject to
any material risk of liability under Section 409 or 502(i) of ERISA or Section
4975 of the Code. No Welfare Plan provides or will provide benefits, including,
without limitation, death or medical benefits (whether or not insured) with
respect to any current or former employee of the Borrower, or, to the best
knowledge of Borrower, any ERISA Affiliate beyond his or her retirement or other
termination of service other than (i) coverage mandated by applicable law, (ii)
death or disability benefits that have been fully provided for by fully paid up
insurance or (iii) severance benefits.
(EE) LOCATION OF CHIEF EXECUTIVE OFFICES. The location of the
Borrower's principal place of business and chief executive office is at the
address set forth in the opening paragraph of this Agreement.
(FF) NOT FOREIGN PERSON. Borrower is not a "foreign person" within the
meaning of ss. 1445(f)(3) of the Code.
54
(GG) LABOR MATTERS. Borrower is not a party to any collective
bargaining agreements.
(HH) MANAGEMENT AGREEMENT. The Management Agreement is in full force
and effect. There is no default, breach or violation existing thereunder by any
party thereto and no event (other than payments due but not yet delinquent)
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach or violation by any party
thereunder.
(II) LEASES.
(i) The Mortgaged Property is not subject to any Leases other
than the Leases described in the rent roll delivered to the Agent in
connection with the making of the Loan. The location and size of each
leased premises and the commencement and expiration date and the rent
currently payable thereunder is in all material respects accurately set
forth in such rent roll. To the Actual Knowledge of the Borrower, none
of the Leases referred to in such rent roll has been assigned,
modified, supplemented or amended in any way that would render
inaccurate any material information contained in such rent roll. Except
as set forth in such rent roll, no tenant under any Lease has any right
or option to renew or extend the Lease. Except as set forth in such
rent roll, there are no "free rent" or other rental concessions under
the existing Leases effective during the term of this Agreement.
(ii) Except in connection with the Loan, the Borrower has not
assigned, pledged or hypothecated its right, title or interest in, to
or under the Leases of the Mortgaged Property or of the rentals
thereunder. No tenant under any Lease has any right or option to cancel
the Lease (other than pursuant to customary casualty and condemnation
provisions). To the Actual Knowledge of the Borrower, all of the
construction and other obligations to be performed by the landlord
under the Leases have been satisfied, and any and all required payments
to be made by the landlord under the Leases for tenant improvements
have been made. No rent under the Leases has been paid more than one
month in advance. No actions, whether voluntary or involuntary, are
pending against any tenant under a Lease at the Mortgaged Property
under the bankruptcy or insolvency laws of the United States or any
state or territory of the United States. The current Leases are in full
force and effect and there are no defaults thereunder by either party
and no conditions which with the passage of time and/or notice would
constitute defaults thereunder, and there are no existing defenses,
offsets or counterclaims held by any tenant of the Mortgaged Property
against the enforcement of such Leases by Borrower.
Section 4.2. SURVIVAL OF REPRESENTATIONS. Borrower agrees that
(i) all of the representations and warranties set forth in SECTION 4.1 and
elsewhere in this Agreement and in the other Loan Documents delivered on the
Closing Date are made as of the Closing Date and (ii) all such representations
and warranties made by Borrower shall survive the delivery of the Note and
55
making of the Loan and continue for so long as any amount remains owing to the
Lenders under this Agreement, the Note or any of the other Loan Documents;
PROVIDED, however, that the representations set forth in SECTION 4.1(Q) shall
survive repayment of the Loan. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents shall be deemed
to have been relied upon by the Lenders and the Collateral Agent.
ARTICLE FIVE
AFFIRMATIVE COVENANTS
Section 5.1. AFFIRMATIVE COVENANTS. Borrower covenants and
agrees that, from the date hereof and until payment in full of the Indebtedness:
(A) EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.
Borrower shall do or cause to be done all things reasonably necessary to
preserve, renew and keep in full force and effect its existence as a limited
liability company, all rights, licenses, Permits and franchises necessary for
the conduct of its business and to comply with all Legal Requirements and
Insurance Requirements applicable to it and the Mortgaged Property. Borrower
shall at all times maintain, preserve and protect all franchises and trade names
and preserve all the remainder of its property necessary for the continued
conduct of its business and keep the Mortgaged Property in good repair, working
order and condition, except for reasonable wear and use, and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgage. Borrower shall keep or shall cause the Manager to keep the
Mortgaged Property insured at all times, by financially sound and reputable
insurers, to such extent and against such risks, and maintain liability and such
other insurance, as is more fully provided in this Agreement.
(B) BASIC CARRYING COST AND OTHER CLAIMS. Borrower shall pay
and discharge or cause Manager to pay and discharge all Impositions, as well as
all lawful claims for labor, materials and supplies or otherwise, which could
become a Lien, all as more fully provided in, and subject to any rights to
contest contained in, the Mortgage. Borrower shall pay all Basic Carrying Costs
with respect to itself and the Mortgaged Property in accordance with the
provisions of the Mortgage, subject, however, to rights to contest payment of
Impositions in accordance with the Mortgage. The obligation to pay Basic
Carrying Costs pursuant to this Agreement shall include, to the extent permitted
by applicable law, Impositions resulting from future changes in law which impose
upon the Lenders an obligation to pay any property taxes on the Mortgaged
Property or other Impositions.
(C) LITIGATION. Borrower shall give prompt written notice to
the Agent of any litigation or governmental proceedings pending or threatened
(in writing) against either Borrower or the Manager which is reasonably likely
to have a Material Adverse Effect.
56
(D) RESERVED.
(E) RESERVED.
(F) RESERVED.
(G) RESERVED.
(H) RESERVED.
(I) ENVIRONMENTAL INDEMNIFICATION. Borrower shall indemnify,
reimburse, defend, and hold harmless the Agent, each Lender, the Collateral
Agent and each of their respective parents, partners, shareholders, principals,
subsidiaries, Affiliates, directors, officers, employees, representatives,
agents, successors, assigns and attorneys (collectively, the "INDEMNIFIED
PARTIES") for, from, and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses
(including, without limitation, interest, penalties, reasonable attorneys' fees,
disbursements and expenses, and reasonable consultants' fees, disbursements and
expenses (but excluding internal overhead, administrative and similar costs of
the Agent, the Lenders and the Collateral Agent)), asserted against, resulting
to, imposed on, or incurred by any Indemnified Party, directly or indirectly, in
connection with any of the following (except to the extent same are directly and
solely caused by the fraud, bad faith, gross negligence or willful misconduct of
any Indemnified Party and except that any Indemnified Party shall not be
indemnified against claims resulting from actions taken with respect to the
Mortgaged Property after the Agent forecloses its Lien or security interest upon
the Mortgaged Property unless and to the extent such indemnification relates to
any of the following which occurred while the Borrower owned the Mortgaged
Property):
(i) events, circumstances, or conditions which are alleged to,
or do, form the basis for an Environmental Claim;
(ii) any pollution or threat to human health or the environment
that is related in any way to the Borrower's or any previous owner's or
operator's management, use, control, ownership or operation of the
Mortgaged Property (including, without limitation, all on-site and
off-site activities involving Hazardous Substances), and whether
occurring, existing or arising prior to or from and after the date
hereof, and whether or not the pollution or threat to human health or
the environment is described in the Environmental Reports;
(iii) any Environmental Claim against any Person whose
liability for such Environmental Claim the Borrower has or may have
assumed or retained either contractually or by operation of law; or
57
(iv) the breach of any representation, warranty or covenant set
forth in SECTION 4.1(Q) and SECTIONS 5.1(D) through 5.1(I), inclusive.
The provisions of and undertakings and indemnification set
forth in this SECTION 5.1(I) shall survive the satisfaction and payment of the
Indebtedness and termination of this Agreement.
(J) GENERAL INDEMNITY.
(i) Borrower shall at its sole cost and expense, protect,
defend, indemnify and hold harmless the Indemnified Parties from and
against any and all claims, suits, liabilities (including, without
limitation, strict liabilities), administrative and judicial actions
and proceedings, obligations, debts, damages, losses, costs, expenses,
fines, penalties, charges, fees, expenses, judgments, awards, and
litigation costs, of whatever kind or nature and whether or not
incurred in connection with any judicial or administrative proceedings
(including, but not limited to, reasonable attorneys' fees and other
reasonable costs of defense) (the "LOSSES") imposed upon or incurred by
or asserted against any Indemnified Parties (other than those arising
from a state of facts that first came into existence after the Lenders
acquired title to the Mortgaged Property of the Borrower through
foreclosure or a deed in lieu thereof or from the Lenders' bad faith,
willful misconduct or gross negligence), and directly or indirectly
arising out of or in any way relating to any one or more of the
following: (a) ownership of the Note, the Mortgage, any of the other
Loan Documents, the Mortgaged Property of the Borrower or any interest
therein or receipt of any Rents, or Borrower's acquisition of the
Mortgaged Property or any claim made by any prior owner of the
Mortgaged Property relating to such acquisition or any sums that may be
payable to such prior owner in connection therewith; (b) any amendment
to, or restructuring of, the Indebtedness, and the Note, the Mortgage,
or any of the other Loan Documents; (c) any and all lawful action that
may be taken by the Lenders in connection with the enforcement of the
provisions of this Agreement, the Note, the Mortgage or any of the
other Loan Documents, whether or not suit is filed in connection with
same, or in connection with the Borrower or any Affiliate of the
Borrower becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (d) any accident,
injury to or death of persons or loss of or damage to property
occurring in, on or about the Mortgaged Property or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Mortgaged Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (f) any failure on the part of the Borrower to perform or be
in compliance with any of the terms of this Agreement or any of the
other Loan Documents; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the
Mortgaged Property or any part thereof; (h) the failure of any person
to file timely with the Internal
58
Revenue Service an accurate Form 0000-X, Xxxxxxxxx for Recipients of
Proceeds from Real Estate, Broker and Barter Exchange Transactions,
which may be required in connection with this Agreement; (i) any
failure of the Mortgaged Property to be in compliance with any Legal
Requirement; (j) the enforcement by any Indemnified Party of the
provisions of this SECTION 5.1(J); or (k) any and all claims and
demands whatsoever which may be asserted against the Lenders by reason
of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any
Lease. Any amounts payable to an Indemnified Party by reason of the
application of this SECTION 5.1(J)(i) shall become due and payable ten
(10) days after demand and shall bear interest at the Default Rate from
the tenth (10th) day after demand until paid.
(ii) The Borrower shall, at its sole cost and expense, protect,
defend, indemnify and hold harmless the Indemnified Parties from and
against any and all Losses imposed upon or incurred by or asserted
against any of the Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or
recording of this Agreement, the Mortgage, the Note or any of the other
Loan Documents (other than taxes imposed on the income of the Lenders).
(iii) The Borrower shall, at its sole cost and expense,
protect, defend, indemnify and hold harmless the Indemnified Parties
from and against any and all Losses that the Indemnified Parties may
incur, directly or indirectly, as a result of a default under the
Borrower's covenants with respect to ERISA and employee benefits plans
contained herein.
(iv) Promptly after receipt by an Indemnified Party under this
SECTION 5.1(J) or SECTION 5.1(I), of notice of the making of any claim
or the commencement of any action, such Indemnified Party shall, if a
claim in respect thereof is to be made by such Indemnified Party
against the Borrower under this SECTION 5.1(J) or SECTION 5.1(I),
notify the Borrower in writing, but the omission so to notify the
Borrower will not relieve the Borrower from any liability which it may
have to any Indemnified Party under this SECTION 5.1(J) or SECTION
5.1(I), or otherwise unless and to the extent that neither Borrower
otherwise possessed knowledge of such claim or action and such failure
resulted in the forfeiture by the Borrower of substantial rights and
defenses. In case any such claim is made or action is brought against
any Indemnified Party and such Indemnified Party seeks or intends to
seek indemnity from the Borrower, the Borrower will be entitled to
participate in, and, to the extent that they may wish, to assume the
defense thereof with a single counsel reasonably satisfactory to the
Lenders; and, upon receipt of notice from the Borrower to such
Indemnified Party of their election so to assume the defense of such
claim or action and only upon approval by the Indemnified Party of such
counsel, the Borrower will not be liable to such Indemnified Party
under this SECTION 5.1(J) or SECTION 5.1(I), for any legal or other
expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof. Notwithstanding the preceding sentence, each
Indemnified Party will be entitled to employ counsel separate from such
counsel for the Borrower and from
59
any other party in such action if such Indemnified Party reasonably
determines that a conflict of interest exists which makes
representation by counsel chosen by the Borrower not advisable. In such
event, the reasonable fees and disbursements of such separate counsel
will be paid by the Borrower. The Borrower shall not, without the prior
written consent of an Indemnified Party, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such
Indemnified Party is an actual or potential party to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding. Each Indemnified
Party shall not enter into a settlement of or consent to the entry of
any judgment with respect to or otherwise compromise any action, claim,
suit or proceeding as to which an Indemnified Party would be entitled
to indemnification hereunder without the written consent of the
Borrower which shall not be unreasonably withheld or delayed.
The provisions of and undertakings and indemnification set forth in this SECTION
5.1(J) shall survive the satisfaction and payment of the Indebtedness and
termination of this Agreement.
(K) ACCESS TO MORTGAGED PROPERTY. Borrower shall permit or
shall cause Manager to permit agents, representatives and employees of the
Lenders to inspect the respective Mortgaged Property or any part thereof at such
reasonable times as may be requested by the Agent upon reasonable advance
written notice, subject, however, to the rights of the tenants of the Mortgaged
Property.
(L) NOTICE OF DEFAULT. Borrower shall promptly advise the Agent
of any change in Borrower's condition, financial or otherwise, which is
reasonably likely to have a Material Adverse Effect, or of the occurrence of any
Default or Event of Default.
(M) COOPERATE IN LEGAL PROCEEDINGS. Borrower shall cooperate
fully with the Agent with respect to any proceedings before any Governmental
Authority which may materially affect the rights of the Lenders hereunder or any
rights obtained by the Lenders under any of the Loan Documents and, in
connection therewith, not prohibit the Agent, at its election, from
participating in any such proceedings.
(N) PERFORM LOAN DOCUMENTS. Borrower shall observe, perform and
satisfy or cause the Manager to observe, perform and satisfy all the terms,
provisions, covenants and conditions required to be observed, performed or
satisfied by it or the Manager, and shall pay when due all costs, fees and
expenses required to be paid by it or the Manager, under the Loan Documents
executed and delivered by the Borrower or its Member and the Manager.
(O) INSURANCE BENEFITS. Borrower shall cooperate with the Agent
in obtaining for the Lenders the benefits of any Insurance Proceeds lawfully or
equitably payable to the Lenders
60
in connection with the Mortgaged Property. The Agent shall be reimbursed for any
expenses reasonably incurred in connection therewith (including reasonable
attorneys' fees and disbursements and the payment by the Borrower of the expense
of an Appraisal on behalf of the Agent in case of a fire or other casualty
affecting the Mortgaged Property or any part thereof, but excluding internal
overhead, administrative and similar costs of the Agent) out of such Insurance
Proceeds, all as more specifically provided in this Agreement.
(P) FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost
and expense:
(i) upon the Agent's reasonable request therefor given from
time to time (but not more often than once during each six month period
following the Closing Date), pay for (a) reports of UCC, tax lien,
judgment and litigation searches with respect to the Borrower and (b)
searches of title to the Mortgaged Property, each such search to be
conducted by search firms designated by the Agent in each of the
locations designated by the Agent;
(ii) furnish to the Agent all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and
specifications, Appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement
and instrument required to be furnished pursuant to the terms of the
Loan Documents or reasonably requested by Agent in connection
therewith;
(iii) execute and deliver to the Agent such documents,
instruments, certificates, assignments and other writings, and do such
other acts necessary, to evidence, preserve and/or protect the
Collateral at any time securing or intended to secure the Note, as the
Agent may reasonably require (including, without limitation, amended or
replacement Mortgage, UCC financing statements or Collateral Security
Instruments); and
(iv) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective
carrying out of the intents and purposes of this Agreement and the
other Loan Documents, as the Agent shall reasonably require from time
to time.
(Q) MANAGEMENT OF MORTGAGED PROPERTY. The Mortgaged Property
will be managed at all times by the Manager or a successor manager approved by
Agent subject to the terms and conditions below pursuant to the Management
Agreement or a successor management agreement approved by Agent subject to the
terms and conditions below until terminated as herein provided. Pursuant to the
Management Subordination, the Manager shall agree that the Management Agreement
is subject and subordinate in all respects to the Lien of the Mortgage. The
Management Agreement may be terminated (1) by Borrower at any time in accordance
with the provisions of the Management Agreement so long as a successor manager
as specified below shall have been appointed and such successor manager has (i)
entered into a management
61
agreement substantially in the form of the Management Agreement entered into by
the previous Manager, subject to any modifications approved by Agent, and (ii)
executed and delivered the Management Subordination to Agent, and (2) by Agent
upon thirty (30) days' prior written notice to Borrower and the Manager (a) upon
the occurrence and continuation of an Event of Default or (b) if the Manager
commits any act which would permit termination under the Management Agreement
(subject to any applicable notice, grace and cure periods provided in the
Management Agreement). Subject to the preceding sentence, the Borrower may from
time to time appoint a successor manager to manage any of the Mortgaged Property
with the Agent's prior written consent. Notwithstanding the foregoing, any
successor manager selected hereunder by the Agent or Borrower to manage the
Mortgaged Property shall be a reputable management company having at least seven
years experience in the management of commercial real property in San Francisco,
California of a similar type, size and quality as the Mortgaged Property under
management. Borrower further covenants and agrees that the Manager (including
any successor property manager serving as the Manager) shall at all times during
the term of the Loan maintain workers' compensation insurance as required by
Governmental Authorities. The Borrower further covenants and agrees that, with
respect to the Management Agreement and the Management Subordination and the
Mortgaged Property, the Borrower shall: (i) promptly notify the Agent of the
occurrence of any default under the Management Agreement; and (ii) promptly
deliver to the Agent a copy of each written financial statement, business plan,
capital expenditures plan, notice and report, if any, received under the
Management Agreement.
(R) FINANCIAL REPORTING.
(i) Borrower shall keep and maintain or shall cause to be kept
and maintained on a Fiscal Year basis in accordance with GAAP
consistently applied, books, records and accounts reflecting in
reasonable detail all of the financial affairs of Borrower and all
items of income and expense in connection with the operation of the
Mortgaged Property and in connection with any services, equipment or
furnishings provided in connection with the operation of the Mortgaged
Property, whether such income or expense may be realized by such Person
or by any other Person whatsoever. The Agent shall have the right from
time to time at all times during normal business hours upon reasonable
prior written notice to examine such books, records and accounts at the
office of Borrower or other Person maintaining such books, records and
accounts and to make such copies or extracts thereof as the Agent shall
desire. After the occurrence of an Event of Default, Borrower shall pay
any costs and expenses incurred by the Agent to examine the accounting
records with respect to the Mortgaged Property, as the Agent shall
reasonably determine to be necessary or appropriate in the protection
of the Lenders' interest.
(ii) Borrower shall furnish to the Agent annually, within
ninety (90) days following the end of each Fiscal Year, a complete copy
of the Guarantor's and the Principal's financial statement audited by
an Independent certified public accountant acceptable to the Agent in
accordance with GAAP consistently applied covering each such
62
Person's financial position and results of operations, for such Fiscal
Year and containing a statement of revenues and expenses, a statement
of assets and liabilities and a statement of each such Person's equity,
all of which shall be in form and substance acceptable to the Agent.
The Agent shall have the right from time to time to review the auditing
procedures used in the preparation of such annual financial statements
and to consult with the accountant with respect to such procedures.
Together with the annual financial statements, Borrower shall furnish
to the Agent an Officer's Certificate certifying as of the date thereof
(x) that the annual financial statements present fairly in all material
respects the results of operations and financial condition of Borrower
all in accordance with GAAP consistently applied, and (y) whether
Borrower knows of the existence of an Event of Default or Default, and
if such Event of Default or Default exists, the nature thereof, the
period of time it has existed and the action then being taken to remedy
same.
(iii) Borrower shall furnish to the Agent, within forty-five
(45) days following the end of each Fiscal Year quarter a quarterly
financial statement with respect to the Mortgaged Property for that
quarter certified by the Borrower to be true, complete and correct.
Borrower shall furnish to the Agent copies of any report sent to the
Member pursuant to an Organization Agreement. Borrower shall furnish to
the Agent information with respect to any change in the ownership
interests of Borrower promptly after the consummation of any such
transaction (and in any event not later than five Business Days after
the related closing).
(iv) Borrower shall furnish or shall cause the Manager to
furnish to Lender, within fifteen (15) Business Days after request,
such request to occur not more often than once each calendar quarter,
such further information with respect to the operation of the Mortgaged
Property and the financial affairs of Borrower as may be reasonably
requested by the Agent, including all business plans prepared for the
Borrower.
(v) Borrower shall furnish to the Agent, within fifteen (15)
Business Days after request, such further information regarding any
Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA as may be reasonably requested by the
Agent.
(vi) Not later than the Closing Date and, subsequently, at
least thirty (30) days prior to the end of each of Borrower's Fiscal
Years, Borrower shall submit or cause to be submitted to the Agent an
Operating Budget of property expenses, Capital Improvement Costs
(including Leasing Commissions and TI Costs), replacement reserve costs
as well as projected Gross Revenues for the next Fiscal Year for the
Mortgaged Property. Such draft Operating Budget shall not be effective
or implemented without the prior written approval of Agent, such
approval not to be unreasonably withheld or delayed. Until so approved
by the Agent for the subsequent Fiscal Year, the Operating Budget
approved by the Agent for the preceding Fiscal Year shall remain in
effect for purposes of SECTION 2.12; PROVIDED,
63
that for so long as such prior Operating Budget remains in effect,
amounts set forth in the prior Operating Budget with respect to
property expenses, TI Costs and Leasing Commissions shall be deemed
increased on a percentage basis by an amount equal to the increase in
the Consumer Price Index (expressed as a percentage) as measured over
the calendar year that the prior Operating Budget was in effect.
(S) CONDUCT OF BUSINESS. The Borrower shall cause the operation
of the Mortgaged Property to be conducted at all times in a manner consistent
with at least the level of operation of the Mortgaged Property as of the Closing
Date, including, without limitation, the following:
(i) to maintain or cause to be maintained the standard of the
Mortgaged Property at all times at a level not lower than that
maintained by prudent managers of similar facilities or land in the
region where the Mortgaged Property is located;
(ii) to operate or cause to be operated the Mortgaged Property
in a prudent manner in compliance in all material respects with
applicable Legal Requirements and Insurance Requirements relating
thereto and maintain or cause to be maintained all licenses, Permits
and any other agreements necessary for the continued use and operation
of the Mortgaged Property; and
(iii) to maintain or cause to be maintained sufficient
Inventory and Equipment of types and quantities at the Mortgaged
Property to enable it or the Manager to operate the Mortgaged Property.
(T) SINGLE-PURPOSE ENTITY.
(i) Borrower at all times will continue to be a duly formed and
validly existing limited liability company under the laws of the State
of its formation and a Single-Purpose Entity.
(ii) Borrower shall at all times comply with the provisions of
its Organization Agreement and the laws of the State of its formation
relating to limited liability companies.
(iii) Borrower shall observe all customary formalities
regarding its existence.
(iv) Borrower shall accurately maintain its financial
statements, accounting records and other corporate documents separate
from those of its member, Affiliates of its members and any other
Person. Borrower shall not commingle its assets with those of its
members, any Affiliates of its member, or any other Person and shall
continue to accurately maintain its own bank accounts and separate
books of account.
64
(v) Borrower shall continue to pay its own liabilities from its
own separate assets.
(vi) Borrower shall continue to identify itself in all dealings
with the public, under its own name or trade names and as a separate
and distinct entity and shall not identify itself as being a division
or a part of any other entity. Borrower will not identify its members
or any Affiliates of its members as being a division or part of the
Borrower.
(vii) Borrower shall continue to be adequately capitalized in
light of the nature of its business.
(viii) Borrower shall not assume or guarantee the liabilities
of its member (or any predecessor corporation, partnership or limited
liability company), any Affiliates of its member or any other Person,
except for liabilities relating to the Mortgaged Property and except as
permitted by or pursuant to this Agreement. Borrower shall not acquire
obligations or securities of its member (or any predecessor
corporation, partnership or limited liability company), or any
Affiliates of its member. Borrower shall not make loans to its members
(or any predecessor corporation, partnership or limited liability
company), or any Affiliates of its member.
(ix) Borrower shall not enter into or be a party to any
transaction with its member (or any predecessor corporation,
partnership or limited liability company) or any Affiliates of its
members, except for in the ordinary course of business on terms which
are no less favorable than would be obtained in a comparable arm's
length transaction with an unrelated third party (other than in
connection with the execution of the Management Agreement).
(U) ERISA. Borrower shall deliver to the Agent as soon as
possible, and in any event within fifteen (15) Business Days after the Borrower
knows or has reason to know that any of the events or conditions specified below
with respect to any Plan or Multiemployer Plan has occurred or exists, an
Officer's Certificate setting forth details respecting such event or condition
and the action, if any, that the Borrower or its ERISA Affiliate proposes to
take with respect thereto (and a copy of any report or notice required to be
filed with or given to PBGC by the Borrower or an ERISA Affiliate with respect
to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan, as
to which PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within thirty (30) days of the
occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless
65
of the issuance of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under Section 412(d) of the Code
for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Borrower or
an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of the Borrower of a notice from a Multiemployer Plan that
such action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any ERISA Affiliate of the Borrower that
results in material liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of
a purchaser default) or the receipt by the Borrower or any ERISA
Affiliate of the Borrower of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under Section
4041A of ERISA;
(v) the institution of a proceeding by a fiduciary (within the
meaning of Section 3(21) of ERISA) of any Multiemployer Plan against
the Borrower or any ERISA Affiliate of the Borrower to enforce Section
515 of ERISA, which proceeding is not dismissed within thirty (30)
days;
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part
if the Borrower or an ERISA Affiliate of the Borrower fails to timely
provide security to the Plan in accordance with the provisions of said
Sections; and
(vii) the imposition of a lien pursuant to Section 302(f) of
ERISA or Section 412(h) of the Code in connection with a Plan.
(V) ASSIGNMENT OR PARTICIPATION OF NOTE. In the event that the
Agent notifies Borrower that a secondary market sale (an "ASSIGNMENT") of, or a
sale of a participation interest (a "PARTICIPATION") in, the Note to another
party is a desirable course of action with respect to the Loan, then Borrower
shall cooperate with the Agent, in the preparation of any information reasonably
necessary or incidental to such Assignment or Participation with respect to the
Collateral which is reasonably within the possession or control of Borrower or
is obtainable by Borrower and shall in good faith enter into any amendments to
this Agreement and/or the other Loan Documents and execute and deliver a new
Note or Notes to the assignee, all as necessary to
66
accomplish the Assignment or Participation provided, however, that such
cooperation shall be conditioned upon (a) Borrower incurring no additional
liability or obligation as a result of such Assignment or Participation and (b)
all costs related to such cooperation, and all costs incurred by Agent as a
result of such Assignment or Participation, shall be paid by Agent (including,
without limitation, all reasonable out of pocket costs incurred by Borrower
related thereto).
(W) APPRAISAL. Not later than thirty (30) days following the
Closing Date, Borrower shall deliver to the Agent an Appraisal prepared by an
Appraiser for the Mortgaged Property in form and substance reasonably acceptable
to the Agent.
(X) INSURANCE.
(i) Borrower, at its sole cost and expense, shall keep the
Improvements and Equipment with respect to the Mortgaged Property
insured during the term of the Loan with the coverage and in the
amounts required under this Agreement for the mutual benefit of
Borrower, the Agent for the benefit of the Lenders against loss or
damage by fire and against loss or damage by other risks and hazards
covered by a standard extended coverage insurance policy (including,
without limitation, riot and civil commotion, vandalism, malicious
mischief, burglary and theft on the "Special Form" (formerly an "All
Risk" form). Such insurance shall be in an amount (i) equal to at least
then full replacement cost of the Improvements and Equipment (exclusive
of the cost of foundations and footings), without deduction for
physical depreciation, and (ii) such that the insurer would not deem
Borrower a co-insurer under said policies. The policies of insurance
carried in accordance with this SECTION 5.1(X) shall be paid not less
than thirty (30) days in advance and shall contain the "Replacement
Cost Endorsement" with a waiver of depreciation.
(ii) Borrower, at its sole cost and expense, for the mutual
benefit of Borrower and the Agent, shall also obtain and maintain or
cause to be obtained and maintained during the entire term of the Loan
the following policies of insurance for the Mortgaged Property:
(1) flood insurance, if any part of the Mortgaged
Property is located in an area identified by the Federal
Emergency Management Agency as an area having special flood
hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968 (and any
amendment or successor act thereto) in an amount at least
equal to the maximum limit of coverage available with respect
to the Improvements and Equipment under said Act;
(2) commercial general liability insurance, including
broad form property damage, blanket contractual and personal
injuries (including death resulting therefrom) coverages and
containing minimum limits per occurrence of $1,000,000 and
with umbrella liability coverage of $15,000,000;
67
(3) business interruption insurance (including rental
value) in an annual aggregate amount equal to the estimated
Gross Revenues from the Leases of the Mortgaged Property
(including, without limitation, the loss of all Rents and
additional Rents payable by all of the lessees under the
Leases (whether or not such Leases are terminable in the event
of a fire or casualty)), such insurance to cover losses for a
period of at least one year after the date of the fire or
casualty in question and to be increased or decreased, as
applicable, from time to time during the term of the Loan (but
not more than once in any 12 month period) if, and when, the
Gross Revenues from the Leases of the Mortgaged Property
materially increase or decrease, as applicable (including,
without limitation, increases from new Leases and renewal
Leases entered into in accordance with the terms of this
Agreement), to reflect all increased Rent and increased
additional Rent payable by all of the lessees under such
renewal Leases and all Rent and additional Rent payable by all
of the lessees under such new Leases;
(4) insurance against loss or damage from (x) leakage
of sprinkler systems and (y) explosion of steam boilers, air
conditioning equipment, high pressure piping, machinery and
equipment, pressure vessels or similar apparatus now or
hereafter installed in the Improvements (without exclusion for
explosions), in an amount reasonably required by the Agent;
(5) workers' compensation insurance coverage (in
amounts not less than the statutory minimums for all persons
employed by the Borrower, if any, and in compliance with all
other requirements of applicable local, state and federal law)
and "Employers Liability" insurance in amounts not less than
required by statute;
(6) provided that earthquake insurance coverage is
reasonably commercially available, earthquake insurance
coverage in an amount equal to $20,000,000; and
(7) such other insurance as may from time to time be
reasonably required by the Agent in order to protect its
interests with respect to the Loan and the Mortgage Property.
(iii) All policies of insurance (the "POLICIES") required
pursuant to this SECTION 5.1(X) (i) shall be issued by an insurer which
has a claims paying ability rating of not less than "A" (or the
equivalent) by Standard & Poor's and one other Rating Agency
satisfactory to the Agent or A:XII or better as to claims paying
ability by AM Best, (ii) other than with respect to workers'
compensation insurance coverage, shall name the Agent, for the benefit
of the Lenders, as additional insureds as their interests may appear
and contain a standard noncontributory mortgagee clause naming the
Agent (and/or such other party as may be designated by the Agent) as
the party to which all payments made by
68
such insurance company shall be paid, (iii) shall be maintained
throughout the term of the Loan without cost to the Agent, (iv) shall
contain such provisions as the Agent deems reasonably necessary or
desirable to protect its interest (including, without limitation,
endorsements providing that neither the Borrower, the Agent nor any
other party shall be a co-insurer under said Policies and that the
Agent shall receive at least thirty (30) days prior written notice of
any modification, reduction or cancellation), (v) shall contain a
waiver of subrogation against the Agent and (vi) shall be reasonably
satisfactory in form and substance to the Agent and reasonably approved
by the Agent as to amounts, form, risk coverage, deductibles, loss
payees and insureds. Borrower shall pay the premiums for such Policies
as the same become due and payable. Copies of said Policies, certified
as true and correct by Borrower, or insurance certificates thereof,
shall be delivered to the Agent. Not later than fifteen (15) Business
Days prior to the expiration date of each of the Policies, Borrower
will deliver to the Agent satisfactory evidence of the renewal of each
Policy. The insurance coverage required under this SECTION 5.1(X) may
be effected under a blanket policy or policies covering the Mortgaged
Property and other property and assets not constituting a part of the
Mortgaged Property; PROVIDED that any such blanket policy shall
specify, except in the case of general liability insurance, the portion
of the total coverage of such policy that is allocated exclusively to
the Mortgaged Property, and any sublimits in such blanket policy
applicable to the Mortgaged Property, which amounts shall not be less
than the amounts required pursuant to this SECTION 5.1(X) and which
shall in any case comply in all other respects with the requirements of
this SECTION 5.1(X).
(iv) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Borrower shall give
prompt notice thereof to the Agent.
(1) In case of loss covered by Policies, the Agent
may either (A) jointly with the Borrower settle and adjust any
claim or (B) allow the Borrower to agree with the insurance
company or companies on the amount to be paid upon the loss;
PROVIDED, that the Borrower may adjust losses aggregating not
in excess of $800,000 if such adjustment is carried out in a
commercially reasonable and timely manner, PROVIDED, FURTHER,
that if at the time of the settlement of such claim a monetary
Event of Default has occurred and is continuing, then the
Agent shall settle and adjust such claim without the consent
of the Borrower. In any such case the Agent shall and is
hereby authorized to collect and receipt for any such
Insurance Proceeds subject to and to the extent provided for
in this Agreement. The reasonable expenses incurred by the
Agent in the adjustment and collection of Insurance Proceeds
shall become part of the Indebtedness and be secured by the
Mortgage and shall be reimbursed by Borrower to the Agent upon
demand therefor.
(2) In the event of any insured damage to or
destruction of the Mortgaged Property or any part thereof
(herein called an "INSURED CASUALTY") where the aggregate
amount of the loss, as reasonably determined by an Independent
69
insurance adjuster, is less than ten percent (10%) of the Loan
Amount, and if, in the reasonable judgment of the Agent, the
Mortgaged Property can be restored within twelve (12) months
of settlement of the claim and at least twelve (12) months
prior to the Maturity Date to a condition at least equal to
the condition thereof that existed prior to the Insured
Casualty, or if the Agent otherwise elects to allow the
Borrower to restore the Mortgaged Property, then, if no Event
of Default shall have occurred and be continuing, the
Insurance Proceeds (after reimbursement of any reasonable
expenses incurred by the Agent in connection with the
collection of any applicable Insurance Proceeds) shall be made
available to pay or to reimburse the Borrower for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged
Property or part thereof subject to the Insured Casualty, as
provided for below. Borrower hereby covenants and agrees to
commence and diligently to prosecute such restoring,
repairing, replacing or rebuilding; PROVIDED, that Borrower
shall pay all costs (and if required by the Agent, Borrower
shall deposit the total thereof with the Agent in advance) of
such restoring, repairing, replacing or rebuilding in excess
of the Insurance Proceeds made available pursuant to the terms
hereof (the "DEFICIENT AMOUNT").
(3) Except as provided above, the Insurance Proceeds
collected upon any Insured Casualty shall be held in an
Eligible Account by the Agent and shall, at the option of the
Agent in its sole discretion, be applied to the payment of the
Indebtedness as provided in SECTION 2.12(f) of this Agreement
or applied to the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to
the Insured Casualty, in the manner set forth below.
(4) In the event that Insurance Proceeds (after
reimbursement of any reasonable expenses incurred by the Agent
in connection with the collection of any applicable Insurance
Proceeds), if any, shall be made available to the Borrower for
the restoring, repairing, replacing or rebuilding of the
Mortgaged Property, the Borrower covenants to restore, repair,
replace or rebuild the same to be of at least comparable value
as prior to such damage or destruction, all to be effected in
accordance with Legal Requirements and plans and
specifications approved in advance by the Agent, such approval
not to be unreasonably withheld or delayed. The Borrower shall
pay all costs (and if required by the Agent, the Borrower
shall deposit the total thereof with the Agent in advance) of
such restoring, repairing, replacing or rebuilding in excess
of the Insurance Proceeds made available pursuant to the terms
hereof.
(5) In the event the Borrower is entitled to the use
of or reimbursement out of Insurance Proceeds held by the
Agent, such proceeds shall be disbursed from time to time upon
the Agent (or at the Agent's election, the Collateral Agent)
being furnished with (A) evidence reasonably satisfactory to
it of the estimated cost of
70
completion of the restoration, repair, replacement and
rebuilding, (B) funds, or, at the Agent's option, assurances
reasonably satisfactory to the Agent that such funds are
available and sufficient in addition to the Insurance Proceeds
to complete the proposed restoration, repair, replacement and
rebuilding, and (C) such architect's certificates, waivers of
lien, contractor's sworn statements, title insurance
endorsements, bonds and other evidences of cost, payment and
performance of the foregoing repair, restoration, replacement
or rebuilding as the Agent may reasonably require and approve.
The Agent may, in any event, require that all plans and
specifications for such restoration, repair, replacement and
rebuilding be submitted to and approved by the Agent prior to
commencement of work, such approval not to be unreasonably
withheld or delayed. All proceeds of rental or business
interruption insurance shall be administered in accordance
with SECTION 2.12(a) of this Agreement. The Agent may retain a
construction consultant to inspect such work and review the
Borrower's request for payments and the Borrower shall, on
demand by the Agent, reimburse the Agent for the reasonable
fees and disbursements of such consultant. No payment made
prior to the final completion of the restoration, repair,
replacement and rebuilding shall exceed ninety percent (90%)
of the value of the work performed from time to time (except
for restoration work on a trade by trade basis in which event,
payment may be made in full upon the completion of such work);
funds other than Insurance Proceeds shall be disbursed prior
to disbursement of such proceeds; and, at all times, the
undisbursed balance of such proceeds remaining in the accounts
of the Agent, together with funds deposited for that purpose
or irrevocably committed to the repayment of the Agent by or
on behalf of the Borrower for that purpose, shall be at least
sufficient in the reasonable judgment of the Agent to pay for
the cost of completion of the restoration, repair, replacement
or rebuilding, free and clear of all liens or claims for lien,
except for Permitted Encumbrances. Any surplus which may
remain out of Insurance Proceeds held by the Agent after
payment of such costs of restoration, repair, replacement or
rebuilding shall be paid to the Borrower so long as no Event
of Default has occurred and is continuing.
(v) Borrower shall not carry separate insurance, concurrent in
kind or form or contributing in the event of loss, with any insurance
required under this Agreement; PROVIDED, HOWEVER, that notwithstanding
the foregoing, Borrower may carry insurance not required under this
Agreement if any such insurance affecting the Mortgaged Property shall
be for the mutual benefit of Borrower and the Agent, as their
respective interests may appear, and shall be subject to all other
provisions of this SECTION 5.1(X).
(Y) CONDEMNATION.
(i) Borrower shall promptly give the Agent written notice of
the actual or threatened commencement of any proceeding for a Taking
and shall deliver to the Agent
71
copies of any and all papers served in connection with such
proceedings. The Agent is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain any Condemnation Proceeds for said Taking.
With respect to any compromise or settlement in connection with such
proceeding, the Agent will jointly with Borrower compromise and reach
settlement unless at the time of such Taking a monetary Event of
Default has occurred, in which event the Agent shall compromise and
reach settlement without the consent of Borrower. Notwithstanding the
foregoing provisions of this SECTION 5.1(Y), Borrower is authorized to
negotiate, compromise and settle, without participation by the Agent,
Condemnation Proceeds of up to $800,000 in connection with any Taking.
Notwithstanding any Taking, Borrower shall continue to pay the
Indebtedness at the time and in the manner provided for in this
Agreement and the other Loan Documents and the Indebtedness shall not
be reduced except in accordance therewith.
(ii) Borrower shall cause the Condemnation Proceeds to be paid
directly to the Agent as provided in SECTION 2.12(f) of this Agreement.
The Agent may, in its reasonable discretion, apply any such
Condemnation Proceeds to the reduction or discharge of the Indebtedness
(whether or not then due and payable). If Condemnation Proceeds in
respect of such Taking are applied to the payment of the Indebtedness
as provided for in this Agreement, Borrower shall be relieved of any
duty to restore, repair, replace or rebuild the Mortgaged Property.
(iii) With respect to a Taking in part, which shall mean any
Taking which does not render the Mortgaged Property physically or
economically unsuitable in the reasonable judgment of the Agent for the
use to which it was devoted prior to the Taking, Borrower shall cause
the Condemnation Proceeds to be paid to the Agent or deposited into the
applicable account pursuant to the provisions of this Agreement, to be
applied to the cost of repairing, replacing, restoring or rebuilding
the Mortgaged Property as follows:
(1) Provided that Condemnation Proceeds shall be made
available to Borrower for the restoring, repairing, replacing
or rebuilding of the Mortgaged Property, Borrower hereby
covenants to restore, repair, replace or rebuild the same to
be of at least comparable value and, to the extent
commercially practicable, of substantially the same character
as prior to the Taking, all to be effected in accordance with
applicable law and plans and specifications approved in
advance by the Agent, such approval not to be unreasonably
withheld or delayed. Borrower shall pay all costs (and if
required by the Agent, Borrower shall deposit the total
thereof with the Agent in advance) of such restoring,
repairing, replacing or rebuilding in excess of the
Condemnation Proceeds made available pursuant to the terms
hereof.
72
(2) The Condemnation Proceeds held by the Agent shall
be held in an Eligible Account and shall be disbursed from
time to time upon the Agent (or at the Agent's election, the
Collateral Agent) being furnished with (A) evidence reasonably
satisfactory to it of the estimated cost of completion of the
restoration, repair, replacement and rebuilding, (B) funds,
or, at the Agent's option, assurances satisfactory to the
Agent that such funds are available and sufficient in addition
to the Condemnation Proceeds to complete the proposed
restoration, repair, replacement and rebuilding, and (C) such
architect's certificates, waivers of lien, contractor's sworn
statements, title insurance endorsements, bonds and other
evidences of cost, payment and performance of the foregoing
repair, restoration, replacement or rebuilding as the Agent
may reasonably require and approve. The Agent may, in any
event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted
to and approved by the Agent prior to commencement of work,
which approval shall not be unreasonably withheld or delayed.
The Agent may retain a construction consultant to inspect such
work and review the Borrower's request for payments and the
Borrower shall, on demand by the Agent, reimburse the Agent
for the reasonable fees and disbursements of such consultant.
No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed
ninety percent (90%) of the value of the construction work
performed from time to time; funds other than Condemnation
Proceeds shall be disbursed prior to disbursement of such
proceeds; and at all times, the undisbursed balance of such
proceeds remaining in the hands of the Agent, together with
funds deposited for that purpose or irrevocably committed to
the repayment of the Agent by or on behalf of the Borrower for
that purpose, shall be at least sufficient in the reasonable
judgment of the Agent to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear
of all liens or claims for lien. Any surplus which may remain
out of Condemnation Proceeds held by the Agent after payment
of such costs of restoration, repair, replacement or
rebuilding shall be paid to the Borrower so long as no Event
of Default has occurred and is continuing.
(3) If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by the Agent of
any such Condemnation Proceeds to which it is entitled
hereunder, the Agent shall have the right, whether or not a
deficiency judgment on the Note shall have been sought,
recovered or denied, to have reserved in any foreclosure
decree a right to receive said award or payment, or a portion
thereof sufficient to pay the Indebtedness. In no case shall
any such application reduce or postpone any payments otherwise
required pursuant to this Agreement, other than the final
payment on the Note.
(Z) LEASES AND RENTS.
73
(i) Borrower absolutely and unconditionally assigns
to the Agent, Borrower's right, title and interest in all current and
future Leases and Rents, it being intended by Borrower that this
assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Such assignment to the Agent
shall not be construed to bind the Agent to the performance of any of
the covenants, conditions or provisions contained in any such Lease or
otherwise impose any obligation upon the Agent. Borrower shall execute
and deliver to the Agent such additional instruments, in form and
substance reasonably satisfactory to the Agent, as may hereafter be
reasonably requested in writing by the Agent to further evidence and
confirm such assignment. Nevertheless, subject to the terms of this
SECTION 5.1(Z), the Agent grants to Borrower a license to lease, own,
maintain, operate and manage the Mortgaged Property and to collect, use
and apply the Rent, which license is revocable upon the occurrence of
an Event of Default under this Agreement. Any portion of the Rents held
by Borrower shall be held in trust for the benefit of the Agent for use
in the payment of the Indebtedness. Upon the occurrence of an Event of
Default and during the continuance thereof, the license granted to
Borrower herein shall automatically be revoked, and the Agent shall
immediately be entitled to possession of all Rents, whether or not the
Agent enters upon or takes control of the Mortgaged Property. The Agent
is hereby granted and assigned by Borrower the right, at its option,
upon revocation of the license granted herein, to enter upon the
Mortgaged Property in person, by agent or by court-appointed receiver
to collect the Rents. Any Rents collected after the revocation of the
license shall be applied toward payment of the Indebtedness in the
priority and proportions set forth in SECTION 2.8 hereof or otherwise
as the Agent in its discretion shall deem proper.
(ii) All Leases entered into by the Borrower shall
provide for rental rates comparable to then-existing local market rates
and terms and conditions commercially reasonable and consistent with
then-prevailing local market terms and conditions for similar type
properties in similar condition. With respect to any Lease for more
than 50,000 square feet, Borrower shall not enter into any such Leases,
without the prior written consent of the Agent, such consent not to be
unreasonably withheld or delayed. Borrower shall furnish the Agent with
(1) detailed term sheets in advance in the case of any Leases,
modifications, amendments or renewals for which Agent's consent is
required and (2) in the case of any other Leases, executed copies of
such Leases upon written request. All renewals or amendments or
modifications of Leases which do not satisfy the requirements of the
first sentence of this SECTION 5.1(Z)(ii) shall be subject to the prior
approval of the Agent. All Leases executed after the date hereof shall
provide that they are subordinate to the Mortgage and that the lessee
agrees to attorn to the Agent. The Agent shall, upon the request of any
tenant occupying space in excess of 50,000 square feet, execute and
deliver a non-disturbance agreement in form reasonably satisfactory to
the Agent. Borrower (i) shall observe and perform all of the material
obligations imposed upon the lessor under the Leases and shall not do
or permit to be done anything to materially impair the value of the
Leases as security for the Indebtedness; (ii) shall promptly send
copies to the Agent of
74
all written notices of default which Borrower shall send or receive
thereunder; (iii) shall enforce all of the material terms, covenants
and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed and shall effect a termination
or diminution of the obligations of tenants under leases, only in a
manner that a prudent owner of a similar property to the Mortgaged
Property would enforce such terms covenants and conditions or effect
such termination or diminution in the ordinary course of business; (iv)
shall not collect any of the Rents more than one (1) month in advance;
(v) shall not execute any other assignment of lessor's interest in the
Leases or Rents; and (vi) shall not convey or transfer or suffer or
permit a conveyance or transfer of the Mortgaged Property or of any
interest therein so as to effect a merger of the estates and rights of,
or a termination or diminution of the obligations of, lessees
thereunder.
(iii) Borrower shall deposit security deposits of
lessees which are turned over to or for the benefit of Borrower or
otherwise collected by or on behalf of Borrower, into an Eligible
Account with the same name as the Collection Accounts. Any bond or
other instrument which the Borrower is permitted to hold in lieu of
cash security deposits under any applicable Legal Requirements shall be
maintained in full force and effect unless replaced by cash deposits as
hereinabove described, shall, if permitted pursuant to Legal
Requirements, name the Agent as payee or mortgagee thereunder (or at
the Agent's option, be fully assignable to the Agent) and shall, in all
respects, comply with any applicable Legal Requirements and otherwise
be reasonably satisfactory to the Agent. Borrower shall, upon request,
provide the Agent with evidence reasonably satisfactory to the Agent of
the Borrower's compliance with the foregoing. Upon the occurrence and
during the continuance of any Event of Default, Borrower shall, upon
the Agent's request, if permitted by any applicable Legal Requirements,
turn over to the Agent the security deposits (and any interest
theretofore earned thereon) with respect to all or any portion of the
Mortgaged Property, to be held by the Agent subject to the terms of the
Leases.
(AA) MAINTENANCE OF MORTGAGED PROPERTY. Borrower shall cause
the Mortgaged Property to be maintained in a good and safe condition and repair,
subject to wear and tear and damage caused by casualty or condemnation. The
Improvements and the Equipment shall not be removed, demolished or altered
(except for (a) normal replacement of the Equipment or (b) pursuant to Leases in
effect from time to time or (c) for removals, demolition or alterations that
cost up to $250,000) without the consent of the Agent, such consent not to be
unreasonably withheld or delayed. Except with respect to an Insured Casualty
which shall be governed by the terms and conditions provided herein, Borrower
shall (or, in the case of commercial tenants, shall cause such tenants to)
promptly repair, replace or rebuild any part of the Mortgaged Property that
becomes damaged, worn or dilapidated. Borrower shall or shall cause their
tenants to complete and pay for any structure at any time in the process of
construction or repair on the Land. Borrower shall not initiate, join in, or
consent to any change in any private restrictive covenant, zoning law or other
public or private restriction, limiting or defining the uses which may be made
of the Mortgaged Property or any part thereof, without consent of the Agent. If
under applicable
75
zoning provisions the use of all or any portion of the Mortgaged Property is or
shall become a nonconforming use, Borrower will not cause or permit such
nonconforming use to be discontinued or abandoned without the express written
consent of the Agent, such consent not to be unreasonably withheld or delayed.
Borrower shall not (i) change the use of the Land in any material respect, (ii)
permit or suffer to occur any waste on or to the Mortgaged Property or to any
portion thereof or (iii) take any steps whatsoever to convert the Mortgaged
Property, or any portion thereof, to a condominium or cooperative form of
ownership or management.
(BB) CONVERSION RIGHT. The Borrower hereby acknowledges and
agrees that the Agent shall have a one-time right during the term of the Loan to
bifurcate the Loan into (a) a senior loan secured by the Mortgage (modified as
necessary in connection with such bifurcation) (the "FIRST MORTGAGE LOAN") and
(b) a mezzanine loan to Guarantor secured by a pledge agreement substantially in
the form of EXHIBIT L (the "MEZZANINE LOAN"), PROVIDED that the weighted average
interest rate on the First Mortgage Loan and the Mezzanine Loan shall not exceed
the existing rate on the Loan. The Borrower agrees that it shall, and it shall
cause the Guarantor to, cooperate in all respects with the Agent in the
bifurcation of the Loan including, without limitation, amending this Agreement
and the other Loan Documents, and executing such additional documents, as
reasonably may be required by the Agent); PROVIDED that all reasonable costs
incurred by the Borrower (including, without limitation, legal fees and
expenses) in so cooperating with the Agent shall be borne by the Agent.
(CC) SUBORDINATION AND NON-DISTURBANCE AGREEMENT. If, prior to
the Closing Date, Borrower has not obtained a subordination, non-disturbance and
attornment agreement from any tenant under any Lease, Borrower shall make
commercially reasonable efforts after the Closing Date to obtain such an
agreement from such tenant in form and substance reasonably acceptable to the
Agent.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. NEGATIVE COVENANTS. Borrower covenants and agrees
that, until payment in full of the Indebtedness, it will not do, directly or
indirectly (and, as to a Transfer of interests in Borrower, no direct or
indirect owner of such interests shall do), any of the following unless the
Agent consents thereto in writing:
(A) LIENS ON THE MORTGAGED PROPERTY. Incur, create, assume,
become or be liable in any manner with respect to, or, except as expressly
permitted by or pursuant to the Mortgages, permit to exist, any Lien with
respect to the Mortgaged Property, except: (i) Liens in favor of the Lenders and
(ii) the Permitted Encumbrances.
76
(B) TRANSFER. Except as expressly permitted by or pursuant to
this Agreement or the Mortgage, own any real property other than the Mortgaged
Property or Transfer or permit to be Transferred the Mortgaged Property or any
portion thereof or interest therein or any direct or indirect ownership
interests in the Borrower.
(C) OTHER BORROWINGS. Incur, create, assume, become or be
liable in any manner with respect to Other Borrowings, except that the Borrower
may (i) incur secured or unsecured indebtedness relating solely to financing of
trade payables, the acquisition of goods, services and supplies (including, but
not limited to reasonable attorney's fees and costs) used in the ordinary course
of Borrower's business or the acquisition or leasing of Equipment used in the
ordinary course of Borrower's business, to the extent that such loans or leases
are ordinary and customary in the industry of operating properties similar to
the Mortgaged Property, and the proceeds of which are not distributed to
Borrower except as reimbursement for monies expended by Borrower to pay for
trade payables, the acquisition of goods, services and supplies and to fund the
financing, acquisition or leasing of such Equipment, (ii) incur loans from the
Member or its Affiliates; PROVIDED that (a) such loans are subordinate to the
Loan and unsecured, (b) the terms of such loans provide that the Member shall
not take any judicial or non-judicial action to commence any foreclosure
proceeding with respect thereto for so long as any of the Indebtedness remains
outstanding, (c) the proceeds of such loans are used by Borrower to pay expenses
(including operating expenses) or closing costs relating to the Mortgaged
Property, to fund the Account Collateral, to acquire Equipment or to make
interest payments on the Loan, and (d) such loans are on terms satisfactory to
the Agent on behalf of the Lenders, or (iii) incur other indebtedness previously
approved by the Agent in its reasonable discretion.
(D) DISSOLUTION; MERGER OR CONSOLIDATION. Dissolve, terminate,
liquidate, merge with or consolidate into another Person.
(E) CHANGE IN BUSINESS. Cease to be a Single-Purpose Entity,
or make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
(F) DEBT CANCELLATION. Cancel or otherwise forgive or release
any material claim or debt owed to such Person by any other Person, except for
adequate consideration or in the ordinary course of its business.
(G) AFFILIATE TRANSACTIONS. Enter into, or be a party to, any
transaction with an Affiliate of the Borrower, except in the ordinary course of
business and on terms which are fully disclosed to the Agent in advance and are
no less favorable to the Borrower than would be obtained in a comparable arm's
length transaction with an unrelated third party.
(H) CREATION OF EASEMENTS. Except as expressly permitted by or
pursuant to the Mortgage or this Agreement, create, or permit the Mortgaged
Property or any part thereof to
77
become subject to, any easement, license or restrictive covenant, other than a
Permitted Encumbrance (the Agent agreeing not to unreasonably withhold or delay
any consent requested by Borrower pursuant to this Section 6.1(H)).
(I) MISAPPLICATION OF FUNDS. Distribute any Rents or Moneys
received from Accounts in violation of the provisions of SECTION 2.12, or fail
to deliver any security deposit to the Manager, or misappropriate any security
deposit or portion thereof.
(J) CERTAIN RESTRICTIONS. Enter into any agreement which
expressly restricts its ability to enter into amendments, modifications or
waivers of any of the Loan Documents.
(K) ASSIGNMENT OF LICENSES AND PERMITS. Assign or transfer any
of its interest in any Permits pertaining to the Mortgaged Property, or assign,
transfer or remove or permit any other Person to assign, transfer or remove any
records pertaining to the Mortgaged Property, except as otherwise permitted
hereunder.
(L) PLACE OF BUSINESS. Change its chief executive office or
its principal place of business without giving the Agent at least fifteen (15)
days' prior written notice thereof and promptly providing the Agent such
information as the Agent may reasonably request in connection therewith.
(M) LEASES. Enter into, amend or cancel Leases, except as
permitted by or pursuant to this Agreement.
(N) MANAGEMENT AGREEMENT. (i) Terminate or cancel the
Management Agreement except in accordance with this Agreement, (ii) consent to
either the reduction of the term of or the assignment of the Management
Agreement, (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement, or (iv) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, the Management Agreement in any material respect; PROVIDED, HOWEVER, that
if a Management Agreement is terminated and a successor manager is not appointed
to manage the Mortgaged Property within three (3) months of the date of
termination, then the Agent may appoint a successor manager.
(O) PLANS AND WELFARE PLANS. Knowingly (i) engage in or permit
any transaction in connection with which the Borrower or any ERISA Affiliate is
reasonably likely to be subject to either a material civil penalty or tax
assessed pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the
Code, (ii) permit any Welfare Plan to provide benefits (including, without
limitation, medical benefits (whether or not insured)), with respect to any of
its current or former employees beyond his or her retirement or other
termination of service other than (a) coverage mandated by applicable law, (b)
death or disability benefits that have been fully provided for by paid up
insurance or otherwise or (c) severance benefits, (iii) permit its assets to
become "plan
78
assets", whether by operation of law or under regulations promulgated under
ERISA or (iv) adopt, amend (except as may be required by applicable law or to
maintain tax qualified status) or increase the amount of any benefit or amount
payable under, or permit any ERISA Affiliate to adopt, amend (except as may be
required by applicable law or to maintain tax qualified status) or increase the
amount of any benefit or amount payable under, any Plan or Welfare Plan, except
for normal increases in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in its
benefits expense to Borrower or any ERISA Affiliate.
ARTICLE VII
EVENT OF DEFAULT
Section 7.1. EVENT OF DEFAULT. The occurrence of one or more
of the following events shall be an "EVENT OF DEFAULT" hereunder:
(i) if on any Payment Date the Borrower fails to pay any
accrued and unpaid interest on the Loan or any other principal amount
referred to in SECTION 2.12(b) then due and payable in accordance with
the provisions hereof (except that such failure shall not be an Event
of Default up to two times during each consecutive twelve (12) month
period commencing on the Closing Date for the greater of ten (10)
calendar days after any such Payment Date and five (5) Business Days
after written notice of such failure from the Agent and, with respect
to the third and any additional failure during each such twelve-month
period, for ten (10) calendar days after any such Payment Date (without
the requirement of delivery of written notice));
(ii) if Borrower fails (a) to pay the outstanding Indebtedness
on the Maturity Date or the fees payable to the Collateral Agent on any
Payment Date, (b) to deposit into the Collection Account, the amount
required pursuant to SECTION 2.7(a) or 2.7(b), respectively or (c) to
reduce the outstanding Principal Indebtedness by the amount payable on
any Payment Date or Business Day pursuant to SECTION 2.7(a) or 2.7(b),
respectively;
(iii) if Borrower fails to pay any other amount payable
pursuant to this Agreement or any other Loan Document when due and
payable in accordance with the provisions hereof or thereof, as the
case may be, and such failure continues for ten (10) Business Days
after the Agent delivers written notice thereof to Borrower;
(iv) if any representation or warranty made herein or in any
other Loan Document, or in any report, certificate, financial statement
or other Instrument, agreement or document furnished by the Borrower or
a Member or the Manager in connection with this Agreement, the Note or
any other Loan Document executed and delivered by any such
79
Person, shall be false as of the date such representation or warranty
was made and shall continue to be false sixty (60) days after notice
from the Agent;
(v) if the Borrower or the Guarantor makes an assignment for
the benefit of creditors;
(vi) if a receiver, liquidator or trustee shall be appointed
for the Borrower or the Guarantor or if the Borrower or the Guarantor
shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by
or against, consented to, or acquiesced in by, the Borrower or the
Guarantor, or if any proceeding for the dissolution or liquidation of
the Borrower or the Guarantor shall be instituted; PROVIDED, HOWEVER,
that if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by the Borrower or the Guarantor, upon
the same not being discharged, stayed or dismissed within sixty (60)
days, or if the Borrower or the Guarantor shall generally not be paying
its debts as they become due;
(vii) except in accordance with this Agreement, if the
Borrower attempts to delegate its obligations or assign its rights
under this Agreement, any of the other Loan Documents or any interest
herein or therein, or if any Transfer occurs;
(viii) if any provision of an Organization Agreement affecting
the purpose for which the Borrower is formed is amended or modified in
a manner which is reasonably likely to have a Material Adverse Effect,
the Agent or Collateral Agent, or if the Borrower fails to perform or
enforce the provisions of the Organizational Agreement and such failure
is reasonably likely to have a Material Adverse Effect or attempts to
dissolve without Agent's consent;
(ix) if an Event of Default as defined or described in the
Note, the Mortgage or any other Loan Document occurs (whether as to the
Borrower or the Mortgaged Property or any portion thereof); or
(x) if the Borrower shall continue to be in Default under any
of the other terms, covenants or conditions of this Agreement, the
Note, the Mortgage or the other Loan Documents (other than SECTION
6.1(P)), for thirty (30) days after notice from the Agent or its
successors or assigns, in the case of any other Default (unless
otherwise provided herein or in such other Loan Document); provided,
HOWEVER, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and the
Borrower shall have commenced to cure such Default within such thirty
(30) day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) day period shall be extended for an
additional reasonable period not to exceed sixty (60) days in total.
80
then, upon the occurrence of any such Event of Default and at any time
thereafter, the Agent or any Lender or its successors or assigns, may, in
addition to any other rights or remedies available to it pursuant to this
Agreement, the Note, the Mortgage and the other Loan Documents, or at law or in
equity, take such action, without further notice or demand, as the Agent or any
Lender or its successors or assigns, deems advisable to protect and enforce its
rights against Borrower and in and to all or any portion of the Mortgaged
Property (including, without limitation, declaring the entire Indebtedness to be
immediately due and payable) and may enforce or avail itself of any or all
rights or remedies provided in the Loan Documents against the Borrower and/or
the Mortgaged Property (including, without limitation, all rights or remedies
available at law or in equity).
Section 7.2. REMEDIES. (a) Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers, other remedies available
to the Agent or the Lenders against Borrower or any other Person under this
Agreement, the Note, the Mortgage or any of the other Loan Documents or at law
or in equity may be exercised by Lenders at any time and from time to time,
whether or not all or any portion of the Indebtedness shall be declared due and
payable, and whether or not the Agent shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to all or any portion of the Mortgaged
Property. Any such actions taken by the Agent shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as the Agent may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of the Agent and the Lenders
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents.
(a) In the event of the foreclosure or other action by the
Agent or any Lender to enforce its remedies in connection with all or any
portion of the Mortgaged Property, the Agent shall apply all Net Proceeds
received to repay the Indebtedness in accordance with SECTION 2.8, the
Indebtedness shall be reduced to the extent of such Net Proceeds and the
remaining portion of the Indebtedness shall remain outstanding and secured by
the Mortgage and the other Loan Documents, it being understood and agreed by the
Borrower that the Borrower is liable, subject to SECTION 8.24, for the repayment
of all the Indebtedness.
(b) Upon the occurrence and during the continuance of any
Event of Default, Agent shall have the right, in addition to any other rights or
remedies of Agent hereunder or under the other Loan Documents, but not the
obligation, in its own name or in the name of Borrower, to enter into possession
of all or any portion of the Mortgaged Property, to perform all work necessary
to complete the construction, reconstruction, maintenance or renovation of the
Mortgaged Property or to operate all or any portion of the Mortgaged Property
and to employ watchmen and other safeguards to protect the Mortgaged Property.
Borrower hereby appoints Agent as its attorney-in-fact, if Agent elects to do
so, at any time upon the occurrence and during the continuance of any Event of
Default, (i) to use such sums as are necessary to make such
81
alteration, repairs and renovations to all or any portion of the Project and to
employ such architects, engineers and contractors as may be required for the
purpose of completing any construction, reconstruction, maintenance or
renovation of all or any portion of the Mortgaged Property or for the operation
of the Mortgaged Property or any portion thereof, (iii) to endorse the name of
Borrower on any checks or drafts representing proceeds of the insurance policies
or condemnation awards, or other checks or instruments payable to the Borrower
with respect to the Mortgaged Property, (iv) to do every act with respect to the
alteration, repair or renovation of or the construction, repair, maintenance and
operation of the Mortgaged Property or any portion thereof which Borrower
otherwise may do, and (v) to prosecute or defend any action or proceeding
incident to the Mortgaged Property. The power-of-attorney granted hereby is a
power coupled with an interest and is irrevocable. Agent shall have no
obligation to undertake any of the foregoing actions, but if Agent should do so,
it shall have no liability to Borrower for the sufficiency or adequacy of any
such actions taken by Agent, except with respect to liability arising from
Agent's gross negligence, willful misconduct or failure to comply with Legal
Requirements. Notwithstanding the foregoing, it is expressly understood that
Agent assumes no liability or responsibility for (i) performance of any duties
of the Borrower hereunder or under any of the Loan Documents or (ii) any other
matters pertaining to control over the management and affairs of the Borrower,
nor by any such action shall Agent be deemed to create a partnership or joint
venture with the Borrower.
Section 7.3. REMEDIES CUMULATIVE. The rights, powers and
remedies of the Agent or any Lender under this Agreement shall be cumulative and
not exclusive of any other right, power or remedy which the Agent or any Lender
may have against Borrower or any other Person pursuant to this Agreement or any
of the other Loan Documents or existing at law or in equity or otherwise. The
Agent or any Lender's rights, powers and remedies may be pursued singly,
concurrently or otherwise, at such time and in such order as the Agent may
determine in the Agent's sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of any Default or Event of Default shall not be
construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon. Notwithstanding any other
provision of this Agreement, the Agent for the benefit of the Lenders reserves
the right to seek a deficiency judgment or preserve a deficiency claim, in
connection with the foreclosure of a Mortgage on any of the Mortgaged Property,
to the extent necessary to foreclose on other parts of the Mortgaged Property.
Section 7.4. DEFAULT ADMINISTRATION FEE. At any time after the
occurrence of an Event of Default and the acceleration of the Indebtedness, as
reimbursement and compensation for the additional internal expenditures,
administrative expenses, fees and other costs associated with actions to be
taken in connection with such Event of Default, and regardless of whether the
Agent shall have commenced the exercise of any remedies pursuant to SECTION 7.2,
the Default Administration Fee shall be payable by Borrower to the Agent for the
benefit of the Lenders upon
82
demand; provided, that the Default Administration Fee and interest thereon shall
not be payable in connection with any repayment or prepayment of the Principal
Indebtedness after the occurrence of such Event of Default and prior to its
cure, in the event the Borrower shall be paying the Refinancing Fee together
with such repayment or prepayment.
Section 7.5. WAIVER OF AUTOMATIC STAY. IN THE EVENT THE
BORROWER OR THE MEMBER SHALL (I) FILE A PETITION WITH ANY COURT OF COMPETENT
JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER THE BANKRUPTCY CODE, (II)
BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE BANKRUPTCY CODE, (III)
FILE OR BE THE SUBJECT OF ANY PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY
PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY,
INSOLVENCY, OR OTHER RELIEF, (IV) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN
THE APPOINTMENT OF ANY TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR FOR ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS, OR (V) BE THE SUBJECT OF ANY ORDER, JUDGMENT,
OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING A PETITION
FILED AGAINST THE BORROWER OR ANY MEMBER FOR ANY REORGANIZATION, ARRANGEMENT,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY
PRESENT OR FUTURE FEDERAL OR STATE LAW RELATING TO BANKRUPTCY, INSOLVENCY OR
REORGANIZATION FOR THE BORROWER OR THE MEMBER, THEN, AGENT SHALL THEREUPON BE
ENTITLED TO OBTAIN AND THE BORROWER OR THE MEMBER, AS THE CASE MAY BE, TO THE
FULLEST EXTENT PERMITTED BY LAW, IRREVOCABLY AND UNCONDITIONALLY CONSENT TO
GRANT AGENT IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF
THE BANKRUPTCY CODE, OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND
REMEDIES WHICH WOULD OTHERWISE BE AVAILABLE TO AGENT AS PROVIDED IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS AND AS OTHERWISE PROVIDED BY LAW, AND
BORROWER AND THE MEMBER, AS THE CASE MAY BE, TO THE EXTENT PERMITTED BY LAW,
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THEIR RIGHT TO OBJECT TO SUCH
RELIEF.
83
ARTICLE VIII
MISCELLANEOUS
Section 8.1. SURVIVAL. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, the making by the initial Lender of the Loan hereunder and the
execution and delivery by Borrower to the initial Lender of the Note, and shall
continue in full force and effect so long as any portion of the Indebtedness is
outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party. All covenants, promises and agreements in this Agreement
contained, by or on behalf of Borrower, shall inure to the benefit of the
respective successors and assigns of the Agent and each Lender. Nothing in this
Agreement or in any other Loan Document, express or implied, shall give to any
Person other than the parties and the holder of the Note, the Mortgage and the
other Loan Documents, and their legal representatives, successors and assigns,
any benefit or any legal or equitable right, remedy or claim hereunder.
Section 8.2. AGENT'S DISCRETION. Whenever pursuant to this
Agreement, Lenders exercise any right given to approve or disapprove, or any
arrangement or term is to be satisfactory to the Agent, the decision of the
Agent to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of the Agent and shall be final and
conclusive.
Section 8.3. GOVERNING LAW. (a) This Agreement was negotiated
in New York, and made by the initial Lender and accepted by Borrower in the
State of New York, and the proceeds of the Note delivered pursuant hereto were
disbursed from New York, which State the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby,
and in all respects (including, without limitation, matters of construction,
validity and performance), this Agreement and the obligations arising hereunder
shall be governed by, and construed in accordance with, the laws of the State of
New York applicable to contracts made and performed in such State and any
applicable law of the United States of America.
(a) Any legal suit, action or proceeding against the Lenders
or Borrower arising out of or relating to this Agreement shall be instituted in
any federal or state court in New York, New York. Borrower hereby (i)
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum,
and (ii) irrevocably submits to the jurisdiction of any such court in any such
suit, action or proceeding.
84
Section 8.4. MODIFICATION, WAIVER IN WRITING. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, the Note or any other Loan Document, or consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.
Section 8.5. DELAY NOT A WAIVER. Neither any failure nor any
delay on the part of any Lender in insisting upon strict performance of any
term, condition, covenant or agreement, or exercising any right, power, remedy
or privilege hereunder, or under the Note, or of any other Loan Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement, the Note or any
other Loan Document, each Lender shall not be deemed to have waived any right
either to require prompt payment when due of all other amounts due under this
Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.
Section 8.6. NOTICES. All notices, consents, approvals and
requests required or permitted hereunder or under any other Loan Document shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) certified or registered United States mail, postage prepaid, or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed if to Lender at its address set forth on the first page
hereof, Attention: Xxxxx Xxxxx, if to Collateral Agent at its address set forth
on the first page hereof, and if to the Borrower at its address set forth on the
first page hereof, or at such other address and Person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this SECTION 8.6. A
copy of all notices, consents, approvals and requests directed to the Agent
shall be delivered to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxxxxxx, Esq.; a copy of all notices, consents,
approvals and requests directed to Borrower shall be delivered to (i) Ocwen
Capital Corporation, 0000 Xxxx Xxxx Xxxxx Xxxxx Xxxx., Xxxxx 0000, Xxxx Palm
Beach, Florida 33401, Attention: Secretary, phone no.: (000) 000-0000; fax no.:
(000) 000-0000, (ii) Ocwen Capital Corporation, 1675 West Palm Beach Xxxxx
Xxxx., Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx,
phone no.: (000) 000-0000; fax no.: (000) 000-0000 and (iii) Xxxxxx, Xxxx &
Xxxxxxxx LLP, Jamboree Center, 0 Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxxx Xxxxx, Esq., phone no.: (000) 000-0000; fax no.: (714)
000-0000; and a copy of all notices, consents, approvals and requests directed
to Collateral Agent shall be delivered to Collateral Agent at its address set
forth on the first page hereof, Attention: Xxxxxx Xxxxxxx. A
85
notice shall be deemed to have been given: in the case of hand delivery, at the
time of delivery; in the case of registered or certified mail, when delivered or
two Business Days after mailing; or in the case of expedited prepaid delivery
and telecopy, on the Business Day after the same was sent. A party receiving a
notice which does not comply with the technical requirements for notice under
this SECTION 8.6 may elect to waive any deficiencies and treat the notice as
having been properly given.
Section 8.7. TRIAL BY JURY. BORROWER, TO THE FULLEST EXTENT
THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH
RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.
Section 8.8. HEADINGS. The Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 8.9. ASSIGNMENT. Borrower may not sell, assign or
transfer any interest in the Loan Documents or any portion thereof (including,
without limitation, its rights, title, interests, remedies, powers and duties
hereunder and thereunder) without Agent's prior written consent. Each Lender
shall have the right, without the consent of Borrower, to assign or participate
this Agreement and/or any of the other Loan Documents and the obligations
hereunder to any Person (including, without limitation, in connection with a
securitization transaction of the Note, either alone or together with other debt
instruments). In the case of an Assignment by any Lender, (a) the assignee shall
have, to the extent of such Assignment, the same rights, benefits and
obligations as it would have if it were the original "Lender" hereunder and (b)
upon any such substitution of any Lender, a replacement or addition "Lender
signature page" shall be executed by Lender and attached to this Agreement and
thereupon become a part of this Agreement. Each potential assignee or
participant lender shall be required to sign a confidentiality agreement, which
shall provide for protection of all proprietary and confidential information of
Borrower and Guarantor. Subject to the preceding sentence, each participating
lender shall be entitled to receive all information received by the Agent under
this Agreement. The Borrower shall keep confidential to the same extent as such
potential assignee or participant lender shall have agreed in such
confidentiality agreement all information relating to such proposed Assignment
or Participation and the identity of such potential assignee or participant.
Notwithstanding anything in this Agreement to the contrary, after an Assignment
by any Lender, the "Lender" (prior to the Assignment) shall continue to have the
benefits of any rights or indemnifications and shall continue to have the
obligations contained herein which such Lender had during the period such party
was "Lender" hereunder.
Section 8.10. SEVERABILITY. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any
86
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
Section 8.11. PREFERENCES. The Lenders shall have no
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the obligations of Borrower pursuant to
this Agreement, the Note or any other Loan Document. The Lenders shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the obligations of Borrower hereunder,
PROVIDED that such application or reapplication is performed by the Lenders in
accordance with the terms of this Agreement or any other applicable Loan
Document. To the extent the Borrower makes a payment or payments to any Lender
for the Borrower's benefit, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by such
Lender.
Section 8.12. WAIVER OF NOTICE. Borrower shall not be entitled
to any notices of any nature whatsoever from any Lender or Collateral Agent
except with respect to matters for which this Agreement or the other Loan
Documents specifically and expressly provides for the giving of notice by such
Lender and/or Collateral Agent to Borrower and except with respect to matters
for which Borrower are not, pursuant to applicable Legal Requirements, permitted
to waive the giving of notice. Borrower hereby expressly waives the right to
receive any notice from any Lender and Collateral Agent with respect to any
matter for which this Agreement or the other Loan Documents does not
specifically and expressly provide for the giving of notice by such Lender or
Collateral Agent to Borrower.
Section 8.13. FAILURE TO CONSENT. If the Borrower shall seek
the approval by or consent of the Agent or the Lenders hereunder or under the
Note, or any of the other Loan Documents and the Agent or the Lenders shall fail
or refuse to give such consent or approval, the Borrower shall not be entitled
to any damages for any withholding or delay of such approval or consent by the
Agent or the Lenders, it being intended that the Borrower's sole remedy shall be
to bring an action for an injunction or specific performance which remedy for
injunction or specific performance shall be available only in those cases where
the Agent has expressly agreed hereunder or under the Note or under any of the
other Loan Documents not to unreasonably withhold or delay its consent or
approval.
Section 8.14. EXHIBITS INCORPORATED. The information set forth
on the cover, heading and recitals hereof, and the Exhibits attached hereto, are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
87
Section 8.15. OFFSETS, COUNTERCLAIMS AND DEFENSES. Any
assignee of any Lender's interest in and to this Agreement, the Note, the
Mortgage and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to this Agreement, the
Note, the Mortgage and the other Loan Documents which Borrower may otherwise
have against any assignor or this Agreement, the Note, the Mortgage and the
other Loan Documents, and no such unrelated counterclaim or defense shall be
interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon this Agreement, the Note, the Mortgage and other Loan
Documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.
Section 8.16. NO JOINT VENTURE OR PARTNERSHIP. Borrower and
each Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and any Lender nor to grant any Lender any interest in the Mortgaged Property
other than that of mortgagee or lender.
Section 8.17. WAIVER OF MARSHALLING OF ASSETS DEFENSE. To the
fullest extent Borrower may legally do so, Borrower waives all rights to a
marshalling of the assets of Borrower, and others with interests in Borrower,
and of the Mortgaged Property, or to a sale in inverse order of alienation in
the event of foreclosure of the interests hereby created, and agree not to
assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of any Lender under the Loan Documents to a sale of the
Mortgaged Property for the collection of the Indebtedness without any prior or
different resort for collection, or the right of any Lender to the payment of
the Indebtedness out of the Net Proceeds of the Mortgaged Property in preference
to every other claimant whatsoever.
Section 8.18. RESERVED.
Section 8.19. CONFLICT; CONSTRUCTION OF DOCUMENTS. In the
event of any conflict between the provisions of this Agreement and the
provisions of the Note, the Mortgage or any of the other Loan Documents, the
provisions of this Agreement shall prevail. The parties hereto acknowledge that
they were represented by counsel in connection with the negotiation and drafting
of the Loan Documents and that the Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Section 8.20. BROKERS AND FINANCIAL ADVISORS. Borrower and the
initial Lender hereby represent that they have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Subject to the preceding
sentence, Borrower and initial Lender hereby agree to indemnify and hold the
other and Collateral Agent harmless from and against any and all claims,
liabilities, costs and expenses
88
of any kind in any way relating to or arising from a claim by any Person that
such Person acted on behalf of the indemnifying party in connection with the
transactions contemplated herein. The provisions of this SECTION 8.20 shall
survive the expiration and termination of this Agreement and the repayment of
the Indebtedness.
Section 8.21. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the same
instrument.
Section 8.22. ESTOPPEL CERTIFICATES. Borrower and each Lender
hereby agree at any time and from time to time upon not less than fifteen (15)
days prior written notice by Borrower or such Lender to execute, acknowledge and
deliver to the party specified in such notice, a statement, in writing,
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
knowledge of such certifying party, any Default or Event of Default has occurred
and is then continuing, and, if so, specifying each such Default or Event of
Default; PROVIDED, HOWEVER, that it shall be a condition precedent to any
Lender's obligation to deliver the statement pursuant to this SECTION 8.22, that
such Lender shall have received, together with Borrower's request for such
statement, an Officer's Certificate stating that no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or Event
of Default).
Section 8.23. PAYMENT OF EXPENSES. Borrower shall pay all
Transaction Costs, which shall include, without limitation, (a) reasonable
out-of-pocket costs and expenses of Lenders in connection with (i) the
negotiation, preparation, execution and delivery of the Loan Documents and the
documents and instruments referred to therein, (ii) the creation, perfection or
protection of Lenders' Liens in the Collateral both prior to and following the
Closing Date (including, without limitation, fees and expenses for title and
lien searches or amended or replacement Mortgages, UCC Financing Statements or
Collateral Security Instruments, title insurance premiums and filing and
recording fees, third party due diligence expenses for the Mortgaged Property
plus travel expenses, accounting firm fees, costs of the Appraisals,
Environmental Reports (and an environmental consultant), and the Engineering
Reports (iii) the negotiation, preparation, execution and delivery of any
amendment, waiver or consent relating to any of the Loan Documents and (iv) the
preservation of rights under and enforcement of the Loan Documents and the
documents and instruments referred to therein, including any restructuring or
rescheduling of the Indebtedness, (b) the reasonable fees, expenses and
disbursements of counsel to Lenders in connection with all of the foregoing, (c)
all fees and expenses of Collateral Agent and its counsel and (d) any Lender's
reasonable out-of-pocket travel expenses in connection with site visits
contemplated in this Agreement.
Section 8.24. NONRECOURSE. Anything contained herein, in the
Note or in any other Loan Document to the contrary notwithstanding, no recourse
shall be had for the payment of the
89
principal or interest on the Note or for any other Indebtedness, obligation or
liability hereunder or under any other Loan Document or for any claim based
hereon or thereon or otherwise in respect hereof or thereof against (i) any
partner, agent, contractor, director, officer, member, consultant, manager,
stockholder, subscriber to capital stock, incorporator, beneficiary,
participant, trustee or advisor of the Borrower, any partner or member in the
Borrower, or any partner or member therein; (ii) any legal representative, heir,
estate, successor or assign of any thereof; (iii) any corporation (or any
officer, director, employee or shareholder thereof), limited liability company
(or member thereof), partnership (or any partner thereof), individual or entity
to which any ownership interest in the Borrower shall have been directly or
indirectly transferred; (iv) any purchaser of any asset of the Borrower; or (v)
any other Person (except the Borrower), for any deficiency or other sum owing
with respect to the Note or any other Indebtedness, obligation or liability or
arising under this Agreement or any Loan Document. It is understood that neither
the Note nor any other Indebtedness, obligation or liability under or with
respect to this Agreement and any other Loan Document may be enforced against
any Person described in CLAUSES (i) through (v) above; PROVIDED, HOWEVER, that
the foregoing provisions of this paragraph shall not:
(1) prevent recourse to the Borrower, any Collateral or other
assets encumbered by the Mortgage, any Collateral Security Instrument
or any other instrument or document granting the Lenders any security
interest or lien pursuant to the Loan Documents;
(2) in the event of any actual fraud, misapplication or
misappropriation of funds or intentional misrepresentation, estop the
Agent or the Lenders from instituting or prosecuting a legal action or
proceeding or otherwise making a claim against the Person or Persons
committing such actual fraud, misapplying or misappropriating such
funds or making such intentional misrepresentation, or the recipient or
beneficiary of such fraud, misapplication, misappropriation or
intentional misrepresentation, whether or not such Person, recipient or
beneficiary, is any Person described in CLAUSES (i) through (v) above
for losses relating to or arising from such actual fraud,
misapplication, misappropriation or intentional misrepresentation;
(3) have any applicability whatsoever to the Pledge Agreement,
the Guaranty of Payment or the Guaranty of Non-Recourse Obligations or
the liability of the parties thereunder;
(4) prevent recourse to the Borrower or the Guarantor (but not
any of the other Persons described in CLAUSES (i) through (v) above)
with respect to the breach of any provision in the Environmental
Indemnity Agreement or this Agreement concerning Environmental Laws,
Hazardous Substances and any indemnification of the Agent or any Lender
with respect thereto contained in either document;
90
(5) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Note or secured by the Loan
Documents, and the same shall continue until paid or discharged in
full; or
(6) apply with respect to the right of the Lenders after an
Event of Default to recover security deposits received by the Borrower
or any Person described in CLAUSES (i) through (v) above (or that the
Borrower or such Person received credit for) from tenants and not
previously refunded or turned over.
ARTICLE IX
THE AGENT
Section 9.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Agreement and of the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
SECTION 9.5 and the first sentence of SECTION 9.6 hereof shall include reference
to its Affiliates and its own and its Affiliates' officers, directors, employees
and agents): (a) shall have no duties or responsibilities except those expressly
set forth in this Agreement and in the other Loan Documents, and shall not by
reason of this Agreement or any other Loan Document be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure by the
Borrower or any other Person to perform any of their obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document; and (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.
Section 9.2. RELIANCE BY AGENT. The Agent shall be entitled to
rely upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
91
As to any matters not expressly provided for by this Agreement or any other Loan
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with the
instructions given by all of the Lenders, and such instructions of such Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.
Section 9.3. DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Agent has received written notice from a Lender or the Borrower specifying
such Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to SECTION 9.7 hereof) take such action with respect to such
Default or Event of Default as shall be directed by all Lenders, PROVIDED that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of all of the Lenders.
Section 9.4. RIGHTS AS A LENDER. With respect to the Loan made
by it, the Agent in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may (without having to account
therefor to any Lender) lend money to, make investments in and generally engage
in any kind of business with the Borrower or any of its Affiliates as if it were
not acting as the Agent, and the Agent and its Affiliates may accept fees and
other consideration from the Borrower or such Affiliate for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
Section 9.5. INDEMNIFICATION. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under SECTION 5.1(J), but without
limiting the obligations of Borrower under said SECTION 5.1(J) ratably in
accordance with their respective portion of the Loan, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by any Lender)
arising out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Borrower is obligated to pay under SECTION 5.1(J)), but
excluding, unless a Default or Event of Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other
92
documents, PROVIDED that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 9.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and their Affiliates and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or under any other Loan Document. The Agent shall not be required to keep itself
informed as to the performance or observance by Borrower of this Agreement or
any of the other Loan Documents or to inspect the properties or books of
Borrower or any of their Affiliates. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of Borrower or any of their Affiliates that may
come into the possession of the Agent or any of its Affiliates.
Section 9.7. FAILURE TO ACT. Except for action expressly
required of the Agent hereunder and under the other Loan Documents, the Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction
from the Lenders of their indemnification obligations under SECTION 9.5 hereof
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.
Section 9.8. RESIGNATION OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign upon
giving notice thereof to the Lenders and the Borrower; PROVIDED, however, that
such resignation shall not be effective until such time as the successor Agent
is in place. Upon any such resignation, the Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Lenders and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, that shall be a
sophisticated financial institution. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this ARTICLE IX shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
93
Section 9.9. AGENCY FEE. Each Lender will pay to the Agent an
agency fee as may be agreed upon between such Lender and the Agent. Borrower
shall not be liable for the payment of such fee.
Section 9.10. CONSENTS UNDER LOAN DOCUMENTS. The Agent may
consent to any modification, supplement or waiver under any of the Loan
Documents; PROVIDED that, without the prior consent of each Lender, the Agent
shall not release any Collateral or otherwise terminate any Lien under any Loan
Document providing for collateral security, or agree to additional obligations
being secured by such collateral security (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the Indebtedness), except
that no such consent shall be required, and the Agent is hereby authorized, to
release any Lien covering Collateral that is the subject of a disposition
permitted hereunder.
Section 9.11. NOTICES, REPORTS AND OTHER COMMUNICATIONS. The
Agent shall provide, at its expense, copies of each notice, report, document,
correspondence or other written communication delivered to the Agent by Borrower
or any Affiliate of Borrower pursuant to any Loan Document, to each Lender
identified in such notice, report, document, correspondence or other written
communication or reasonably determined by the Agent to be entitled thereto or
affected thereby, as soon as practicable after the Agent's receipt thereof.
(SIGNATURE PAGE FOLLOWS)
94
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
AGENT AND INITIAL LENDER:
SALOMON BROTHERS REALTY CORP.,
a New York corporation
By: /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
BORROWER:
OAIC XXXX STREET, LLC, a
Delaware limited liability company
By: Ocwen Partnership, L.P., a Virginia
limited partnership, its sole member
By: Ocwen General, Inc., its managing member
By: /s/ JORDAN X. XXXX
------------------------------------------
Name: Jordan X. Xxxx
Title: President
COLLATERAL AGENT:
LASALLE NATIONAL BANK, a nationally chartered
bank (as Collateral Agent for Salomon Brothers
Realty Corp. only)
By: /s/ XXXXXX X. XXXXXXX, XX.
------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Trust Officer
95
The following exhibits have been omitted, but copies are available to the
Commission upon request:
EXHIBITS
A - Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals (Form)
C - Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing (Form)
D - Management Agreement
E - Manager's Consent and Subordination of Management
Agreement (Form)
F-1 - Closing Date Opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP
(corporate matters, Loan Document enforceability)
F-2 - Closing Date Opinion of Piper & Marbury
(nonconsolidation)
G - Guaranty of Nonrecourse Obligations (Form)
H - Financing Statements (Form)
I - Lien Search Jurisdictions
J - Assignment of Rents and Leases (Form)
K - Environmental Indemnity Agreement (Form)
L - Pledge Agreement (Form)
M - Guaranty of Payment (Form)
N - Request for Advance
96
EXHIBIT B
PROMISSORY NOTE
Up to $80,000,000 New York, New York
April ___, 1998
FOR VALUE RECEIVED, the undersigned, OAIC XXXX STREET, LLC, a Delaware
limited liability company (the "MAKER"), promises to pay to the order of SALOMON
BROTHERS REALTY CORP., a New York corporation (together with any subsequent
holder of this Note, the "HOLDER") at its office located at Seven Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as the Holder may
from time to time designate in writing, the principal sum of up to EIGHTY
MILLION DOLLARS ($80,000,000), together with interest thereon, and all other
amounts payable under the Loan Documents, such principal, interest and other
amounts to be payable as provided in the Loan Agreement.
This Note is the Note referred to in that certain Loan Agreement, dated
as of April ___, 1998, among the Maker, as borrower and the Holder, as initial
lender (as modified and supplemented and in effect from time to time, the "LOAN
AGREEMENT"). Reference to the Loan Agreement is hereby made for a statement of
the rights of the Holder and the duties and obligations of the Maker, but
neither this reference to the Loan Agreement nor any provision thereof shall
affect or impair the absolute and unconditional obligation of the Maker to pay
the principal, interest and other amounts, if any, payable with respect to this
Note when due. Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Loan Agreement. The outstanding principal
amount shall bear interest at the rates provided for in the Loan Agreement.
This Note is secured by the Deed of Trust and certain other Loan
Documents.
The principal sum evidenced by this Note, together with accrued
interest and other sums or amounts due hereunder, shall become immediately due
and payable at the option of the Holder upon the occurrence of any Event of
Default in accordance with the provisions of the Loan Agreement.
With respect to the amounts due pursuant to this Note, the Maker waives
the following: (1) all rights of exemption of property from levy or sale under
execution or other process for the collection of debts under the Constitution or
laws of the United States or any state thereof; (2) demand, presentment,
protest, notice of dishonor, notice of nonpayment, suit against any party,
diligence in collection of this Note, and all other requirements necessary to
enforce this Note, except for notices required by Governmental Authorities and
notices required by the Loan Agreement; and (3) any further receipt by or
acknowledgement of any Collateral now or hereafter deposited as security for the
Loan.
In no event shall the amount of interest (and any other sums or amounts
that are deemed to constitute interest under applicable Legal Requirements) due
or payable hereunder (including interest calculated at the Default Rate) exceed
the maximum rate of interest designated by applicable Legal Requirements (the
"MAXIMUM AMOUNT"), and in the event such payment is inadvertently paid by the
Maker or inadvertently received by the Holder, then such excess sum shall be
credited as a payment of principal, and if in excess of such balance, shall be
immediately returned to the Maker upon such determination. It is the express
intent hereof that the Maker not pay and the Holder not receive, directly or
indirectly, interest in excess of the Maximum Amount.
The Holder shall not by any act, delay, omission or otherwise be deemed
to have modified, amended, waived, extended, discharged or terminated any of its
rights or remedies, and no modification, amendment, waiver, extension, discharge
or termination of any kind shall be valid unless in writing and signed by the
Holder. All rights and remedies of the Holder under the terms of this Note and
applicable statutes or rules of law shall be cumulative, and may be exercised
successively or concurrently. The Maker agrees that there are no defenses,
equities or setoffs with respect to the obligations set forth herein, and to the
extent any such defenses, equities, or setoffs may exist, the same are hereby
expressly released, forgiven, waived and forever discharged.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable Legal Requirements,
but if any provision of this Note shall be prohibited by or invalid under
applicable Legal Requirements, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
The Holder may, at its option, release any Collateral given to secure
the indebtedness evidenced hereby, and no such release shall impair the
obligations of the Maker to the Holder.
This Note was negotiated in New York, and made by the Maker and
accepted by the Holder in the State of New York, and the proceeds of this Note
were disbursed from New York, which State the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby,
and in all respects (including, without limitation, matters of construction,
validity and performance), this Note and the obligations arising hereunder shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and performed in such State and any applicable
law of the United States of America.
Any legal suit, action or proceeding against the Holder by the Maker
arising out of or relating to this Note shall be instituted in any federal or
state court in New York, New York. Any legal suit, action or proceeding against
the Maker by the Holder arising out of or relating to this Note shall be
instituted in any federal or state court in New York, New York or in the State
of California. The Maker hereby (i) irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such suit, action or proceeding brought in such a
court and any claim that any such proceeding brought in
2
such a court has been brought in an inconvenient forum, and (ii) irrevocably
submits to the jurisdiction of any such court in any suit, action or proceeding.
The provisions of this Note shall be subject to the provisions of
SECTION 8.24 of the Loan Agreement, which provisions are incorporated by
reference as if herein set forth in full.
THE MAKER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY
TORT ACTION), BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS NOTE OR THE OTHER
LOAN DOCUMENTS. THE MAKER AGREES THAT THE HOLDER MAY FILE A COPY OF THIS WAIVER
WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED
AGREEMENT OF THE MAKER IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND
THAT, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, ANY DISPUTE OR
CONTROVERSY WHATSOEVER BETWEEN THE MAKER AND THE HOLDER SHALL INSTEAD BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
3
IN WITNESS WHEREOF, the Maker has caused this Note to be properly
executed on the date first above written, and has authorized this Note to be
dated as of the day and year first above written.
OAIC XXXX STREET, LLC,
a Delaware limited liability company,
By:
----------------------------------
Name:
Title:
