Contract
Dated as
of March 15, 2005
Between
XXXXXXX
PROPERTIES - AUSTIN RESEARCH PARK, L.P.,
as
Borrower
and
NOMURA
CREDIT & CAPITAL, INC.,
as
Lender
Property
Austin
Research Park I & II
00000
Xxxxxxxx Xxxxxxxxx
Xxxxxx,
Xxxxx
|
Page | ||
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ARTICLE
1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION |
1 | |
|
Section
1.1 Definitions |
1 | |
|
Section
1.2 Principles
of Construction |
26 | |
|
ARTICLE
2 GENERAL TERMS |
27 | |
|
Section
2.1 Loan
Commitment; Disbursement to Borrower |
27 | |
|
Section
2.2 Interest
Rate |
27 | |
|
Section
2.3 Loan
Payment |
33 | |
|
Section
2.4 Prepayments |
34 | |
|
Section
2.5 Extension
of Maturity Date |
35 | |
|
Section
2.6 Cash
Management |
40 | |
|
ARTICLE
3 CONDITIONS PRECEDENT |
43 | |
|
Section
3.1 Conditions
Precedent to Closing |
43 | |
|
ARTICLE
4 REPRESENTATIONS AND WARRANTIES |
48 | |
|
Section
4.1 Borrower
Representations |
48 | |
|
Section
4.2 Survival
of Representations |
56 | |
|
ARTICLE
5 BORROWER COVENANTS |
56 | |
|
Section
5.1 Affirmative
Covenants |
56 | |
|
Section
5.2 Negative
Covenants |
66 | |
|
ARTICLE
6 INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS |
73 | |
|
Section
6.1 Insurance |
73 | |
|
Section
6.2 Casualty |
76 | |
|
Section
6.3 Condemnation |
77 | |
|
Section
6.4 Restoration |
77 | |
|
ARTICLE
7 RESERVE FUNDS |
81 | |
|
Section
7.1 Intentionally
Omitted |
81 | |
|
Section
7.2 Tax
and Insurance Escrow Funds |
81 | |
|
Section
7.3 Intentionally
Omitted |
83 | |
|
Section
7.4 Rollover
Reserve |
83 | |
|
Section
7.5 Alaris
Reserve Funds |
84 | |
|
Section
7.6 Reserve
Funds, Generally |
86 | |
|
ARTICLE
8 DEFAULTS |
87 | |
|
Section
8.1 Event
of Default |
87 | |
|
Section
8.2 Remedies |
90 | |
|
ARTICLE
9 SPECIAL PROVISIONS |
91 | |
|
Section
9.1 Sale
of Note and Securitization |
91 | |
|
Section
9.2 Securitization
Indemnification |
93 | |
|
Section
9.3 Intentionally
Omitted |
96 | |
|
Section
9.4 Exculpation |
96 | |
|
Section
9.5 Matters
Concerning Manager |
98 | |
|
Section
9.6 Servicer |
98 | |
|
Section
9.7 Restructuring
of Loan |
99 | |
|
ARTICLE
10 MISCELLANEOUS |
100 | |
|
Section
10.1 Survival |
100 | |
|
Section
10.2 Lender’s
Discretion |
100 | |
|
Section
10.3 Governing
Law |
100 | |
|
Section
10.4 Modification,
Waiver in Writing |
102 | |
|
Section
10.5 Delay
Not a Waiver |
102 | |
|
Section
10.6 Notices |
102 | |
|
Section
10.7 Trial
by Jury |
103 | |
|
Section
10.8 Headings |
103 | |
|
Section
10.9 Severability |
103 | |
|
Section
10.10 Preferences |
103 | |
|
Section
10.11 Waiver
of Notice |
104 | |
|
Section
10.12 Remedies
of Borrower |
104 | |
|
Section
10.13 Expenses;
Indemnity |
104 | |
|
Section
10.14 Schedules
Incorporated |
105 | |
|
Section
10.15 Offsets,
Counterclaims and Defenses |
105 | |
|
Section
10.16 No
Joint Venture or Partnership; No Third Party Beneficiaries |
106 | |
|
Section
10.17 Publicity |
106 | |
|
Section
10.18 Waiver
of Marshalling of Assets |
106 | |
|
Section
10.19 Waiver
of Counterclaim |
106 | |
|
Section
10.20 Conflict;
Construction of Documents; Reliance |
106 | |
|
Section
10.21 Brokers
and Financial Advisors |
107 | |
|
Section
10.22 Prior
Agreements |
107 | |
|
ARTICLE
11 MEZZANINE LOAN |
107 | |
|
Section
11.1 Mezzanine
Loan Notices |
107 | |
|
Section
11.2 Mezzanine
Loan Estoppels |
108 | |
|
Section
11.3 Deed
in Lieu of Foreclosure |
108 | |
|
Section
11.4 Reserve
Funds |
108 | |
|
Section
11.5 Intercreditor
Agreement |
108 | |
THIS LOAN
AGREEMENT, dated as of March 15, 2005 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”),
between NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, having an
address at Two World Financial Center, New York, New York 10281 (together with
its successors and assigns, “Lender”), and
XXXXXXX PROPERTIES - AUSTIN RESEARCH PARK, L.P., a Texas limited partnership,
having its principal place of business at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 (“Borrower”).
W
I T N E S S E T H:
WHEREAS,
Borrower desires to obtain the Loan (as hereinafter defined) from Lender;
and
WHEREAS,
Lender is willing to make the Loan to Borrower, subject to and in accordance
with the terms of this Agreement and the other Loan Documents (as hereinafter
defined).
NOW
THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE
1
DEFINITIONS;
PRINCIPLES OF CONSTRUCTION
Section
1.1 Definitions. For all
purposes of this Agreement, except as otherwise expressly required or unless the
context clearly indicates a contrary intent:
“Acceptable
Counterparty” shall
mean any counterparty to the Interest Rate Cap Agreement that (a) as of the date
of the Interest Rate Cap Agreement, has a long-term unsecured debt rating (or,
if such counterparty does not have a long-term unsecured debt rating, has a
“counterparty rating”) of at least “AA” by S&P and “Aa2” from Xxxxx’x, which
rating shall not include a “t” or otherwise reflect a termination risk, and
(b) until the expiration of the applicable Interest Rate Cap Agreement,
shall maintain a long-term unsecured debt rating or “counterparty rating”, as
applicable, of at least “AA-” by S&P and “Aa3” from Xxxxx’x, which rating
shall not include a “t” or otherwise reflect a termination risk.
“Acquired
Property” shall
have the meaning set forth in Section
5.1.11(f)(i)
hereof.
“Acquired
Property Statements” shall
have the meaning set forth in Section 5.1.11(f)(i)
hereof.
“Additional
Insolvency Opinion” shall
have the meaning set forth in Section
4.1.30(c)
hereof.
“Adjustment
Date” shall
have the meaning set forth in Section
3.1.21(a) hereof.
“Affiliate” shall
mean, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is a
director or officer of such Person or of an Affiliate of such Person. As used in
this definition, the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction, management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
“Affiliated
Loans” shall
mean a loan made by Lender to an Affiliate of Borrower or
Guarantor.
“Affiliated
Manager” shall
mean any Manager or Sub-Manager in which Borrower, Principal or Guarantor has,
directly or indirectly, any legal, beneficial or economic interest.
“Aggregate
Outstanding Principal Balance” shall
mean, as of any date, the sum of the Outstanding Principal Balance and the
Mezzanine Loan Outstanding Principal Balance.
“ALTA” shall
mean American Land Title Association, or any successor thereto.
“Annual
Budget” shall
mean the operating budget, including all planned Capital Expenditures, for the
Property prepared by Borrower for the applicable Fiscal Year or other period,
except that Lender acknowledges that, for up to sixty (60) days after the
Closing Date, the most recent budget for the Property prepared by CommonWealth
Pacific, LLC or its Affiliates may be used by Borrower for operating the
Property.
“Applicable
Interest Rate” shall
mean the rate or rates at which the Outstanding Principal Balance bears interest
from time to time in accordance with the provisions of Section 2.2.3
hereof.
“Approved
Annual Budget” shall
have the meaning set forth in Section
5.1.11(d)
hereof.
“Approved
Leasing Expenses” shall
mean actual out-of-pocket expenses incurred by Borrower in leasing space at the
Property pursuant to Leases entered into in accordance with the Loan Documents,
including brokerage commissions and tenant improvements, which expenses (i) are
(A) specifically approved by Lender in connection with approving the applicable
Lease, (B) incurred in the ordinary course of business and on market terms and
conditions in connection with Leases which do not require Lender’s approval
under the Loan Documents, and Lender shall have received and approved a budget
for such tenant improvement costs and a schedule of leasing commissions payments
payable in connection therewith, or (C) otherwise approved by Lender in its
reasonable discretion, and (ii) are substantiated by executed Lease documents
and brokerage agreements.
“Assignment
of Leases” shall
mean that certain first priority Assignment of Leases and Rents, dated as of the
date hereof, from Borrower, as assignor, to Lender, as assignee, assigning to
Lender all of Borrower’s interest in and to the Leases and Rents as security for
the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
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“Assignment
of Management Agreement” shall
mean that certain Assignment of Management Agreement and Subordination of
Management Fees, dated as of the date hereof, among Lender, Borrower and
Manager, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
“Assignment
of Sub-Management Agreement” shall
mean that certain Assignment of Sub-Management Agreement and Consent and
Agreement of Sub-Manager, dated as of the date hereof, among Lender, Borrower,
Manager and Sub-Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Award” shall
mean any compensation paid by any Governmental Authority in connection with a
Condemnation.
“Bankruptcy
Action” shall
mean with respect to any Person (a) such Person filing a voluntary petition
under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency
law; (b) the filing of an involuntary petition against such Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or
soliciting or causing to be solicited petitioning creditors for any involuntary
petition against such Person; (c) such Person filing an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, or soliciting or causing to be solicited
petitioning creditors for any involuntary petition from any Person; (d) such
Person seeking, consenting to or acquiescing in or joining in an application for
the appointment of a custodian, receiver, trustee, or examiner for such Person
or any portion of the Property; or (e) such Person making an assignment for the
benefit of creditors, or admitting, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due.
“Bankruptcy
Code” shall
mean 11 U.S.C. § 101 et
seq., as the
same may be amended from time to time.
“Basic
Carrying Costs” shall
mean, for any period, the sum of the following costs: (a) Taxes, (b) Other
Charges, and (c) Insurance Premiums.
“Blanket
Insurance Premium Financing Arrangement” shall
have the meaning set forth in Section
6.1(c)
hereof.
“Borrower” shall
have the meaning set forth in the introductory paragraph hereto, together with
its successors and permitted assigns.
“Borrower
Parties” shall
have the meaning set forth in Section
9.4
hereof.
“Breakage
Costs” shall
have the meaning set forth in Section 2.2.3(h)
hereof.
“Business
Day” shall
mean any day other than a Saturday, Sunday or any other day on which national
banks in the State of New York or the State of California are not open for
business.
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“Capital
Expenditures” shall
mean, for any period, the amount expended for items capitalized under GAAP
(including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements).
“Cash
Expenses” shall
mean, for any period, the Operating Expenses for the operation of the Property
as approved by Lender in its sole discretion or as set forth in a then effective
Approved Annual Budget, if applicable, to the extent that such expenses are
actually incurred by Borrower, minus any payments into the Tax and Insurance
Escrow Funds.
“Cash
Management Account” shall
have the meaning set forth in Section
2.6.2(a)
hereof.
“Cash
Management Agreement” shall
mean that certain Cash Management Agreement, dated as of the date hereof, by and
among Borrower, Manager and Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
“Casualty” shall
have the meaning set forth in Section
6.2
hereof.
“Casualty
Consultant” shall
have the meaning set forth in Section
6.4(b)(iii)
hereof.
“Casualty
Retainage” shall
have the meaning set forth in Section
6.4(b)(iv)
hereof.
“Xxxxxxx
Xxxxxx” shall
mean Xxxxxxx Xxxxxx & Co., Inc., a California corporation.
“Xxxxxxx
Xxxxxx Lease” shall
mean that certain Amended and Restated Research Park Lease Agreement (Building
II), dated as of July 17, 2000, between Xxxxxxx Xxxxxx and XX Xxxxxx Research
Park Limited Partnership, Borrower’s predecessor in interest, for the Xxxxxxx
Xxxxxx Space, as amended by First Amendment to Amended and Restated Research
Park Lease Agreement (Building II), dated December, 2000 and Second Amendment to
Amended and Restated Research Park Lease Agreement, dated March 1,
2001.
“Xxxxxxx
Xxxxxx Replacement Lease Requirements” shall
have the meaning set forth in Section
7.5.1
hereof.
“Xxxxxxx
Xxxxxx Reserve Account” shall
have the meaning set forth in Section
7.5.1
hereof.
“Xxxxxxx
Xxxxxx Reserve Funds” shall
have the meaning set forth in Section
7.5.1 hereof.
“Xxxxxxx
Xxxxxx Space” shall
mean the approximately 115,542 rentable square feet of space at the Property
leased by Xxxxxxx Xxxxxx pursuant to the Xxxxxxx Xxxxxx Lease.
“Xxxxxxx
Xxxxxx Sweep Period” shall
mean the period of time from and after a Xxxxxxx Xxxxxx Trigger Event until the
occurrence of an Xxxxxxx Xxxxxx Sweep Termination.
“Xxxxxxx
Xxxxxx Sweep Termination” shall
have the meaning set forth in Section
7.5.1
hereof.
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“Xxxxxxx
Xxxxxx Trigger Event” shall
have the meaning set forth in Section
7.5.1 hereof.
“Closing
Date” shall
mean the date of the funding of the Loan.
“Code” shall
mean the Internal Revenue Code of 1986, as amended, as it may be further amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or final
form.
“Collateral
Assignment of Interest Rate Cap Agreement” shall
mean that certain Collateral Assignment of Interest Rate Cap Agreement, dated as
of the date hereof, executed by Borrower in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
“Condemnation” shall
mean a temporary or permanent taking by any Governmental Authority as the result
or in lieu or in anticipation of the exercise of the right of condemnation or
eminent domain, of all or any part of the Property, or any interest therein or
right accruing thereto, including any right of access thereto or any change of
grade affecting the Property or any part thereof.
“Condemnation
Proceeds” shall
have the meaning set forth in Section
6.4(b)
hereof.
“Counterparty” shall
mean, with respect to the Interest Rate Cap Agreement, SMBC Derivative Products
Limited, and with respect to any Replacement Interest Rate Cap Agreement, any
substitute Acceptable Counterparty.
“Covered
Disclosure Information” shall
have the meaning set forth in Section
9.2(b)
hereof.
“Debt” shall
mean the Outstanding Principal Balance together with all interest accrued and
unpaid thereon and all other sums (including, if applicable, any Prepayment
Premium) due to Lender in respect of the Loan under the Note, this Agreement,
the Mortgage and the other Loan Documents.
“Debt
Service” shall
mean, with respect to any particular period of time, scheduled principal and/or
interest payments due under this Agreement and the Note.
“Debt
Service Coverage Ratio” shall
mean a ratio for the applicable twelve (12) full calendar month period in
which:
(a) the
numerator is the Net Operating Income for such period, based upon the then
current Rent payable by tenants under Leases at the Property that are in
occupancy and paying current, unabated Rent (excluding interest on credit
accounts) as set forth in the financial statements required hereunder;
and
(b) the
denominator is the assumed aggregate debt service for (i) the Mezzanine Loan for
such period calculated on the basis of a six and nine-tenths percent (6.9%) debt
- 5
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service
constant and (ii) the Loan for such period calculated on the basis of a six and
nine-tenths percent (6.9%) debt service constant.
“Default” shall
mean the occurrence of any event hereunder or under any other Loan Document
which, but for the giving of notice or passage of time, or both, would be an
Event of Default.
“Default
Rate” shall
mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate and (b)
five percent (5%) above the Applicable Interest Rate.
“Deficient
NCF Amount” shall
mean, as of any date of determination, an annual amount (but not less than zero)
which, when added to the Underwritten Net Operating Income (excluding any Rent
received pursuant to the Vacant Space Master Lease with respect to the Xxxxxxx
Xxxxxx Space) of the Property determined as of such date of determination for
the preceding twelve (12) full calendar month period, would result in an
Underwritten Debt Service Coverage Ratio (excluding any Rent received pursuant
to the Vacant Space Master Lease with respect to the Xxxxxxx Xxxxxx Space) equal
to 1.07:1.0.
“Determination
Date” shall
mean, with respect to any Interest Accrual Period, the date that is two (2)
London Business Days prior to the fifteenth (15th) day of the calendar month in
which such Interest Accrual Period commences; provided that the
first Determination Date shall be the Closing Date.
“Deposit
Bank” shall
have the meaning set forth in the Cash Management Agreement.
“Disclosure
Document” shall
mean a prospectus, prospectus supplement, private placement memorandum, offering
memorandum, offering circular, term sheet, road show presentation materials or
other offering documents or marketing materials, in each case in preliminary or
final form, used to offer Securities in connection with a
Securitization.
“Eligible
Account” shall
mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained with a
federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution, or (b) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case
of a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other
instrument.
“Eligible
Institution” shall
mean a depository institution or trust company, the short term unsecured debt
obligations or commercial paper of which are rated at least “A-1+” by S&P,
“P-1” by Xxxxx’x and “F-1+” by Fitch in the case of accounts in which funds are
held for thirty (30) days or less (or, in the case of accounts in which funds
are held for more than thirty (30) days, the long term unsecured debt
obligations of which are rated at least “AA” by Fitch and S&P and “Aa2” by
Xxxxx’x).
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“Embargoed
Person” shall
have the meaning set forth in Section
4.1.35
hereof.
“Environmental
Indemnity” shall
mean that certain Environmental Indemnity Agreement, dated as of the date
hereof, executed by Borrower and Guarantor in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
“Event
of Default” shall
have the meaning set forth in Section
8.1(a)
hereof.
“Excess
Cash Flow” shall
have the meaning set forth in Section
2.6.2(b)(viii)
hereof.
“Exchange
Act” shall
have the meaning set forth in Section
9.2(a)
hereof.
“Exchange
Act Filing” shall
have the meaning set forth in Section
5.1.11(i)
hereof.
“Existing
Approved Leasing Expenses” shall
have the meaning set forth in Section 7.4.1
hereof.
“Extraordinary
Expense” shall
have the meaning set forth in Section
5.1.11(e)
hereof.
“Financing
Installment” shall
have the meaning set forth in Section
6.1(c)
hereof.
“First
Extended Maturity Date” shall
mean April 9, 2008.
“First
Extension Option” shall
have the meaning set forth in Section
2.5.1
hereof.
“First
Extension Term” shall
have the meaning set forth in Section
2.5.1
hereof.
“Fiscal
Year” shall
mean each twelve (12) month period commencing on January 1 and ending on
December 31 during each year of the term of the Loan.
“Fitch” shall
mean Fitch, Inc.
“Fixed
Maturity Date” shall
mean either (a) the Initial Maturity Date, (b) if Borrower shall have
properly exercised the First Extension Option, the First Extended Maturity Date,
(c) if Borrower shall have properly exercised the First Extension Option
and the Second Extension Option, the Second Extended Maturity Date, or
(d) if Borrower shall have properly exercised the First Extension Option,
the Second Extension Option and the Third Extension Option, the Third Extended
Maturity Date.
“Foreign
Taxes” shall
have the meaning set forth in Section 2.2.3(e)
hereof.
“Full
Service Gross Rent” shall
mean base Rent plus any reimbursements payable for Taxes, Insurance Premiums,
utility expenses and costs and expenses of operating and maintaining the
Property.
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“GAAP” shall
mean generally accepted accounting principles in the United States of America as
of the date of the applicable financial report.
“Governmental
Authority” shall
mean any court, board, agency, commission, office or other authority of any
nature whatsoever for any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx,
xxxxxxxxx, xxxx or otherwise) whether now or hereafter in
existence.
“Gross
Income from Operations” shall
mean, for any period, all income, computed in accordance with GAAP, derived from
the ownership and operation of the Property from whatever source during such
period, including, but not limited to, Rents, utility charges, escalations,
forfeited security deposits, interest on credit accounts, service fees or
charges, license fees, parking fees, rent concessions or credits, and other
pass-through or reimbursements paid by tenants under the Leases of any nature,
including Rents payable under the Vacant Space Master Lease, but excluding any
Rents from month to month tenants or tenants that are included in any Bankruptcy
Action, sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, proceeds from the sale of furniture, fixtures and
equipment, Insurance Proceeds and Condemnation Proceeds (other than business
interruption or other loss of income insurance), and any disbursements to
Borrower from the Tax and Insurance Escrow Funds, the Xxxxxxx Xxxxxx Reserve
Funds, the Rollover Reserve Funds or any other escrow fund established by the
Loan Documents.
“Guarantor” shall
mean Xxxxxxx Properties, L.P., a Maryland limited partnership, and any other
Person hereafter executing a separate guaranty or indemnity agreement in favor
of Lender in connection with the Loan.
“Guaranty” shall
mean that certain Guaranty Agreement, dated as of the date hereof, from
Guarantor in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Improvements” shall
have the meaning set forth in the granting clause of the Mortgage.
“Indebtedness” shall
mean for any Person, on a particular date, the sum (without duplication) at such
date of (a) all indebtedness or liability of such Person (including, without
limitation, amounts for borrowed money and indebtedness in the form of mezzanine
debt and preferred equity); (b) obligations evidenced by bonds, debentures,
notes, or other similar instruments; (c) obligations for the deferred purchase
price of property or services (including trade obligations); (d) obligations
under letters of credit; (e) obligations under acceptance facilities; (f) all
guaranties, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds, to invest in any Person or entity, or
otherwise to assure a creditor against loss; and (g) obligations secured by any
Liens, whether or not the obligations have been assumed.
“Indemnified
Liabilities” shall
have the meaning set forth in Section
10.13(b)
hereof.
“Indemnified
Person” and
“Indemnified
Persons” shall
have the meaning set forth in Section 9.2(b)
hereof.
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“Indemnifying
Person” shall
mean each of Borrower and Principal.
“Independent
Director” or
“Independent
Manager” shall
mean a natural person who is not at the time of initial appointment, or at any
time while serving as a director or manager, as applicable, and has not been at
any time during the preceding five (5) years: (a) a stockholder, director or
manager (with the exception of serving as the Independent Director or
Independent Manager), officer, employee, partner, member, attorney or counsel of
Principal, Borrower or any Affiliate of either of them; (b) a customer, supplier
or other Person who derives any of its purchases or revenues from its activities
with Principal, Borrower or any Affiliate of either of them; (c) a person
controlling or under common control with any such stockholder, director,
manager, officer, partner, member, customer, supplier or other Person; or (d) a
member of the immediate family of any such stockholder, director, manager,
officer, employee, partner, member, customer, supplier or other Person. As used
in this definition, the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
“Initial
Blanket Insurance Premium Installment” shall
have the meaning set forth in Section 7.2(a)
hereof.
“Initial
Maturity Date” shall
mean April 9, 2007.
“Insolvency
Opinion” shall
mean that certain non-consolidation opinion letter dated the date hereof
delivered by Xxxxxxxxx & Xxxxxx, Professional Corporation in connection with
the Loan.
“Insurance
Premiums” shall
have the meaning set forth in Section
6.1(b)
hereof.
“Insurance
Proceeds” shall
have the meaning set forth in Section
6.4(b)
hereof.
“Intercreditor
Agreement” shall
mean that certain Intercreditor Agreement dated as of the date hereof by and
between Lender and Mezzanine Lender.
“Interest
Accrual Period” shall
mean, with respect to any Payment Date, the period commencing on the ninth (9th)
day of the preceding calendar month and terminating on and including the eighth
(8th) day of the calendar month in which such Payment Date occurs; provided,
however, that no
Interest Accrual Period shall end later than the Maturity Date (other than for
purposes of calculating interest at the Default Rate), and the initial Interest
Accrual Period shall begin on and include the Closing Date and shall end on and
include the immediately following eighth (8th) day of the calendar
month.
“Interest
Rate Cap Agreement” shall
mean, as applicable, an Interest Rate Cap Agreement (together with the
confirmation and schedules relating thereto) in form and substance reasonably
satisfactory to Lender between Borrower and an Acceptable Counterparty or a
Replacement Interest Rate Cap Agreement.
“Investment
Grade Rating” shall
mean a long term unsecured debt rating of not less than “BBB-” (or its
equivalent) from (i) prior to a Securitization, S&P and (ii) after a
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Securitization,
any one of Xxxxx’x, S&P, Fitch or any other nationally-recognized
statistical rating agency rating the Securities.
“Lease” shall
mean any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any Person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in the Property, including the
Vacant Space Master Lease, and (a) every modification, amendment or other
agreement relating to such lease, sublease, subsublease, or other agreement
entered into in connection with such lease, sublease, subsublease, or other
agreement, and (b) every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.
“Lease
Termination Payments” shall
have the meaning set forth in Section 7.4.1(b)(i)
hereof.
“Legal
Requirements” shall
mean all federal, state, county, municipal and other governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
of Governmental Authorities affecting the 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, including, without limitation, the
Americans with Disabilities Act of 1990, as amended, and all permits, licenses
and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Borrower, at any time in force affecting the Property or
any part thereof, including, without limitation, any which may (a) require
repairs, modifications or alterations in or to the Property or any part thereof,
or (b) in any way limit the use and enjoyment thereof.
“Lender” shall
have the meaning set forth in the introductory paragraph hereto, together with
its successors and assigns.
“Liabilities” shall
have the meaning set forth in Section
9.2(b)
hereof.
“LIBOR” shall
mean, with respect to each Interest Accrual Period, the rate (expressed as a
percentage per annum and rounded upward, if necessary, to the next nearest 1/8
of 1%) for deposits in U.S. dollars, for a one-month period, that appears on
Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London
time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on such
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen Libor Page as of
11:00 a.m., London time, on such Determination Date, if at least two such
offered rates so appear. If fewer than two such offered rates appear on the
Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, Lender shall request the principal London office of any four
major reference banks in the London interbank market selected by Lender to
provide such bank’s offered quotation (expressed as a percentage per annum) to
prime banks in the London interbank market for deposits in U.S. dollars for a
one-month period as of 11:00 a.m., London time, on such Determination Date
for amounts of not less than U.S. $1,000,000. If at least two such offered
quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided,
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Lender
shall request any three major banks in New York City selected by Lender to
provide such bank’s rate (expressed as a percentage per annum) for loans in U.S.
dollars to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time on the applicable Determination Date for
amounts of not less than U.S. $1,000,000. If at least two such rates are so
provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be
determined conclusively by Lender or its agent absent manifest error.
“LIBOR
Loan” shall
mean the Loan at such time as interest thereon accrues at a rate of interest
based upon LIBOR.
“Licenses” shall
have the meaning set forth in Section
4.1.22
hereof.
“Lien” shall
mean any mortgage, deed of trust, lien, pledge, hypothecation, easement,
restrictive covenant, preference, assignment, security interest, or any other
encumbrance, charge or transfer of, or any agreement to enter into or create,
any of the foregoing, on or affecting Borrower, the Property, or any portion
thereof or any interest therein, or any direct or indirect interest in Borrower
or Principal, 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, and
mechanic’s, materialmen’s and other similar liens and encumbrances.
“Loan” shall
mean the loan in the principal amount of Thirty-Seven Million and No/100 Dollars
($37,000,000.00), made by Lender to Borrower pursuant to this
Agreement.
“Loan
Documents” shall
mean, collectively, this Agreement, the Note, the Mortgage, the Assignment of
Leases, the Environmental Indemnity, the Assignment of Management Agreement, the
Assignment of Sub-Management Agreement, the Guaranty, the Cash Management
Agreement, the Collateral Assignment of Interest Rate Cap Agreement and all
other documents executed and/or delivered in connection with the
Loan.
“Loan
to Value Ratio” shall
mean the ratio, as of a particular date, the numerator of which is an amount
equal to the Aggregate Outstanding Principal Balance as of such date and the
denominator of which is an amount equal to the appraised value of the Property
as of such date as determined by Lender in its sole discretion.
“Lockbox
Account” shall
have the meaning set forth in Section
2.6.1(a)
hereof.
“Lockbox
Bank” shall
mean Bank of the West or any successor or permitted assigns
thereof.
“Lockout
Release Date” shall
mean July 9, 2005.
“London
Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which commercial
banks in London, England are not open for business.
“Major
Lease” shall
mean any Lease which, either individually or when taken together with any other
Lease with the same tenant or its Affiliates, demises in excess of 10,000 square
feet in the Improvements.
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“Management
Agreement” shall
mean the management agreement entered into by and between Borrower and Manager,
pursuant to which Manager is to provide management and other services with
respect to the Property, or, if the context requires, the Replacement Management
Agreement.
“Manager” shall
mean Xxxxxxx Properties, L.P., or, if the context requires, a Qualified Manager
who is managing the Property in accordance with the terms and provisions of this
Agreement.
“Maturity
Date” shall
mean (a) the Fixed Maturity Date or (b) such other date on which the final
payment of principal of the Note becomes due and payable as therein or herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.
“Maximum
Legal Rate” shall
mean the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or the other Loan
Documents, under the laws of such state or states whose laws are held by any
court of competent jurisdiction to govern the interest rate provisions of the
Loan.
“Mezzanine
Borrower” shall
mean MP-Austin
LP Mezzanine, LLC, a Delaware limited liability company, in its
capacity as a borrower under the Mezzanine Loan Documents, and its permitted
successors or permitted assigns.
“Mezzanine
Cash Management Account” shall
mean the “Mezzanine Cash Management Account” as defined in the Mezzanine Loan
Agreement.
“Mezzanine
Debt” shall
mean the “Debt” as defined in the Mezzanine Loan Agreement.
“Mezzanine
Default” shall
mean a “Default” as defined in the Mezzanine Loan Agreement.
“Mezzanine
Event of Default” shall
mean an “Event of Default” as defined in the Mezzanine Loan
Agreement.
“Mezzanine
Lender” shall
mean Nomura Credit & Capital, Inc., in its capacity as holder of the
Mezzanine Loan, its successors or assigns.
“Mezzanine
Loan” shall
mean a loan in the principal amount of Five Million and No/100 Dollars
($5,000,000.00), made by Mezzanine Lender to Mezzanine Borrower.
“Mezzanine
Loan Agreement” shall
mean that certain Loan Agreement dated as of the date hereof between Mezzanine
Lender and Mezzanine Borrower.
“Mezzanine
Loan Documents” shall
mean all documents evidencing and/or securing the Mezzanine Loan.
“Mezzanine
Loan Outstanding Principal Balance” shall
mean, as of any date, the outstanding principal balance of the Mezzanine
Loan.
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“Mezzanine
Monthly Interest Payment” shall
mean the “Monthly Interest Payment” as defined in the Mezzanine Loan Agreement.
“Monthly
Interest Payment” shall
have the meaning set forth in Section
2.3.1
hereof.
“Moody’s” shall
mean Xxxxx’x Investors Service, Inc.
“Mortgage” shall
mean that certain first priority Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated the date hereof, executed and
delivered by Borrower as security for the Loan and encumbering the Property, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
“Net
Cash Flow” shall
mean, for any period, the amount obtained by subtracting Operating Expenses and
Capital Expenditures for such period from Gross Income from Operations for such
period.
“Net
Cash Flow Schedule” shall
have the meaning set forth in Section
5.1.11(b)
hereof.
“Net
Operating Income” shall
mean, for any period, the amount obtained by subtracting Operating Expenses for
such period from Gross Income from Operations for such period.
“Net
Proceeds” shall
have the meaning set forth in Section
6.4(b)
hereof.
“Net
Proceeds Deficiency” shall
have the meaning set forth in Section
6.4(c)(vi)
hereof.
“New
Mezzanine Loan” shall
have the meaning set forth in Section
9.7
hereof.
“New
Vacant Space Lease” shall
have the meaning set forth in Section
3.1.21(a)
hereof.
“Note” shall
mean that certain Promissory Note dated of even date herewith in the principal
amount of Thirty-Seven Million and No/100 Dollars ($37,000,000.00), made by
Borrower to the order of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Notice” shall
have the meaning set forth in Section
10.6
hereof.
“Obligations” shall
mean, collectively, Borrower’s obligations for the payment of the Debt and the
performance of the Other Obligations.
“Offering
Document Date” shall
have the meaning set forth in Section
5.1.11(f)(iv)
hereof.
“Officer’s
Certificate” shall
mean a certificate delivered to Lender by Borrower that is signed by an
authorized senior officer of the general partner or managing member of Borrower,
as applicable.
“Operating
Expenses” shall
mean, for any period, the total of all expenditures, computed in accordance with
GAAP, of whatever kind relating to the operation, maintenance and management of
the Property, which expenditures are incurred on a regular monthly or other
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periodic
basis, including without limitation, utilities, ordinary repairs and maintenance
(which ordinary repairs and maintenance for the purposes of this definition
shall be no less than an assumed expense of $27,000.00 per month), insurance,
license fees, property taxes and assessments, advertising expenses, management
fees, payroll and related taxes, computer processing charges, tenant
improvements and leasing commissions (which tenant improvements and leasing
commissions for the purposes of this definition shall be no less than an assumed
expense of $33,808.50 per month), operational equipment or other lease payments
as approved by Lender, and other similar costs, but excluding
depreciation, Debt Service, Capital Expenditures, and contributions to the Tax
and Insurance Escrow Funds, the Xxxxxxx Xxxxxx Reserve Funds, the Rollover
Reserve Funds and any other reserves required under the Loan
Documents.
“Operating
Partnership” shall
mean Xxxxxxx Properties, L.P., a Maryland limited partnership, which is the
operating partnership of the REIT.
“Other
Charges” shall
mean all ground rents, maintenance charges, impositions other than Taxes, and
any other charges, including, without limitation, vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Property, now or
hereafter levied or assessed or imposed against the Property or any part
thereof.
“Other
Obligations” shall
mean (a) the performance of all obligations of Borrower contained herein; (b)
the performance of each obligation of Borrower contained in any other Loan
Document; and (c) the performance of each obligation of Borrower contained in
any renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of this Agreement, the Note or
any other Loan Documents.
“Outstanding
Principal Balance” shall
mean, as of any date, the outstanding principal balance of the
Loan.
“Payment
Date” shall
mean the ninth (9th) day of each calendar month during the term of the Loan or,
if such day is not a Business Day, the immediately preceding Business
Day.
“Permitted
Encumbrances” shall
mean, collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental
Authority not yet due or delinquent, and (d) such other title and survey
exceptions as Lender has approved or may approve in writing in Lender’s sole
discretion.
“Permitted
Investments” shall
have the meaning set forth in the Cash Management Agreement.
“Person” shall
mean any individual, corporation, partnership, joint venture, limited liability
company, estate, trust, unincorporated association, any Governmental Authority,
and any fiduciary acting in such capacity on behalf of any of the
foregoing.
“Personal
Property” shall
have the meaning set forth in the granting clause of the Mortgage.
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“Physical
Conditions Report” shall
mean a report prepared by a company satisfactory to Lender regarding the
physical condition of the Property, satisfactory in form and substance to Lender
in its sole discretion.
“Policies” shall
have the meaning set forth in Section
6.1(b)
hereof.
“Prepayment
Premium” shall
mean if the prepayment occurs on or after the Lockout Release Date and prior to
October 9, 2006, an amount equal to the Spread Maintenance Premium. If a
prepayment occurs on or after October 9, 2006, no Prepayment Premium will be
payable.
“Prime
Rate” shall
mean the annual rate of interest publicly announced by Citibank, N.A. in New
York, New York, as its base rate, as such rate shall change from time to time.
If Citibank, N.A. ceases to announce a base rate, Prime Rate shall mean the rate
of interest published in The
Wall Street Journal from
time to time as the “Prime Rate.” If more than one “Prime Rate” is published in
The
Wall Street Journal for a
day, the average of such “Prime Rates” shall be used, and such average shall be
rounded up to the nearest one-eighth of one percent (0.125%). If The
Wall Street Journal ceases
to publish the “Prime Rate,” Lender shall select an equivalent publication that
publishes such “Prime Rate,” and if such “Prime Rates” are no longer generally
published or are limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index.
“Prime
Rate Loan” shall
mean the Loan at such time as interest thereon accrues at a rate of interest
based upon the Prime Rate.
“Prime
Rate Spread” shall
mean the difference (expressed as the number of basis points) between
(a) LIBOR plus the Spread on the date LIBOR was last applicable to the Loan
and (b) the Prime Rate on the date that LIBOR was last applicable to the
Loan; provided,
however, that in
no event shall such difference be a negative number.
“Principal” shall
mean MP-Austin
GP Mezzanine, LLC, a Delaware limited liability company, the
Special Purpose Entity that is the general partner of Borrower.
“Property” shall
mean each parcel of real property, the Improvements thereon and all personal
property owned by Borrower and encumbered by the Mortgage, together with all
rights pertaining to such property and Improvements, as more particularly
described in the granting clause of the Mortgage and referred to therein as the
“Property”.
“Provided
Information” shall
mean any and all financial and other information provided at any time by, or on
behalf of, any Indemnifying Person with respect to the Property, Borrower,
Principal, Guarantor, Manager and/or Sub-Manager.
“Qualified
Manager” shall
mean either (a) Manager or (b) in the reasonable judgment of Lender, a reputable
and experienced management organization (which may be an Affiliate of Borrower)
possessing experience in managing properties similar in size, scope, use and
value as the Property, provided that
Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that management of the Property by such Person will not cause a
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downgrade,
withdrawal or qualification of the then current ratings of the Securities or any
class thereof.
“Qualified
Sub-Manager” shall
mean either (a) Sub-Manager, or (b) in the reasonable judgment of Lender, a
reputable and experienced management organization possessing experience in
managing properties similar in size, scope, use and value as the Property,
provided that
Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that management of the Property by such Person will not cause a
downgrade, withdrawal or qualification of the then current ratings of the
Securities or any class thereof.
"Qualifying
Income” shall
mean Gross Income from Operations actually collected by Borrower for the last
full calendar month prior to the date of the calculation, but excluding Rents
from (a) tenants that are more than thirty (30) days delinquent in the payment
of Rent, (b) tenants whose Leases are expiring within six (6) months from the
date of any calculation of Qualifying Income, or (c) tenants that are not
occupying their leased space or have given notice of their intention to vacate
(unless any such tenant has an Investment Grade Rating or such tenant has sublet
all of its leased space for a term equal to the lesser of three years from the
date of any calculation or the remaining term of such Lease at a Full Service
Gross Rent that is not less than eighty percent (80%) of the Full Service Gross
Rent payable by such tenant under its Lease and the Rent from such sublease is
payable to the Lockbox Account pursuant to the terms of the Cash Management
Agreement).
“Rating
Agencies” shall
mean each of S&P, Xxxxx’x and Fitch, or any other nationally recognized
statistical rating agency which has been approved by Lender.
“REIT” shall
mean Xxxxxxx Properties Inc., a Maryland corporation.
“REMIC
Trust” shall
mean a “real estate mortgage investment conduit” within the meaning of Section
860D of the Code that holds the Note.
“Rents” shall
mean all rents (including, without limitation, percentage rents), rent
equivalents, moneys payable as damages (including payments by reason of the
rejection of a Lease in a Bankruptcy Action) or in lieu of rent or rent
equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payments and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or any of its agents or employees from any and
all sources arising from or attributable to the Property and the Improvements,
including all revenues from telephone services, laundry, vending, television and
all receivables, customer 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 the Property or rendering of services by
Borrower, Manager, Sub-Manager or any of their respective agents or employees
and proceeds, if any, from business interruption or other loss of income
insurance.
“Replacement
Interest Rate Cap Agreement” shall
mean an interest rate cap agreement from an Acceptable Counterparty with terms
substantially the same as the Interest
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Rate Cap
Agreement except that the same shall be effective in connection with replacement
of the Interest Rate Cap Agreement (a) on extension of the maturity date
thereof in connection with the extension of the Fixed Maturity Date, and/or
(b) following a downgrade, withdrawal or qualification of the long-term
unsecured debt rating of the Counterparty; provided that to
the extent any such interest rate cap agreement does not meet the foregoing
requirements, a “Replacement Interest Rate Cap Agreement” shall be such interest
rate cap agreement approved in writing by each of the Rating Agencies with
respect thereto.
“Replacement
Management Agreement” shall
mean, collectively, (a) either (i) a management agreement with a Qualified
Manager substantially in the same form and substance as the Management
Agreement, or (ii) a management agreement with a Qualified Manager, which
management agreement shall be reasonably acceptable to Lender in form and
substance, provided that,
with respect to this subclause (ii), Lender,
at its option, may require that Borrower obtain confirmation from the applicable
Rating Agencies that such management agreement will not cause a downgrade,
withdrawal or qualification of the then current ratings of the Securities or any
class thereof; and (b) an assignment of management agreement and subordination
of management fees substantially in the form then used by Lender (or of such
other form and substance reasonably acceptable to Lender), executed and
delivered to Lender by Borrower and such Qualified Manager at Borrower’s
expense.
“Replacement
Sub-Management Agreement” shall
mean, collectively, (a) either (i) a sub-management agreement with a Qualified
Sub-Manager substantially in the same form and substance as the Sub-Management
Agreement, or (ii) a management agreement with a Qualified Sub-Manager, which
sub-management agreement shall be reasonably acceptable to Lender in form and
substance, provided that,
with respect to this subclause (ii), Lender,
at its option, may require that Borrower obtain confirmation from the applicable
Rating Agencies that such sub-management agreement will not cause a downgrade,
withdrawal or qualification of the then current ratings of the Securities or any
class thereof; and (b) an assignment of sub-management agreement and
subordination of sub-management fees substantially in the form then used by
Lender (or of such other form and substance reasonably acceptable to Lender),
executed and delivered to Lender by Borrower and such Qualified Sub-Manager at
Borrower’s expense.
“Reserve
Funds” shall
mean, collectively, the Tax and Insurance Escrow Funds, the Rollover Reserve
Funds, the Xxxxxxx Xxxxxx Reserve Funds and any other escrow fund established
pursuant to the Loan Documents.
“Restoration” shall
mean the repair and restoration of the Property after a Casualty or Condemnation
as nearly as possible to the condition the Property was in immediately prior to
such Casualty or Condemnation, with such alterations as may be reasonably
approved by Lender.
“Restricted
Party” shall
mean, collectively (a) Borrower, Principal, Guarantor and any Affiliated
Manager, and (b) any shareholder, partner, member, non-member manager, direct or
indirect legal or beneficial owner, agent or employee of Borrower, Principal,
Guarantor, any Affiliated Manager or any non-member manager.
“RICO” shall
mean the Racketeer Influenced and Corrupt Organizations Act.
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“Rollover
Reserve Account” shall
have the meaning set forth in Section
7.4.1
hereof.
“Rollover
Reserve Funds” shall
have the meaning set forth in Section
7.4.1
hereof.
“S&P” shall
mean Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx
Companies.
“Sale
or Pledge” shall
mean a voluntary or involuntary sale, conveyance, assignment, transfer,
encumbrance or pledge of a legal or beneficial interest.
“Second
Extended Maturity Date” shall
mean April 9, 2009.
“Second
Extension Option” shall
have the meaning set forth in Section
2.5.2
hereof.
“Second
Extension Term” shall
have the meaning set forth in Section
2.5.2
hereof.
“Securities” shall
have the meaning set forth in Section
9.1
hereof.
“Securities
Act” shall
have the meaning set forth in Section
9.2(a)
hereof.
“Securitization” shall
have the meaning set forth in Section
9.1
hereof.
“Servicer” shall
have the meaning set forth in Section
9.6
hereof.
“Servicing
Agreement” shall
have the meaning set forth in Section
9.6
hereof.
“Severed
Loan Documents” shall
have the meaning set forth in Section
8.2(b)
hereof.
“Special
Purpose Entity” shall
mean a corporation, limited partnership or limited liability company that at all
times prior to, on and after the date hereof:
(a) was, is
and will be organized solely for the purpose of (i) acquiring, developing,
owning, holding, selling, leasing, transferring, exchanging, managing and
operating the Property, entering into this Agreement with Lender, refinancing
the Property in connection with a permitted repayment of the Loan, and
transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; or (ii) acting as the general partner of the limited
partnership that owns the Property or as the sole member of the limited
liability company that owns the Property;
(b) has not
been, is not, and will not be engaged in any business unrelated to (i) the
acquisition, development, ownership, management, leasing or operation of the
Property, (ii) acting as the general partner of the limited partnership
that owns the Property, or (iii) acting as the sole member of the limited
liability company that owns the Property, as applicable;
(c) has not
had, does not have and will not have any assets other than those related to the
Property or its partnership interest in the limited partnership or the limited
liability company interest in the limited liability company that owns the
Property or acts as the general partner or the sole member thereof, as
applicable;
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(d) has not
engaged, sought or consented to, and will not engage in, seek or consent to,
(i) any dissolution, winding up, liquidation, consolidation, merger, sale
of all or substantially all of its assets, (ii) except as permitted under
the terms of this Agreement, any transfer of partnership or limited liability
company interests (if such entity is a general partner in a limited partnership
or a member in a limited liability company), or (iii) any amendment of its
limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation or operating agreement (as applicable)
with respect to the matters set forth in this definition without the written
consent of Lender;
(e) if such
entity is a limited partnership, has had, now has and will have as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability companies;
(f) if such
entity is a corporation, has had, now has and will have at least two (2)
Independent Directors, and has not caused or allowed, and will not cause or
allow, the board of directors of such entity to take any Bankruptcy Action or
any other action requiring the unanimous affirmative vote of one hundred percent
(100%) of the members of its board of directors unless two (2) Independent
Directors shall have participated in such vote;
(g) if such
entity is a limited liability company with more than one member, has had, now
has and will have at least one member that is a Special Purpose Entity that is a
corporation that has at least two (2) Independent Directors and that owns at
least one percent (1.0%) of the equity of the limited liability
company;
(h) if such
entity is a limited liability company with only one member, has been, now is,
and will be a limited liability company organized in the State of Delaware that
has (i) as its only member a managing member, (ii) at least two (2)
Independent Managers and has not caused or allowed, and will not cause or allow,
the board of managers of such entity to take any Bankruptcy Action or any other
action requiring the unanimous affirmative vote of one hundred percent (100%) of
the managers pursuant to the terms of the limited liability company agreement of
Borrower (as in effect as of the date hereof) unless two (2) Independent
Managers have participated in such vote, and (iii) at least one person acting as
Independent Manager who shall become the sole member of such entity upon the
dissolution of the existing member;
(i) if such
entity is (i) a limited liability company, has had, now has, and will have
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, (ii) a limited partnership, has had, now has, and will
have a limited partnership agreement, or (iii) a corporation, has had, now has,
and will have a certificate of incorporation that, in each of the foregoing
cases, provides that such entity will not, as long as any portion of the Debt
remains outstanding: (A) dissolve, merge, liquidate or consolidate;
(B) except as permitted under the terms of this Agreement, sell all or
substantially all of its assets or the assets of Borrower (as applicable); (C)
engage in any other business activity or amend its organizational documents with
respect to the matters set forth in this definition without the written consent
of Lender; or (D) without the
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affirmative
vote of two (2) Independent Directors or Independent Managers, as applicable,
and of all other directors or managers of such entity, take any Bankruptcy
Action with respect to itself or any other entity in which it has a direct or
indirect legal or beneficial ownership interest;
(j) has been,
is and intends to remain solvent and has paid and intends to continue to pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets as the same have or shall become due, and has
maintained, is maintaining and intends to maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(k) has not
failed, and will not fail, to correct any known misunderstanding regarding the
separate identity of such entity;
(l) has
maintained and will maintain its accounts, books and records separate from any
other Person and has filed and will file its own tax returns, except to the
extent that it has been or is required to file consolidated tax returns by
law;
(m) has
maintained and will maintain its own records, books, resolutions and
agreements;
(n) other
than as provided in the Cash Management Agreement, (i) has not commingled, and
will not commingle, its funds or assets with those of any other Person and
(ii) has not participated and will not participate in any cash management
system with any other Person;
(o) has held
and will hold its assets in its own name;
(p) has
conducted and will conduct its business in its name or in a name franchised or
licensed to it by an entity other than an Affiliate of Borrower, except for
services rendered under a business management services agreement with an
Affiliate that complies with the terms contained in Subsection
(dd) below,
so long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of Borrower;
(q) has
maintained and will maintain its financial statements, accounting records and
other entity documents separate from any other Person and has not permitted, and
will not permit, its assets to be listed as assets on the financial statement of
any other entity except as required by GAAP; provided,
however, that
any such consolidated financial statement shall contain a note indicating that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated
entity;
(r) has paid
and will pay its own liabilities and expenses, including the salaries of its own
employees, out of its own funds and assets, and has maintained and will maintain
a sufficient number of employees in light of its contemplated business
operations;
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(s) has
observed and will observe all partnership, corporate or limited liability
company formalities, as applicable;
(t) has had
no and will have no Indebtedness other than (i) the Loan, (ii) unsecured
trade and operational debt incurred in the ordinary course of business relating
to the ownership and operation of the Property and the routine administration of
Borrower, in amounts not to exceed one percent (1%) of the original principal
amount of the Loan and the Mezzanine Loan, in the aggregate, which liabilities
are not more than sixty (60) days past the date incurred, are not evidenced by a
note and are paid when due, and which amounts are normal and reasonable under
the circumstances, and (iii) such other liabilities as are permitted pursuant to
this Agreement;
(u) has not
assumed or guaranteed or become obligated for, and will not assume or guarantee
or become obligated for, the debts of any other Person and has not held out and
will not hold out its credit as being available to satisfy the obligations of
any other Person except as permitted pursuant to this Agreement;
(v) has not
acquired and will not acquire obligations or securities of its partners, members
or shareholders or any other Affiliate;
(w) has
allocated and will allocate, fairly and reasonably, any overhead expenses that
are shared with any Affiliate, including, but not limited to, paying for shared
office space and services performed by any employee of an
Affiliate;
(x) has
maintained and used, now maintains and uses, and will maintain and use, separate
stationery, invoices and checks bearing its name. The stationery, invoices, and
checks utilized by the Special Purpose Entity or utilized to collect its funds
or pay its expenses have borne and shall bear its own name and have not borne
and shall not bear the name of any other entity unless such entity is clearly
designated as being the Special Purpose Entity’s agent;
(y) has not
pledged and will not pledge its assets for the benefit of any other
Person;
(z) has held
itself out and identified itself, and will hold itself out and identify itself,
as a separate and distinct entity under its own name or in a name franchised or
licensed to it by an entity other than an Affiliate of Borrower and not as a
division or part of any other Person, except for services rendered under a
business management services agreement with an Affiliate that complies with the
terms contained in Subsection
(dd) below,
so long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of Borrower;
(aa) has
maintained and will maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any other Person;
(bb) has not
made and will not make loans to any Person or hold evidence of indebtedness
issued by any other Person or entity (other than cash and investment-grade
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securities
issued by an entity that is not an Affiliate of or subject to common ownership
with such entity);
(cc) has not
identified and will not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it, and has not identified
itself, and shall not identify itself, as a division of any other
Person;
(dd) has not
entered into or been a party to, and will not enter into or be a party to, any
transaction with its partners, members, shareholders or Affiliates except (i) in
the ordinary course of its business and on terms which are intrinsically fair,
commercially reasonable and are no less favorable to it than would be obtained
in a comparable arm’s-length transaction with an unrelated third party, and (ii)
in connection with this Agreement;
(ee) has not
had and will not have any obligation to indemnify, and has not indemnified and
will not indemnify, its partners, officers, directors or members, as the case
may be, unless such an obligation was and is fully subordinated to the
Obligations and will not constitute a claim against the Obligations in the event
that cash flow in excess of the amount required to pay the Obligations is
insufficient to pay such obligation;
(ff) if such
entity is a corporation, it has considered and shall consider the interests of
its creditors in connection with all corporate actions;
(gg) except as
provided in the Loan documents, does not and will not have any of its
obligations guaranteed by any Affiliate; and
(hh) has
complied and will comply with all of the terms and provisions contained in its
organizational documents. The statement of facts contained in its organizational
documents are true and correct and will remain true and correct.
“Spread” shall
mean two percent (2.0%).
“Spread
Maintenance Premium” shall
mean an amount equal to the product of (a) the Outstanding Principal
Balance being prepaid, multiplied by (b) the applicable percentage set
forth on Schedule
V attached
hereto with respect to the Payment Date on which the prepayment occurs, or, if
the prepayment is not made on a Payment Date, the following Payment
Date.
“Standard
Statements” shall
have the meaning set forth in Section
5.1.11(f)(i)
hereof.
“State” shall
mean the State or Commonwealth in which the Property or any part thereof is
located.
“Strike
Price” shall
mean, as applicable:
(a) with
respect to the period commencing on the Closing Date through and including the
Initial Maturity Date, four and nine-tenths percent (4.90%) per annum;
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(b) with
respect to the First Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
First Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.07,
and
(ii) the
Spread;
(c) with
respect to the Second Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
Second Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.07,
and
(ii) the
Spread; and
(d) with
respect to the Third Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
Third Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.07,
and
(ii) the
Spread.
“Sub-Management
Agreement” shall
mean that certain Property Management Sub-Contract, dated as of March 15, 2005,
pursuant to which Sub-Manager is to provide management and other services with
respect to the Property, or if the context requires a Replacement Sub-Management
Agreement.
“Sub-Manager” shall
mean Cousins Properties Services LP, a Texas limited partnership, or if the
context requires, a Qualified Sub-Manager who is managing the Property in
accordance with the terms and provisions of this Agreement.
“Survey” shall
mean a survey of the Property prepared pursuant to the requirements contained in
Section
4.1.27
hereof.
“Tax
and Insurance Escrow Account” shall
have the meaning set forth in Section
7.2
hereof.
“Tax
and Insurance Escrow Funds” shall
have the meaning set forth in Section
7.2
hereof.
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“Taxes” shall
mean all real estate and personal property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against the Property
or part thereof, together with all interest and penalties thereon.
“Third
Extended Maturity Date” shall
mean April 9, 2010.
“Third
Extension Option” shall
have the meaning set forth in Section
2.5.3
hereof.
“Third
Extension Term” shall
have the meaning set forth in Section
2.5.3
hereof.
“Threshold
Amount” shall
have the meaning set forth in Section
5.1.21
hereof.
“Title
Company” shall
mean Fidelity National Title Insurance Company.
“Title
Insurance Policy” shall
mean an ALTA mortgagee title insurance policy in a form acceptable to Lender
(or, if the Property is in a State which does not permit the issuance of such
ALTA policy, such form as shall be permitted in such State and acceptable to
Lender) issued with respect to the Property and insuring the lien of the
Mortgage.
“Transfer” shall
have the meaning set forth in Section
5.2.10(b)
hereof.
“UCC” or
“Uniform
Commercial Code” shall
mean the Uniform Commercial Code as in effect in the State.
“Underwritten
Debt Service Coverage Ratio” shall
mean a ratio for the applicable twelve (12) full calendar month period in
which:
(a) the
numerator is the Underwritten Net Operating Income for such period;
and
(b) the
denominator is the greater of (i) the aggregate amount of (x) the debt service
due and payable on the Mezzanine Loan for such period (net of any payments made
to Mezzanine Borrower pursuant to any interest rate cap agreement) and (y) the
Debt Service due and payable on the Loan for such period (net of any payments
made to Borrower pursuant to any Interest Rate Cap Agreement), or (ii) an
assumed aggregate debt service for (1) the Mezzanine Loan for such period
calculated on the basis of a six and nine-tenths percent (6.9%) debt service
constant and (2) the Loan for such period calculated on the basis of a six and
nine-tenths percent (6.9%) debt service constant.
“Underwritten
Net Operating Income” shall
mean, for any twelve (12) full calendar month period, the underwritten Net Cash
Flow of the Property determined by Lender in its reasonable discretion in
accordance with Lender’s then current underwriting standards for loans of this
type and the then current underwriting standards of the Rating Agencies, based
upon (i) Qualifying Income actually collected by Borrower for the last full
calendar month prior to the date of the calculation, annualized, less (ii)
Operating Expenses (other than expenses for tenant improvements and leasing
commissions), for the trailing twelve full calendar month period and (iii)
Capital Expenditures at the annual rate of $0.10 per leasable square foot of
space at the Property.
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“U.S.
Obligations” shall
mean non-redeemable securities evidencing an obligation to timely pay principal
and/or interest in a full and timely manner that are direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged.
“Vacant
Space Master Lease” shall
have the meaning set forth in Section
3.1.21(a) hereof.
“Vacant
Space” shall
have the meaning set forth in Section
3.1.21(a) hereof.
“Vacant
Space Rent” shall
have the meaning set forth in Section
3.1.21(a) hereof.
Section
1.2 Principles
of Construction. All
references to sections and schedules are to sections and schedules in or to this
Agreement unless otherwise specified. All uses of the word “including” shall
mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.
ARTICLE
2
GENERAL
TERMS
Section
2.1 Loan
Commitment; Disbursement to Borrower.
2.1.1 Agreement
to Lend and Borrow. Subject
to and upon the terms and conditions set forth herein, Lender hereby agrees to
make, and Borrower hereby agrees to borrow, the Loan on the Closing
Date.
2.1.2 Single
Disbursement to Borrower.
Borrower may request and receive only one disbursement hereunder in respect of
the Loan and any amount borrowed and repaid hereunder in respect of the Loan may
not be reborrowed.
2.1.3 The
Note, Mortgage and Loan Documents. The
Loan shall be evidenced by the Note and secured by the Mortgage, the Assignment
of Leases and the other Loan Documents.
2.1.4 Use of
Proceeds.
Borrower shall use the proceeds of the Loan to (a) purchase the Property,
(b) pay all past-due Basic Carrying Costs, if any, with respect to the Property,
(c) make initial deposits into the Reserve Funds on the Closing Date in the
amounts provided herein, (d) pay costs and expenses incurred in connection with
the closing of the Loan, as approved by Lender, (e) fund any working capital
requirements of the Property, and (f) distribute the balance, if any, to
Borrower, Mezzanine Borrower and further upstream to the Operating Partnership.
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Section
2.2 Interest
Rate.
2.2.1 Interest
Generally. Subject
to the provisions of Section
2.2.5 hereof
and without limiting the terms thereof, interest on the Outstanding Principal
Balance shall accrue from the Closing Date to but excluding the Maturity Date at
the Applicable Interest Rate, and thereafter, if not paid in full, at the
Default Rate.
2.2.2 Interest
Calculation.
Interest on the Outstanding Principal Balance shall be calculated by multiplying
(a) the actual number of days elapsed in the period for which the
calculation is being made by (b) a daily rate based on a three hundred
sixty (360) day year by (c) the Outstanding Principal
Balance.
2.2.3 Determination
of Interest Rate.
(a) The
Applicable Interest Rate with respect to the Loan shall be: (i) LIBOR plus
the Spread with respect to the applicable Interest Accrual Period for a LIBOR
Loan or (ii) the Prime Rate plus the Prime Rate Spread for a Prime Rate
Loan if the Loan is converted to a Prime Rate Loan pursuant to the provisions of
Section 2.2.3 (c) or
(f).
(b) Subject
to the terms and conditions of this Section 2.2.3, the
Loan shall be a LIBOR Loan and Borrower shall pay interest on the Outstanding
Principal Balance at LIBOR plus the Spread for the applicable Interest Accrual
Period. Any change in the rate of interest hereunder due to a change in the
Applicable Interest Rate shall become effective as of the opening of business on
the first day on which such change in the Applicable Interest Rate shall become
effective, with the understanding that LIBOR shall change only on a
Determination Date as set forth in the definition of LIBOR. Each determination
by Lender of the Applicable Interest Rate shall be conclusive and binding for
all purposes, absent manifest error.
(c) In the
event that Lender shall have determined (which determination shall be conclusive
and binding upon Borrower absent manifest error) that by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining LIBOR, then Lender shall forthwith give notice by
telephone of such determination, confirmed in writing, to Borrower at least
one (1) day prior to the last day of the related Interest Accrual Period.
If such notice is given, the related outstanding LIBOR Loan shall be converted,
on the last day of the then current Interest Accrual Period, to a Prime Rate
Loan.
(d) If,
pursuant to the terms of this Agreement, any portion of the Loan has been
converted to a Prime Rate Loan and Lender shall determine (which determination
shall be conclusive and binding upon Borrower absent manifest error) that the
event(s) or circumstance(s) which resulted in such conversion shall no longer be
applicable, Lender shall give notice by telephone of such determination,
confirmed in writing, to Borrower at least one (1) day prior to the last day of
the related Interest Accrual Period. If such notice is given, the related
outstanding Prime Rate Loan shall be converted to a LIBOR Loan on the last day
of the then current Interest Accrual Period.
(e) With
respect to a LIBOR Loan, all payments made by Borrower hereunder shall be made
free and clear of, and without reduction for or on account of, income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions, reserves or
withholdings imposed,
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levied,
collected, withheld or assessed by any Governmental Authority, which are
imposed, enacted or become effective after the date hereof (such non-excluded
taxes being referred to collectively as “Foreign
Taxes”),
excluding income and franchise taxes of the United States of America or any
political subdivision or taxing authority thereof or therein (including Puerto
Rico). If any Foreign Taxes are required to be withheld from any amounts payable
to Lender hereunder, the amounts so payable to Lender shall be increased to the
extent necessary to yield to Lender (after payment of all Foreign Taxes)
interest or any such other amounts payable hereunder at the rate or in the
amounts specified hereunder. Whenever any Foreign Tax is payable pursuant to
applicable law by Borrower, as promptly as possible thereafter, Borrower shall
send to Lender an original official receipt, if available, or certified copy
thereof showing payment of such Foreign Tax. Borrower hereby indemnifies Lender
for any incremental taxes, interest or penalties that may become payable by
Lender which may result from any failure by Borrower to pay any such Foreign Tax
when due to the appropriate taxing authority or any failure by Borrower to remit
to Lender the required receipts or other required documentary
evidence.
(f) If any
requirement of law or any change therein or in the interpretation or application
thereof, shall hereafter make it unlawful for Lender to make or maintain a LIBOR
Loan as contemplated hereunder (i) the obligation of Lender hereunder to
make a LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be
canceled forthwith and (ii) any outstanding LIBOR Loan shall be converted
automatically to a Prime Rate Loan on the next succeeding Payment Date or within
such earlier period as required by law. Borrower hereby agrees promptly to pay
Lender, upon demand, any additional amounts necessary to compensate Lender for
any costs incurred by Lender in making any conversion in accordance with this
Agreement, including, without limitation, any interest or fees payable by Lender
to lenders of funds obtained by it in order to make or maintain the LIBOR Loan
hereunder. Lender’s notice of such costs, as certified to Borrower, shall be
conclusive absent manifest error.
(g) In the
event that any change in any requirement of law or in the interpretation or
application thereof, or compliance by Lender with any request or directive
(whether or not having the force of law) hereafter issued from any central bank
or other Governmental Authority:
(i) shall
hereafter impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of Lender
which is not otherwise included in the determination of LIBOR
hereunder;
(ii) shall
hereafter have the effect of reducing the rate of return on Lender’s capital as
a consequence of its obligations hereunder to a level below that which Lender
could have achieved but for such adoption, change or compliance (taking into
consideration Lender’s policies with respect to capital adequacy) by any amount
deemed by Lender to be material; or
(iii) shall
hereafter impose on Lender any other condition and the result of any of the
foregoing is to increase the cost to Lender of making, renewing or maintaining
loans or extensions of credit or to reduce any amount receivable
hereunder;
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then, in
any such case, Borrower shall promptly pay Lender, upon demand, any additional
amounts necessary to compensate Lender for such additional cost or reduced
amount receivable which Lender deems to be material as determined by Lender. If
Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.2.3(g), Lender
shall provide Borrower with not less than ninety (90) days’ notice
specifying in reasonable detail the event by reason of which it has become so
entitled and the additional amount required to fully compensate Lender for such
additional cost or reduced amount. A certificate as to any additional costs or
amounts payable pursuant to the foregoing sentence submitted by Lender to
Borrower shall be conclusive in the absence of manifest error. This provision
shall survive payment of the Note and the satisfaction of all other obligations
of Borrower under this Agreement and the Loan Documents.
(h) Borrower
agrees to indemnify Lender and to hold Lender harmless from any loss or expense
which Lender sustains or incurs as a consequence of (i) any default by
Borrower in payment of the principal of or interest on a LIBOR Loan, including,
without limitation, any such loss or expense arising from interest or fees
payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory)
of the LIBOR Loan on a day that (A) is not the Payment Date immediately
following the last day of an Interest Accrual Period with respect thereto or
(B) is the Payment Date immediately following the last day of an Interest
Accrual Period with respect thereto if Borrower did not give the prior notice of
such prepayment required pursuant to the terms of this Agreement, including,
without limitation, such loss or expense arising from interest or fees payable
by Lender to lenders of funds obtained by it in order to maintain the LIBOR Loan
hereunder and (iii) the conversion (for any reason whatsoever, whether
voluntary or involuntary) of the Applicable Interest Rate from LIBOR plus the
Spread to the Prime Rate plus the Prime Rate Spread with respect to any portion
of the Outstanding Principal Balance then bearing interest at LIBOR plus the
Spread on a date other than the Payment Date immediately following the last day
of an Interest Accrual Period, including, without limitation, such loss or
expenses arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain a LIBOR Loan hereunder (the amounts referred
to in the preceding clauses (i),
(ii) and
(iii) are
herein referred to collectively as the “Breakage
Costs”);
provided,
however, that
Borrower shall not indemnify Lender from any loss or expense arising from
Lender’s willful misconduct or gross negligence. This provision shall survive
payment of the Note in full and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.
(i) Lender
shall not be entitled to claim compensation pursuant to this Section 2.2.3 for any
Foreign Taxes, increased cost or reduction in amounts received or receivable
hereunder, or any reduced rate of return, which was incurred or which accrued
more than ninety (90) days before the date Lender notified Borrower of the
change in law or other circumstance on which such claim of compensation is based
and delivered to Borrower a written statement setting forth in reasonable detail
the basis for calculating the additional amounts owed to Lender under this
Section 2.2.3, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.2.4 Additional
Costs. Lender
will use reasonable efforts (consistent with legal and regulatory restrictions)
to maintain the availability of the LIBOR Loan and to avoid or reduce any
increased or additional costs payable by Borrower under Section 2.2.3,
including, if
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requested
by Borrower, a transfer or assignment of the Loan to a branch, office or
Affiliate of Lender in another jurisdiction, or a redesignation of its lending
office with respect to the Loan, in order to maintain the availability of the
LIBOR Loan or to avoid or reduce such increased or additional costs, provided
that the transfer or assignment or redesignation (a) would not result in
any additional costs, expenses or risk to Lender that are not reimbursed by
Borrower and (b) would not be disadvantageous in any other respect to
Lender as determined by Lender in its sole discretion.
2.2.5 Default
Rate. In the
event that, and for so long as, any Event of Default shall have occurred and be
continuing, the Outstanding Principal Balance and, to the extent permitted by
law, all accrued and unpaid interest in respect of the Loan and any other
amounts due pursuant to the Loan Documents, shall accrue interest at the Default
Rate, calculated from the date such payment was due without regard to any grace
or cure periods contained herein.
2.2.6 Usury
Savings. It is
the intent of Lender and Borrower in the execution of this Agreement and all
other instruments now or hereafter securing the Note and this Agreement to
contract in strict compliance with applicable usury law. In furtherance thereof,
Lender and Borrower stipulate and agree that none of the terms and provisions
contained in this Agreement, or in any other instrument executed in connection
herewith, shall ever be construed to create a contract to pay for the use,
forbearance or detention of money, interest at a rate in excess of the maximum
interest rate permitted to be charged by applicable law; that neither Borrower
nor any guarantors, endorsers or other parties now or hereafter becoming liable
for payment of the Loan shall ever be obligated or required to pay interest on
the Loan at a rate in excess of the maximum interest that may be lawfully
charged under applicable law; and that the provisions of this Section
2.2.6 shall
control over all other provisions of the Loan and any other instruments now or
hereafter executed in connection herewith which may be in apparent conflict
herewith. Lender expressly disavows any intention to charge or collect excessive
unearned interest or finance charges in the event the maturity of the Loan is
accelerated. If the maturity of the Loan shall be accelerated for any reason or
if the principal of the Loan is paid prior to the end of the term of the Loan,
and as a result thereof the interest received for the actual period of existence
of the Loan exceeds the applicable maximum lawful rate, Lender shall, at its
option, either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of the Loan then outstanding and
thereby shall render inapplicable any and all penalties of any kind provided by
applicable law as a result of such excess interest. In the event that Lender
shall contract for, charge or receive any amount or amounts and/or any other
thing of value which are determined to constitute interest which would increase
the effective interest rate on the Loan to a rate in excess of that permitted to
be charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be either
immediately returned to Borrower or credited against the principal balance of
the Loan then outstanding, in which event any and all penalties of any kind
under applicable law as a result of such excess interest shall be inapplicable.
By execution of the Loan Borrower acknowledges that it believes the Loan to be
non-usurious and agrees that if, at any time, Borrower should have reason to
believe that the Loan is in fact usurious, it will give Lender notice of such
condition and Borrower agrees that said holder shall have ninety (90) days in
which to make appropriate refund or other adjustment in order to correct such
condition if in fact such exists.
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2.2.7 The
Interest Rate Cap Agreement.
(a) Prior to
or contemporaneously with the Closing Date, Borrower shall enter into an
Interest Rate Cap Agreement with a LIBOR strike price equal to the Strike Price.
The Interest Rate Cap Agreement (i) shall be in a form and substance
reasonably acceptable to Lender, (ii) shall be with an Acceptable
Counterparty, (iii) shall direct such Acceptable Counterparty to deposit
directly into the Cash Management Account any amounts due Borrower under such
Interest Rate Cap Agreement so long as any portion of the Debt exists, provided
that the Debt shall be deemed to exist if the Property is transferred by
judicial or non-judicial foreclosure or deed-in-lieu thereof, (iv) shall be
for a period equal to the term of the Loan, and (v) shall have an initial
notional amount equal to the principal balance of the Loan. Borrower shall
collaterally assign to Lender, pursuant to the Collateral Assignment of Interest
Rate Cap Agreement, all of its right, title and interest to receive any and all
payments under the Interest Rate Cap Agreement, and shall deliver to Lender an
executed counterpart of such Interest Rate Cap Agreement (which shall, by its
terms, authorize the assignment to Lender and require that payments be deposited
directly into the Cash Management Account).
(b) Borrower
shall comply with all of its obligations under the terms and provisions of the
Interest Rate Cap Agreement. All amounts paid by the Counterparty under the
Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately
into the Cash Management Account. Borrower shall take all actions reasonably
requested by Lender to enforce Lender’s rights under the Interest Rate Cap
Agreement in the event of a default by the Counterparty and shall not waive,
amend or otherwise modify any of its rights thereunder.
(c) In the
event (i) Borrower exercises the First Extension Option, the Second
Extension Option or the Third Extension Option, or (ii) Lender notifies
Borrower that the Counterparty no longer qualifies as an Acceptable
Counterparty, Borrower shall replace, or shall cause the Counterparty to
replace, the Interest Rate Cap Agreement with a Replacement Interest Rate Cap
Agreement with a LIBOR strike price equal to the applicable Strike Price
(A) which Replacement Interest Rate Cap Agreement shall extend the maturity
date set forth in the Interest Rate Cap Agreement to the Fixed Maturity Date
(with respect to the foregoing clause (i)) prior
to or on the commencement date of the First Extension Term, the Second Extension
Term or the Third Extension Term, as the case may be, or (B) as required
due to the occurrence of any of the events listed in the foregoing clause (ii), not
later than thirty (30) days following receipt of notice from Lender of such
downgrade, withdrawal or qualification. With respect to each Replacement
Interest Rate Cap Agreement, Borrower shall deliver to Lender a Collateral
Assignment of Interest Rate Cap Agreement in a form comparable to the Collateral
Assignment of Interest Rate Cap Agreement entered into by Borrower as of the
date of this Agreement and that has been acknowledged by the Acceptable
Counterparty providing the Replacement Interest Rate Cap Agreement.
(d) In the
event that Borrower fails to purchase and deliver to Lender the Interest Rate
Cap Agreement or fails to maintain the Interest Rate Cap Agreement in accordance
with the terms and provisions of this Agreement, after two (2) Business Days
prior written notice to Borrower if the Interest Rate Cap Agreement is being
replaced pursuant to Section
2.2.7(c)(ii) hereof,
Lender may purchase the Interest Rate Cap Agreement and the cost incurred by
Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower
to Lender with interest
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thereon
at the Default Rate from the date such cost was incurred by Lender until such
cost is reimbursed by Borrower to Lender.
(e) In
connection with the Interest Rate Cap Agreement, Borrower shall obtain and
deliver to Lender an opinion from counsel (which counsel may be in-house counsel
for the Counterparty) for the Counterparty (upon which Lender and its successors
and assigns may rely) which shall provide, in relevant part, that:
(i) the
Counterparty is duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has the organizational power and
authority to execute and deliver, and to perform its obligations under, the
Interest Rate Cap Agreement;
(ii) the
execution and delivery of the Interest Rate Cap Agreement by the Counterparty,
and any other agreement which the Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have been
and remain duly authorized by all necessary action and do not contravene any
provision of its certificate of incorporation or by-laws (or equivalent
organizational documents) or any law, regulation or contractual restriction
binding on or affecting it or its property;
(iii) all
consents, authorizations and approvals required for the execution and delivery
by the Counterparty of the Interest Rate Cap Agreement, and any other agreement
which the Counterparty has executed and delivered pursuant thereto, and the
performance of its obligations thereunder have been obtained and remain in full
force and effect, all conditions thereof have been duly complied with, and no
other action by, and no notice to or filing with any governmental authority or
regulatory body is required for such execution, delivery or performance;
and
(iv) the
Interest Rate Cap Agreement, and any other agreement which the Counterparty has
executed and delivered pursuant thereto, has been duly executed and delivered by
the Counterparty and constitutes the legal, valid and binding obligation of the
Counterparty, enforceable against the Counterparty in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section
2.3 Loan
Payment.
2.3.1 Interest
Payments.
Borrower shall pay to Lender (a) on the date hereof, an amount equal to interest
only at the Applicable Interest Rate on the Outstanding Principal Balance from
the Closing Date up to but not including the first Payment Date following the
Closing Date, and (b) on each Payment Date thereafter up to and including the
Maturity Date, an amount equal to interest only at the Applicable Interest Rate
on the Outstanding Principal Balance for the applicable Interest Accrual Period
(the “Monthly
Interest Payment”).
2.3.2 Payment
on Maturity Date.
Borrower shall pay to Lender on the Maturity Date the Outstanding Principal
Balance, all accrued and unpaid interest and all other amounts due hereunder and
under the Note, the Mortgage and the other Loan Documents.
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2.3.3 Late
Payment Charge. If any
principal, interest or any other sums due under the Loan Documents is not paid
by Borrower by the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the maximum amount permitted by applicable law, in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Any such
late payment charge shall be secured by the Mortgage and the other Loan
Documents to the extent permitted by applicable law.
2.3.4 Method
and Place of Payment. Except
as otherwise specifically provided herein, all payments and prepayments under
this Agreement and the Note shall be made to Lender not later than 1:00 P.M.,
New York City time, on the date when due and shall be made in lawful money of
the United States of America in immediately available funds at Lender’s office
or as otherwise directed by Lender, and any funds received by Lender after such
time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day.
2.3.5 Payments
Generally. For
purposes of making payments hereunder, but not for purposes of calculating
Interest Accrual Periods, if the day on which such payment is due is not a
Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day. Lender shall have the right from time to time, in its
sole discretion, upon not less than thirty (30) days prior written notice to
Borrower, to change the Payment Date to a different calendar day each month
which is not more than five (5) days earlier nor more than five (5) days later
than the ninth day of each calendar month; provided,
however, that if
Lender shall have elected to change the Payment Date as aforesaid, Lender shall
have the option, but not the obligation, to adjust the Interest Accrual Period
accordingly. All amounts due pursuant to this Agreement and the other Loan
Documents shall be payable without setoff, counterclaim, defense or any other
deduction whatsoever.
Section
2.4 Prepayments.
2.4.1 Voluntary
Prepayments. Prior
to the Lockout Release Date, the Outstanding Principal Balance may not be
prepaid in whole or in part. On any Payment Date occurring on or after the
Lockout Release Date, Borrower may, at its option and upon thirty (30) days
prior written notice to Lender, prepay the Debt in whole but not in part (except
pursuant to Section
2.4.2 hereof);
provided,
however, that
any such prepayment is accompanied by (a) all interest which would have
accrued on the amount of the Loan to be paid through and including the last day
of the Interest Accrual Period related to the Payment Date next occurring
following the date of such prepayment, or, if such prepayment occurs on a
Payment Date, through and including the last day of the Interest Accrual Period
related to such Payment Date; (b) the Prepayment Premium, if applicable; and
(c) all other sums due and payable under this Agreement, the Note, the
Mortgage and the other Loan Documents, including, but not limited to, the
Breakage Costs, if any, and, if an Event of Default has occurred, any late fees
and default interest required to be paid by Borrower hereunder as a result
thereof and all of Lender’s costs and expenses (including, without limitation,
reasonable attorney’s fees and disbursements) incurred by Lender in connection
with such prepayment. Notwithstanding anything to the contrary set forth in this
Agreement, no prepayment shall be permitted from and including the day following
any Payment Date through and including the next Determination Date succeeding
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such day.
If the Prepayment Premium is due to Lender, Lender shall not be obligated to
accept any prepayment unless it is accompanied by the Prepayment Premium due in
connection therewith. Borrower shall have the right to revoke or rescind in
writing any notice of prepayment any time on or before the prepayment date set
forth in Borrower’s notice of prepayment provided that
Borrower pays to Lender concurrently with each such revocation or rescission the
sum of (i) all actual out-of-pocket costs and expenses incurred by Lender
in connection with or as a result of such revocation or rescission, plus
(ii) a fee in the amount of $25,000.00.
2.4.2 Mandatory
Prepayments. On the
next occurring Payment Date following the date on which Lender actually receives
any Net Proceeds, if Lender is not obligated or does not elect pursuant to the
terms hereof to make such Net Proceeds available to Borrower for Restoration,
Borrower shall prepay, or authorize Lender to apply Net Proceeds as a prepayment
of, the Outstanding Principal Balance in an amount equal to one hundred percent
(100%) of such Net Proceeds. Notwithstanding anything to the contrary contained
in the Loan Documents, so long as no Event of Default has occurred and is
continuing, no Prepayment Premium shall be due in connection with any prepayment
made pursuant to this Section
2.4.2. Any
partial prepayment under this Section 2.4.2 shall be
applied to the last payments of principal due under the Loan. Any Net Proceeds
remaining after the prepayment of the Debt in full shall be (a) transferred
by Lender to Mezzanine Lender for application in accordance with the terms of
the Mezzanine Loan Documents if the Mezzanine Loan (or any portion thereof) is
then outstanding or (b) paid to Borrower if the Mezzanine Loan has been repaid
in full.
2.4.3 Prepayments
After Default. If
after the occurrence and during the continuance of an Event of Default, payment
of all or any part of the Debt is tendered by Borrower or otherwise recovered by
Lender (including through application of any Reserve Funds), such tender or
recovery shall be deemed (a) to have been made on the next occurring
Payment Date together with the monthly Debt Service amount calculated at the
Default Rate, and (b) if such tender or recovery occurs prior to the
Lockout Release Date, a voluntary prepayment by Borrower in violation of the
prohibition against prepayment set forth in Section 2.4.1 and
Borrower shall pay, in addition to the Debt, an amount equal to five percent
(5%) of the Outstanding Principal Balance to be prepaid or
satisfied.
Section
2.5 Extension
of Maturity Date.
2.5.1 First
Extension Option.
Borrower shall have the right to extend the Initial Maturity Date to the First
Extended Maturity Date (the “First
Extension Option”; and
the period commencing on the Initial Maturity Date and ending on the First
Extended Maturity Date being referred to herein as the “First
Extension Term”),
provided that all
of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the Initial Maturity Date advising that
Borrower is exercising the First Extension Option;
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(b) No
Default, Mezzanine Default, Event of Default or Mezzanine Event of Default
exists as of the date Borrower exercises the First Extension Option and as of
the commencement date of the First Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the First Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefit thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the First Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the First
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the First Extended
Maturity Date;
(d) Borrower
shall have extended the term of the Mezzanine Loan to a maturity date not
earlier than the First Extended Maturity Date in accordance with the terms of
the Mezzanine Loan Agreement;
(e) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the
Initial Maturity Date has been extended (without any other amendments or
confirmations); and
(f) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses.
2.5.2 Second
Extension Option.
Provided Borrower has properly exercised the First Extension Option, Borrower
shall have the right to extend the First Extended Maturity Date to the Second
Extended Maturity Date (the “Second
Extension Option”; and
the period commencing on the First Extended Maturity Date and ending on the
Second Extended Maturity Date being referred to herein as the “Second
Extension Term”),
provided that all of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the First Extended Maturity Date
advising that Borrower is exercising the Second Extension Option;
(b) No
Default, Mezzanine Default, Event of Default or Mezzanine Event of Default
exists as of the date Borrower exercises the Second Extension Option and as of
the commencement date of the Second Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the Second Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefits thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the Second Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the Second
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the Second Extended
Maturity Date;
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(d) Borrower
shall have extended the term of the Mezzanine Loan to a maturity date not
earlier than the Second Extended Maturity Date in accordance with the terms of
the Mezzanine Loan Agreement;
(e) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the First
Extended Maturity Date has been extended (without any other amendments or
confirmations); and
(f) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses.
2.5.3 Third
Extension Option.
Provided Borrower has properly exercised the First Extension Option and the
Second Extension Option, Borrower shall have the right to extend the Second
Extended Maturity Date to the Third Extended Maturity Date (the “Third
Extension Option”; and
the period commencing on the Second Extended Maturity Date and ending on the
Third Extended Maturity Date being referred to herein as the “Third
Extension Term”),
provided that all of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the Second Extended Maturity Date
advising that Borrower is exercising the Third Extension Option;
(b) No
Default, Mezzanine Default, Event of Default or Mezzanine Event of Default
exists as of the date Borrower exercises the Third Extension Option and as of
the commencement date of the Third Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the Third Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefits thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the Third Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the Third
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the Third Extended
Maturity Date;
(d) Borrower
shall have extended the term of the Mezzanine Loan to a maturity date not
earlier than the Third Extended Maturity Date in accordance with the terms of
the Mezzanine Loan Agreement;
(e) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the
Second Extended Maturity Date has been extended (without any other amendments or
confirmations); and
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(f) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses.
Section
2.6 Cash
Management.
2.6.1 Lockbox
Account.
(a) Borrower
shall establish and maintain a segregated Eligible Account (the “Lockbox
Account”) with
the Lockbox Bank in trust for the benefit of Lender, which Lockbox Account shall
be under the sole dominion and control of Lender. The Lockbox Account shall be
entitled “Xxxxxxx Properties - Austin Research Park, L.P., for the benefit of
Nomura Credit & Capital, Inc., its successors and assigns, as Lender,
pursuant to Loan Agreement dated as of March 15, 2005 -- Lockbox Account.”
Borrower (i) hereby grants to Lender a first priority security interest in the
Lockbox Account and all deposits at any time contained therein and the proceeds
thereof, and (ii) will take all actions necessary to maintain in favor of Lender
a perfected first priority security interest in the Lockbox Account, including,
without limitation, executing and filing UCC-1 Financing Statements and
continuations thereof. Borrower will not in any way alter or modify the Lockbox
Account, will not further pledge, assign, encumber or grant a security interest
in its interest in the Lockbox Account and will notify Lender of the account
number thereof. Lender and Servicer shall have the sole right to make
withdrawals from the Lockbox Account and all costs and expenses for establishing
and maintaining the Lockbox Account shall be paid by Borrower.
(b) Borrower
shall, or shall cause Manager or Sub-Manger to, deliver written instructions to
all tenants under Leases to deliver all Rents payable thereunder directly to the
Lockbox Account. Borrower shall, and shall cause Manager and Sub-Manager to,
deposit all amounts received by Borrower, Manager or Sub-Manager constituting
Rents into the Lockbox Account within one (1) Business Day after
receipt.
(c) Borrower
shall obtain from the Lockbox Bank its agreement in form and substance
reasonably satisfactory to Lender, to transfer to the Cash Management Account in
immediately available funds by federal wire transfer all amounts on deposit in
the Lockbox Account once every Business Day throughout the term of the
Loan.
2.6.2 Cash
Management Account.
(a) Lender
and/or Servicer shall establish and maintain a segregated Eligible Account (the
“Cash
Management Account”) to be
held by Servicer in trust for the benefit of Lender, which Cash Management
Account shall be under the sole dominion and control of Lender. The Cash
Management Account shall be entitled “Xxxxxxx Properties - Austin Research Park,
L.P., for the benefit of Nomura Credit & Capital, Inc., its successors and
assigns, as Lender, pursuant to Loan Agreement dated as of March 15, 2005 - Cash
Management Account.” Borrower (i) hereby grants to Lender a first priority
security interest in the Cash Management Account and all deposits at any time
contained therein and the proceeds thereof, and (ii) will take all actions
necessary to maintain in favor of Lender a perfected first priority security
interest in the Cash Management Account, including, without limitation,
executing and filing UCC-1
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Financing
Statements and continuations thereof. Borrower will not in any way alter or
modify the Cash Management Account, will not further pledge, assign, encumber or
grant a security interest in its interest in the Cash Management Account and
will notify Lender of the account number thereof. Lender and Servicer shall have
the sole right to make withdrawals from the Cash Management Account and all
costs and expenses for establishing and maintaining the Cash Management Account
shall be paid by Borrower.
(b) Provided
no Event of Default shall have occurred and be continuing, on each Payment Date
(or, if such Payment Date is not a Business Day, on the immediately preceding
Business Day) all funds on deposit in the Cash Management Account shall be
applied by Lender to the payment of the following items in the order
indicated:
(i) First,
payment to Lender of an amount sufficient to pay the monthly deposit to the Tax
and Insurance Escrow Funds in accordance with the terms and conditions of
Section
7.2
hereof;
(ii) Second,
payment to Lender of the Monthly Interest Payment due on such Payment
Date;
(iii) Third,
payment to Lender of (or reimbursement of Lender for) any reasonable
miscellaneous fees or expenses (including, without limitation, any “protective
advances” made by Lender in respect of the Loan) then due and payable pursuant
to the terms of the Loan Documents;
(iv) Fourth,
payment to Lender of any other amounts then due and payable under the Loan
Documents (other than the Outstanding Principal Balance);
(v) Fifth,
payment to Borrower of amounts necessary to pay monthly Cash Expenses incurred
(A) until such time as there shall exist an applicable Approved Annual
Budget, pursuant to a written request for payment submitted by Borrower to
Lender specifying the individual Cash Expenses, which request and the requested
Cash Expenses shall be in form and substance acceptable to Lender in its
reasonable discretion or (B) after such time as there shall exist an Approved
Annual Budget, in accordance with the related Approved Annual Budget pursuant to
a written request for payment submitted by Borrower to Lender specifying the
individual Cash Expenses, which request shall be in a form reasonably acceptable
to Lender;
(vi) Sixth,
payment to Borrower of amounts necessary to pay Extraordinary Expenses
reasonably approved by Lender, if any;
(vii) Seventh,
to Servicer, for transfer to the Mezzanine Cash Management Account, of an amount
equal to the Mezzanine Monthly Interest Payment payable on such Payment Date and
any then delinquent interest payable under the Mezzanine Loan Documents;
(viii) Eighth,
during the existence of an Xxxxxxx Xxxxxx Sweep Period, if the Loan has not been
indefeasibly paid in full, payment of all amounts remaining in the Cash
Management Account after payment of amounts required to fully fund items
(i)
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through
(vii) above
(the “Excess
Cash Flow”) into
the Xxxxxxx Xxxxxx Reserve Account;
(ix) Ninth, if
no Xxxxxxx Xxxxxx Sweep Period then exists or if the Loan has been indefeasibly
paid in full, and if the Mezzanine Loan is then outstanding, to Servicer, for
transfer to the Mezzanine Cash Management Account, all Excess Cash Flow;
and
(x) Lastly,
payment to Borrower of any remaining Excess Cash Flow.
(c) The
insufficiency of funds on deposit in the Cash Management Account shall not
relieve Borrower of the obligation to make any payments, as and when due
pursuant to this Agreement and the other Loan Documents, and such obligations
shall be separate and independent, and not conditioned on any event or
circumstance whatsoever.
(d) All funds
on deposit in the Cash Management Account following the occurrence and during
the continuance of an Event of Default may be applied by Lender in such order
and priority as Lender shall determine in its sole discretion.
2.6.3 Payments
Received Under the Cash Management Agreement.
Notwithstanding anything to the contrary contained in this Agreement and the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower’s obligations with respect to the payment of the Monthly
Interest Payments and amounts due for the Tax and Insurance Escrow Funds and any
other payment reserves established pursuant to this Agreement or any other Loan
Document shall be deemed satisfied to the extent sufficient amounts are
deposited in the Cash Management Account to satisfy such obligations on the
dates each such payment is required, regardless of whether any of such amounts
are so applied by Lender.
ARTICLE
3
CONDITIONS
PRECEDENT
Section
3.1 Conditions
Precedent to Closing. The
obligation of Lender to make the Loan hereunder is subject to the fulfillment by
Borrower, or waiver by Lender, of the following conditions precedent no later
than the Closing Date (all of which conditions shall be deemed satisfied or
waived by Lender’s funding of the Loan, unless Borrower has specifically agreed
in writing to cause such condition to occur after the Closing
Date):
3.1.1 Representations
and Warranties; Compliance with Conditions. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.
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3.1.2 Loan
Agreement and Note. Lender
shall have received a copy of this Agreement and the Note, in each case, duly
executed and delivered on behalf of Borrower.
3.1.3 Delivery
of Loan Documents; Title Insurance; Reports; Leases.
(a) Mortgage,
Assignment of Leases. Lender
shall have received from Borrower fully executed and acknowledged counterparts
of the Mortgage and the Assignment of Leases and evidence that counterparts of
the Mortgage and Assignment of Leases have been delivered to the Title Company
for recording, in the reasonable judgment of Lender, so as to effectively create
upon such recording valid and enforceable Liens upon the Property, of the
requisite priority, in favor of Lender (or such trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents. Lender shall have
also received from Borrower fully executed counterparts of the other Loan
Documents.
(b) Title
Insurance. Lender
shall have received a Title Insurance Policy issued by the Title Company and
dated as of the Closing Date, with reinsurance and direct access agreements
acceptable to Lender. Such Title Insurance Policy shall (i) provide coverage in
amounts satisfactory to Lender, (ii) insure Lender that the Mortgage creates a
valid lien on the Property encumbered thereby of the requisite priority, free
and clear of all exceptions from coverage other than Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the terms of
any endorsements), (iii) contain such endorsements and affirmative coverages as
Lender may reasonably request, and (iv) name Lender and its successors and
assigns as the insured. The Title Insurance Policy shall be assignable, to the
extent permitted under applicable state law. Lender also shall have received
evidence that all premiums in respect of such Title Insurance Policy have been
paid.
(c) Survey. Lender
shall have received a current Survey, certified to the Title Company and Lender
and their successors and assigns, in form and content satisfactory to Lender and
prepared by a professional and properly licensed land surveyor satisfactory to
Lender in accordance with the Accuracy Standards for ALTA/ACSM Land Title
Surveys as adopted by ALTA, American Congress on Surveying & Mapping and
National Society of Professional Surveyors in 1999. The Survey shall reflect the
same legal description contained in the Title Insurance Policy. The surveyor’s
seal shall be affixed to the Survey and the surveyor shall provide a
certification for the Survey in form and substance acceptable to
Lender.
(d) Insurance. Lender
shall have received valid certificates of insurance for the Policies required
hereunder, satisfactory to Lender in its sole discretion, and evidence of the
payment of all Insurance Premiums payable for the existing policy
period.
(e) Environmental
Reports. Lender
shall have received a Phase I environmental report (and, if recommended by the
Phase I environmental report, a Phase II environmental report) in respect of the
Property, satisfactory in form and substance to Lender.
(f) Zoning. Lender
shall have received, either (A) letters or other evidence with respect to the
Property from the appropriate municipal authorities (or other Persons)
concerning
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applicable
zoning and building laws, or (B) an ALTA 3.1 zoning endorsement for the Title
Insurance Policy, in each case in substance reasonably satisfactory to
Lender.
(g) Encumbrances.
Borrower shall have taken or caused to be taken such actions in such a manner so
that Lender has a valid and perfected first priority Lien as of the Closing Date
with respect to the Mortgage, subject only to applicable Permitted Encumbrances
and such other Liens as are permitted pursuant to the Loan Documents, and Lender
shall have received satisfactory evidence thereof.
3.1.4 Related
Documents. Each
additional document not specifically referenced herein, but relating to the
transactions contemplated herein, shall be in form and substance reasonably
satisfactory to Lender, and shall have been duly authorized, executed and
delivered by all parties thereto and Lender shall have received and approved
certified copies thereof.
3.1.5 Delivery
of Organizational Documents.
(a) Borrower
shall deliver or cause to be delivered to Lender copies certified by Borrower of
all organizational documentation related to Borrower and/or its formation,
structure, existence, good standing and/or qualification to do business, as
Lender may request in its sole discretion, including, without limitation, good
standing certificates, qualifications to do business in the appropriate
jurisdictions, resolutions authorizing the entering into of the Loan and
incumbency certificates as may be reasonably requested by Lender.
(b) Borrower
shall deliver or cause to be delivered to Lender copies certified by Borrower of
all organizational documentation related to Principal, Guarantor, and other
members and/or partners of Borrower, and/or the formation, structure, existence,
good standing and/or qualification to do business of any of the foregoing, as
Lender may reasonably request, including, without limitation, good standing
certificates, qualifications to do business in the appropriate jurisdictions,
authorizing resolutions and incumbency certificates as may be reasonably
requested by Lender.
3.1.6 Opinions
of Borrower’s Counsel. Lender
shall have received opinions from Borrower’s counsel with respect to
non-consolidation and the due execution, authority and enforceability of the
Loan Documents and such other matters as Lender may reasonably require, all such
opinions in form, scope and substance satisfactory to Lender and Lender’s
counsel in their reasonable discretion.
3.1.7 Budgets.
Borrower shall have delivered, and Lender shall have approved, the Annual Budget
for the current Fiscal Year.
3.1.8 Basic
Carrying Costs.
Borrower shall have paid all Basic Carrying Costs relating to the Property which
are in arrears, including without limitation, (a) accrued but unpaid Insurance
Premiums, (b) currently due Taxes (including any in arrears) and (c) currently
due Other Charges, which amounts shall be funded with proceeds of the
Loan.
3.1.9 Completion
of Proceedings. All
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated by this Agreement and the other Loan Documents and all
documents incidental thereto shall be satisfactory in form and substance
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to
Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably
request.
3.1.10 Payments. All
payments, deposits or escrows required to be made or established by Borrower
under this Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid.
3.1.11 Tenant
Estoppels. Lender
shall have received an executed tenant estoppel letter, which shall be in form
and substance satisfactory to Lender, from such Tenants under Leases at the
Property as Lender shall reasonably require.
3.1.12 Transaction
Costs.
Borrower shall have paid or reimbursed Lender for all title insurance premiums,
recording and filing fees, costs of environmental reports, Physical Conditions
Reports, appraisals and other reports, the fees and costs of Lender’s counsel
and all other third party out-of-pocket expenses incurred in connection with the
origination of the Loan.
3.1.13 Material
Adverse Change. There
shall have been no material adverse change in the financial condition or
business condition of Borrower, Principal, Guarantor or the Property since the
date of the most recent financial statements delivered to Lender. The income and
expenses of the Property, the occupancy thereof, and all other features of the
transaction shall be as represented to Lender without material adverse change.
None of Borrower, Principal, Guarantor or any of their respective constituent
Persons shall be the subject of any Bankruptcy Action.
3.1.14 Leases
and Rent Roll. Lender
shall have received copies of all Leases and certified copies of any Leases as
requested by Lender. Lender shall have received a current certified rent roll of
the Property, reasonably satisfactory in form and substance to
Lender.
3.1.15 Subordination
and Attornment. Lender
shall have received appropriate instruments acceptable to Lender subordinating
to the Lien of the Mortgage all of the Leases designated by Lender. Lender shall
have received an agreement to attorn to Lender from any tenant under a Lease
that does not provide for such attornment by its terms, and which attornment
agreement shall be satisfactory in form and substance to Lender.
3.1.16 Tax
Lot. Lender
shall have received evidence that the Property constitutes one (1) or more
separate tax lots, which evidence shall be satisfactory in form and substance to
Lender.
3.1.17 Physical
Conditions Reports. Lender
shall have received a Physical Conditions Reports, which report shall be
satisfactory in form and substance to Lender.
3.1.18 Management
Agreement. Lender
shall have received a copy of the Management Agreement, which shall be
satisfactory in form and substance to Lender. The aggregate fee payable to
Manager and Sub-Manager shall not exceed three and one half percent (3.5%) of
Gross Income from Operations per annum (excluding any Rents payable under the
Vacant Space Master Lease). The Management Agreement shall also provide that all
of Manager’s rights under the Management Agreement are subordinate to the Lien
of the Mortgage and the rights of Lender.
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3.1.19 Appraisal. Lender
shall have received an appraisal of the Property, which shall be satisfactory in
form and substance to Lender.
3.1.20 Financial
Statements. Lender
shall have received a balance sheet with respect to the Property for the two (2)
most recent Fiscal Years and statements of income and statements of cash flows
with respect to the Property for the three (3) most recent Fiscal Years, each in
form and substance satisfactory to Lender.
3.1.21 Vacant
Space Master Lease: (a)
Borrower shall have entered into a Lease (the “Vacant
Space Master Lease”) with
the Operating Partnership for the 24,018 square feet of vacant space (the
“Vacant
Space”) at the
Property, which Vacant Space Master Lease shall (i) provide for the payment, in
equal monthly installments, of an annual base rent equal to $312,234.00 plus
tenant’s pro rata share (based on the amount of Vacant Space to the amount of
gross leaseable area at the Property) of taxes, insurance premiums and other
costs incurred by Borrower in owning, operating and maintaining the Property
(collectively, the “Vacant
Space Rent”), (ii)
have a term expiring on April 9, 2007 and (iii) be otherwise in form and
substance satisfactory to Lender. Lender will consent to a reduction of the
Vacant Space Rent payable by the Operating Partnership on the first day of each
calendar quarter commencing on July 1, 2005 (each such quarterly date, an
“Adjustment
Date”) to the
extent of the Rents payable under Leases executed by Borrower since the
preceding Adjustment Date (or, with respect to the first Adjustment Date, since
the Closing Date), if such Leases (A) demise the Vacant Space (or portions
thereof), (B) have a term of not less than least five (5) years,
(C) are with tenants approved by Lender in its reasonable discretion who
are in occupancy of their premises and paying full unabated Rent, (D) are
not in default, and (E) comply with the terms and provisions of
Section
5.1.20 hereof
and are otherwise approved by Lender in its reasonable discretion, all as
evidenced to the reasonable satisfaction of Lender (such evidence to include a
copy of the applicable Lease and tenant estoppel certificates executed by the
applicable tenants in form and substance reasonably acceptable to Lender). Any
Lease meeting the requirements of the preceding sentence is referred to herein
as a “New
Vacant Space Lease”. At
such time as Borrower has entered into New Vacant Space Leases providing for the
payment of Full Service Gross Rent in an amount equal to or greater than the
Vacant Space Rent and has satisfied each of the conditions set forth above in
this Section with respect to each such New Vacant Space Lease, Lender shall
consent to the termination of the Vacant Space Master Lease.
(b) In
addition, the Vacant Space Master Lease shall provide that in the event that
Xxxxxxx Xxxxxx exercises its option to terminate the Xxxxxxx Xxxxxx Lease as of
September 30, 2007, the Vacant Space Master Lease shall include the Xxxxxxx
Xxxxxx Space for a term commencing on October 1, 2007 and expiring on September
30, 2012. The annual Rent payable by the Operating Partnership under the Vacant
Space Master Lease with respect to the Xxxxxxx Xxxxxx Space shall be an amount
equal to the Deficient NCF Amount as of October 1, 2007, payable in equal
monthly installments on the first (1st) day of
each calendar month commencing on October 1, 2007. On each Adjustment Date
occurring after October 1, 2007, the annual Rent payable by the Operating
Partnership under the Vacant Space Master Lease with respect to the Xxxxxxx
Xxxxxx Space shall be increased or decreased, as applicable, to the then current
Deficient NCF Amount as reasonably determined by Lender. Borrower shall deliver
to Lender on each Adjustment Date its calculation of the then current Deficient
NCF Amount. Lender will consent to a termination of the Vacant Space Master
Lease with respect to the Xxxxxxx Xxxxxx
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Space
upon the earlier to occur of either (i) the Underwritten Net Operating
Income from the Property (exclusive
of Full Service Gross Rent payable pursuant to the Vacant
Space Master Lease with respect to the Xxxxxxx Xxxxxx Space),
calculated on a trailing twelve (12) full calendar month basis, shall be
sufficient to achieve an Underwritten Debt Service Coverage Ratio (exclusive of
Full Service Gross Rent payable pursuant to the Vacant Space Master Lease with
respect to the Xxxxxxx Xxxxxx Space) equal to or greater than of 1.07:1.0 for
two (2) consecutive Adjustment Dates or (ii) Mortgage Borrower has entered
into Leases on market-rate terms for all
of the Xxxxxxx Xxxxxx Space, which Leases (A) are with tenants approved by
Lender in its sole discretion who are in occupancy, and paying full unabated
Rent (any tenant improvements and tenant allowances having been completed and
paid in full), (B) comply with the terms and provisions of Section
5.1.20 hereof
and (C) are not in default; all as evidenced to the reasonable satisfaction
of Lender (such evidence to include a copy of the applicable Lease and tenant
estoppel certificates executed by the applicable tenants).
3.1.22 Sub-Management
Agreement. Lender
shall receive within thirty (30) days after the date hereof a copy of the
Sub-Management Agreement, which shall be satisfactory in form and substance to
Lender. The fee payable to the Sub-Manager aggregated with the fee paid to
Manager pursuant to the Management Agreement shall not exceed three and one half
percent (3.5%) of Gross Income from Operations per annum (excluding any Rents
payable under the Vacant Space Master Lease). The Sub-Management Agreement shall
also provide that all of the Sub-Manager’s rights under the Sub-Management
Agreement are subordinate to the Lien of the Mortgage and the rights of
Lender.
3.1.23 Further
Documents. Lender
or its counsel shall have received such other and further approvals, opinions,
documents and information as Lender or its counsel may have reasonably requested
including the Loan Documents in form and substance satisfactory to Lender and
its counsel.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
Section
4.1 Borrower
Representations.
Borrower represents and warrants as of the date hereof and as of the Closing
Date that:
4.1.1 Organization.
Borrower has been duly organized and is validly existing and in good standing
with requisite power and authority to own its properties and to transact the
businesses in which it is now engaged. Borrower is duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so
qualified in connection with its properties, businesses and operations. Borrower
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged, and the sole business of Borrower is the
ownership, management and operation of the Property. The ownership interests of
Borrower are as set forth on the organizational chart attached hereto as
Schedule
III.
4.1.2 Proceedings.
Borrower has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the other Loan Documents. This
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Agreement
and the other Loan Documents have been duly executed and delivered by or on
behalf of Borrower and constitute the legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms,
subject only to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
4.1.3 No
Conflicts. The
execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower, Principal and/or Guarantor, as applicable, will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Loan Documents) upon any of
the property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement, management
agreement or other agreement or instrument to which Borrower is a party or by
which any of Borrower’s property or assets is subject, nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any Governmental Authority having jurisdiction over Borrower or
any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any such
Governmental Authority required for the execution, delivery and performance by
Borrower, Principal and/or Guarantor, as applicable, of this Agreement or any
other Loan Documents has been obtained and is in full force and
effect.
4.1.4 Litigation. There
are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or threatened against or
affecting Borrower, Principal, Guarantor or the Property, which actions, suits
or proceedings, if determined against Borrower, Principal, Guarantor or the
Property, might materially adversely affect the condition (financial or
otherwise) or business of Borrower, Principal or Guarantor or the condition or
ownership of the Property.
4.1.5 Agreements.
Borrower is not a party to any agreement or instrument or subject to any
restriction which might materially and adversely affect Borrower or the
Property, or Borrower’s business, properties or assets, operations or condition,
financial or otherwise. Borrower is not in default in any material respect 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 Borrower or the Property are bound. Borrower has no material financial
obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Borrower is a party or by which Borrower or the
Property is otherwise bound, other than (a) obligations incurred in the ordinary
course of the operation of the Property as permitted pursuant to clause
(t) of the
definition of “Special Purpose Entity” set forth in Section
1.1 hereof
and (b) obligations under the Loan Documents.
4.1.6 Title. Fee
simple title to the Property is, or contemporaneously with the funding of the
Loan will be, owned by Borrower free and clear of all Liens whatsoever except
the Permitted Encumbrances, such other Liens as are permitted pursuant to the
Loan Documents and the Liens created by the Loan Documents. The Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the Property (as currently used) or Borrower’s ability to
repay the Loan. The Mortgage and the Assignment of Leases, when
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properly
recorded in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith, will create
(a) a valid, perfected first priority lien on the Property, subject only to
Permitted Encumbrances and the Liens created by the Loan Documents, and (b)
perfected security interests in and to, and perfected collateral assignments of,
all personalty (including the Leases), all in accordance with the terms thereof,
in each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. To Borrower’s knowledge, there are no claims for payment for
work, labor or materials affecting the Property which are or may become a Lien
prior to, or of equal priority with, the Liens created by the Loan
Documents.
4.1.7 Solvency.
Borrower has (a) not entered into the transaction contemplated by this Agreement
or executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents.
Giving effect to the Loan, 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 proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur debts and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debts and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of the obligations of Borrower).
No petition in bankruptcy has been filed against Borrower, Principal or any of
their respective constituent Persons, and none of Borrower, Principal or any of
their respective constituent Persons has ever made an assignment for the benefit
of creditors or taken advantage of any insolvency act for the benefit of
debtors. None of Borrower, Principal or any of their respective constituent
Persons is 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 properties, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it, Principal or any of
their respective constituent Persons.
4.1.8 Full
and Accurate Disclosure. No
statement of fact made by 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. There is no material fact presently known to Borrower which has not
been disclosed to Lender which adversely affects, nor as far as Borrower can
foresee, might adversely affect, the Property or the business, operations or
condition (financial or otherwise) of Borrower.
4.1.9 No
Plan Assets.
Borrower does not sponsor, is not obligated to contribute to and is not itself
an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to
Title I of ERISA, and none of the assets of Borrower constitutes or will
constitute “plan assets” of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101. In addition, (a)
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Borrower
is not a “governmental plan” within the meaning of Section 3(32) of ERISA, and
(b) transactions by or with Borrower are not subject to any state statute
regulating investments of, or fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Agreement, including, but not limited to the
exercise by Lender of any of its rights under the Loan Documents.
4.1.10 Compliance.
Borrower and, to Borrower’s knowledge, the Property (including the use thereof)
comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes.
Borrower is not in default or violation of any order, writ, injunction, decree
or demand of any Governmental Authority. There has not been committed by
Borrower, or any other Person in occupancy of or involved with the operation or
use of the Property, any act or omission affording any Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents.
4.1.11 Financial
Information. All
financial data, including, without limitation, the statements of cash flow and
income and operating expense, that have been delivered to Lender in connection
with the Loan (a) are true, complete and correct in all material respects, (b)
accurately represent the financial condition of the Property as of the date of
such reports, and (c) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Except for
Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Property or the
operation thereof as an office building, except as referred to or reflected in
said financial statements. Since the date of such financial statements, there
has been no material adverse change in the financial condition, operation or
business of Borrower from that set forth in said financial
statements.
4.1.12 Condemnation. No
Condemnation or other proceeding has been commenced or, to Borrower’s best
knowledge, is threatened or contemplated with respect to all or any portion of
the Property or for the relocation of any roadway providing access to the
Property.
4.1.13 Federal
Reserve Regulations. 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 any Legal Requirements or by the
terms and conditions of this Agreement or the other Loan Documents.
4.1.14 Utilities
and Public Access. The
Property has rights of access to public ways and is served by water, sewer,
sanitary sewer and storm drain facilities adequate to service the Property for
its intended uses. All public utilities necessary or convenient to the full use
and enjoyment of the Property are located either in the public right-of-way
abutting the Property (which are connected so as to serve the Property without
passing over other property) or in
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recorded
easements serving the Property and such easements are set forth in and insured
by the Title Insurance Policy. All roads necessary for the use of the Property
for its current purpose have been completed and dedicated to public use and
accepted by all Governmental Authorities.
4.1.15 Not a
Foreign Person.
Borrower is not a “foreign person” within the meaning of §1445(f)(3) of the
Code.
4.1.16 Separate
Lots. The
Property is comprised of one (1) or more parcels which constitute a separate tax
lot or lots and does not constitute a portion of any other tax lot not a part of
the Property.
4.1.17 Assessments. To
Borrower’s knowledge, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting the Property nor are
there any contemplated improvements to the Property that may result in such
special or other assessments, other than the Permitted
Encumbrances.
4.1.18 Enforceability. The
Loan Documents are not subject to any right of rescission, set-off, counterclaim
or defense by Borrower, Principal or Guarantor, including, without limitation,
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (subject to principles of equity and bankruptcy, insolvency and
other laws generally affecting creditors’ rights and the enforcement of debtors’
obligations), and none of Borrower, Principal or Guarantor has asserted any
right of rescission, set-off, counterclaim or defense with respect
thereto.
4.1.19 No
Prior Assignment. There
are no prior assignments of the Leases or any portion of the Rents due and
payable or to become due and payable which are presently
outstanding.
4.1.20 Insurance.
Borrower has obtained and has delivered to Lender certificates for all Policies
required hereunder, with all premiums currently payable paid thereunder,
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. No claims have been made under any such Policies, and no Person,
including Borrower, has done, by act or omission, anything that would impair the
coverage of any such Policies.
4.1.21 Use of
Property. The
Property is used exclusively as an office building and other appurtenant and
related uses.
4.1.22 Certificate
of Occupancy; Licenses. To
Borrower’s knowledge, all certifications, permits, licenses and approvals,
including without limitation, certificates of completion and use and occupancy
permits required for the legal use, occupancy and operation of the Property as
an office building (collectively, the “Licenses”), have
been obtained and are in full force and effect. Borrower shall keep and maintain
in full force and effect all Licenses necessary for the operation of the
Property as an office building. The use being made of the Property is in
conformity with the certificate of occupancy issued for the
Property.
4.1.23 Flood
Zone. Except
as may be provided in the Survey, none of the Improvements on the Property are
located in an area identified by the Federal Emergency
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Management
Agency as an area having special flood hazards or, if so located, the flood
insurance required pursuant to Section
6.1(a)(i) hereof
is in full force and effect with respect to the Property.
4.1.24 Physical
Condition. To
Borrower’ knowledge, the Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, is in good condition, order and repair in
all material respects. To Borrower’s knowledge, there exists no structural or
other material defects or damages in the Property, whether latent or otherwise.
Borrower has not received notice from any insurance company or bonding company
of any defects or inadequacies in the Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
4.1.25 Boundaries. Except
as provided in the Survey, all of the Improvements which were included in
determining the appraised value of the Property lie wholly within the boundaries
and building restriction lines of the Property, and no improvements on adjoining
properties encroach upon the Property, and no easements or other encumbrances
upon the Property encroach upon any of the Improvements, so as to affect the
value or marketability of the Property except those which are insured against by
the Title Insurance Policy.
4.1.26 Leases. The
Property is not subject to any Leases other than the Leases described in
Schedule
I attached
hereto and made a part hereof. Borrower is the owner of the landlord’s interest
in the Leases. No Person has any possessory interest in the Property or right to
occupy the same except under and pursuant to the provisions of the Leases. The
current Leases are in full force and effect and there are no defaults thereunder
by either party and there are no conditions that, with the passage of time or
the giving of notice, or both, would constitute defaults thereunder. The copies
of the Leases delivered to Lender are true and complete, and there are no oral
agreements with respect thereto. No Rent (excluding security deposits) has been
paid more than one (1) month in advance of its due date. All work to be
performed by Borrower under each Lease has been performed as required in such
Lease and has been accepted by the applicable tenant, and any payments, free
rent, partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by Borrower to any tenant has already been
received by such tenant. There has been no prior sale, transfer or assignment,
hypothecation or pledge of any Lease or of the Rents received therein which is
still in effect. Except as provided in Schedule I attached
hereto, no tenant listed on Schedule I attached
hereto has assigned its Lease or sublet all or any portion of the premises
demised thereby, no such tenant holds its leased premises under assignment or
sublease, nor does anyone except such tenant and its employees occupy such
leased premises. No tenant under any Lease has a right or option pursuant to
such Lease or otherwise to purchase all or any part of the Property of which the
leased premises are a part. No tenant under any Lease has any right or option
for additional space in the Improvements.
4.1.27 Survey. The
Survey for the Property delivered to Lender in connection with this Agreement
has been prepared in accordance with the provisions of Section 3.1.3(c)
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hereof,
and, to Borrower’s knowledge, does not fail to reflect any material matter
affecting the Property or the title thereto.
4.1.28 Principal
Place of Business; State of Organization.
Borrower’s principal place of business as of the Closing Date is the address set
forth in the introductory paragraph of this Agreement. Borrower is organized
under the laws of the State of Delaware.
4.1.29 Filing
and Recording Taxes. All
transfer taxes, deed stamps, intangible taxes or other amounts in the nature of
transfer taxes required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the transfer of the Property
to Borrower have been paid. All mortgage, mortgage recording, stamp, intangible
or other similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Mortgage, have been paid or are
being paid simultaneously herewith, and, under current Legal Requirements, the
Mortgage and the other Loan Documents are enforceable in accordance with their
respective terms by Lender (or any subsequent holder thereof), subject to
principles of equity and bankruptcy, insolvency and other laws generally
applicable to creditors’ rights and the enforcement of debtors’
obligations.
4.1.30 Special
Purpose Entity/Separateness.
(a) Until the
Debt has been paid in full, Borrower hereby represents, warrants and covenants
that (i) Borrower is, shall be and shall continue to be a Special Purpose
Entity, and (ii) Principal is, shall be and shall continue to be a Special
Purpose Entity.
(b) The
representations, warranties and covenants set forth in Section 4.1.30(a) shall
survive for so long as any amount remains payable to Lender under this Agreement
or any other Loan Document.
(c) All of
the assumptions made in the Insolvency Opinion, including, but not limited to,
any exhibits attached thereto, are true and correct in all respects and any
assumptions made in any subsequent non-consolidation opinion required to be
delivered in connection with the Loan Documents (an “Additional
Insolvency Opinion”),
including, but not limited to, any exhibits attached thereto, will have been and
shall be true and correct in all respects. Borrower has complied and will comply
with, and Principal has complied and Borrower will cause Principal to comply
with, all of the assumptions made with respect to Borrower and Principal in the
Insolvency Opinion. Borrower will have complied and will comply with, and
Principal will have complied and Borrower shall cause Principal to comply with,
all of the assumptions made with respect to Borrower and Principal in any
Additional Insolvency Opinion. Each entity other than Borrower and Principal
with respect to which an assumption shall be made in the Insolvency Opinion or
in any Additional Insolvency Opinion will have complied and will comply with all
of the assumptions made with respect to it in the Insolvency Opinion or any such
Additional Insolvency Opinion.
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4.1.31 Management
Agreement. The
Management Agreement is in full force and effect and there is no default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or the giving of notice would constitute a default
thereunder.
4.1.32 Illegal
Activity. No
portion of the Property has been or will be purchased with proceeds of any
illegal activity.
4.1.33 No
Change in Facts or Circumstances; Disclosure. All
information submitted by Borrower to Lender including, but not limited to, all
financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan or in satisfaction of the terms thereof
and all statements of fact made by Borrower in this Agreement or in any other
Loan Document, are accurate, complete and correct in all material respects.
There has been no material adverse change in any condition, fact, circumstance
or event that would make any such information inaccurate, incomplete or
otherwise misleading in any material respect or that otherwise materially and
adversely affects or might materially and adversely affect the use, operation or
value of the Property or the business operations and/or the financial condition
of Borrower. Borrower has disclosed to Lender all material facts and has not
failed to disclose any material fact that could cause any Provided Information
or representation or warranty made herein to be materially
misleading.
4.1.34 Investment
Company Act.
Borrower is not (a) an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (b) 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 (c) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
4.1.35 Embargoed
Person. At all
times throughout the term of the Loan, including after giving effect to any
Transfers permitted pursuant to the Loan Documents, (a) none of the funds
or other assets of Borrower, Principal or Guarantor shall constitute property
of, or shall be beneficially owned, directly or indirectly, by any Person
subject to trade restrictions under United States law, including, but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701
et
seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and
any Executive Orders or regulations promulgated under any such United States
laws, with the result that the investment in Borrower, Principal or Guarantor,
as applicable (whether directly or indirectly), is or would be prohibited by law
(each, an “Embargoed
Person”) or the
Loan made by Lender is or would be in violation of law, (b) no Embargoed Person
shall have any interest of any nature whatsoever in Borrower, Principal or
Guarantor, as applicable, with the result that the investment in Borrower,
Principal or Guarantor, as applicable (whether directly or indirectly), is or
would be prohibited by law or the Loan is or would be in violation of law, and
(c) none of the funds of Borrower, Principal or Guarantor, as applicable, shall
be derived from any unlawful activity with the result that the investment in
Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is or would be prohibited by law or the Loan is or would be in
violation of law.
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4.1.36 Cash
Management Account.
(a) This
Agreement, together with the other Loan Documents, creates a valid and
continuing security interest (as defined in the Uniform Commercial Code of the
State of New York) in the Lockbox Account and the Cash Management Account in
favor of Lender, which security interest is prior to all other Liens, other than
Permitted Encumbrances, and is enforceable as such against creditors of and
purchasers from Borrower. Other than in connection with the Loan Documents and
except for Permitted Encumbrances, Borrower has not sold or otherwise conveyed
the Lockbox Account or the Cash Management Account.
(b) Each of
the Lockbox Account and the Cash Management Account constitutes a “deposit
account” within the meaning of the Uniform Commercial Code of the State of New
York.
(c) The
Lockbox Bank has agreed to comply with all instructions originated by Lender,
without further consent by Borrower, directing disposition of the Lockbox
Account and all sums at any time held, deposited or invested therein, together
with any interest or other earnings thereon, and all proceeds thereof (including
proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities.
(d) The
Lockbox Account and the Cash Management Account are in the name of Borrower, as
pledgor, or Lender, as pledgee.
4.1.37 Vacant
Space Master Lease. The
Vacant Space Master Lease is in full force and effect and there are no uncured
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder. The copy of the Vacant Space Master Lease delivered to Lender is
true and complete, and there are no oral agreements with respect
thereto.
Section
4.2 Survival
of Representations.
Borrower agrees that all of the representations and warranties of Borrower set
forth in Section
4.1 hereof
and elsewhere in this Agreement and in the other Loan Documents shall survive
for so long as any amount remains owing to Lender under this Agreement or any of
the other Loan Documents by Borrower. All representations, warranties, covenants
and agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its
behalf.
ARTICLE
5
BORROWER
COVENANTS
Section
5.1 Affirmative
Covenants. From
the date hereof and until payment and performance in full of all Obligations, or
the earlier release of the Lien of the Mortgage (and all related obligations) in
accordance with the terms of this Agreement and the other Loan Documents,
Borrower hereby covenants and agrees with Lender that:
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5.1.1 Existence;
Compliance with Legal Requirements.
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its existence, rights, licenses, permits and
franchises and comply with all Legal Requirements applicable to Borrower and the
Property. There shall never be committed by Borrower, and Borrower shall not
permit any other Person in occupancy of or involved with the operation or use of
the Property to commit, any act or omission affording the federal government or
any state or local government the right of forfeiture against the Property or
any part thereof or any monies paid in performance of Borrower’s obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all
franchises and trade names, preserve all the remainder of its property used or
useful in the conduct of its business, and shall keep the Property in good
working order and repair, 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 the 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. After prior notice
to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding promptly initiated and conducted in good faith and with due
diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Borrower or the Property or any alleged violation of any Legal
Requirement, provided that:
(a) no Default or Event of Default has occurred and remains uncured; (b)
Borrower is permitted to do so under the provisions of any mortgage or deed of
trust superior in lien to the Mortgage; (c) such proceeding shall be
permitted under, and be conducted in accordance with, the provisions of any
instrument to which Borrower is subject and shall not constitute a default
thereunder; (d) such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (e) neither the Property nor any part
thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost as a result of such contest; (f) Borrower
shall, upon final determination thereof, promptly comply with any such Legal
Requirement determined to be valid or applicable or cure any violation of any
Legal Requirement; (g) such proceeding shall suspend the enforcement of the
contested Legal Requirement against Borrower and the Property; and (h) Borrower
shall furnish such security as may be required in the proceeding, or as may be
reasonably requested by Lender, to insure compliance with such Legal
Requirement, together with all interest and penalties payable in connection
therewith. Lender may apply any such security, as necessary to cause compliance
with such Legal Requirement at any time when, in the reasonable judgment of
Lender, the validity, applicability or violation of such Legal Requirement is
finally established or the Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or
lost.
5.1.2 Taxes
and Other Charges.
Borrower shall pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Property, or any part thereof, as the same
become due and payable; provided,
however, that
Borrower’s obligation to directly pay Taxes shall be suspended for so long as
Borrower complies with the terms and provisions of Section 7.2 hereof.
Borrower will deliver to Lender receipts for payment or other evidence
satisfactory to Lender that the Taxes and Other Charges have been so paid or are
not then delinquent no later than ten (10) days prior to the date on which the
Taxes and/or Other Charges would otherwise be delinquent if not paid. Borrower
shall furnish to Lender receipts for the
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payment
of the Taxes and the Other Charges prior to the date the same shall become
delinquent provided,
however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section
7.2 hereof.
Borrower shall not suffer and shall promptly cause to be paid and discharged any
Lien or charge whatsoever which may be or become a Lien or charge against the
Property, and shall promptly pay for all utility services provided to the
Property. After prior notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes or Other Charges, provided that (a) no Default or
Event of Default has occurred and remains uncured; (b) Borrower is permitted to
contest same under the provisions of any mortgage or deed of trust superior in
lien to the Mortgage; (c) such proceeding shall be permitted under, and be
conducted in accordance with, the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder; (d) such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (e) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost as a result of such contest; (f) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (g) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (h) Borrower shall
furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon. Lender may pay over any such
cash deposit or part thereof held by Lender to the claimant entitled thereto at
any time when, in the reasonable judgment of Lender, the entitlement of such
claimant is established or the Property (or any part thereof or interest
therein) shall be in danger of being sold, forfeited, terminated, cancelled or
lost or there shall be any danger of the Lien of the Mortgage being primed by
any related Lien.
5.1.3 Litigation.
Borrower shall give prompt written notice to Lender of any litigation or
governmental proceedings pending or threatened against Borrower, Principal
and/or Guarantor which might materially adversely affect Borrower’s, Principal’s
or Guarantor’s condition (financial or otherwise) or business or the
Property.
5.1.4 Access
to Property.
Borrower shall permit agents, representatives and employees of Lender to inspect
the Property or any part thereof at reasonable hours upon reasonable advance
notice (which may be given verbally), subject to the rights of tenants under
their respective Leases.
5.1.5 Notice
of Default.
Borrower shall promptly advise Lender of any material adverse change in
Borrower’s, Principal’s or Guarantor’s condition, financial or otherwise, or of
the occurrence of any Default, Event of Default or Mezzanine Event of Default of
which Borrower has knowledge.
5.1.6 Cooperate
in Legal Proceedings.
Borrower shall cooperate fully with Lender with respect to any proceedings
before any court, board or other Governmental Authority which may in any way
affect the rights of Lender hereunder or any rights obtained by Lender under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
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5.1.7 Perform
Loan Documents.
Borrower shall observe, perform and satisfy all the terms, provisions, covenants
and conditions of, and shall pay when due all costs, fees and expenses to the
extent required under the Loan Documents executed and delivered by, or
applicable to, Borrower. Payment of the costs and expenses associated with any
of the foregoing shall be in accordance with the terms and provisions of this
Agreement, including, without limitation, the provisions of Section
10.13
hereof.
5.1.8 Award
and Insurance Benefits.
Borrower shall cooperate with Lender in obtaining for Lender the benefits of any
Awards or Insurance Proceeds lawfully or equitably payable in connection with
the Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including, without limitation, attorneys’ fees and
disbursements, and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of Casualty or Condemnation affecting the Property or
any part thereof) out of such Insurance Proceeds.
5.1.9 Further
Assurances.
Borrower shall, at Borrower’s sole cost and expense:
(a) furnish
to Lender 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 by Borrower
pursuant to the terms of the Loan Documents or which are reasonably requested by
Lender in connection therewith;
(b) execute
and deliver to Lender such documents, instruments, certificates, assignments and
other writings, and do such other acts necessary or desirable, to evidence,
preserve and/or protect the collateral at any time securing or intended to
secure the Obligations under the Loan Documents, as Lender may reasonably
require; and
(c) 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 Lender shall
reasonably require from time to time.
5.1.10 Mortgage
Taxes.
Borrower represents that it has paid all state, county and municipal recording
and all other taxes imposed upon the execution and recordation of the
Mortgage.
5.1.11 Financial
Reporting.
(a) Borrower
will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis acceptable to
Lender), proper and accurate books, records and accounts reflecting all of the
financial affairs of Borrower and all items of income and expense in connection
with the operation of the Property. Lender shall have the right, from time to
time at all times during normal business hours upon reasonable notice (which may
be verbal), to examine such books, records and accounts at the office of
Borrower or any other Person maintaining such books, records and accounts and to
make such copies or extracts thereof as Lender shall desire. After the
occurrence and during the continuance of an Event of Default, Borrower shall pay
any costs and expenses incurred by
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Lender to
examine Borrower’s accounting records with respect to the Property, as Lender
shall determine to be necessary or appropriate in the protection of Lender’s
interest.
(b) Borrower
will furnish to Lender annually, within ninety (90) days following the end of
each Fiscal Year of Borrower, a complete copy of Borrower’s annual financial
statements audited by a “Big Four” accounting firm or other independent
certified public accountant acceptable to Lender in accordance with GAAP (or
such other accounting basis acceptable to Lender) covering the Property for such
Fiscal Year and containing statements of profit and loss for Borrower and the
Property and a balance sheet for Borrower. Such statements of Borrower shall set
forth the financial condition and the results of operations for the Property for
such Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Borrower’s annual financial statements shall be accompanied
by (i) a comparison of the budgeted income and expenses and the actual income
and expenses for the prior Fiscal Year, (ii) an unqualified opinion of a “Big
Four” accounting firm or other independent certified public accountant
reasonably acceptable to Lender, (iii) a list of tenants, if any, occupying more
than twenty percent (20%) of the total floor area of the Improvements, (iv) a
breakdown showing the year in which each Lease then in effect expires and the
percentage of total floor area of the Improvements and the percentage of base
rent with respect to which Leases shall expire in each such year, each such
percentage to be expressed on both a per year and cumulative basis, (v) a
schedule audited by such independent certified public accountant reconciling Net
Operating Income to Net Cash Flow (the “Net
Cash Flow Schedule”), which
shall itemize all adjustments made to Net Operating Income to arrive at Net Cash
Flow deemed material by such independent certified public accountant and (vi) an
Officer’s Certificate certifying that each annual financial statement fairly
presents the financial condition and the results of operations of Borrower and
the Property being reported upon, and that such financial statements have been
prepared in accordance with GAAP and as of the date thereof whether there exists
an event or circumstance which constitutes a Default or Event of Default under
the Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Default or Event of Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy the same.
(c) Borrower
will furnish, or cause to be furnished, to Lender on or before thirty-five (35)
days after the end of each calendar month the following items, accompanied by an
Officer’s Certificate stating that such items are true, correct, accurate, and
complete and fairly present the financial condition and results of the
operations of Borrower and the Property (subject to normal year-end
adjustments): (i) a rent roll for the subject month; (ii) monthly and
year-to-date operating statements (including Capital Expenditures) prepared for
each calendar month, noting Net Operating Income, Gross Income from Operations,
and Operating Expenses, and, upon Lender’s request, other information necessary
and sufficient to fairly represent the financial position and results of
operation of the Property during such calendar month, and containing a
comparison of budgeted income and expenses and the actual income and expenses
together with a detailed explanation of any variances of five percent (5%) or
more between budgeted and actual amounts for such periods, all in form
satisfactory to Lender; (iii) a calculation reflecting the annual Debt Service
Coverage Ratio for the immediately preceding twelve (12) month period as of the
last day of such month; and (iv) a Net Cash Flow Schedule. In addition, such
Officer’s Certificate shall also state that the representations and warranties
of
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Borrower
set forth in Section
4.1.30 are true
and correct as of the date of such certificate and that there are no trade
payables outstanding for more than sixty (60) days.
(d) No later
than sixty (60) days after the Closing Date, Borrower shall submit to Lender an
Annual Budget for the Fiscal Year ending on December 31, 2005, in form
reasonably satisfactory to Lender. For the period from the Closing Date until
there is an Approved Annual Budget in accordance with the terms hereof, the most
recent budget prepared by CommonWealth Pacific, LLC or its Affiliates shall be
used by Borrower to operate the Property and by Lender to make disbursements of
Operating Expenses to Borrower in accordance with the terms of this Agreement.
Not later than sixty (60) days prior to the commencement of each Fiscal Year
thereafter, Borrower shall submit to Lender an Annual Budget in form reasonably
satisfactory to Lender. The Annual Budget shall be subject to Lender’s approval
(each such Annual Budget approved by Lender being referred to herein as an
“Approved
Annual Budget”). In the
event that Lender objects to a proposed Annual Budget submitted by Borrower
which requires the approval of Lender hereunder, Lender shall advise Borrower of
such objections within fifteen (15) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise such Annual Budget and resubmit the same to Lender. Lender
shall advise Borrower of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise the same in
accordance with the process described in this subsection until Lender approves
the Annual Budget. Until such time that Lender approves a proposed Annual Budget
that requires the approval of Lender hereunder, the most recently Approved
Annual Budget shall apply; provided that
such Approved Annual Budget shall be adjusted to reflect actual increases in
Taxes, Insurance Premiums and utilities expenses.
(e) In the
event that Borrower must incur an extraordinary Operating Expense or Capital
Expenditure not set forth in the Approved Annual Budget (each an “Extraordinary
Expense”), then
Borrower shall promptly deliver to Lender a reasonably detailed explanation of
such proposed Extraordinary Expense for Lender’s approval, which approval shall
not be unreasonably withheld if such Extraordinary Expense is necessary to
prevent material damage to the Property or injury to Persons.
(f) If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
the following financial statements if, at the time a Disclosure Document is
being prepared for a Securitization, it is expected that the principal amount of
the Loan together with any Affiliated Loans at the time of Securitization may,
or if the principal amount of the Loan together with any Affiliated Loans at any
time during which the Loan and any Affiliated Loans are included in a
Securitization does, equal or exceed 20% of the aggregate principal amount of
all mortgage loans included or expected to be included, as applicable, in the
Securitization:
(i) A balance
sheet with respect to the Property for the two most recent fiscal years, meeting
the requirements of Section 210.3-01 of Regulation S-X of the Securities Act and
statements of income and statements of cash flows with respect to the Property
for the three most recent fiscal years, meeting the requirements of
Section 210.3-02 of Regulation S-X, and, to the extent that such balance
sheet is more than 135 days old as of the date of the document in which such
financial statements are
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included,
interim financial statements of the Property meeting the requirements of
Section 210.3-01 and 210.3-02 of Regulation S-X (all of such financial
statements, collectively, the “Standard
Statements”);
provided,
however, if the
Property is not a hotel, nursing home, or other property that would be deemed to
constitute a business and not real estate under Regulation S-X or other legal
requirements and has been acquired by Borrower from an unaffiliated third party
(such Property, “Acquired
Property”), as to
which the other conditions set forth in Section 210.3-14 of Regulation S-X for
provision of financial statements in accordance with such Section have been met,
in lieu of the Standard Statements otherwise required by this Section, Borrower
shall instead provide the financial statements required by such Section 210.3-14
of Regulation S-X (“Acquired
Property Statements”).
(ii) Not later
than forty-five (45) days after the end of each fiscal quarter following the
date hereof, a balance sheet of the Property as of the end of such fiscal
quarter, meeting the requirements of Section 210.3-01 of Regulation S-X, and
statements of income and statements of cash flows of the Property for the period
commencing following the last day of the most recent fiscal year and ending on
the date of such balance sheet and for the corresponding period of the most
recent fiscal year, meeting the requirements of Section 210.3-02 of Regulation
S-X (provided, that if for such corresponding period of the most recent fiscal
year Acquired Property Statements were permitted to be provided hereunder
pursuant to subsection
(i) above,
Borrower shall instead provide Acquired Property Statements for such
corresponding period).
(iii) Not later
than ninety (90) days after the end of each fiscal year following the date
hereof, a balance sheet of the Property as of the end of such fiscal year,
meeting the requirements of Section 210.3-01 of Regulation S-X, and statements
of income and statements of cash flows of the Property for such fiscal year,
meeting the requirements of Section 210.3-02 of Regulation S-X.
(iv) Within
ten (10) Business Days after notice from Lender in connection with the
Securitization of this Loan, such additional financial statements, such that, as
of the date (each an “Offering
Document Date”) of each
Disclosure Document, Borrower shall have provided Lender with all financial
statements as described in subsection (f)(i) above;
provided that the fiscal year and interim periods for which such financial
statements shall be provided shall be determined as of such Offering Document
Date.
(g) If
requested by Lender, Borrower shall provide to Lender, promptly upon request,
summaries of the financial statements referred to in Section
5.1.11(f) hereof
if, at the time a Disclosure Document is being prepared for a Securitization, it
is expected that the principal amount of the Loan and any Affiliated Loans at
the time of Securitization may, or if the principal amount of the Loan and any
Affiliated Loans at any time during which the Loan and any Affiliated Loans are
included in a Securitization does, equal or exceed 10% (but is less than 20%) of
the aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in a Securitization. Such summaries shall meet the
requirements for “summarized financial information,” as defined in Section
210.1-02(bb) of Regulation S-X, or such other requirements as may be determined
to be necessary or appropriate by Lender.
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(h) All
financial statements provided by Borrower pursuant to Section 5.1.11(f) and
(g) hereof
shall be prepared in accordance with GAAP, and shall meet the requirements of
Regulation S-X and other applicable legal requirements. All financial statements
referred to in Sections
5.1.11(f)(i) and
5.1.11(f)(iii) above
for periods after the Closing Date shall be audited by independent accountants
of Borrower acceptable to Lender in accordance with Regulation S-X and all other
applicable legal requirements, shall be accompanied by the manually executed
report of the independent accountants thereon, which report shall meet the
requirements of Regulation S-X and all other applicable legal requirements, and
shall be further accompanied by a manually executed written consent of the
independent accountants, in form and substance acceptable to Lender, to the
inclusion of such financial statements in any Disclosure Document and any
Exchange Act Filing and to the use of the name of such independent accountants
and the reference to such independent accountants as “experts” in any Disclosure
Document and Exchange Act Filing, all of which shall be provided at the same
time as the related financial statements are required to be provided. All
financial statements (audited or unaudited) provided by Borrower under
Section
5.1.11(f) and
(g) shall be
accompanied by an Officer’s Certificate, which certification shall state that
such financial statements meet the requirements set forth in the first sentence
of this Section
5.1.11(h).
(i) If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
any other or additional financial statements, or financial, statistical or
operating information, as Lender shall determine to be required pursuant to
Regulation S-X or any amendment, modification or replacement thereto or other
legal requirements in connection with any Disclosure Document or any filing
under or pursuant to the Exchange Act in connection with or relating to a
Securitization (hereinafter, an “Exchange
Act Filing”) or as
shall otherwise be reasonably requested by Lender.
(j) In the
event Lender determines, in connection with a Securitization, that the financial
statements required in order to comply with Regulation S-X or other legal
requirements are other than as provided herein, then notwithstanding the
provisions of Section 5.1.11(f),
(g) and
(h) hereof,
Lender may request, and Borrower shall promptly provide, such combination of
Acquired Property Statement and/or Standard Statements or such other financial
statements as Lender determines to be necessary or appropriate for such
compliance.
(k) Any
reports, statements or other information required to be delivered under this
Agreement shall be delivered (i) in paper form, (ii) on a diskette, and (iii) if
requested by Lender and within the capabilities of Borrower’s data systems
without change or modification thereto, in electronic form and prepared using
Microsoft Word for Windows or WordPerfect for Windows files (which files may be
prepared using a spreadsheet program and saved as word processing files).
Borrower agrees that Lender may disclose information regarding the Property and
Borrower that is provided to Lender pursuant to this Section
5.1.11 in
connection with the Securitization to such parties requesting such information
in connection with such Securitization.
5.1.12 Business
and Operations.
Borrower will continue to engage in the businesses presently conducted by it as
and to the extent the same are necessary for the ownership, maintenance,
management and operation of the Property. Borrower will qualify to do business
and will remain in good standing under the laws of each jurisdiction as and to
the
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extent
the same are required for the ownership, maintenance, management and operation
of the Property.
5.1.13 Title
to the Property.
Borrower will warrant and defend (a) the title to the Property and every part
thereof, subject only to Liens permitted hereunder (including Permitted
Encumbrances) and (b) the validity and priority of the Lien of the Mortgage and
the Assignment of Leases, subject only to Liens permitted hereunder (including
Permitted Encumbrances), in each case against the claims of all Persons
whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or
expenses (including reasonable attorneys’ fees and court costs) incurred by
Lender if an interest in the Property, other than as permitted hereunder, is
claimed by another Person.
5.1.14 Costs
of Enforcement. In the
event (a) that the Mortgage is foreclosed in whole or in part or that the
Mortgage is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to
the Mortgage in which proceeding Lender is made a party, or (c) of the
bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of
Borrower or any of its constituent Persons or an assignment by Borrower or any
of its constituent Persons for the benefit of its creditors, Borrower, on behalf
of itself and its successors and assigns, agrees that it/they shall be
chargeable with and shall pay all costs of collection and defense, including,
without limitation, attorneys’ fees and costs, incurred by Lender or Borrower in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.
5.1.15 Estoppel
Statements.
(a) After
request by Lender, Borrower shall within ten (10) days furnish Lender with a
statement, duly acknowledged and certified, setting forth (i) the original
principal amount of the Loan, (ii) the Outstanding Principal Balance, (iii) the
Applicable Interest Rate of the Loan, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the performance
of the Obligations, if any, and (vi) that the Note, this Agreement, the Mortgage
and the other Loan Documents are valid, legal and binding obligations of
Borrower and have not been modified or if modified, giving particulars of such
modification.
(b) Borrower
shall deliver to Lender on the Closing Date, and thereafter upon request, tenant
estoppel certificates from each commercial tenant leasing space at the Property
in form and substance reasonably satisfactory to Lender, provided that
Borrower shall not be required to deliver such certificates more frequently than
two (2) times in any calendar year.
5.1.16 Loan
Proceeds.
Borrower shall use the proceeds of the Loan received by it on the Closing Date
only for the purposes set forth in Section
2.1.4
hereof.
5.1.17 Performance
by Borrower.
Borrower shall in a timely manner observe, perform and fulfill each and every
covenant, term and provision of each Loan Document executed and delivered by, or
applicable to, Borrower, and shall not enter into or otherwise suffer or permit
any amendment, waiver, supplement, termination or other modification of any Loan
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Document
executed and delivered by, or applicable to, Borrower without the prior consent
of Lender.
5.1.18 Confirmation
of Representations.
Borrower shall deliver, in connection with any Securitization, (a) one or more
Officer’s Certificates certifying as to the accuracy of all representations made
by Borrower in the Loan Documents as of the date of the closing of such
Securitization in all relevant jurisdictions, and (b) certificates of the
relevant Governmental Authorities in all relevant jurisdictions indicating the
good standing and qualification of Borrower and Principal as of the date of the
Securitization.
5.1.19 Intentionally
Omitted.
5.1.20 Leasing
Matters. Any
Major Lease executed after the Closing Date shall be approved by Lender, which
approval shall not be unreasonably withheld. Upon request, Borrower shall
furnish Lender with executed copies of all Leases. All renewals of Leases and
all proposed Leases shall provide for rental rates comparable to existing local
market rates. All proposed Leases shall be on commercially reasonable terms and
shall not contain any terms that would materially affect Lender’s rights under
the Loan Documents. All Leases executed after the date hereof shall provide that
they are subordinate to the Mortgage and that the lessee agrees to attorn to
Lender or any purchaser at a sale by foreclosure or power of sale. Borrower (a)
shall observe and perform the obligations imposed upon the lessor under the
Leases in a commercially reasonable manner; (b) shall enforce and may amend or
terminate the terms, covenants and conditions contained in the Leases upon the
part of the lessee thereunder to be observed or performed in a commercially
reasonable manner and in a manner not to impair the value of the Property
involved except that no termination by Borrower or acceptance of surrender by a
tenant of any Leases shall be permitted unless by reason of a tenant default and
then only in a commercially reasonable manner to preserve and protect the
Property, provided,
however, that no
such amendment, termination or surrender of any Major Lease will be permitted
without the written consent of Lender; (c) shall not collect any of the rents
more than one (1) month in advance (other than security deposits); (d) shall not
execute any other assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents); (e) shall neither alter, modify
or change the terms of any Lease in a manner inconsistent with the provisions of
the Loan Documents nor alter, modify or change the terms of any Major Leases or
the Vacant Space Master Lease without the prior written consent of Lender; (f)
shall execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Leases as Lender shall from
time to time reasonably require. Notwithstanding anything to the contrary
contained herein, Borrower shall not enter into a Lease of all or substantially
all of the Property without Lender’s prior written consent.
5.1.21 Alterations.
Borrower shall obtain Lender’s prior consent to any alterations to any
Improvements, which consent shall not be unreasonably withheld, conditioned or
delayed except with respect to any alterations to any Improvements which may
have a material adverse effect on Borrower’s financial condition, the value of
the Property or the Net Operating Income. Notwithstanding the foregoing,
Lender’s consent shall not be required in connection with any alterations that
will not have a material adverse effect on Borrower’s financial condition, the
value of the Property or the Net Operating Income, provided that such
alterations (a) are made in connection with tenant improvement work
performed pursuant to, or
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alterations
permitted without Borrower’s consent by, the terms of any Lease approved by
Lender pursuant to the terms of this Agreement, (b) do not adversely affect
any structural component of any Improvements, any utility or HVAC system
contained in any Improvements or the exterior of any building constituting a
part of any Improvements and the aggregate cost thereof does not exceed One
Million and 00/100 Dollars ($1,000,000.00), or (c) are performed in
connection with Restoration after the occurrence of a Casualty in accordance
with the terms and provisions of this Agreement. If the total unpaid amounts due
and payable with respect to alterations to the Improvements at the Property
(other than such amounts to be paid or reimbursed by tenants under the Leases or
by disbursements from the Rollover Reserve Funds) shall at any time exceed Five
Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Threshold
Amount”),
Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for the Obligations any of the following: (i)
cash, (ii) U.S. Obligations, (iii) other securities having a rating acceptable
to Lender and that the applicable Rating Agencies have confirmed in writing will
not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any
class thereof in connection with any Securitization, or (iv) a completion and
performance bond or an irrevocable letter of credit (payable on sight draft
only) issued by a financial institution (A) having a rating by S&P of not
less than “A-1+” if the term of such bond or letter of credit is no longer than
three (3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Lender, and (B) that
the applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade, withdrawal or qualification of the initial, or,
if higher, then current ratings assigned to any Securities or any class thereof
in connection with any Securitization. Such security shall be in an amount equal
to the excess of the total unpaid amounts with respect to alterations to the
Improvements on the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases or by disbursements from the Rollover Reserve Funds)
over the Threshold Amount and Lender may apply such security from time to time
at the option of Lender to pay for such alterations.
5.1.22 Operation
of Property.
(a) Borrower
shall cause the Property to be operated, in all material respects, in accordance
with the Management Agreement or Replacement Management Agreement, as applicable
and the Sub-Management Agreement or Replacement Sub-Management Agreement, as
applicable. In the event that the Management Agreement expires or is terminated
(without limiting any obligation of Borrower to obtain Lender’s consent to any
termination or modification of the Management Agreement in accordance with the
terms and provisions of this Agreement), Borrower shall promptly enter into a
Replacement Management Agreement with Manager or another Qualified Manager, as
applicable. In the event that the Sub-Management Agreement expires or is
terminated, Borrower shall either enter into a Replacement Sub-Management
Agreement with Sub-Manager or another Qualified Sub-Manager or not enter into
any other agreement with respect to management of the Property, other than the
Management Agreement.
(b) Borrower
shall: (i) promptly perform and/or observe, in all material respects, all of the
covenants and agreements required to be performed and observed by it under the
Management Agreement and do all things necessary to preserve and to keep
unimpaired its
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material
rights thereunder; (ii) promptly notify Lender of any material default under the
Management Agreement of which it is aware; (iii) promptly deliver to Lender a
copy of each financial statement, business plan, capital expenditures plan,
notice, report and estimate received by it under the Management Agreement (which
is not covered by the financial reporting requirements of Section
5.1.11); and
(iv) enforce the performance and observance of all of the covenants and
agreements required to be performed and/or observed by Manager under the
Management Agreement, in a commercially reasonable manner.
(c) Borrower
shall, or shall cause Manager, to: (i) promptly perform and/or observe in all
material respects all of the covenants and agreements required to be performed
and observed by Borrower or Manager under the Sub-Management Agreement and do
all things necessary to preserve and to keep unimpaired their material rights
thereunder; (ii) promptly notify Lender of any material default under the
Sub-Management Agreement of which it is aware; (iii) promptly deliver to Lender
a copy of each financial statement, business plan, capital expenditures plan,
notice, report and estimate received by it or Manager under the Sub-Management
Agreement (which is not covered by the financial reporting requirements of
Section
5.1.11); and
(iv) enforce the performance and observance of all of the covenants and
agreements required to be performed and/or observed by Sub-Manager under the
Sub-Management Agreement, in a commercially reasonable manner.
Section
5.2 Negative
Covenants. From
the date hereof until payment and performance in full of the Obligations or the
earlier release of the Lien of the Mortgage in accordance with the terms of this
Agreement and the other Loan Documents, Borrower covenants and agrees with
Lender that it will not do, directly or indirectly, any of the
following:
5.2.1 Operation
of Property.
(a) Borrower
shall not, without Lender’s prior consent (which consent shall not be
unreasonably withheld): (i) subject to Section
9.5 hereof,
surrender, terminate or cancel the Management Agreement; provided, that Borrower
may, without Lender’s consent, replace Manager so long as the replacement
manager is a Qualified Manager pursuant to a Replacement Management Agreement;
(ii) reduce or consent to the reduction of the term of the Management Agreement;
(iii) increase or consent to the increase of the aggregate amount of any charges
or fees under the Management Agreement and Sub-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.
(b) Borrower
shall not, without Lender’s prior consent (which consent shall not be
unreasonably withheld): (i) subject to Section
9.5 hereof,
surrender, terminate or cancel the Sub-Management Agreement; provided, that
Borrower may, without Lender’s consent, either (A) replace the Sub-Manager so
long as the replacement manager is a Qualified Sub-Manager pursuant to a
Replacement Management Agreement; or (B) terminate the Sub-Management Agreement
and have no sub-manager with respect to the Property (ii) except as set forth in
clause(i), reduce or consent to the reduction of the term of the Sub-Management
Agreement; (iii) increase or consent to the increase of the aggregate amount of
any charges or fees under the Sub-Management Agreement and the Management
Agreement; or (iv) except as set forth in clause (i)
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otherwise
modify, change, supplement, alter or amend, or waive or release any of its
rights and remedies under, the Sub-Management Agreement in any material
respect.
(c) Following
the occurrence and during the continuance of an Event of Default, Borrower shall
not exercise any rights, make any decisions, grant any approvals or otherwise
take any action under the Management Agreement without the prior consent of
Lender, which consent may be withheld in Lender’s sole discretion.
5.2.2 Liens.
Borrower shall not create, incur, assume or suffer to exist any Lien on any
portion of the Property or permit any such action to be taken, except:
(a) Permitted Encumbrances; (b) Liens created by or permitted pursuant
to the Loan Documents; and (c) Liens for Taxes or Other Charges not yet
due.
5.2.3 Dissolution.
Borrower shall not (a) engage in any dissolution, liquidation, consolidation or
merger with or into any other business entity, (b) engage in any business
activity not related to the ownership and operation of the Property, (c)
transfer, lease or sell, in one transaction or any combination of transactions,
the assets or all or substantially all of the properties or assets of Borrower
except to the extent permitted by the Loan Documents, (d) modify, amend,
waive or terminate its organizational documents or its qualification and good
standing in any jurisdiction, or (e) cause Principal to (i) dissolve, wind up or
liquidate or take any action, or omit to take any action, as a result of which
Principal would be dissolved, wound up or liquidated in whole or in part, or
(ii) amend, modify, waive or terminate the certificate of formation or operating
agreement of Principal, in each case, without obtaining the prior written
consent of Lender.
5.2.4 Change
in Business.
Borrower shall not enter into any line of business other than the ownership and
operation of the Property, 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.
5.2.5 Debt
Cancellation.
Borrower shall not cancel or otherwise forgive or release any claim or debt
(other than termination of Leases in accordance herewith) owed to Borrower by
any Person, except for adequate consideration and in the ordinary course of
Borrower’s business.
5.2.6 Zoning.
Borrower shall not initiate or consent to any zoning reclassification of any
portion of the Property or seek any variance under any existing zoning
ordinance, or use or permit the use of any portion of the Property in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, in each
case, without the prior consent of Lender.
5.2.7 No
Joint Assessment.
Borrower shall not suffer, permit or initiate the joint assessment of all or any
portion of the Property with (a) any other real property constituting a tax lot
separate from the Property, or (b) any portion of the 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 Property.
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5.2.8 Principal
Place of Business and Organization.
Borrower shall not change its principal place of business set forth in the
introductory paragraph of this Agreement without first giving Lender at least
thirty (30) days prior notice. Borrower shall not change the place of its
organization as set forth in Section
4.1.28 without
the consent of Lender, which consent shall not be unreasonably withheld. Upon
Lender’s request, Borrower shall execute and deliver additional financing
statements, security agreements and other instruments which may be necessary to
effectively evidence or perfect Lender’s security interest in the Property as a
result of such change of principal place of business or place of
organization.
5.2.9 ERISA.
(a) Borrower
shall not engage in any transaction that would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights
under the Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA.
(b) Borrower
further covenants and agrees to deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as requested by
Lender in its sole discretion, that (i) Borrower is not an “employee benefit
plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii)
Borrower is not subject to any state statute regulating investments of, or
fiduciary obligations with respect to, governmental plans; and (iii) one or more
of the following circumstances is true:
(A) Equity
interests in Borrower are publicly offered securities, within the meaning of 29
C.F.R. §2510.3-101(b)(2);
(B) Less than
twenty-five percent (25%) of each outstanding class of equity interests in
Borrower is held by “benefit plan investors” within the meaning of 29 C.F.R.
§2510.3-101(f)(2); or
(C) Borrower
qualifies as an “operating company” or a “real estate operating company” within
the meaning of 29 C.F.R. §2510.3-101(c) or (e).
5.2.10 Transfers.
(a) Borrower
acknowledges that Lender has examined and relied on the experience of Borrower
and its general partners, members, principals and (if Borrower is a trust)
beneficial owners, as applicable, in owning and operating properties such as the
Property in agreeing to make the Loan, and will continue to rely on Borrower’s
ownership of the Property as a means of maintaining the value of the Property as
security for repayment of the Debt and the performance of the Other Obligations.
Borrower acknowledges that Lender has a valid interest in maintaining the value
of the Property so as to ensure that, should Borrower default in the repayment
of the Debt or the performance of the Other Obligations contained in the Loan
Documents, Lender can recover the Debt by a sale of the Property.
(b) Without
the prior written consent of Lender and except to the extent otherwise set forth
in this Section
5.2.10,
Borrower shall not, and shall not permit any Restricted Party to,
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(i) sell,
convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with
respect to, or otherwise transfer or dispose of (directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, and whether or
not for consideration or of record) the Property or any part thereof or any
legal or beneficial interest therein, or (ii) permit a Sale or Pledge of an
interest in the Property or any Restricted Party (collectively, a “Transfer”), other
than pursuant to Leases of space in the Improvements to tenants in accordance
with the provisions of Section 5.1.20
hereof.
(c) A
Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Property, or any part thereof, for
a price to be paid in installments; (ii) an agreement by Borrower leasing all or
substantially all of the Property for other than actual occupancy by a space
tenant thereunder, or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or
issuance of new stock; (iv) if a Restricted Party is a limited or general
partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general partner or any profits or proceeds
relating to such partnership interest, or the Sale or Pledge of limited
partnership interests or any profits or proceeds relating to such limited
partnership interest or the creation or issuance of new limited partnership
interests; (v) if a Restricted Party is a limited liability company, any merger
or consolidation or the change, removal, resignation or addition of a managing
member or non-member manager (or if no managing member, any member) or the Sale
or Pledge of the limited liability company interest of a managing member (or if
no managing member, any member) or any profits or proceeds relating to such
limited liability company interest, or the Sale or Pledge of non-managing
limited liability company interests or the creation or issuance of new
non-managing limited liability company interests; (vi) if a Restricted Party is
a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the
legal or beneficial interest in a Restricted Party or the creation or issuance
of new legal or beneficial interests; or (vii) the removal or the resignation of
the managing agent (including, without limitation, an Affiliated Manager) other
than in accordance with Section
5.1.22
hereof.
(d) Notwithstanding
the provisions of this Section
5.2.10, the
following transfers shall not be deemed to be a Transfer and shall not require
Lender’s consent: (i) the sale or transfer, in one or a series of
transactions, of not more than forty-nine percent (49%) of the stock in a
Restricted Party; (ii) the sale or transfer, directly or indirectly, in one
or a series of transactions, of not more than forty-nine percent (49%) of the
limited partnership interests or non-managing limited liability company
interests (as the case may be) in a Restricted Party; provided,
however, that
with respect to each such sale or transfer (A) no such sales or transfers
shall result in the change of voting control in the Restricted Party,
(B) as a condition to each such sale or transfer, Lender shall receive not
less than thirty (30) days prior notice of such proposed sale or transfer,
(C) no such sale or transfer of any direct ownership interests in Borrower,
the general partner of Borrower or Mezzanine Borrower shall be permitted,
(D) Borrower shall pay or cause to be paid any and all costs imposed or
incurred as a result of any such sale or transfer, including, without
limitation, any transfer taxes, and (E) if after giving effect to any such
sale or transfer, more than forty-nine percent (49%) in the aggregate of direct
or indirect interests in a Restricted Party are owned by any Person and its
Affiliates that owned less than forty-nine
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percent
(49%) direct or indirect interest in such Restricted Party as of the Closing
Date, Borrower shall deliver to Lender an Additional Insolvency Opinion
acceptable to Lender and the Rating Agencies; and (iii) the execution by
Borrower of a license agreement and related documents for the operation of a
health club on the Property with a wholly owned taxable reit subsidiary of the
Operating Partnership provided that Borrower delivers to Lender an executed copy
of such license agreement and related documents and all fees payable to Borrower
arising from such license are deposited into the Lockbox Account. In addition to
the requirements of this Section
5.2.10(d), except
following transfers of the Property permitted pursuant to Section
5.2.10(f), at all
times during the term of the Loan, the Operating Partnership must continue to
control Borrower and Affiliated Manager and own, directly or indirectly, at
least a fifty-one percent (51%) interest in Borrower and Affiliated Manager. The
sale, transfer or issuance of stock in the REIT shall not be deemed a transfer
hereunder provided the stock of the REIT is listed and traded on the New York
Stock Exchange or such other nationally recognized stock exchange.
(e) Lender
shall not be required to demonstrate any actual impairment of its security or
any increased risk of default hereunder in order to declare the Debt immediately
due and payable upon a Transfer without Lender’s written consent. This provision
shall apply to every Transfer regardless of whether voluntary or not, or whether
or not Lender has consented to any previous Transfer.
(f) Notwithstanding
anything to the contrary contained herein and without limiting any Transfers or
rights under Section
5.2.10(g) hereof,
Lender agrees that it shall not unreasonably withhold its consent to a Transfer
(or to an unlimited number of Transfers) of the Property by Borrower (or the
then owner of the Property), provided that the
following terms and conditions are satisfied: (i) Borrower (or the then owner of
the Property) shall have given at least thirty (30) days prior written notice to
Lender of the proposed Transfer and the proposed Transfer shall not be effective
earlier than the date that is three (3) months after the first Payment Date;
(ii) no Default or Event of Default shall have occurred or be continuing;
(iii) the proposed transferee of the Property shall have executed and
delivered an express assumption of this Agreement, the Note, the Mortgage and
the other Loan Documents, subject to the provisions of Section
9.4 hereof;
(iv) payment of all of fees and expenses incurred in connection with such
Transfer, including, without limitation, the cost of any third party reports,
legal fees and expenses, Rating Agency fees and expenses or required legal
opinions; (v) payment of a non-refundable $5,000 application fee and an
assumption fee equal to one-quarter of one percent (0.25%) of the Outstanding
Principal Balance with respect to the initial transfer and one-half of one
percent (0.50%) of the Outstanding Principal Balance with respect to each
transfer thereafter; (vi) the delivery of an Additional Insolvency Opinion
reflecting the proposed Transfer reasonably satisfactory in form and substance
to Lender; (vii) the proposed transferee’s compliance with the
representations and covenants set forth in Section
4.1.30 and
Section
5.2.9 hereof;
(viii) the delivery of evidence satisfactory to Lender that the single purpose
nature and bankruptcy remoteness of the proposed transferee, and its
shareholders, partners or members, as the case may be, following such Transfer
is in accordance with the then current standards of Lender and the Rating
Agencies; (ix) prior to any release of Guarantor, a substitute guarantor
acceptable to Lender in its sole discretion shall have assumed the Guaranty
executed by Guarantor or executed a replacement guaranty reasonably satisfactory
to Lender; (x) Lender shall have received confirmation in writing from the
Rating Agencies to the effect that such Transfer
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will not
result in a re-qualification, reduction or withdrawal of the then current rating
assigned to the Securities or any class thereof in any applicable
Securitization; (xi) the satisfaction of all of the conditions set forth in
Section 5.2.10(f) of the Mezzanine Loan Agreement; and (xii) the satisfaction of
such other conditions as Lender shall determine in its reasonable discretion to
be in the interest of Lender, including, without limitation, the
creditworthiness, reputation and qualifications of the transferee with respect
to the Loan and the Property.
(g) A
Transfer that occurs by inheritance, devise or bequest or by operation of law
upon the death or disability of a natural person who holds an indirect interest
in Borrower and a Transfer by a natural person of indirect interests in Borrower
for estate planning purposes shall not require the consent of Lender and no
transfer fee shall be payable in connection therewith, provided that, in
each case, such Transfer is to a non-minor member of the immediate family of the
holder of such interest, or a trust established for the benefit of a member of
the immediate family of the holder of such interest, and provided further that, in
each case, each of the following transfer conditions are satisfied:
(i) no Event
of Default shall have occurred and remain uncured;
(ii) Borrower
shall give Lender notice of such Transfer together with copies of all
instruments effecting such transfer not less than ten (10) days prior to the
date of such Transfer, or in the event that any such Transfer or series of
Transfers shall result in any Person that does not own more than a 20% direct or
indirect interest in Borrower as of the date hereof owning more than a 20%
direct or indirect interest in Borrower, Borrower shall give Lender thirty (30)
days prior written notice of such Transfer and Lender shall have an opportunity
to perform its customary credit and background searches with respect to such
transferee, except in the case of the death or disability of an interest holder,
in which event Borrower shall give Lender notice of such Transfer within ten
(10) Business Days after such Transfer;
(iii) no such
Transfer of interest shall result in a change of control of Borrower (or its
managing member or general partner) or the day to day operations of the
Property, or, if such Transfer would result in a change of control of Borrower
(or its managing member or general partner) or the day to day operations of the
Property as a result of the death or disability of an interest holder that is a
natural person, Lender
shall have approved in good faith the Person that will control Borrower and/or
the day to day operations of the Property;
(iv) the legal
and financial structure of Borrower and its shareholders, partners or members,
and the single purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members, after such Transfer shall satisfy Lender’s
then current applicable underwriting criteria and requirements;
(v) if, after
taking into account any prior Transfers pursuant to this Section
5.2.10(g), whether
to the proposed transferee or otherwise, such Transfer (or series of Transfers)
shall result in (A) the proposed transferee, together with all members of
his/her immediate family or any affiliates thereof, owning in the aggregate
(directly, indirectly or beneficially) more than 49% of the interests in
Borrower (or any entity
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directly
or indirectly holding an interest in Borrower), or (B) a Transfer in the
aggregate of more than 49% of the interests in Borrower as of the date hereof,
Borrower shall deliver to Lender, (y) an Additional Insolvency Opinion
reasonable satisfactory to Lender, and (z) at the request of Lender, written
confirmations from the Rating Agencies that such Transfer or series of Transfers
will not result in a qualification, downgrade or withdrawal of the then
applicable ratings of the Securities; and
(vi) Borrower
shall pay all fees and expenses incurred by Lender in connection with such
Transfer, including, without limitation, the cost of any third party reports,
legal fees and expenses, Rating Agency fees and expenses and required legal
opinions.
(h) Notwithstanding
anything to the contrary contained herein, Operating Partnership, or its
Affiliates, shall have the right to, and may, pledge, without Lender’s consent,
its indirect equity interests in Borrower, other than any direct interests in
Borrower, Mezzanine Borrower or General Partner, to secure (i) a loan facility
or loan facilities to Operating Partnership or its Affiliates, other than
Borrower, Mezzanine Borrower or General Partner, from a
group of lenders for which Credit Suisse First Boston acting through its New
York branch will act as initial administrative and collateral agent and (ii)
related hedging arrangements in connection therewith without Lender’s consent;
provided, however, that in either case, Operating Partnership or its Affiliates
(other than Borrower, Mezzanine Borrower or General Partner) pledges, directly
or indirectly, its equity interests in substantially all of the property owning
subsidiaries in which Operating Partnership holds a direct or indirect interest,
and provided further that any enforcement action taken pursuant to such pledge
shall constitute a Transfer that is prohibited pursuant to the terms of this
Section
5.2.10 and the
holder of such pledge shall be required to comply with all of the applicable
provisions of this Section
5.2.10.
5.2.11 Vacant
Space Master Lease.
Notwithstanding anything to the contrary contained herein, Borrower shall give
to Lender copies of all notices given to Borrower or received by Borrower with
respect to the Vacant Space Master Lease. Borrower shall not (i) waive any
rights under the Vacant Space Master Lease, (ii) modify the Rent or other
amounts payable under the Vacant Space Master Lease (except as specifically
provided in Section
3.1.21 hereof),
or extend any period for the payment of rent or other amounts under the Vacant
Space Master Lease, or (iii) terminate, cancel accept a surrender of or
otherwise amend or modify the Vacant Space Master Lease, except as specifically
provided in Section 3.1.21 hereof,
without, in each case, the prior written consent of Lender, which consent may be
granted or withheld by Lender in Lender sole discretion.
ARTICLE
6
INSURANCE;
CASUALTY; CONDEMNATION
Section
6.1 Insurance.
(a) Borrower
shall obtain and maintain, or cause to be maintained, insurance for Borrower and
the Property providing at least the following coverages:
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(i) comprehensive
all risk insurance on the Improvements and the Personal Property, including
contingent liability from Operation of Building Laws, covering Reduction In
Value, Demolition Costs and Increased Cost of Construction Endorsements, in each
case (A) in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation, but the amount shall in
no event be less than the Aggregate Outstanding Principal Balance; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; and (C) providing for no
deductible in excess of Twenty-Five Thousand and No/100 Dollars ($25,000.00) for
all such insurance coverage. In addition, Borrower shall obtain: (x) if any
portion of the Improvements is currently, or at any time in the future, located
in a federally designated “special flood hazard area”, flood hazard insurance in
an amount equal to the Aggregate Outstanding Principal Balance or such other
amount as Lender shall require; (y) earthquake insurance in amounts and in form
and substance satisfactory to Lender in the event the Property is located in an
area with a high degree of seismic activity, and (z) coastal windstorm
insurance in amounts and in form and substance satisfactory to Lender in the
event the Property is located in any coastal region, provided that the
insurance pursuant to the preceding clauses
(x),
(y) and
(z) shall be
on terms consistent with the comprehensive all risk insurance policy required
under this subsection (i);
(ii) commercial
general liability insurance, including a broad form comprehensive general
liability endorsement and coverage against claims for personal injury, bodily
injury, death or property damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called “occurrence” form with a combined limit of
not less than Two Million and No/100 Dollars ($2,000,000.00) in the aggregate
and One Million and No/100 Dollars ($1,000,000.00) per occurrence (and, if on a
blanket policy, containing an “Aggregate Per Location” endorsement); (B) to
continue at not less than the aforesaid limit until required to be changed by
Lender in writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an “if any”
basis; (3) independent contractors; (4) blanket contractual liability for all
legal contracts; and (5) contractual liability covering the indemnities
contained in Article 8 of the Mortgage to the extent the same is
available;
(iii) rental
loss and/or business income interruption insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above;
(C) containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of
eighteen (18) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; and (D) in an amount equal to
one hundred percent (100%) of the projected Gross Income from Operations for a
period of eighteen (18) months from the date of such Casualty (assuming such
Casualty had not occurred) and
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notwithstanding
that the policy may expire at the end of such period. The amount of such
business income insurance shall be determined prior to the date hereof and at
least once each year thereafter based on Borrower’s reasonable estimate of the
gross income from the Property for the succeeding thirty-six (36) month
period. Notwithstanding anything to the contrary in Section
2.6 hereof,
all proceeds payable to Lender pursuant to this subsection shall be held by
Lender and shall be applied at Lender’s sole discretion to (I) the Debt, or
(II) Operating Expenses approved by Lender in its sole discretion; provided,
however, that
nothing herein contained shall be deemed to relieve Borrower of its obligations
to pay the Debt, except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;
(iv) at all
times during which structural construction, repairs or alterations are being
made with respect to the Improvements, and only if the Property coverage form
does not otherwise apply, (A) owner’s contingent or protective liability
insurance covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability insurance policy; and (B) the
insurance provided for in subsection
(i) above
written in a so-called builder’s risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above,
(3) including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(v) if the
Property includes commercial property, worker’s compensation insurance with
respect to any employees of Borrower, as required by any Governmental Authority
or Legal Requirement;
(vi) comprehensive
boiler and machinery insurance, if applicable, in amounts as shall be reasonably
required by Lender on terms consistent with the commercial property insurance
policy required under subsection
(i)
above;
(vii) umbrella
liability insurance in an amount not less than Twenty-Five Million and No/100
Dollars ($25,000,000.00) per occurrence on terms consistent with the commercial
general liability insurance policy required under subsection
(ii)
above;
(viii) motor
vehicle liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence, including
umbrella coverage, of Five Million and No/100 Dollars
($5,000,000.00);
(ix) if the
Property is or becomes a legal “non-conforming” use, ordinance or law coverage
and insurance coverage to compensate for the cost of demolition or rebuilding of
the undamaged portion of the Property along with any reduced value and the
increased cost of construction in amounts as requested by Lender;
(x) the
commercial property and business income insurance required under Sections
6.1(a)(i) and
(iii) above
shall cover perils of terrorism and acts of terrorism and Borrower shall
maintain commercial property and business income insurance for loss resulting
from perils and acts of terrorism on terms (including
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amounts)
consistent with those required under Sections
6.1(a)(i) and
(iii) above at
all times during the term of the Loan; and
(xi) upon
sixty (60) days’ notice, such other reasonable insurance and in such reasonable
amounts as Lender from time to time may reasonably request against such other
insurable hazards which at the time are commonly insured against for properties
similar to the Property located in or around the region in which the Property is
located.
(b) All
insurance provided for in Section
6.1(a) shall be
obtained under valid and enforceable policies (collectively, the “Policies” or in
the singular, the “Policy”), and
shall be subject to the approval of Lender as to insurance companies, amounts,
deductibles, loss payees and insureds. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the State and having a claims paying ability rating of “A” or better (and the
equivalent thereof) by at least two (2) of the Rating Agencies rating the
Securities (one of which must be S&P if S&P is rating the Securities,
and one of which must be Moody’s if Xxxxx’x is rating the Securities), or if
only one Rating Agency is rating the Securities, then only by such Rating
Agency. The Policies described in Section
6.1(a) (other
than those strictly limited to liability protection) shall designate Lender as
mortgagee and loss payee. Not less than ten (10) days prior to the expiration
dates of the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies accompanied by evidence satisfactory to Lender of
payment of the premiums due thereunder (the “Insurance
Premiums”), shall
be delivered by Borrower to Lender.
(c) The
insurance coverage required under this Section
6.1 may be
effected under one or more blanket Policies covering the Property and other
property and assets not constituting a part of the Property; provided that any
blanket Policy shall specify, except in the case of general liability insurance,
the portion of the total coverage of such blanket Policy that is allocated
exclusively to the Property and shall comply in all respects with the
requirements of this Section
6.1. Lender
hereby confirms that it approves (i) the terms of the existing Property
Insurance Sharing Agreement among Borrower and certain of its Affiliates, and
(ii) that the Insurance Premiums are financed through one or more finance
companies (individually and/or collectively, the “Blanket
Insurance Premium Financing Arrangement”) to
whom Borrower pays Borrower’s allocable share of the annual initial deposit and
the monthly payments due for each blanket Policy to the applicable finance
company (with respect to each blanket Policy, such monthly payment, together
with one-twelfth (1/12th) of the allocable share of the annual initial deposit
necessary to accumulate such allocable share for such Policy at least thirty
(30) days prior to its due date, each, a “Financing
Installment”).
(d) All
Policies provided for or contemplated by Section
6.1(a), except
for the Policy referenced in Section
6.1(a)(v), shall
name Borrower as the insured and Lender (and its affiliates) as the additional
insured, as its interests may appear, and in the case of property damage, boiler
and machinery, flood and earthquake insurance, shall contain a so-called New
York standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
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(e) All
Policies provided for in Section
6.1 shall
contain clauses or endorsements to the effect that:
(i) no act or
negligence of Borrower, or anyone acting for Borrower, or of any tenant or other
occupant, or failure to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or any part thereof, shall in
any way affect the validity or enforceability of the insurance insofar as Lender
is concerned;
(ii) the
Policies shall not be materially changed (other than to increase the coverage
provided thereby) or canceled without at least thirty (30) days’ notice to
Lender and any other party named therein as an additional insured;
(iii) the
issuers thereof shall give notice to Lender if the Policies have not been
renewed fifteen (15) days prior to its expiration; and
(iv) Lender
shall not be liable for any Insurance Premiums thereon or subject to any
assessments thereunder.
(f) If at any
time Lender is not in receipt of written evidence that all Policies are in full
force and effect, Lender shall have the right, without notice to Borrower, to
take such action as Lender deems necessary to protect its interest in the
Property, including, without limitation, the obtaining of such insurance
coverage as Lender in its sole discretion deems appropriate. All premiums
incurred by Lender in connection with such action or in obtaining such insurance
and keeping it in effect shall be paid by Borrower to Lender upon demand and,
until paid, shall be secured by the Mortgage and shall bear interest at the
Default Rate.
Section
6.2 Casualty. If the
Property shall be damaged or destroyed, in whole or in part, by fire or other
casualty (a “Casualty”),
Borrower shall (a) give prompt notice of such damage to Lender, and (b) promptly
commence and diligently prosecute the completion of Restoration so that the
Property resembles, as nearly as possible, the condition the Property was in
immediately prior to such Casualty, with such alterations as may be reasonably
approved by Lender and otherwise in accordance with Section
6.4 herein.
Borrower shall pay all costs of such Restoration whether or not such costs are
covered by insurance. Lender may, but shall not be obligated to make proof of
loss if not made promptly by Borrower. In addition, Lender may participate in
any settlement discussions with any insurance companies (and shall approve any
final settlement) with respect to any Casualty in which the Net Proceeds or the
costs of completing Restoration are equal to or greater than One Million and
No/100 Dollars ($1,000,000.00) and Borrower shall deliver to Lender all
instruments reasonably required by Lender to permit such
participation.
Section
6.3 Condemnation.
Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding in respect of Condemnation, and shall deliver to
Lender copies of any and all papers served in connection with such proceedings.
Lender may participate in any such proceedings, and Borrower shall from time to
time deliver to Lender all instruments requested by Lender to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and
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experts,
and cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through
Condemnation or otherwise (including, but not limited to, any transfer made in
lieu of or in anticipation of the exercise of such taking), Borrower shall
continue to perform the Obligations at the time and in the manner provided in
this Agreement and the other Loan Documents and the Outstanding Principal
Balance shall not be reduced until any Award shall have been actually received
and applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Obligations. Lender shall not be limited to the
interest paid on the Award by the applicable Governmental Authority but shall be
entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
Governmental Authority, Borrower shall promptly commence and diligently
prosecute Restoration and otherwise comply with the provisions of Section
6.4 herein.
If the Property is sold, through foreclosure or otherwise, prior to the receipt
by Lender of the Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive the
Award, or a portion thereof sufficient to pay the Debt.
Section
6.4 Restoration. The
following provisions shall apply in connection with Restoration:
(a) If the
Net Proceeds shall be less than One Million and No/100 Dollars ($1,000,000.00)
and the costs of completing Restoration shall be less than One Million and
No/100 Dollars ($1,000,000.00), the Net Proceeds will be disbursed by Lender to
Borrower upon receipt, provided that all of the conditions set forth in
Section
6.4(b)(i) are met
and Borrower delivers to Lender a written undertaking to expeditiously commence
and to satisfactorily complete with due diligence Restoration in accordance with
the terms of this Agreement.
(b) If the
Net Proceeds are equal to or greater One Million and No/100 Dollars
($1,000,000.00), or the costs of completing Restoration is equal to or greater
than One Million and No/100 Dollars ($1,000,000.00), the Net Proceeds will be
held by Lender and Lender shall make the Net Proceeds available for Restoration
in accordance with the provisions of this Section
6.4. The
term “Net
Proceeds” for
purposes of this Section
6.4 shall
mean: (i) the net amount of all insurance proceeds received by Lender
pursuant to Section
6.1 (a)(i),
(iv),
(vi),
(ix) and
(x) as a
result of such damage or destruction, after deduction of Lender’s reasonable
costs and expenses (including, but not limited to, reasonable counsel costs and
fees), if any, in collecting same (“Insurance
Proceeds”), or
(ii) the net amount of the Award, after deduction of Lender’s reasonable costs
and expenses (including, but not limited to, reasonable counsel costs and fees),
if any, in collecting same (“Condemnation
Proceeds”),
whichever the case may be.
(c) (i) In the
event that the Net Proceeds equal or exceed One Million and No/100 Dollars
($1,000,000), the Net Proceeds shall, at the option of Lender in its sole
discretion, be applied to the payment of the Obligations or applied to reimburse
Borrower for the cost of the Restoration in the manner set forth below. In the
event that the Net Proceeds are less than One Million and No/100 Dollars
($1,000,000), the Net Proceeds shall be made available to Borrower for
Restoration upon the approval of Lender in its sole discretion that the
following conditions are met:
(A) no Event
of Default shall have occurred and be continuing;
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(B) (1) in
the event the Net Proceeds are Insurance Proceeds, less than twenty five percent
(25%) of the total floor area of the Improvements on the Property has been
damaged, destroyed or rendered unusable as a result of such Casualty, or (2) in
the event the Net Proceeds are Condemnation Proceeds, less than fifteen percent
(15%) of the land constituting the Property is taken, and such land is located
along the perimeter or periphery of the Property, and no portion of the
Improvements is located on such land;
(C) Leases
demising in the aggregate a percentage amount equal to or greater than ninety
percent (90%) of the total rentable space in the Property which has been demised
under executed and delivered Leases in effect as of the date of the occurrence
of such Casualty or Condemnation, whichever the case may be, shall remain in
full force and effect during and after the completion of Restoration,
notwithstanding the occurrence of any such Casualty or Condemnation, whichever
the case may be, and will make all necessary repairs and restorations thereto at
their sole cost and expense;
(D) Borrower
shall commence Restoration as soon as reasonably practicable (but in no event
later than ninety (90) days after such Casualty or Condemnation, whichever the
case may be, occurs) and shall diligently pursue the same to satisfactory
completion;
(E) Lender
shall be satisfied that any operating deficits, including all scheduled payments
of principal and interest under the Note, which will be incurred with respect to
the Property as a result of the occurrence of any such Casualty or Condemnation,
whichever the case may be, will be covered out of (1) the Net Proceeds, (2) the
insurance coverage referred to in Section 6.1(a)(iii), if
applicable, or (3) by other funds of Borrower;
(F) Lender
shall be satisfied that Restoration will be completed on or before the earliest
to occur of (1) six (6) months prior to the Maturity Date, (2) the earliest date
required for such completion under the terms of any Leases, (3) such time as may
be required under applicable Legal Requirements, or (4) the expiration of the
insurance coverage referred to in Section
6.1(a)(iii);
(G) the
Property and the use thereof after Restoration will be in compliance with and
permitted under all applicable Legal Requirements;
(H) Restoration
shall be done and completed by Borrower in an expeditious and diligent fashion
and in compliance with all applicable Legal Requirements;
(I) such
Casualty or Condemnation, as applicable, does not result in a material loss of
access to the Property or the related Improvements;
(J) the Debt
Service Coverage Ratio for the Property for the next twelve (12) full calendar
months, after giving effect to Restoration, shall be equal to or greater than
1.10:1.0;
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(K) the Loan
to Value Ratio after giving effect to Restoration, shall be equal to or less
than eighty percent (80%);
(L) Borrower
shall deliver, or cause to be delivered, to Lender a signed detailed budget
approved in writing by Borrower’s architect or engineer stating the entire cost
of completing Restoration, which budget shall be acceptable to Lender;
and
(M) the Net
Proceeds together with any cash or cash equivalent deposited by Borrower with
Lender are sufficient in Lender’s reasonable discretion to cover the cost of
Restoration.
(ii) The Net
Proceeds shall be paid directly to Lender for deposit in an interest-bearing
account and, until disbursed in accordance with the provisions of this
Section
6.4(b), shall
constitute additional security for the Debt and the Other Obligations. The Net
Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time
to time during the course of Restoration, upon receipt of evidence satisfactory
to Lender that (A) all materials installed and work and labor performed (except
to the extent that they are to be paid for out of the requested disbursement) in
connection with Restoration have been paid for in full, and (B) there exist no
notices of pendency, stop orders, mechanic’s or materialman’s liens or notices
of intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Property which have not either been fully bonded to the
satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the Title Company.
(iii) All plans
and specifications required in connection with Restoration shall be subject to
prior review and acceptance in all respects by Lender and by an independent
consulting engineer selected by Lender (the “Casualty
Consultant”). Lender
shall have the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with Restoration. The identity of
the contractors, subcontractors and materialmen engaged in Restoration, as well
as the contracts under which they have been engaged, shall be subject to prior
review and acceptance by Lender and the Casualty Consultant. All costs and
expenses incurred by Lender in connection with making the Net Proceeds available
for Restoration including, without limitation, reasonable counsel fees and
disbursements and the Casualty Consultant’s fees, shall be paid by
Borrower.
(iv) In no
event shall Lender be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work in place as part of Restoration, as certified by the Casualty Consultant,
minus the Casualty Retainage. The term “Casualty Retainage” shall mean, as to
each contractor, subcontractor or materialman engaged in Restoration, an amount
equal to ten percent (10%) of the costs actually incurred for work in place as
part of Restoration, as certified by the Casualty Consultant, until Restoration
has been completed. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section
6.4(b), be less
than the amount actually held back by Borrower from contractors, subcontractors
and materialmen engaged in Restoration. The Casualty
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Retainage
shall not be released until the Casualty Consultant certifies to Lender that
Restoration has been completed in accordance with the provisions of this
Section
6.4(b) and that
all approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate Governmental Authorities, and Lender receives
evidence satisfactory to Lender that the costs of Restoration have been paid in
full or will be paid in full out of the Casualty Retainage; provided,
however, that
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in Restoration
as of the date upon which the Casualty Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily completed all work
and has supplied all materials in accordance with the provisions of the
contractor’s, subcontractor’s or materialman’s contract, the contractor,
subcontractor or materialman delivers the lien waivers and evidence of payment
in full of all sums due to the contractor, subcontractor or materialman as may
be reasonably requested by Lender or by the Title Company issuing the Title
Insurance Policy, and Lender receives an endorsement to the Title Insurance
Policy insuring the continued priority of the lien of the related Mortgage and
evidence of payment of any premium payable for such endorsement. If required by
Lender, the release of any such portion of the Casualty Retainage shall be
approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or
materialman.
(v) Lender
shall not be obligated to make disbursements of the Net Proceeds more frequently
than once every calendar month.
(vi) If at any
time the Net Proceeds or the undisbursed balance thereof shall not, in the
opinion of Lender in consultation with the Casualty Consultant, be sufficient to
pay in full the balance of the costs which are estimated by the Casualty
Consultant to be incurred in connection with the completion of Restoration,
Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with
Lender before any further disbursement of the Net Proceeds shall be made. The
Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall
be disbursed for costs actually incurred in connection with Restoration on the
same conditions applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this Section
6.4(b) shall
constitute additional security for the Debt and the Other
Obligations.
(vii) The
excess, if any, of the Net Proceeds and the remaining balance, if any, of the
Net Proceeds Deficiency deposited with Lender after the Casualty Consultant
certifies to Lender that Restoration has been completed in accordance with the
provisions of this Section
6.4(b), and the
receipt by Lender of evidence satisfactory to Lender that all costs incurred in
connection with Restoration have been paid in full, shall be remitted by Lender
(I) to the Mezzanine Cash Management Account, or (II) if the Mezzanine Loan has
been paid in full, provided no Event
of Default shall have occurred and shall be continuing, to
Borrower.
(d) All Net
Proceeds not required pursuant to the terms of this Agreement (i) to be made
available for Restoration, or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section
6.4(c)(vii), may be
retained and applied by Lender in accordance with Section 2.4.2 hereof
toward reduction of the Outstanding Principal Balance whether or not then
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due and
payable in such order, priority and proportions as Lender in its sole discretion
shall deem proper, or, in the sole discretion of Lender, the same may be paid,
(1) if the Mezzanine Loan is outstanding, to the Mezzanine Cash Management
Agreement, or (II) if the Mezzanine Loan has been paid in full, to Borrower
either in whole or in part, for such purposes as Lender shall approve, in its
sole discretion. No prepayment charge shall be payable by Borrower by reason of
a Casualty or Condemnation so long as no Event of Default has occurred and is
continuing prior to such Casualty or Condemnation.
(e) In the
event of foreclosure of the Mortgage, or other transfer of title to the Property
in extinguishment in whole or in part of the Debt all right, title and interest
of Borrower in and to the Policies that are not blanket Policies then in force
concerning the Property and all proceeds payable thereunder shall thereupon vest
in the purchaser at such foreclosure or Lender or other transferee in the event
of such other transfer of title.
ARTICLE
7
RESERVE
FUNDS
Section
7.1 Intentionally
Omitted.
Section
7.2 Tax
and Insurance Escrow Funds.
(a) Borrower
shall pay to Lender (i) on each Payment Date, one-twelfth of the Taxes that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes at least
thirty (30) days prior to their delinquency date, and (ii) (A) on the
Closing Date, an amount equal to $22,057.71 (the “Initial
Blanket Insurance Premium Installment”) and
(B) (1) for so long as the applicable Blanket Insurance Premium
Financing Arrangement remains in full force and effect, on each Payment Date,
the Financing Installment for the next occurring payment under the applicable
Blanket Insurance Premium Financing Arrangement and/or (2) with respect to
any Insurance Premiums not covered by a Blanket Insurance Premium Financing
Arrangement, on each Payment Date, one-twelfth of the Insurance Premiums that
Lender estimates will be payable for the renewal of the coverage afforded by the
Policies for an annual period upon the expiration thereof in order to accumulate
with Lender sufficient funds to pay all such Insurance Premiums at least thirty
(30) days prior to the expiration of the Policies (said amounts in the preceding
clauses (i) and
(ii) being
hereinafter called the “Tax
and Insurance Escrow Funds”). Such
amounts will be transferred by Lender to an account held by Lender (the
“Tax
and Insurance Escrow Account”). The
Tax and Insurance Escrow Funds and the Monthly Interest Payment shall be added
together and shall be paid as an aggregate sum by Borrower to Lender. Provided
no Event of Default shall exist, Lender will apply the Tax and Insurance Escrow
Funds to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections
5.1.2 and
6.1 hereof
and under the Mortgage and/or to payments due to the applicable finance company
under the applicable Blanket Insurance Premium Financing Arrangement, as
applicable. In making any payment relating to the Tax and Insurance Escrow
Funds, Lender may do so according to any xxxx, statement or estimate procured
from the appropriate public office (with respect to Taxes) or insurer or agent
(with respect to Insurance Premiums), without inquiry into the accuracy of such
xxxx, statement or estimate or into the validity of any tax,
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assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax
and Insurance Escrow Funds shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Sections
5.1.2 and
6.1 hereof,
Lender shall credit such excess against future payments to be made to the Tax
and Insurance Escrow Funds. Any amount remaining in the Tax and Insurance Escrow
Funds after the Debt has been paid in full shall be transferred to the Mezzanine
Cash Management Account or, if the Mezzanine Loan has been paid in full,
returned to Borrower. In allocating such excess, Lender may deal with the Person
shown on the records of Lender to be the owner of the Property. If at any time
Lender determines that the Tax and Insurance Escrow Funds are not or will not be
sufficient to pay the items set forth in clauses (i) and
(ii) above,
Lender shall notify Borrower of such determination and Borrower shall increase
its monthly payments to Lender by the amount that Lender estimates is sufficient
to make up the deficiency at least thirty (30) days prior to delinquency of the
Taxes and/or expiration of the Policies, as the case may be. All earnings of
interest on the Tax and Insurance Escrow Funds shall become part of the Tax and
Insurance Escrow Funds and shall be disbursed in accordance with this
Section
7.2. If
Lender so elects at any time, Borrower shall provide, at Borrower’s expense, a
tax service contract for the Term issued by a tax reporting agency acceptable to
Lender. If Lender does not so elect, Borrower shall reimburse Lender for the
cost of making annual tax searches throughout the Term.
(b) Notwithstanding
anything to the contrary contained in this Section 7.2, with
respect to the Initial Blanket Insurance Premium Deposit, and the required
monthly payments required under clause
(ii) above
through the end of the current policy year, the parties agree as follows: for
the period from the date hereof through August 1, 2005, the Property will be
covered by a blanket insurance policy as described in Section
6.1(c) of this
Agreement, but instead of participating in the Blanket Insurance Premium
Financing Arrangement, Borrower will pay its allocable share of the Insurance
Premiums in a single installment, due approximately thirty (30) days after the
date hereof. Borrower’s allocable share of the annual Insurance Premiums for the
blanket policy for the period from the date hereof through August 1, 2005 is the
Initial Blanket Insurance Premium Deposit. Borrower has deposited the Initial
Blanket Insurance Premium Deposit in the Tax and Insurance Escrow Funds on the
date hereof (as set forth in clause
(ii)(A) in the
immediately preceding paragraph). Borrower will notify Lender in writing at
least ten (10) days in advance of the date when such Insurance Premium is due,
whereupon Lender will apply such amount to the payment of Borrower’s allocable
share of the blanket policy Insurance Premium. On the Payment Dates in April,
May, June and July of 2005, Borrower will pay to Lender for deposit in the Tax
and Insurance Escrow Funds the sum of $4,826.78 per month. On each Payment Date
commencing with the Payment Date occurring in August, 2005, Borrower shall make
payments into the Tax and Insurance Escrow Funds as set forth in the preceding
paragraph.
Section
7.3 Intentionally
Omitted.
Section
7.4 Rollover
Reserve.
7.4.1 Deposits
to Rollover Reserve Funds.
(a) On the
Closing Date, Borrower shall deposit with Lender the amount of
(i) $1,000,000.00 to pay for Approved Leasing Expenses incurred by Borrower
after the date
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hereof
plus (ii) $359,704.00 to pay for Approved Leasing Costs set forth on
Schedule
IV attached
hereto (the “Existing
Approved Leasing Expenses”). In
addition, Borrower shall pay to Lender for deposit with Lender those additional
funds described in Section 7.4.1(b) hereof.
All such amounts so deposited shall hereinafter be referred to as the
“Rollover
Reserve Funds” and the
account in which such amounts are held shall hereinafter be referred to as the
“Rollover
Reserve Account”.
(b) In
addition to the required deposits set forth in Section 7.4.1(a) above,
the following items shall be deposited into the Rollover Reserve Account and
held as Rollover Reserve Funds, which Rollover Reserve Funds shall be held by
Lender and disbursed only in accordance with Section
7.4.2 below.
Borrower shall advise Lender at the time of receipt thereof of the nature of
such receipt so that Lender shall have sufficient time to instruct the Deposit
Bank to deposit and hold such amounts in the Rollover Reserve Account pursuant
to the Cash Management Agreement:
(i) All sums
paid with respect to (A) a modification of any Lease or otherwise paid in
connection with Borrower taking any action under any Lease (e.g., granting a
consent) or waiving any provision thereof, (B) any settlement of claims of
Borrower against third parties in connection with any Lease; (C) any rejection,
termination, surrender or cancellation of any Lease (including in any bankruptcy
case) or any lease buy-out or surrender payment from any tenant (including any
payment relating to unamortized tenant improvements and/or leasing commissions)
(collectively “Lease
Termination Payments”), and
(D) any sum received from any tenant to obtain a consent to an assignment or
sublet or otherwise, or any holdover rents or use and occupancy fees from any
tenant or former tenant (to the extent not being paid for use and occupancy or
holdover rent); and
(ii) Any other
extraordinary event pursuant to which Borrower receives payments or income (in
whatever form) derived from or generated by the use, ownership or operation of
the Property not otherwise covered by this Agreement or the Cash Management
Agreement.
7.4.2 Withdrawal
of Rollover Reserve Funds.
Provided that no Event of Default shall exist and remain uncured, Lender shall
make disbursements from the Rollover Reserve Funds for Approved Leasing Expenses
or Existing Approved Leasing Expenses incurred by Borrower, for portions of the
Property other than the Xxxxxxx Xxxxxx Space (or, if no Xxxxxxx Xxxxxx Reserve
Funds are on deposit with Lender, for the Xxxxxxx Xxxxxx Space) as requested, in
writing, by Borrower on a monthly basis in increments of no less than $10,000.00
within five (5) Business Days after delivery by Borrower of Lender’s standard
form of draw request accompanied by (a) copies of invoices for the amounts
requested for tenant improvements and leasing commissions and with respect to
Approved Leasing Expenses the newly executed Lease or the newly executed Lease
extension, renewal, or modification, (b) an Officer’s Certificate
(i) stating that the items to be funded by the requested disbursement are
Approved Leasing Expenses or Existing Approved Leasing Expenses, and a
description thereof, (ii) stating that all tenant improvements at the Property
to be funded by the requested disbursement have been completed in a good and
workmanlike manner and in accordance with all applicable Legal Requirements,
(iii) identifying each Person that supplied materials or labor in connection
with
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the
tenant improvements to be funded by the requested disbursement or the broker
entitled to the leasing commissions, (iv) stating that each such Person has been
paid in full or will be paid in full upon such disbursement for work or services
completed and/or materials furnished, (v) stating that the Approved Leasing
Expenses or Existing Approved Leasing Expenses to be funded have not been the
subject of a previous disbursement, (vi) stating that all previous disbursements
of Rollover Reserve Funds have been used to pay the previously identified
Approved Leasing Expenses or Existing Approved Leasing Expenses, (vii) stating
that all outstanding trade payables which relate to the Leases for which
Approved Leasing Expenses are then to be paid (other than those to be paid from
the requested disbursement or those constituting Permitted Indebtedness) have
been paid in full, and (vii) stating that the related tenant improvements have
been paid in full or will be paid for in full from the requested disbursement or
a certification for leasing commission disbursements stating that such leasing
commission has been paid in full or will be paid for in full from the requested
disbursement, (c) lien waivers, if applicable, and release or other evidence of
payment satisfactory to Lender from all parties furnishing materials and/or
services in connection with the requested payment, and (d) such other evidence
as Lender shall reasonably request to demonstrate that the Approved Leasing
Expenses or Existing Approved Leasing Expenses to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Any disbursement by Lender hereunder in excess of
$10,000.00 and not already paid for by Borrower shall be made by joint check,
payable to Borrower and the applicable contractor, supplier, materialman,
mechanic, subcontractor, broker or other party to whom payment is due in
connection with such disbursement. Lender may require an inspection of the
Property at Borrower’s expense prior to making a disbursement in order to verify
compliance with the requirements of this Section
7.4,2. For so
long as Xxxxxxx Xxxxxx Reserve Funds are on deposit with Lender, requests for
disbursements to pay Approved Leasing Expenses for the Xxxxxxx Xxxxxx Space
shall be made from the Xxxxxxx Xxxxxx Reserve Funds, and not from Rollover
Reserve Funds. Notwithstanding anything to the contrary contained herein, the
amounts deposited in the Rollover Reserve Funds pursuant to Section
7.4.1(a)(ii) hereof
shall only be used to pay for Existing Approved Leasing Expenses until all such
Existing Approved Leasing Expenses have been paid in full, at which time they
may be used to pay for any Approved Leasing Expenses.
Section
7.5 Xxxxxxx
Xxxxxx Reserve Funds.
7.5.1 Deposit
of Xxxxxxx Xxxxxx Reserve Funds. In the
event that (a) Xxxxxxx Xxxxxx exercises its option to terminate the Xxxxxxx
Xxxxxx Lease as of September 30, 2007, or (b) Xxxxxxx Xxxxxx vacates or gives
notice of its intent to vacate the Xxxxxxx Xxxxxx Space or otherwise closes its
business for any reason (other than during the period from the occurrence of a
Casualty affecting the Property through the date the damage to the Property from
such Casualty is restored and repaired), unless Xxxxxxx Xxxxxx has and maintains
an Investment Grade Rating or Xxxxxxx Xxxxxx has sublet all of the Xxxxxxx
Xxxxxx Space for a term equal to the lesser of three (3) years or the remaining
term of the Xxxxxxx Xxxxxx Lease, at a Full Service Gross Rent that is not less
than the Full Service Gross Rent payable by Xxxxxxx Xxxxxx under the Xxxxxxx
Xxxxxx Lease, or (c) Xxxxxxx Xxxxxx is in default under the Xxxxxxx Xxxxxx
Lease beyond any applicable grace and cure periods, or (d) Xxxxxxx Xxxxxx is the
subject of a Bankruptcy Action, (the occurrence of any of such events described
in clauses
(a),
(b),
(c) or
(d) is
hereinafter referred to as an “Xxxxxxx
Xxxxxx Trigger Event”); then,
commencing on August 9, 2006 with
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respect
to a Xxxxxxx Xxxxxx Trigger Event described in clause (a) above, and on the
first Payment Date after any other Xxxxxxx Xxxxxx Trigger Event, and on each
Payment Date occurring thereafter, Borrower shall deposit all Excess Cash Flow
(such funds so deposited being referred to herein as the “Xxxxxxx
Xxxxxx Reserve Funds”) into an
account (the “Xxxxxxx
Xxxxxx Reserve Account”) held by
Lender (it being specifically agreed and understood that Borrower shall be
required to continue to make such deposits of Excess Cash Flow into the Xxxxxxx
Xxxxxx Reserve Account until a Xxxxxxx Xxxxxx Sweep Termination (as defined
below) occurs). The Xxxxxxx Xxxxxx Reserve Account shall be held by Lender as
additional security for the Obligations and disbursed to Borrower in accordance
with the provisions of Section
7.5.2. Upon
the occurrence and during the continuance of a Xxxxxxx Xxxxxx Trigger Event,
Borrower’s failure to deposit all Excess Cash Flow into the Xxxxxxx Xxxxxx
Reserve Account shall constitute an Event of Default. If at any time during the
term of the Loan after the occurrence of an Xxxxxxx Xxxxxx Trigger Event, a
Xxxxxxx Xxxxxx Sweep Termination occurs, then provided no Event of Default
exists, all amounts in the Xxxxxxx Xxxxxx Reserve Account will be transferred to
the Mezzanine Cash Management Account or, if the Mezzanine Loan has been paid in
full, released to Borrower, and Borrower will no longer be obligated to make
deposits into the Xxxxxxx Xxxxxx Reserve Account unless at any time thereafter
another Xxxxxxx Xxxxxx Trigger Event occurs again (it being specifically agreed
and understood that all Excess Cash Flow shall be deposited into the Xxxxxxx
Xxxxxx Reserve Account as set forth above each subsequent time that an Xxxxxxx
Xxxxxx Trigger Event occurs). For purposes hereof, the term “Xxxxxxx
Xxxxxx Sweep Termination” shall
mean the occurrence of the following: (i) with respect to the Xxxxxxx Xxxxxx
Trigger Event described in clause
(a) above,
Borrower shall have delivered to Lender evidence satisfactory to Lender that (x)
all of the Xxxxxxx Xxxxxx Space has been leased to one or more tenants approved
by Lender in its sole discretion pursuant to a Lease satisfying the requirements
set forth in Section
5.1.20 hereof
and otherwise approved by Lender in its sole discretion, (y) such tenants are in
occupancy of the Xxxxxxx Xxxxxx Space, and paying full and unabated Rent, and
(z) Lender has received an estoppel certificate from such tenants in form and
substance reasonably satisfactory to Lender (such conditions (x), (y) and (z)
hereinforth referred to as the “Xxxxxxx
Xxxxxx Replacement Lease Requirements”); (ii)
with respect to the Xxxxxxx Xxxxxx Trigger Event described in clause (b) above,
Borrower shall have delivered to Lender either (A) an estoppel certificate
executed by Xxxxxxx Xxxxxx satisfactory to Lender in its sole discretion
certifying to Lender that the Xxxxxxx Xxxxxx Lease is in full force and effect,
Xxxxxxx Xxxxxx is paying full and unabated rent, and Xxxxxxx Xxxxxx reoccupies
the Property for business for a period of not less than ninety (90) days or
(B) evidence satisfactory to Lender in its sole discretion that the Xxxxxxx
Xxxxxx Lease Requirements have been satisfied; (iii) with respect to the Xxxxxxx
Xxxxxx Trigger Event described in clause
(c) above,
Borrower shall have delivered to Lender evidence satisfactory to Lender in its
sole discretion certifying that Xxxxxxx Xxxxxx is no longer in default under the
Xxxxxxx Xxxxxx Lease or that the Xxxxxxx Xxxxxx Replacement Lease Requirements
have been satisfied, or (iv) with respect to the Xxxxxxx Xxxxxx Trigger Event
described in clause
(d) above,
the Bankruptcy Action is dismissed with prejudice or a reorganization plan
satisfactory to Lender in its sole discretion is approved by the bankruptcy
court, the Xxxxxxx Xxxxxx Lease is assumed as part of such reorganization plan
and all defaults under the Xxxxxxx Xxxxxx Lease are cured and Xxxxxxx Xxxxxx
provides security for its obligations under the Xxxxxxx Xxxxxx Lease
satisfactory to Lender to its sole discretion; or (e) with respect to any
Xxxxxxx Xxxxxx Trigger Event described in clauses
(a),
(b),
(c), or
(d) above,
the Property maintains an Underwritten Debt Service Coverage Ratio (excluding
any Full
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Service
Gross Rent received pursuant to the Vacant Space Master Lease with respect to
the Xxxxxxx Xxxxxx Space) of not less than 1.07 to 1.0 for two consecutive
calendar quarters.
7.5.2 Disbursement
of Xxxxxxx Xxxxxx Reserve Funds. If any
portion of the Xxxxxxx Xxxxxx Space (or, if no Rollover Reserve Funds are on
deposit with Lender, any other portion of the Property) is demised to a tenant
approved by Lender in its sole discretion pursuant to a Lease approved by Lender
in its sole discretion, then the funds in the Xxxxxxx Xxxxxx Reserve Account
shall be made available by Lender for Approved Leasing Expenses incurred by
Borrower with respect to such tenant. Provided that no Event of Default shall
exist and remain uncured, Lender shall make disbursements as requested, in
writing, by Borrower on a monthly basis in increments of no less than $10,000.00
upon compliance by Borrower with the conditions set forth in Section
7.4.2. In
addition, in the event that, on any Payment Date, the amount on deposit in the
Cash Management Account, after application of funds therein to pay the amounts
set forth in Section 2.6.2(b)(i), is
insufficient to pay the Monthly Interest Payment and any other amounts then
payable by Borrower to Lender, Lender shall have the right, but not the
obligation, in its sole discretion, to apply the Xxxxxxx Xxxxxx Reserve Funds to
the payment of any such amounts. Notwithstanding anything to the contrary
contained herein, any amounts on deposit in the Xxxxxxx Xxxxxx Reserve Account
on the Maturity Date may be applied by Lender to the payment of the Outstanding
Principal Balance of the Loan. For so long as Rollover Reserve Funds are on
deposit with Lender, requests for disbursements to pay Approved Leasing Expenses
for space other than the Xxxxxxx Xxxxxx Space shall be made as disbursements of
Rollover Reserve Funds, and not as disbursement of Xxxxxxx Xxxxxx Reserve
Funds.
Section
7.6 Reserve
Funds, Generally.
(a) Borrower
grants to Lender a first-priority perfected security interest in all of the
Reserve Funds and any and all monies now or hereafter deposited in each reserve
account as additional security for payment and performance of the Obligations.
Until expended or applied in accordance herewith, the Reserve Funds shall
constitute additional security for the Obligations. Upon the occurrence and
during the continuance of an Event of Default, Lender may, in addition to any
and all other rights and remedies available to Lender, apply any sums then
present in any or all of the Reserve Funds to the reduction of the Outstanding
Principal Balance in any order in its sole discretion. The Reserve Funds shall
not constitute trust funds and may be commingled with other monies held by
Lender.
(b) Borrower
shall not, without obtaining the prior consent of Lender, further pledge, assign
or grant any security interest in any Reserve Fund or the monies deposited
therein or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-1 Financing Statements, except those naming Lender as
the secured party, to be filed with respect thereto.
(c) The
Reserve Funds shall be held in an Eligible Account and shall bear interest at a
money market rate selected by Lender. Provided that no Event of Default shall
have occurred and be continuing, all interest or other earnings on any of the
Reserve Funds (with the exception of the Tax and Insurance Escrow Funds, which
shall belong to Lender) shall be added to and become a part of such Reserve
Funds and shall be disbursed in the same manner as other monies comprising such
Reserve Funds. Borrower shall have the right to direct Lender to invest
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sums on
deposit in the Eligible Account in Permitted Investments provided that (i) such
investments are then regularly offered by Lender for accounts of this size,
category and type, (ii) such investments are permitted by applicable
federal, state and local rules, regulations and laws, (iii) the maturity date of
the Permitted Investment is not later than the date on which the applicable
Reserve Funds are required for payment of an obligation for which such Reserve
Funds were created, and (iv) no Event of Default shall have occurred and be
continuing. Borrower shall be responsible for payment of any federal, state or
local income or other tax applicable to the interest or income earned on the
Reserve Funds. No other investments of the Reserve Funds shall be permitted
except as set forth in this Section
7.6.
Borrower shall bear all reasonable costs associated with the investment of the
sums in the account in Permitted Investments. Such costs shall be deducted from
the income or earnings on such investment, if any, and to the extent such income
or earnings shall not be sufficient to pay such costs, such costs shall be paid
by Borrower promptly on demand by Lender. Lender shall have no liability for the
rate of return earned or losses incurred on the investment of the sums in
Permitted Investments.
(d) Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses (including, without limitation, litigation costs and
reasonable attorneys fees and expenses) arising from or in any way connected
with the Reserve Funds or the performance of the obligations for which the
Reserve Funds were established. Borrower shall assign to Lender all rights and
claims Borrower may have against all Persons supplying labor, materials or other
services which are to be paid from or secured by the Reserve Funds; provided,
however, that
Lender may not pursue any such right or claim unless an Event of Default has
occurred and remains uncured.
ARTICLE
8
DEFAULTS
Section
8.1 Event
of Default.
(a) Each of
the following events shall constitute an event of default hereunder (an
“Event
of Default”):
(i) if any
portion of the Debt is not paid when due;
(ii) subject
to Borrower’s right to contest as provided herein, if any of the Taxes or Other
Charges are not paid when the same are due and payable, unless, with respect to
the payment of Taxes (a) sums equaling the amount of the Taxes then payable
have been delivered to Lender in accordance with Section
7.2, (b) no
Event of Default shall have occurred and be continuing, and (c) there is no
restriction of Lender’s release of the Tax and Insurance Escrow
Funds;
(iii) if the
Policies are not kept in full force and effect, or if certified copies of the
Policies are not delivered to Lender upon request;
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(iv) if
Borrower Transfers or otherwise encumbers any portion of the Property without
Lender’s prior written consent in violation of the provisions of this Agreement
or Article 6 of the Mortgage;
(v) if any
representation or warranty made by Borrower herein or in any other Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made;
(vi) if
Borrower, Principal or Guarantor shall make an assignment for the benefit of
creditors;
(vii) if a
receiver, liquidator or trustee shall be appointed for Borrower, Principal or
Guarantor, or if Borrower, Principal or Guarantor shall be adjudicated 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 Borrower, Principal or
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower,
Principal or Guarantor shall be instituted; provided,
however, that if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, Principal or Guarantor, the same shall constitute an
Event of Default hereunder only upon the same not being discharged, stayed or
dismissed within sixty (60) days;
(viii) if
Borrower attempts to assign its rights under this Agreement or any of the other
Loan Documents or any interest herein or therein in contravention of the Loan
Documents;
(ix) if
Borrower breaches any of its respective negative covenants contained in
Section
5.2 or any
covenant contained in Section
4.1.30 or
Section
5.1.11
hereof;
(x) with
respect to any term, covenant or provision set forth herein which specifically
contains a notice requirement or grace period, if Borrower shall be in default
under such term, covenant or condition after the giving of such notice or the
expiration of such grace period;
(xi) if any of
the assumptions contained in the Insolvency Opinion delivered to Lender in
connection with the Loan, or in any Additional Insolvency Opinion delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect;
(xii) if a
material default has occurred and continues beyond any applicable cure period
under the Management Agreement or Sub-Management Agreement (or any, applicable,
Replacement Management Agreement or Replacement Sub-Management Agreement, as
applicable), which default permits Manager or Sub-Manager, thereunder, as
applicable, to terminate or cancel the Management Agreement or
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Sub-Management
Agreement (or any Replacement Management Agreement or Replacement Sub-Management
Agreement, as applicable);
(xiii) if,
pursuant to the terms of this Agreement, Borrower is required to deliver a
Replacement Interest Rate Cap Agreement to Lender and fails to deliver a
confirmation evidencing the purchase of such Replacement Interest Rate Cap
Agreement not later than the date on which such Replacement Interest Rate Cap
was required to be purchased;
(xiv) if
Borrower shall continue to be in Default under any of the Other Obligations not
specified in subsections
(i) through
(xiii) above,
for ten (10) days after notice to Borrower from Lender, in the case of any
Default which can be cured by the payment of a sum of money, or for thirty (30)
days after notice from Lender in the case of any other Default; provided,
however, that if
such non-monetary Default is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and, provided
further, that
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 such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days;
(xv) if there
shall be default under any of the other Loan Documents beyond any applicable
cure periods contained in such documents, whether as to Borrower or the
Property, or if any other such event shall occur or condition shall exist, if
the effect of such event or condition is to accelerate the maturity of any
portion of the Debt or to permit Lender to accelerate the maturity of all or any
portion of the Debt; or
(xvi) if there
shall exist an event of default under the Vacant Space Master Lease beyond any
applicable notice and/or cure period contained therein, if the Vacant Space
Master Lease shall have been amended or modified without Lender’s prior written
consent, except as specifically provided in Section
3.1.21 hereof,
if the Vacant Space Master Lease shall have been terminated, cancelled or
surrendered without Lender’s prior written consent, or if the Operating
Partnership is the subject of a Bankruptcy Action.
(b) Upon the
occurrence of an Event of Default (other than an Event of Default described in
clauses
(vi),
(vii) or
(viii) above)
and at any time thereafter, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, Lender may take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower and in
and to the Property, including, without limitation, declaring the Obligations to
be immediately due and payable, and Lender may enforce or avail itself of any or
all rights or remedies provided in the Loan Documents against Borrower and the
Property, including, without limitation, all rights or remedies available at law
or in equity; and upon the occurrence of any Event of Default described in
clauses
(vi),
(vii) or
(viii) above,
the Debt and all Other Obligations of Borrower hereunder and under the other
Loan Documents shall immediately and automatically become due and payable,
without
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notice or
demand, and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary
notwithstanding.
Section
8.2 Remedies.
(a) Upon the
occurrence of an Event of Default, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing, to the extent permitted by applicable
law, (i) Lender shall not be subject to any “one action” or “election of
remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Property and the Mortgage has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Obligations have been paid in full.
(b) Lender
shall have the right from time to time to sever the Note and the other Loan
Documents into one or more separate notes, mortgages and other security
documents (the “Severed
Loan Documents”) in such
denominations as Lender shall determine in its sole discretion for purposes of
evidencing and enforcing its rights and remedies provided hereunder. Borrower
shall execute and deliver to Lender from time to time, promptly after the
request of Lender, a severance agreement and such other documents as Lender
shall request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender. Borrower
hereby absolutely and irrevocably appoints Lender as its true and lawful
attorney, coupled with an interest, in its name and stead to make and execute
all documents necessary or desirable to effect the aforesaid severance, Borrower
ratifying all that its said attorney shall do by virtue thereof; provided,
however, Lender
shall not make or execute any such documents under such power until three (3)
days after notice has been given to Borrower by Lender of Lender’s intent to
exercise its rights under such power. Except as may be required in connection
with a Securitization pursuant to Section
9.1 hereof,
(i) Borrower shall not be obligated to pay any costs or expenses incurred in
connection with the preparation, execution, recording or filing of the Severed
Loan Documents, and (ii) the Severed Loan Documents shall not contain any
representations, warranties or covenants not contained in the Loan Documents and
any such representations and warranties contained in the Severed Loan Documents
will be given by Borrower only as of the Closing Date.
(c) Except as
limited by applicable law, Lender shall have the right from time to time to
partially foreclose the Mortgage in any manner and for any amounts secured by
the Mortgage then due and payable as determined by Lender in its sole
discretion, including the
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following
circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal and/or
interest, Lender may foreclose the Mortgage to recover such delinquent payments,
or (ii) in the event Lender elects to accelerate less than the entire
Outstanding Principal Balance, Lender may foreclose the Mortgage to recover so
much of the Debt as Lender may accelerate and such other sums secured by the
Mortgage as Lender may elect. Notwithstanding one or more partial foreclosures,
the Property shall remain subject to the Mortgage to secure payment of sums
secured by the Mortgage and not previously recovered.
(d) Any
amounts recovered from the Property or any other collateral for the Loan after
an Event of Default may be applied by Lender toward the payment of any interest
and/or principal of the Loan and/or any other amounts due under the Loan
Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.
(e) The
rights, powers and remedies of Lender under this Agreement shall be cumulative
and not exclusive of any other right, power or remedy which Lender may have
against Borrower pursuant to this Agreement or the other Loan Documents, or
existing at law or in equity or otherwise. Lender’s rights, powers and remedies
may be pursued singularly, concurrently or otherwise, at such time and in such
order as Lender may determine in Lender’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 one Default or Event of
Default with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon.
ARTICLE
9
SPECIAL
PROVISIONS
Section
9.1 Sale
of Note and Securitization. (a)
Borrower acknowledges and agrees that Lender may sell all or any portion of the
Loan and the Loan Documents, or issue one or more participations therein, or
consummate one or more private or public securitizations of rated single- or
multi-class securities (the “Securities”) secured
by or evidencing ownership interests in all or any portion of the Loan and the
Loan Documents or a pool of assets that include the Loan and the Loan Documents
(such sales, participations and/or securitizations, collectively, a “Securitization”). At the
request of Lender, and to the extent not already required to be provided by
Borrower under this Agreement, Borrower shall use reasonable efforts to provide
information not in the possession of Lender or which may be reasonably required
by Lender in order to satisfy the market standards to which Lender customarily
adheres or which may be reasonably required by prospective investors and/or the
Rating Agencies in connection with any such Securitization, including, without
limitation, to:
(i) provide
additional and/or updated Provided Information, together with appropriate
verification and/or consents related to the Provided Information through letters
of auditors or opinions of counsel of independent attorneys reasonably
acceptable to Lender and the Rating Agencies;
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(ii) assist in
preparing descriptive materials for presentations to any or all of the Rating
Agencies, and work with, and if requested, supervise, third-party service
providers engaged by Borrower, Principal and their respective affiliates to
obtain, collect, and deliver information requested or required by Lender or the
Rating Agencies;
(iii) deliver
(A) updated opinions of counsel as to non-consolidation, due execution and
enforceability with respect to the Property, Borrower, Principal, Guarantor and
their respective Affiliates and the Loan Documents, and (B) revised
organizational documents for Borrower, which counsel opinions and organizational
documents shall be reasonably satisfactory to Lender and the Rating
Agencies;
(iv) if
required by any Rating Agency, use commercially reasonable efforts to deliver
such additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Property, which estoppel
letters, subordination agreements or other agreements shall be reasonably
satisfactory to Lender and the Rating Agencies;
(v) make such
representations and warranties as of the closing date of the Securitization with
respect to the Property, Borrower, Principal, Guarantor and the Loan Documents
as may be reasonably requested by Lender or the Rating Agencies and consistent
with the facts covered by such representations and warranties as they exist on
the date thereof, including the representations and warranties made in the Loan
Documents;
(vi) execute
such amendments to the Loan Documents as may be requested by Lender or the
Rating Agencies to effect the Securitization and/or deliver one or more new
component notes to replace the original Note or modify the original Note, this
Agreement and the other Loan Documents to reflect multiple components of the
Loan (and such new notes or modified Note shall have the same initial weighted
average coupon of the original Note and provide for the same total amortization
payments, but each such new note or modified Note may have different interest
rates and provide for varying amortization payments), and modify the Cash
Management Agreement with respect to the newly created components such that the
pricing and marketability of the Securities and the size of each class of
Securities and the rating assigned to each such class by the Rating Agencies
shall provide the most favorable rating levels and achieve the optimum rating
levels for the Loan; provided,
however, that
Borrower shall not be required to modify any of the Loan Documents if such
modification or amendment would (i) have a material adverse economic effect
on Borrower or (ii) modify or amend the Loan term, amortization or any other
economic term of the Loan or otherwise materially adversely increase the
obligations or materially decrease the rights of Borrower under the Loan
Documents, including, without limitation, modifying the transfer, recourse,
prepayment, events of default, or remedy provisions, or the organizational
documents of Borrower or its Affiliates;
(vii) if
requested by Lender, review any information regarding the Property, Borrower,
Principal, Guarantor, Manager and the Loan which is contained in a preliminary
or final private placement memorandum, prospectus, prospectus supplement
(including any amendment or supplement to either thereof), or other disclosure
document to be used by Lender or any affiliate thereof; and
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(viii) supply to
Lender such documentation, financial statements and reports as may be in the
possession or control of Borrower or its Affiliates in form and substance
required in order to comply with any applicable securities laws.
(b) All
reasonable third party costs and expenses incurred by Borrower in connection
with Borrower complying with requests made under this Section
9.1
(including, without limitation, the fees and expenses of the Rating Agencies)
shall be paid by Borrower, except that Lender shall reimburse Borrower for all
such costs and expenses in excess of $25,000.00.
Section
9.2 Securitization
Indemnification.
(a) Borrower
understands that certain of the Provided Information may be included in
Disclosure Documents in connection with the Securitization and may also be
included in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Securities
Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects.
(b) The
Indemnifying Persons agree to provide, in connection with the Securitization, an
indemnification agreement (i) certifying that (A) the Indemnifying Persons have
carefully examined such sections of the Disclosure Documents regarding the
Property, Borrower, Manager, Sub-Manager and/or the Loan (to the extent such
information relates to or includes any Provided Information) (collectively with
the Provided Information, the “Covered
Disclosure Information”) and (B)
that the Covered Disclosure Information does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, (ii) jointly and severally indemnifying Lender, any Affiliate of
Lender that has filed any registration statement relating to the Securitization
or has acted as the sponsor or depositor in connection with the Securitization,
any Affiliate of Lender that acts as an underwriter, placement agent or initial
purchaser of Securities issued in the Securitization, any other co-underwriters,
co-placement agents or co-initial purchasers of Securities issued in the
Securitization, and each of their respective officers, directors, partners,
employees, representatives, agents and Affiliates and each Person or entity who
controls any such Person within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each, an “Indemnified
Person” and
collectively, the
“Indemnified
Persons”), for
any losses, claims, damages, liabilities, costs or expenses (including without
limitation legal fees and expenses for enforcement of these obligations
(collectively, the “Liabilities”) to
which any such Indemnified Person may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any of the Disclosure Documents, but only to
the extent based upon Provided Information, and which untrue statement or
alleged untrue statement is not expressly disclosed to Lender by Borrower after
Borrower has had an opportunity to review the Disclosure Document, or arise out
of or are based upon the omission or alleged omission to state in the Provided
Information a material fact required to be stated therein
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or
necessary in order to make the statements in the Provided Information, in light
of the circumstances under which they were made, not misleading, and (iii)
agreeing to reimburse each Indemnified Person for any legal or other expenses
incurred by such Indemnified Person, as they are incurred, in connection with
investigating or defending the Liabilities. This indemnity agreement will be in
addition to any liability which Borrower may otherwise have. Moreover, the
indemnification provided for in clauses (ii) and (iii) above shall be effective
whether or not a separate indemnification agreement described in clause (i)
above is provided.
(c) In
connection with filings under the Exchange Act, the Indemnifying Persons jointly
and severally agree to indemnify (i) the Indemnified Persons for Liabilities to
which any such Indemnified Person may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact in the Provided Information, or the omission or alleged
omission to state in the Provided Information a material fact required to be
stated therein or necessary in order to make the statements in the Provided
Information, in light of the circumstances under which they were made, not
misleading, and which untrue statement or alleged untrue statement is not
expressly disclosed to Lender by Borrower after Borrower has had an opportunity
to review such filing under the Exchange Act, and (ii) to reimburse each
Indemnified Person for any reasonable legal or other expenses incurred by such
Indemnified Persons, as they are incurred, in connection with defending or
investigating the Liabilities.
(d) Promptly
after receipt by an Indemnified Person of notice of any claim or the
commencement of any action, the Indemnified Person shall, if a claim in respect
thereof is to be made against any Indemnifying Person, notify such Indemnifying
Person in writing of the claim or the commencement of that action; provided,
however, that
the failure to notify such Indemnifying Person shall not relieve it from any
liability which it may have under the indemnification provisions of this
Section
9.2 except
to the extent that it has been materially prejudiced by such failure and,
provided further that the failure to notify such Indemnifying Person shall not
relieve it from any liability which it may have to an Indemnified Person
otherwise than under the provisions of this Section
9.2. If any
such claim or action shall be brought against an Indemnified Person, and it
shall notify any Indemnifying Person thereof, such Indemnifying Person shall be
entitled to participate therein and, to the extent that it wishes, assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Person.
After notice from any Indemnifying Person to the Indemnified Person of its
election to assume the defense of such claim or action, such Indemnifying Person
shall not be liable to the Indemnified Person for any legal or other expenses
subsequently incurred by the Indemnified Person in connection with the defense
thereof except as provided in the following sentence; provided,
however, if the
defendants in any such action include both an Indemnifying Person, on the one
hand, and one or more Indemnified Persons on the other hand, and an Indemnified
Person shall have reasonably concluded that there are any legal defenses
available to it and/or other Indemnified Persons that are different or in
addition to those available to the Indemnifying Person, the Indemnified Person
or Persons shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Person or Persons. The Indemnified Person shall instruct its
counsel to maintain reasonably detailed billing records for fees and
disbursements for which such Indemnified Person is seeking reimbursement
hereunder and shall submit copies of such detailed billing records to
substantiate that such counsel’s fees and disbursements are solely related to
the
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defense
of a claim for which the Indemnifying Person is required hereunder to indemnify
such Indemnified Person. No Indemnifying Person shall be liable for the expenses
of more than one (1) such separate counsel unless such Indemnified Person shall
have reasonably concluded that there may be legal defenses available to it that
are different from or additional to those available to another Indemnified
Person.
(e) Without
the prior consent of Lender (which consent shall not be unreasonably withheld),
no Indemnifying Person shall settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless the Indemnifying Person shall have given Lender reasonable
prior notice thereof and shall have obtained an unconditional release of each
Indemnified Person hereunder from all liability arising out of such claim,
action, suit or proceeding. As long as an Indemnifying Person has complied with
its obligations to defend and indemnify hereunder, such Indemnifying Person
shall not be liable for any settlement made by any Indemnified Person without
the consent of such Indemnifying Person (which consent shall not be unreasonably
withheld).
(f) The
Indemnifying Persons agree that if any indemnification or reimbursement sought
pursuant to this Section
9.2 is
finally judicially determined to be unavailable for any reason or is
insufficient to hold any Indemnified Person harmless (with respect only to the
Liabilities that are the subject of this Section
9.2), then
the Indemnifying Persons, on the one hand, and such Indemnified Person, on the
other hand, shall contribute to the Liabilities for which such indemnification
or reimbursement is held unavailable or is insufficient: (x) in such proportion
as is appropriate to reflect the relative benefits to the Indemnifying Persons,
on the one hand, and such Indemnified Person, on the other hand, from the
transactions to which such indemnification or reimbursement relates; or (y) if
the allocation provided by clause (x) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (x) but also the relative faults of the Indemnifying
Persons, on the one hand, and all Indemnified Persons, on the other hand, as
well as any other equitable considerations. Notwithstanding the provisions of
this Section
9.2, (A) no
party found liable for a fraudulent misrepresentation shall be entitled to
contribution from any other party who is not also found liable for such
fraudulent misrepresentation, and (B) the Indemnifying Persons agree that in no
event shall the amount to be contributed by the Indemnified Persons collectively
pursuant to this paragraph exceed the amount of the fees (by underwriting
discount or otherwise) actually received by the Indemnified Persons in
connection with the closing of the Loan or the Securitization.
(g) The
Indemnifying Persons agree that the indemnification, contribution and
reimbursement obligations set forth in this Section
9.2 shall
apply whether or not any Indemnified Person is a formal party to any lawsuits,
claims or other proceedings. The Indemnifying Persons further agree that the
Indemnified Persons are intended third party beneficiaries under this
Section
9.2.
(h) The
rights, liabilities and obligations of the Indemnified Persons and the
Indemnifying Persons under this Section
9.2 shall
survive the termination of this Agreement and the satisfaction and discharge of
the Obligations.
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(i) Notwithstanding
anything to the contrary contained herein, Borrower shall have no obligation to
act as depositor with respect to the Loan or an issuer or registrant with
respect to the Securities issued in any Securitization.
Section
9.3 Intentionally
Omitted.
Section
9.4 Exculpation. Subject
to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower (or any of Borrower’s members, managers partners
shareholders, or Affiliates, whether direct or indirect, collectively, the
“Borrower
Parties”) to
perform and observe the obligations contained in the Note, this Agreement, the
Mortgage or the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
under the Note, this Agreement, the Mortgage and the other Loan Documents, or in
the Property, the Rents, or any other collateral given to Lender pursuant to the
Loan Documents; provided,
however, that,
except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Borrower or the Borrower Parties only to
the extent of Borrower’s or the Borrower Parties’ interest in the Property, in
the Rents and in any other collateral given to Lender, and Lender, by accepting
the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that
it shall not xxx for, seek or demand any deficiency judgment against Borrower or
the Borrower Parties in any such action or proceeding under, or by reason of, or
in connection with, the Note, this Agreement, the Mortgage or the other Loan
Documents. The provisions of this Section shall not, however, (a) constitute a
waiver, release or impairment of any obligation evidenced or secured by any of
the Loan Documents; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for foreclosure and sale under the Mortgage; (c)
affect the validity or enforceability of or any guaranty made in connection with
the Loan or any of the rights and remedies of Lender thereunder; (d) impair the
right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment of Leases; (f) constitute a prohibition against
Lender to seek a deficiency judgment against Borrower in order to fully realize
the security granted by the Mortgage or to commence any other appropriate action
or proceeding in order for Lender to exercise its remedies against the Property;
or (g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
actual loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including, without limitation, attorneys’ fees and costs
reasonably incurred), arising out of or in connection with the
following:
(i) fraud or
intentional misrepresentation by Borrower or Guarantor in connection with the
Loan, including by reason of any claim under RICO;
(ii) the gross
negligence or willful misconduct of Borrower, Guarantor, Principal or any other
Restricted Party;
(iii) the
breach of any representation, warranty, covenant or indemnification provision in
the Environmental Indemnity concerning environmental laws, hazardous substances
or asbestos and any indemnification of Lender with respect thereto in any Loan
Document;
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(iv) wrongful
removal or destruction by Borrower or any Affiliate of Borrower of any portion
of the Property after the occurrence of an Event of Default or any intentional
physical waste of the Property by Borrower of any Affiliate thereof,
provided,
however, that
such physical waste shall exclude wear and tear to the Property that occurs in
the ordinary course of business of the Property;
(v) any Legal
Requirement (including RICO) mandating the forfeiture by Borrower of the
Property, or any portion thereof, because of the conduct or purported conduct of
criminal activity by Borrower or any Restricted Party in connection
therewith;
(vi) any
misrepresentation, miscertification or breach of warranty by Borrower or
Guarantor with respect to any representation, warranty or certification
contained in this Agreement or any other Loan Document or in any document
executed in connection therewith, pursuant to any of the Loan Documents or
otherwise to induce Lender to make the Loan, or any advance thereof, or to
release monies from any account held by Lender (including any reserve or escrow)
or to take other action with respect to the Collateral (as defined in the
Mortgage);
(vii) the
misappropriation or conversion by Borrower or any of its Affiliates of (A) any
Insurance Proceeds paid by reason of any Casualty, (B) any Awards received in
connection with a Condemnation, (C) any Rents following an Event of Default, or
(D) any Rents paid more than one (1) month in advance; provided such
amounts are not applied to the payment of the Loan or the Operating Expenses of
the Property;
(viii) failure
to pay charges for labor or materials or other charges that can create Liens on
any portion of the Property that are superior to the Lien of the Mortgage,
unless such charges are being contested in accordance herewith;
(ix) any
security deposits, advance deposits or any other deposits collected by Borrower
or any Affiliate thereof with respect to the Property which are not delivered to
Lender upon a foreclosure of the Property or action in lieu thereof, except to
the extent any such security deposits were applied in accordance with the terms
and conditions of any of the Leases prior to the occurrence of the Event of
Default that gave rise to such foreclosure or action in lieu thereof;
(x) if
Borrower fails to permit on-site inspections of the Property, fails to provide
financial information specifically required by this Agreement or fails to
appoint a new property manager upon the request of Lender, each as required by,
and in accordance with, the terms and provisions of this Agreement or the
Mortgage; or
(xi) if the
Operating Partnership shall default under the Vacant Space Master Lease beyond
any applicable notice and/or cure period contained therein, if the Vacant Space
Master Lease shall have been amended or modified (except as specified in
Section
3.1.21 hereof)
without Lender’s prior written consent, or if the Vacant Space Master Lease
shall have been terminated, cancelled or surrendered without Lender’s prior
written consent, (except as specified in Section
3.1.21 hereof),
or if the Operating
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Partnership
is the subject of a Bankruptcy Action, other than an involuntary Bankruptcy
Action which is dismissed within ninety (90) days.
Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which Lender
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured by
the Mortgage or to require that all collateral shall continue to secure all of
the Obligations in accordance with the Loan Documents, and (B) Borrower shall be
personally liable for the payment of the Debt (1) in the event of:
(a) Borrower filing a voluntary petition under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law; (b) Borrower filing an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, or soliciting or causing to
be solicited petitioning creditors for any involuntary petition from any Person;
(c) Borrower consenting to or acquiescing in or joining in an application
for the appointment of a custodian, receiver, trustee, or examiner for Borrower
or any portion of the Property; or (d) Borrower making an assignment for
the benefit of creditors, or admitting, in writing or in any legal proceeding,
its insolvency or inability to pay its debts as they become due; (2) if the
first Monthly Interest Payment is not paid when due; (3) if Borrower fails to
maintain its status as a Special Purpose Entity as required by and in accordance
with the terms of this Agreement and there is a substantive consolidation of
Borrower with any other Person; (4) if Borrower fails to obtain Lender’s prior
consent to any Indebtedness or voluntary Lien encumbering the Property as
required by this Agreement or the Mortgage; or (5) if Borrower fails to obtain
Lender’s prior consent to any Transfer as required by this Agreement or the
Mortgage.
Section
9.5 Matters
Concerning Manager and Sub-Manager. (a) If
(i) an Event of Default occurs and is continuing, (ii) Manager shall become
bankrupt or insolvent or (iii) a material default occurs under the Management
Agreement beyond any applicable grace and cure periods, Borrower shall, at the
request of Lender, terminate the Management Agreement and replace Manager with a
manager approved by Lender on terms and conditions satisfactory to Lender, it
being understood and agreed that the management fee for such replacement manager
together with the management fee for any Sub-Manager shall not exceed then
prevailing market rates.
(b) If
(i) an Event of Default occurs and is continuing, (ii) the Sub-Manager shall
become bankrupt or insolvent, or (iii) a material default occurs under the
Sub-Management Agreement beyond any applicable grace and cure periods, Borrower
shall, at the request of Lender, terminate the Sub-Management Agreement and
either (A) replace the Sub-Manager with a sub-manager approved by Lender on
terms and conditions satisfactory to Lender, it being understood and agreed that
the management fee for such replacement manager together with the management fee
for Manager shall not exceed then prevailing market rates or (B) have no
sub-manager with respect to the Property.
Section
9.6 Servicer. At the
option of Lender, the Loan may be serviced by a servicer/trustee (the
“Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing
Agreement”) between
Lender and Servicer.
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Borrower
shall not be responsible for any set-up fees or any other initial costs relating
to or arising under the Servicing Agreement or for the payment of the monthly
servicing fee due to the Servicer under the Servicing Agreement.
Section
9.7 Restructuring
of Loan. At any
time prior to the Securitization of the entire Loan, Lender, without in any way
limiting Lender’s other rights hereunder, in its sole and absolute discretion,
shall have the right at any time to require Borrower to restructure the Loan
into multiple notes (which may include component notes and/or senior and junior
notes) and/or to create participation interests in the Loan, which restructuring
may include reallocation of principal amounts of the Loan or the restructuring
of a portion of the Loan to either the Mezzanine Loan or an additional mezzanine
loan (the “New
Mezzanine Loan”) to the
owners of the equity interests in Borrower, secured by a pledge of such
interests, and/or the reallocation of a portion of the Mezzanine Loan to the
Loan and/or the New Mezzanine Loan or the establishment of different interest
rates, floor interest rates and debt service payments for the Loan, the
Mezzanine Loan and the New Mezzanine Loan and the payment of the Loan, the
Mezzanine Loan and the New Mezzanine Loan in such order of priority as may be
designated by Lender; provided that
(i) the total amounts of the Loan, the Mezzanine Loan and the New Mezzanine
Loan shall equal the amount of the Loan and the Mezzanine Loan immediately prior
to the restructuring and the economic terms of the Loan, the Mezzanine Loan and
the New Mezzanine Loan shall be the same as the economic terms of the Loan and
the Mezzanine Loan prior to such Restructuring, (ii) except in the case of
an Event of Default under, or prepayment of, the Loan, the Mezzanine Loan and/or
the New Mezzanine Loan, the weighted interest rate of the Loan, the Mezzanine
Loan and the New Mezzanine Loan, if any, shall, at the time of the
restructuring, equal the weighted average interest rate of the Loan and the
Mezzanine Loan, and (iii) except in the case of an Event of Default under, or a
prepayment of, the Loan, the Mezzanine Loan and/or the New Mezzanine Loan, the
debt service payments on the Loan, the Mezzanine Loan and the New Mezzanine Loan
shall equal the debt service payments which would have been payable under the
Loan and the Mezzanine Loan had the restructuring not occurred. Borrower shall
cooperate with all reasonable requests of Lender in order to restructure the
Loan and the Mezzanine Loan and create a New Mezzanine Loan, if applicable, and
shall, upon ten (10) Business Days written notice from Lender, which notice
shall include the forms of documents for which Lender is requesting execution
and delivery, (A) execute and deliver such documents, including, without
limitation in the case of any New Mezzanine Loan, a mezzanine note, a mezzanine
loan agreement, a pledge and security agreement, and a mezzanine deposit account
agreement, (B) cause Borrower’s counsel to deliver such legal opinions, and
(C) create such bankruptcy remote borrower under the New Mezzanine Loan as,
in each of the case of clauses (A),
(B) and
(C) above,
shall be reasonably required by Lender or required by any Rating Agency in
connection therewith, all in form and substance reasonably satisfactory to
Lender, including, without limitation, the severance of this Agreement, the
Mortgage and other Loan Documents if requested. Except as may be required in
connection with a Securitization pursuant to Section
9.1 hereof,
Borrower shall not be obligated to pay any costs or expenses incurred in
connection with any such restructuring as set forth in this Section 9.7.
Borrower’s failure to comply with its obligation under this Section
9.7 within
ten (10) Business Days after Borrower’s receipt of notice of such failure shall
constitute an Event of Default under this Agreement.
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ARTICLE
10
MISCELLANEOUS
Section
10.1 Survival. This
Agreement and all covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall survive the
making by Lender of the Loan and the execution and delivery to Lender of the
Note, and shall continue in full force and effect so long as all or any of the
Obligations are outstanding and unpaid unless a longer period is expressly set
forth herein or in the other Loan Documents. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
Section
10.2 Lender’s
Discretion.
Whenever pursuant to this Agreement, Lender exercises any right given to it to
approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender 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 Lender and
shall be final and conclusive. Whenever this Agreement expressly provides that
Lender may not withhold its consent or its approval of an arrangement or term,
such provisions shall also be deemed to prohibit Lender from delaying or
conditioning such consent or approval.
Section
10.3 Governing
Law.
(a) THIS
AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER
AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF 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
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER 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 (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL
TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT, OF THE
LIENS, AND SECURITY INTERESTS, AND ASSIGNMENTS OF LEASES, RENTS, CASH, MONEY,
REVENUES, AGREEMENTS, DOCUMENTS AND OTHER PROPERTY AND INTERESTS THEREIN AS
FURTHER SECURITY CREATED OR GRANTED PURSUANT HERETO AND/OR PURSUANT TO THE ANY
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF
THE STATE IN WHICH THE APPLICABLE PROPERTY IS LOCATED. TO
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THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT, THE NOTE AND/OR THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE
NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, EXCEPT AS PROVIDED
ABOVE.
(b) ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT:
Corporation
Trust Company
000
Xxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
AS
ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND
ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND NOTICE OF SAID SERVICE MAILED OR DELIVERED
TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION.
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Section
10.4 Modification,
Waiver in Writing. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, or of any other Loan Document, nor
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
10.5 Delay
Not a Waiver. Neither
any failure nor any delay on the part of 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 under any
other Loan Document, or under 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, 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
10.6 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, return receipt requested 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 as follows (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 notice to the
other parties hereto in the manner provided for in this Section
10.6):
|
If
to Lender: |
Nomura
Credit & Capital, Inc. |
|
Xxx
Xxxxx Xxxxxxxxx Xxxxxx | |
|
Xxx
Xxxx, Xxx Xxxx 00000 | |
|
Attention:
Xxxxxxx Xxxxxxxx | |
|
Facsimile
No.: (000) 000-0000 | |
|
with
a copy to: |
Xxxxx
Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP |
|
000
Xxxxx Xxxxxx | |
|
Xxx
Xxxx, Xxx Xxxx 00000 | |
|
Attention:
Xxxxxxx X. Xxxxxxx, Esq. | |
|
Facsimile
No.: (000) 000-0000 | |
|
If
to Borrower: |
Xxxxxxx
Properties - Austin Research Park, L.P. |
|
000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000 | |
|
Xxx
Xxxxxxx, Xxxxxxxxxx 00000 | |
|
Attention:
Xxxxxx X. Xxxxxxx III | |
|
Facsimile
No.: (000) 000-0000 |
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|
with
a copy to: |
Xxxxxxxxx
& Xxxxxx, Professional Corporation |
|
Wilshire
Palisades Building | |
|
0000
Xxxxx Xxxxxx, Xxxxx 000 | |
|
Xxxxx
Xxxxxx, Xxxxxxxxxx 00000 | |
|
Attention:
Xxxx X. Xxxxxx, Esq. | |
|
Facsimile
No.: (000) 000-0000 | |
A 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 the
first attempted delivery on a Business Day; or in the case of expedited prepaid
delivery and telecopy, upon the first attempted delivery on a Business Day; or
in the case of telecopy, upon sender’s receipt of a machine-generated
confirmation of successful transmission after advice by telephone to recipient
that a telecopy notice is forthcoming.
Section
10.7 Trial
by Jury.
BORROWER
AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR
ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER
AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EITHER
PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section
10.8 Headings. The
Article and/or Section headings and the Table of Contents 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
10.9 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 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
10.10 Preferences. Lender
shall have the continuing and exclusive right to apply or reverse and reapply
any and all payments by Borrower to any portion of the Debt. To the extent
Borrower makes a payment or payments to Lender, 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 Lender.
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Section
10.11 Waiver
of Notice.
Borrower hereby expressly waives, and shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice.
Section
10.12 Remedies
of Borrower. In the
event that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment.
Section
10.13 Expenses;
Indemnity.
(a) Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of notice from Lender for all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby and all the costs of furnishing all opinions by
counsel for Borrower (including without limitation any opinions reasonably
requested by Lender as to any legal matters arising under this Agreement or the
other Loan Documents with respect to the Property); (ii) except as expressly
provided under the terms of this Agreement or the other Loan Documents,
Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) except as expressly provided under the terms of
this Agreement or the other Loan Documents, Lender’s ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) except as expressly provided under the terms of this
Agreement and the other Loan Documents, the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and/or the other Loan Documents and any other
documents or matters requested by Lender; (v) securing Borrower’s compliance
with any requests made pursuant to the provisions of this Agreement and the
other Loan Documents; (vi) the filing and recording fees and expenses, title
insurance and reasonable fees and expenses of counsel for providing to Lender
all required legal opinions, and other similar expenses incurred in creating and
perfecting the Liens in favor of Lender pursuant to this Agreement and the other
Loan Documents; (vii) enforcing or preserving any rights, either in response to
third party claims or in prosecuting or defending any action or proceeding or
other litigation, in each case against, under or affecting Borrower, this
Agreement, the other Loan Documents, the Property, or any other security given
for the Loan; and (viii) enforcing any Obligations of or collecting any payments
due from Borrower under this Agreement, the other Loan Documents or with respect
to the Property or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the
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nature of
a “work-out” or of
any insolvency or bankruptcy proceedings; provided,
however, that
Borrower shall not be liable for the payment of any such costs and expenses to
the extent the same arise by reason of the gross negligence, illegal acts, fraud
or willful misconduct of Lender or its agents or which arise by reason of acts
that first occur after Lender or its designee has taken title to the Property.
Any cost and expenses due and payable to Lender may be paid from any amounts in
the Lockbox Account.
(b) Borrower
shall indemnify, defend and hold harmless Lender from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for Lender in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Lender shall be
designated a party thereto), that may be imposed on, incurred by, or asserted
against Lender in any manner relating to or arising out of (i) any breach by
Borrower of its Obligations under, or any material misrepresentation by Borrower
contained in, this Agreement or the other Loan Documents, or (ii) the use or
intended use of the proceeds of the Loan (collectively, the “Indemnified
Liabilities”);
provided,
however, that
Borrower shall not have any obligation to Lender hereunder to the extent that
such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of Lender or its agents or which arise by reason of
acts that first occur after Lender or its designee has taken title to the
Property. To the extent that the undertaking to indemnify, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall pay the maximum portion that
it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Lender.
(c) Borrower
covenants and agrees to pay for or, if Borrower fails to pay, to reimburse
Lender for, any fees and expenses incurred by any Rating Agency in connection
with any Rating Agency review of the Loan, the Loan Documents or any transaction
contemplated thereby or any consent, approval, waiver or confirmation obtained
from such Rating Agency pursuant to the terms and conditions of this Agreement
or any other Loan Document and Lender shall be entitled to require payment of
such fees and expenses as a condition precedent to the obtaining of any such
consent, approval, waiver or confirmation.
Section
10.14 Schedules
Incorporated. The
Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.
Section
10.15 Offsets,
Counterclaims and Defenses. Any
assignee of Lender’s interest in and to this Agreement, the Note and the other
Loan Documents shall take the same free and clear of all offsets, counterclaims
or defenses which are unrelated to such documents which Borrower may otherwise
have against any assignor of such 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 such 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.
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Section
10.16 No
Joint Venture or Partnership; No Third Party Beneficiaries.
(a) Borrower
and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein
is intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between Borrower and Lender or to grant Lender any interest
in the Property other than that of mortgagee, beneficiary or
lender.
(b) This
Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and nothing contained in this Agreement or the other Loan Documents
shall be deemed to confer upon anyone other than Lender and Borrower any right
to insist upon or to enforce the performance or observance of any of the
Obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.
Section
10.17 Publicity. All
news releases, publicity or advertising by Borrower or their Affiliates through
any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, or to any
of their Affiliates, shall be subject to the prior approval of
Lender.
Section
10.18 Waiver
of Marshalling of Assets. To the
fullest extent permitted by law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower,
Borrower’s partners and others with interests in Borrower, and of the Property,
or to a sale in inverse order of alienation in the event of foreclosure of the
Mortgage, and agrees 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 Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.
Section
10.19 Waiver
of Counterclaim.
Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.
Section
10.20 Conflict;
Construction of Documents; Reliance. In the
event of any conflict between the provisions of this Agreement and any of the
other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering
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into the
Loan without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.
Section
10.21 Brokers
and Financial Advisors.
Borrower hereby represents that it has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including, without limitation,
Lender’s attorneys’ fees and expenses) in any way relating to or arising from a
claim by any Person that such Person acted on behalf of Borrower or Lender in
connection with the transactions contemplated herein. The provisions of this
Section 10.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
Section
10.22 Prior
Agreements. This
Agreement and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements among or between such parties, whether
oral or written, including, without limitation, the Floating Rate CMBS Term
Sheet dated February 26, 2005 between Borrower and Lender, are superseded by the
terms of this Agreement and the other Loan Documents.
ARTICLE
11
MEZZANINE
LOAN
Section
11.1 Mezzanine
Loan Notices.
(a) Promptly
after receipt, Borrower will deliver to Lender a true, correct and complete copy
of all material notices, demands, requests or material correspondence (including
electronically transmitted items) received from Mezzanine Lender by Mezzanine
Borrower or any guarantor under the Mezzanine Loan Documents.
(b) Unless
otherwise delivered to Lender pursuant to the provisions of Section 5.1.11,
Borrower will deliver (or cause Mezzanine Borrower to deliver) to Lender all of
the financial statements, reports, certificates and related items delivered or
required to be delivered by Mezzanine Borrower to Mezzanine Lender under the
Mezzanine Loan Documents as and when due under the Mezzanine Loan
Documents.
(c) Borrower
acknowledges and agrees that the right of Mezzanine Lender to amend or modify
the Mezzanine Loan Documents shall be limited as provided in the
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Intercreditor
Agreement. Borrower shall provide Lender with a copy of any amendment or
modification to the Mezzanine Loan Documents within five (5) Business Days after
the execution thereof.
Section
11.2 Mezzanine
Loan Estoppels. After
written request by Lender, Borrower shall (or shall cause Mezzanine Borrower to)
from time to time, use reasonable efforts to obtain from Mezzanine Lender such
estoppel certificates with respect to the status of the Mezzanine Loan and
compliance by Mezzanine Borrower with the terms of the Mezzanine Loan Documents
as may reasonably be requested by Lender. In the event or to the extent that
Mezzanine Lender is not legally obligated to deliver such estoppel certificates
and is unwilling to deliver the same, or is legally obligated to deliver such
estoppel certificates but breaches such obligation, then Borrower shall not be
in breach of this provision so long as Borrower furnishes to Lender estoppels
executed by Borrower and Mezzanine Borrower expressly representing to Lender the
information requested by Lender regarding the status of the Mezzanine Loan and
the compliance by Mezzanine Borrower with the terms of the Mezzanine Loan
Documents. Borrower hereby indemnifies Lender from and against all liabilities,
obligations, losses, damages, penalties, assessments, actions, or causes of
action, judgments, suits, claims, demands, costs, expenses (including reasonable
attorneys’ and other professional fees, whether or not suit is brought and
settlement costs) and reasonable disbursements of any kind or nature whatsoever
which may be imposed on, actually incurred by, or asserted against Lender based
in whole or in part upon any fact, event, condition, or circumstances relating
to the Mezzanine Loan which was misrepresented in any material respect by
Borrower in, or which warrants disclosure and was omitted from such estoppel
executed by Borrower and Mezzanine Borrower.
Section
11.3 Deed
in Lieu of Foreclosure. Without
the express prior written consent of Lender, Borrower shall not, and shall not
cause, suffer or permit Mezzanine Borrower to, enter into any deed-in-lieu or
consensual foreclosure with or for the benefit of Mezzanine Lender or any of its
affiliates. Without the express prior written consent of Lender, Borrower shall
not, and shall not cause, suffer or permit Mezzanine Borrower to, enter into any
consensual sale or other transaction in connection with the Mezzanine Loan which
could diminish, modify, terminate, impair or otherwise adversely affect the
interests of Lender or Borrower, the Property or any portion thereof or any
interest therein or of Mezzanine Borrower in the Property or any portion thereof
or any interest therein.
Section
11.4 Reserve
Funds.
Borrower and Lender hereby agree and acknowledge that, notwithstanding anything
to the contrary contained herein, if (i) all of the Obligations have been
satisfied, (ii) there is any amount remaining in the Reserve Funds, and
(iii) the Mezzanine Loan (or any portion thereof) is outstanding, then Lender
will not pay any such remaining amount in the Reserve Funds to Borrower, but
rather shall deliver such amount to Mezzanine Lender to be held in accordance
with the terms of the Mezzanine Loan Documents.
Section
11.5 Intercreditor
Agreement.
Borrower hereby acknowledges and agrees that any intercreditor agreement entered
into between Lender and Mezzanine Lender will be solely for the benefit of
Lender and Mezzanine Lender, and that neither Borrower nor Mezzanine Borrower
shall be intended third-party beneficiaries of any of the provisions therein,
shall have no rights thereunder and shall not be entitled to rely on any of the
provisions contained therein. Lender and Mezzanine Lender shall have no
obligation to disclose to Borrower the contents of
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the
intercreditor agreement. Borrower’s obligations hereunder are and will be
independent of such intercreditor agreement and shall remain unmodified by the
terms and provisions thereof.
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IN
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.
|
XXXXXXX
PROPERTIES - AUSTIN RESEARCH PARK, L.P., a Texas limited
partnership | ||
|
By: |
MP-Austin
GP Mezzanine, LLC,
a
Delaware limited liability company, its general partner | |
|
XXXXXXX
PROPERTIES - AUSTIN RESEARCH PARK, L.P.,
a
Texas limited partnership | ||
|
By: |
/s/
Xxxxxx X. Xxxxx | |
|
Name:
Xxxxxx X. Xxxxx | ||
|
Title:
Executive Vice President and CFO | ||
|
NOMURA
CREDIT & CAPITAL, INC., | ||
|
a
Delaware corporation | ||
|
By: |
/s/ Xxxx Xxxxxx | |
|
Name:
Xxxx Xxxxxx | ||
|
Title:
Executive Officer | ||
