LOAN AGREEMENT
Dated as of December 31, 1997
by and between
BPP/GOLDEN STATE ACQUISITIONS, L.L.C.
(as Borrower)
and
NOMURA ASSET CAPITAL CORPORATION
(as Lender)
TABLE OF CONTENTS
Page
ARTICLE I. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II. GENERAL TERMS. . . . . . . . . . . . . . . . . . . . . .. . . . 27
Section 2.1. Amount of the Loan . . . . . . . . . . . . . . . . . . . . 27
Section 2.2. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . 27
Section 2.3. Security for the Loan. . . . . . . . . . . . . . . . . . . 27
Section 2.4. Borrower's Note. . . . . . . . . . . . . . . . . . . . . . 28
Section 2.5. Principal and Interest Payments. . . . . . . . . . . . . . 28
Section 2.6. Voluntary Defeasance . . . . . . . . . . . . . . . . . . . 29
Section 2.7. Prepayment . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.8. Application of Payments. . . . . . . . . . . . . . . . . . 32
Section 2.9. Payment of Debt Service, Method and Place of Payment . . . 32
Section 2.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.11. Defeasance Requirements . . . . . . . . . . . . . . . . . 32
Section 2.12. Central Cash Management . . . . . . . . . . . . . . . . . 34
Section 2.13. Security Agreement. . . . . . . . . . . . . . . . . . . . 42
Section 2.14. Securitization. . . . . . . . . . . . . . . . . . . . . . 44
Section 2.15. Supplemental Deed of Trust Affidavits . . . . . . . . . . 46
Section 2.16. Transfer of Trust Property. . . . . . . . . . . . . . . . 46
ARTICLE III. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . 46
Section 3.1. Conditions Precedent to the Making of the Loan . . . . . . 46
Section 3.2. Form of Loan Documents and Related Matters . . . . . . . . 51
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 51
Section 4.1. Representations and Warranties of Borrower . . . . . . . . 51
Section 4.2. Survival of Representations and Warranties . . . . . . . . 59
ARTICLE V. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.1. Borrower Covenants . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VI. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.1. Borrower Negative Covenants. . . . . . . . . . . . . . . . 70
ARTICLE VII. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 7.1. Event of Default . . . . . . . . . . . . . . . . . . . . . 73
Section 7.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 7.3. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . 76
Section 7.4. Lender's Right to Perform. . . . . . . . . . . . . . . . . 77
ARTICLE VIII. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.1. Survival . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.2. Lender's Discretion. . . . . . . . . . . . . . . . . . . . 77
Section 8.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.4. Modification, Waiver in Writing. . . . . . . . . . . . . . 78
Section 8.5. Delay Not a Waiver . . . . . . . . . . . . . . . . . . . . 78
Section 8.6. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.7. Trial By Jury. . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.8. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.9. Assignment . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.10. Severability. . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.11. Preferences . . . . . . . . . . . . . . . . . . . . . . . 80
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Section 8.12. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . 80
Section 8.13. Remedies of Borrower. . . . . . . . . . . . . . . . . . . 80
Section 8.14. Exculpation . . . . . . . . . . . . . . . . . . . . . . . 80
Section 8.15. Exhibits Incorporated . . . . . . . . . . . . . . . . . . 81
Section 8.16. Offsets, Counterclaims and Defenses . . . . . . . . . . . 81
Section 8.17. No Joint Venture or Partnership . . . . . . . . . . . . . 82
Section 8.18. Waiver of Marshalling of Assets Defense . . . . . . . . . 82
Section 8.19. Waiver of Counterclaim. . . . . . . . . . . . . . . . . . 82
Section 8.20. Conflict: Construction of Documents . . . . . . . . . . . 82
Section 8.21. Brokers and Financial Advisors. . . . . . . . . . . . . . 82
Section 8.22. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 82
Section 8.23. Estoppel Certificates . . . . . . . . . . . . . . . . . . 83
Section 8.24. Payment of Expenses . . . . . . . . . . . . . . . . . . . 83
Section 8.25. Bankruptcy Waiver . . . . . . . . . . . . . . . . . . . . 83
Section 8.26. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 83
Section 8.27. Dissemination of Information. . . . . . . . . . . . . . . 84
Section 8.28. Limitation of Interest. . . . . . . . . . . . . . . . . . 84
Section 8.29. Indemnification . . . . . . . . . . . . . . . . . . . . . 85
Section 8.30. Borrower Acknowledgments. . . . . . . . . . . . . . . . . 85
Section 8.31. Publicity . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.32. Cross-Collateralization . . . . . . . . . . . . . . . . . 85
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LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of December 31, 1997, is by and between
NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation (together, with its
successors and assigns, "Lender"), having an address at 2 World Xxxxxxxxx
Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx XxXxxx,
Telefax Number (000) 000-0000, and BPP/GOLDEN STATE ACQUISITIONS, L.L.C., a
Delaware limited liability company ("Borrower"), with an address of c/x
Xxxxxxx Pacific Properties, Inc., 000 Xxxx Xxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxx Xxxxx, Telefax Number: (000) 000-0000.
RECITALS
WHEREAS, Borrower desires to obtain a loan (the "Loan") from Lender in
the principal amount of One Hundred Thirty-Five Million Thirty-Nine Thousand
Nine Hundred Fifty and 82/100 Dollars ($135,039,950.82) (the "Loan Amount")
to pay the acquisition costs for the Facilities to be acquired by Borrower;
WHEREAS, Lender is willing to make the Loan on the condition that
Borrower joins in the execution and delivery of this Agreement which shall
establish the terms and conditions of the Loan; and
WHEREAS, Lender and Borrower contemplate that all or any portion of
Lender's interest in the Loan and to the Loan Documents may be assigned, in
whole or in part, by Lender to another Person, including, without limitation,
to a trustee on behalf of security holders in connection with a
Securitization.
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 hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. For all purposes of this Agreement:
(a) the capitalized terms defined in this Article I have the meanings
assigned to them in this Article I, and include the plural as well as the
singular;
(b) all accounting terms have the meanings assigned to them in
accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, or other subdivision; and
(d) the following terms have the following meanings:
"Account Collateral" has the meaning provided in Section 2.13(a).
"Accounts" means any of Borrower's rights to payment for goods sold or
leased or for services rendered arising from the ownership or operation of
any Facility and not evidenced by an Instrument, including, without
limitation, all accounts and accounts receivable arising from the ownership
or operation of any Facility, now existing or hereafter coming into
existence, and all proceeds thereof (whether cash or non-cash, moveable or
immovable, tangible or intangible), received from the sale, exchange,
transfer, collection or other disposition or substitution thereof. In
addition to the foregoing, the term "Accounts" shall include the meaning as
such term has in the UCC.
"Accrued Interest" has the meaning provided in Section 2.5(e).
"Adjusted Net Operating Income" means, for any Facility and for any
applicable period, the Net Operating Income for such period subject to the
following adjustments and assumptions: (i) Operating Income shall not be
considered for tenants who, as of the date of such calculation, are not in
occupancy and paying rent; (ii) reimbursements from tenants will be included
only to the extent Lender determines, in its sole discretion, that such
reimbursements are stabilized and recurring, but reimbursements in excess of
the corresponding expense items shall not be included; (iii) percentage rent
will be included only to the extent Lender determines that such percentage
rent is stabilized and recurring, up to a maximum of 50-75% of percentage
rent collected in the preceding 12 months; (iv) income from month-to-month
tenants and temporary tenants will be included only to the extent Lender
determines that such month-to-month income and temporary income are
stabilized and recurring, up to a maximum of 50% of such rent collected in
the preceding 12 months; (v) other income may be included on a case-by-case
basis in Lender's sole discretion, and in any event only to the extent such
income is determined by Lender to be stabilized and recurring and of an
operating nature for a period of at least three years; (vi) a vacancy and
credit loss allowance will be applied, in an amount equal to the greatest of
(a) actual historical vacancy and/or credit loss, (b) 5% of the non-anchor
revenues (to the extent not accounted for), and (c) market vacancy
allowances; (vii) expenses will be equal to the actual expenses for the
trailing 12 months ended in the most recently completed fiscal quarter
(except for real estate taxes and insurance, which will be included at their
stabilized, recurring levels), and will exclude any non-recurring items and
the costs of capital improvements; (viii) management fees will be assumed to
be the greater of (a) actual management fees and (b) 4% of effective gross
income for the Facility (provided, that the amount of the management fees so
determined will be reduced by those costs which are incurred by the Facility
and were deducted under other sections hereof, but would ordinarily be paid
by the manager from its management fee; (ix) capital expenditures will be
deemed to be the greater of (a) $0.15 per square foot and (b) the amount
recommended by the structural engineering/property condition reports approved
by Lender prior to the Closing; (x) a deduction will be made for the
pro-rated amount of tenant improvement costs and leasing commissions, based
on a 60% retention rate assumption and other assumptions based on market
information, for tenants that are scheduled to roll over during the
amortization period of the Loan, without
2
duplication for costs deducted under other sections, subject to a minimum of
$1.00 per occupied square foot for non-anchor space; and (xi) such other
adjustments as determined by Lender in its reasonable discretion consistent
with its due diligence findings and prevailing market conditions.
Notwithstanding the foregoing, Adjusted Net Operating Income shall be
determined in a manner consistent with and using the same underwriting
standards and methodology as used in calculating Base Net Operating Income.
"Advisor" means Nomura Securities International, Inc.
"Affiliate" of any specified Person means any other Person controlling,
controlled by or under common control with such specified Person. For the
purposes of this Agreement, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or
other beneficial interests, by contract or otherwise; and the terms
"controls", "controlling" and "controlled" have the meanings correlative to
the foregoing.
"Agreement" means this Loan Agreement, as the same may from time to time
hereafter be modified, supplemented or amended.
"Allocated Loan Amount" means, with respect to any Facility, the portion
of the Loan Amount allocated to such Facility as set forth on Exhibit B
attached hereto, as such amounts shall be adjusted from time to time as
hereinafter set forth. Upon each adjustment in the amount of Principal
Indebtedness due to either (i) a regular monthly payment of principal
pursuant to Section 2.5(c), (ii) a prepayment of principal pursuant to
Section 2.7(c), or (iii) a payment of Excess Cash Flow pursuant to Section
2.7(a), each Allocated Loan Amount shall be decreased by an amount equal to
the product of (x) the amount of such principal payment multiplied by (y) a
fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
total of all Allocated Loan Amounts (prior to the adjustment in question).
Notwithstanding the foregoing, when the Principal Indebtedness is reduced as
a result of Lender's receipt of proceeds with respect to a Taking or casualty
affecting one hundred percent (100%) of a Facility, the Allocated Loan Amount
for such Facility with respect to which the proceeds were received shall be
reduced to zero (such Allocated Loan Amount prior to reduction being referred
to as the "Withdrawn Allocated Amount"), and each other Allocated Loan Amount
shall, if the Withdrawn Allocated Amount exceeds the proceeds with respect to
such Taking or casualty (such excess being referred to as the "Proceeds
Deficiency"), be increased by an amount equal to the product of (1) the
Proceeds Deficiency multiplied by (2) a fraction, the numerator of which is
the applicable Allocated Loan Amount (prior to the adjustment in question)
and the denominator of which is the aggregate of all of the Allocated Loan
Amounts (prior to the adjustment in question) other than the Withdrawn
Allocated Amount.
"Annual Operating Budget" means an annual budget for the operations of
the Facilities (broken down on a month-by-month basis and a
Facility-by-Facility basis) prepared and submitted by Borrower to Lender on
or prior to December 31, 1997 for the calendar year commencing January 1,
1998 and thereafter on each December 1 for each succeeding calendar
3
year, all in form and substance reasonably satisfactory to Lender and as
reasonably approved by Lender, as the same shall be amended by Borrower from
time to time, with Lender's written consent, not be unreasonably withheld or
delayed. Lender's approval shall be deemed given if Lender does not respond
to Borrower's proposed budget within thirty (30) days of Lender's receipt
thereof.
"Appraisals" means the appraisals, if any, with respect to any Facility
delivered to Lender in connection with the Loan and any more recent appraisal
of any Facility delivered to Lender or Lender's servicer, as applicable, each
made by an Appraiser at the request of Borrower or Lender, as any of the same
may be updated by recertification from time to time (and pursuant to the
terms of this Agreement) by the Appraiser performing such Appraisal.
"Appraiser" means any Independent appraiser selected by Borrower (and
reasonably satisfactory to Lender) who is (i) a member of the Appraisal
Institute with a national practice and who has at least ten (10) years
experience with real estate of the same type and in the geographic area of
the applicable Facility to be appraised or (ii) otherwise reasonably
acceptable to Lender.
"Appurtenant Rights" has the meaning set forth in the Deed of Trust.
"Assignment of Agreements" means, with respect to each Facility, a first
priority Assignment of Management Agreement and Agreements Affecting Real
Estate, in form and substance satisfactory to Lender in its sole discretion,
dated as of the Closing Date from Borrower, as assignor, to Lender, as
assignee, as the same may thereafter from time to time be supplemented,
amended, modified or extended by one or more written agreements supplemental
thereto, and "Assignments of Agreements" means all such instruments
collectively.
"Assignment of Leases" means, with respect to each Facility, a
first priority Assignment of Leases and Rents, in form and substance
satisfactory to Lender in its sole discretion, dated as of the Closing Date
from Borrower, as assignor, to Lender, as assignee, assigning to Lender
Borrower's interest in and to the Leases and the Rents with respect to the
applicable Facility as security for the Loan, as the same may thereafter from
time to time be supplemented, amended, modified or extended by one or more
written agreements supplemental thereto, and "Assignments of Leases" means
all such instruments collectively.
"Base Payment" has the meaning provided in Section 2.5(c).
"Base Net Operating Income" means the amount shown on Exhibit C.
"Basic Carrying Costs" means, with respect to any Facility, the
following costs with respect to such Facility: (i) real property taxes,
assessments and Impositions applicable to such Facility, and (ii) insurance
premiums for policies of insurance required or permitted to be maintained by
Borrower pursuant to this Agreement or the other Loan Documents.
"Basic Carrying Costs Monthly Installment" means, with respect to all of
the Facilities, Lender's reasonable and good faith estimate of one-twelfth
(1/12th) of the sum of the
4
annual amounts of all of the relevant Basic Carrying Costs (provided, that
Lender may calculate reasonably and in good faith the monthly amount to
assure that funds are reserved in sufficient amounts to enable the payment of
all Impositions, including, without limitation, taxes and insurance premiums,
thirty (30) days prior to their respective due dates). If the relevant Basic
Carrying Costs for the then current Fiscal Year or payment period are not
ascertainable by Lender at the time a monthly deposit is required to be made,
the Basic Carrying Costs Monthly Installment shall be Lender's reasonable and
good faith estimate based on one-twelfth (1/12th) of the relevant aggregate
Basic Carrying Costs for the prior Fiscal Year or payment period, with
reasonable adjustments as reasonably determined by Lender. As soon as the
relevant Basic Carrying Costs are fixed for the then current Fiscal Year or
period, the next ensuing Basic Carrying Costs Monthly Installment shall be
reasonably adjusted to reflect any deficiency or surplus in prior Basic
Carrying Costs Monthly Installments.
"Basic Carrying Costs Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of Basic Carrying Costs.
"Borrower" has the meaning provided in the first paragraph of this
Agreement.
"Xxxxxxx Party Agreement" means that certain Certificate dated as of the
date hereof, executed by the signatories thereto (collectively, the "Xxxxxxx
Parties" and each individually, a "Xxxxxxx Party") for the benefit of Lender,
regarding the separateness covenants of such Xxxxxxx Parties.
"Business Day" means any day other than (i) a Saturday or a Sunday, and
(ii) a day on which federally insured depository institutions in Xxx Xxxx,
Xxx Xxxx, Xxxxxxx, Xxxxxxxx and any state in which the Collection Account or
the Cash Collateral Account is located are authorized or obligated by law,
regulation, governmental decree or executive order to be closed.
"Capital Improvement Costs" means costs incurred by Borrower in
connection with capital improvements to the Facilities.
"Capital Reserve Amount" means, with respect to all of the Facilities,
an amount per annum equal to the greater of (i) the sum of the amounts
obtained by multiplying $0.15 by the number of square feet of gross rentable
area (as approved by Lender) for each Facility per annum and (ii) the sum of
the amounts indicated in the Engineering Report(s) as the annual amount
required to maintain each Facility.
"Capital Reserve Monthly Installment" means, with respect to the
Facilities, an amount equal to one-twelfth (1/12th) of the Capital Reserve
Amount for all of the Facilities.
"Capital Reserve Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of Capital Improvement Costs.
"Cash Collateral Account" has the meaning provided in Section 2.12(b).
5
"Cash Collateral Account Agreement" has the meaning provided in Section
2.13(c).
"Cash Collateral Account Bank" means the bank chosen by Lender to hold
the Cash Collateral Account, or any successor bank hereafter selected by
Lender upon prior written notice to Borrower and otherwise in accordance with
the terms hereof.
"Cash Management Event" means the occurrence of any one or more of the
following: (i) an Event of Default or (ii) the Optional Prepayment Date.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Collateral" means, collectively, the Land, Appurtenant Rights,
Improvements, Equipment, Rents, Leases, Accounts, Account Collateral, General
Intangibles, goods, Instruments, Inventory, Money, Permitted Investments and
(to the full extent assignable) Permits and all Proceeds and products of any
of the foregoing, all whether now owned or hereafter acquired and all other
property which is or hereafter may become subject to a Lien in favor of
Lender as security for the Loan.
"Collateral Security Instrument" means any right, document or
instrument, other than a Deed of Trust, given as security for the Loan
(including, without limitation, the Assignments of Leases, the Assignments of
Agreements, and the Manager's Subordinations), as the same may thereafter
from time to time be supplemented, amended, modified or extended by one or
more written agreements supplemental thereto.
"Collection Account" has the meaning provided in Section 2.12(a).
"Collection Account Agreement" has the meaning set forth in Section
2.12(b).
"Collection Account Bank" means, with respect to each Facility, the
applicable collection bank for such Facility and any successor bank hereafter
selected by Borrower and reasonably approved by Lender.
"Condemnation Proceeds" has the meaning provided in Section 2.12(h).
"Contingent Obligation" means, without duplication, any obligation of
Borrower guaranteeing any indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of Borrower, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor, (iii) to purchase property,
6
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
owner of such primary obligation against loss in respect thereof. The amount
of any Contingent Obligation shall be deemed to be an amount equal to
Borrower's maximum anticipated liability in respect thereof (assuming that
Borrower is required to perform thereunder) as determined by Lender in good
faith (taking into account the non-recourse or limited recourse nature of
such Contingent Obligation, if applicable).
"Current Interest Accrual Period" has the meaning provided in Section
2.12(g).
"Debt Service" means, for any period, the aggregate of all principal,
interest payments, Default Rate interest, Late Charges and Yield Maintenance
Premium that accrue or are due and payable in accordance with the Loan
Documents during such period.
"Debt Service Coverage Ratio" means, for any period, the quotient
obtained by dividing Net Operating Income for all of the Facilities for the
specified period by the aggregate amount of the Base Payments due for such
period.
"Debt Service Payment Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of Debt Service.
"Deed of Trust" means, with respect to each Facility, a first priority
Fee and Leasehold Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing or such other comparable document which is customarily used by
prudent lenders in the jurisdiction in which the applicable Collateral is
located, in form and substance satisfactory to Lender in Lender's sole
discretion, dated as of the Closing Date, granted by Borrower to the Deed of
Trust Trustee for the benefit of Lender with respect to the Facility covered
thereby as security for the Loan, as the same may thereafter from time to
time be supplemented, amended, modified or extended by one or more written
agreements supplemental thereto, and "Deeds of Trust" means all such
instruments collectively.
"Deed of Trust Trustee" means the trustee, if any, under the applicable
Deed of Trust.
"Default" means the occurrence of any event which, but for the giving of
notice or the passage of time, or both, would be an Event of Default.
"Default Collateral" has the meaning provided in Section 8.14.
"Default Rate" means the per annum, interest rate equal to the lesser of
(i) the Maximum Amount or (ii) the Interest Rate plus five percent (5%).
"Defeasance Debt Service Coverage Ratio" means, in respect of any
period, the quotient obtained by dividing (i) the aggregate amount of the
Adjusted Net Operating Income of the Facilities remaining after a defeasance
pursuant to Section 2.11 by (ii) the aggregate amount
7
of the Base Payments due for such period minus the payments Lender would have
received had the relevant U.S. Obligations referred to in Section 2.11 been held
as security for the Note for such period.
"Defeasance Deposit" means the following in each of the following
circumstances:
(i) in the case of a total defeasance of the Loan and each Facility
pursuant to Section 2.11, "Defeasance Deposit" means the amount that will
be sufficient to purchase U.S. Obligations (A) having maturity dates on or
prior to, but as close as possible to, successive scheduled Payment Dates
(after the Defeasance Release Date) upon which Payment Dates interest and
principal payments would be required under the Note as though the Maturity
Date of the Note were the Optional Prepayment Date and (B) in amounts
sufficient to pay all scheduled principal and interest payments on the
Note as if the Maturity Date of the Note were the Optional Prepayment Date
(but without any adjustment of the monthly amortization schedule); and
(ii) in the case of a partial defeasance of the Loan on a
Facility-by-Facility basis pursuant to Section 2.11, "Defeasance Deposit"
means the amount that will be sufficient to purchase U.S. Obligations (A)
having maturity dates on or prior to, but as close as possible to, the
successive scheduled Payment Dates (after the date of such voluntary
defeasance) upon which Payment Dates interest and principal payments would
be required under the Note as though the Maturity Date of the Note were
the Optional Prepayment Date and (B) in amounts sufficient to pay all
scheduled principal and interest payments on the Note (1) as if the
Maturity Date of the Note were the Optional Prepayment Date (but without
any adjustment of the monthly amortization schedule) and (2) as if the
outstanding principal indebtedness due under the Note were an amount equal
to 125% of the Allocated Loan Amount for the Facility being defeased; and
(ii) in the case of a partial defeasance of the Loan pursuant to Section
5.1(P), "Defeasance Deposit" means the amount that will be sufficient to
purchase U.S. Obligations (A) having maturity dates on or prior to, but as
close as possible to, the successive scheduled Payment Dates (after the
date of such voluntary defeasance) upon which Payment Dates interest and
principal payments would be required under the Note as though the Maturity
Date of the Note were the Optional Prepayment Date and (B) in amounts
sufficient to pay all scheduled principal and interest payments on the
Note (1) as if the Maturity Date of the Note were the Optional Prepayment
Date (but without any adjustment of the monthly amortization schedule) and
(2) as if the outstanding principal indebtedness due under the Note were
an amount equal to the amount required to be defeased pursuant to Section
5.1(P) in connection with such partial defeasance.
"Defeasance Release Date" has the meaning provided in Section 2.11(a).
8
"Deferred Maintenance Amount" means, with respect to all of the
Facilities, the aggregate sum of the amount for each Facility or any portion
thereof as set forth on Exhibit C.
"Deferred Maintenance Costs" means the costs incurred by Borrower in
connection with completion of the repairs to (including, but not limited to,
work in connection with causing any Facility to comply with the Americans
with Disabilities Act) and environmental remediation of all of the Facilities
as itemized on Exhibit D hereto.
"Deferred Maintenance Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of Deferred Maintenance Costs.
"Designated Treasury Rate" means the yield, calculated by linear
interpolation (rounded to three decimal places) of the yields of United
States Treasury Constant Maturities with terms (one longer and one shorter)
most nearly approximating that of noncallable United States Treasury
obligations having maturities as close as possible to twenty (20) years from
the Optional Prepayment Date, as determined by Lender on the basis of Federal
Reserve Statistical Release H.15-Selected Interest Rates under the heading
U.S. Governmental Security/Treasury Constant Maturities, or other recognized
source of financial market information selected by Lender for the week prior
to the Optional Prepayment Date.
"Eligible Account" means (i) an account maintained with a federal or
state chartered depository institution or trust company whose (x) commercial
paper, short-term debt obligations or other short-term deposits are rated at
least A-1 by each Rating Agency if the deposits in such account are to be
held in such account for thirty (30) days or less or (y) long-term unsecured
debt obligations are rated at least AA- by each Rating Agency if the deposits
in such account are to be held in such account for more than thirty (30)
days; or (ii) a segregated trust account maintained with the trust department
of a federal or state chartered depository institution or trust company
acting in its fiduciary capacity which institution or trust company is
subject to regulations regarding fiduciary funds on deposit substantially
similar to 12 C.F.R. Section 9.10(b); or (iii) an account otherwise
acceptable to each Rating Agency, as confirmed in writing that such account
would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any security issued in
connection with a Securitization.
"Engineer" means any reputable Independent engineer, properly licensed
in the relevant jurisdiction and approved by Lender in Lender's reasonable
discretion.
"Engineering Reports" means, with respect to any Facility, the
structural engineering reports prepared by an Engineer and delivered to
Lender in connection with the Loan and any amendments or supplements thereto
delivered to Lender.
"Entity" means a (a) limited partnership, if Borrower is listed as a
limited partnership in the first paragraph of this Agreement or (b) limited
liability company, if Borrower is listed as a limited liability company in
the first paragraph of this Agreement.
9
"Environmental Claim" means any written request for information by a
Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or
other written communication by any Person or Governmental Authority
requiring, alleging or asserting liability with respect to Borrower, or any
Facility, whether for damages, contribution, indemnification, cost recovery,
compensation, injunctive relief, investigatory, response, remedial or cleanup
costs, damages to natural resources, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, Use, Release or
threatened Release into the environment of any Hazardous Substance
originating at or from, or otherwise affecting any Facility, (ii) any fact,
circumstance, condition or occurrence forming the basis of any violation, or
alleged violation, of any Environmental Law by Borrower or otherwise
affecting any Facility or (iii) any alleged injury or threat of injury to
health, safety or the environment by Borrower or otherwise affecting any
Facility.
"Environmental Laws" means any and all applicable federal, state, local
and foreign laws, rules, regulations or municipal ordinances, each as amended
from time to time, any judicial or administrative orders, decrees, settlement
agreements or judgments thereunder, and any Permits, approvals, licenses,
registrations, filings and authorizations, in each case as in effect as of
the relevant date, relating to the environment, health or safety, or the
Release or threatened Release of Hazardous Substances into the indoor or
outdoor environment including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata, or otherwise
relating to the presence or Use of Hazardous Substances.
"Environmental Reports" means, with respect to any Facility, the
environmental audit reports delivered to Lender in connection with the Loan
and any amendments or supplements thereto delivered to Lender.
"Equipment" means all fixtures, appliances, machinery, furniture,
furnishings, decorations, tools and supplies, now owned or hereafter acquired
by Borrower, including but not limited to, all beds, linens, radios,
televisions, carpeting, telephones, cash registers, computers, lamps,
glassware, restaurant and kitchen equipment, and building equipment,
including but not limited to, all heating, lighting, incinerating, waste
removal and power equipment, engines, pipes, tanks, motors, conduits,
switchboards, security and alarm systems, plumbing, lifting, cleaning, fire
prevention, fire extinguishing, refrigeration, washing machines, dryers,
stoves, refrigerators, ventilating, and communications apparatus, air cooling
and air conditioning apparatus, escalators, elevators, ducts, and
compressors, materials and supplies, and all other machinery, apparatus,
equipment, fixtures and fittings now owned or hereafter acquired by Borrower
wherever located, any portion thereof or any appurtenances thereto, together
with all additions, replacements, parts, fittings, accessions, attachments,
accessories, modifications and alterations of any of the foregoing. In
addition to the foregoing, the term "Equipment" shall include the meaning as
such term has in the UCC.
"Equity Interests" means all direct or indirect record or beneficial
equity interests in Borrower, at all tiers or levels.
10
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefore.
"ERISA Affiliate" means any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which Borrower is a member, and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which
Borrower is a member.
"Event of Default" has the meaning set forth in Section 7.1.
"Excess Cash Flow" has the meaning set forth in Section 2.12.
"Extra Funds" has the meaning set forth in Section 2.12.
"Facility" means each "Real Property" (as defined in the Deed of Trust),
and the Collateral with respect thereto, for so long as such Real Property
and related Collateral is encumbered by the lien of a Deed of Trust, such
that, in the event that a Facility has been released in full pursuant to
Section 2.11 of this Agreement, then the term "Facility" shall no longer be
deemed to refer to the Real Property and related Collateral which is the
subject of such release. "Facilities" shall refer, at any time, collectively
to each and all Real Property and related Collateral that are encumbered by
the lien of a Deed of Trust as of the relevant time.
"Fiscal Year" means the 12-month period ending on December 31 of each
year or such other fiscal year of Borrower as Borrower may select from time
to time with the prior written consent of Lender not to be unreasonably
withheld or delayed.
"GAAP" means generally accepted accounting principles consistently
applied in the United States of America as of the date of the applicable
financial report.
"General Intangibles" means all intangible personal property of Borrower
(other than Accounts, Rents, Instruments, Inventory, Money and Permits),
including, without limitation, things in action, settlements, judgments,
contract rights, rights to performance (including, without limitation, rights
under warranties), refunds of real estate taxes and assessments and other
rights to payment of Money, copyrights, trademarks, trade names and patents
now existing or hereafter in existence. In addition to the foregoing, the
term "General Intangibles" shall include the meaning as such term has in the
UCC.
"Governmental Authority" means any national or federal government, any
state, regional, local or other political subdivision thereof with
jurisdiction and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
00
"Xxxxx Xxxxxxx" means, with respect to any Facility, the total dollar
amount of all income and receipts of any kind whatsoever received by Borrower
in the ordinary course of its business with respect to such Facility,
including, without limitation, all Rents (but excluding security deposits
until forfeited or otherwise entitled to be retained by Borrower) and Money.
"Hazardous Substance" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls
("PCBs"), lead in drinking water, and lead-based paint, the presence,
generation, use, transportation, storage or disposal of or exposure to which
(x) is regulated or could lead to liability under any Environmental Law or
(y) is subject to notice or reporting requirements under any Environmental
Law, (ii) any chemicals or other materials or substances which are now or
hereafter become defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants," "pollutants" or words of similar import under
any Environmental Law and (iii) any other chemical or any other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
"Impositions" means all taxes (including, without limitation, all real
estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction
privilege, privilege, license or similar taxes), assessments (including,
without limitation, to the extent not discharged prior to the Closing Date,
all assessments for public improvements or benefits, whether or not commenced
or completed within the term of the Deed of Trust), ground rents, water,
sewer or other rents and charges, excises, levies, fees (including, without
limitation, license, permit, inspection, authorization and similar fees), and
all other governmental charges, in each case whether general or special,
ordinary or extraordinary, foreseen or unforeseen, of every character in
respect of any Facility (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed
or imposed on or in respect of or be a Lien upon (i) Borrower (including,
without limitation, all income, franchise, single business or other taxes
imposed on Borrower for the privilege of doing business in the jurisdiction
in which any Facility, or any other Collateral is located) or Lender, (ii)
any Facility, or any other Collateral or any part thereof or (iii) any
occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with any Facility or the leasing or use of any
Facility or any part thereof or the acquisition or financing of the
acquisition of any Facility by Borrower. Nothing contained in this Agreement
shall be construed to require Borrower to pay any tax, assessment levy or
charge imposed on Lender, in the nature of a franchise, capital levy, estate,
inheritance, succession, income or net revenue tax.
"Improvements" means, with respect to any Facility, all buildings,
structures and improvements of every nature whatsoever situated on the Land
on the Closing Date or thereafter, including, but not limited to, to the
extent (if any) of Borrower's right, title or interest therein or thereto,
all gas and electric fixtures, radiators, heaters, washing machines, dryers,
refrigerators, ovens, engines and machinery, boilers, ranges, elevators and
motors, plumbing and heating fixtures, antennas, carpeting and other floor
coverings, water heaters, awnings and storm sashes,
12
and cleaning apparatus which are or shall be attached to the Land or said
buildings, structures or improvements.
"Indebtedness" means, at any given time, the Principal Indebtedness,
together with all accrued and unpaid interest thereon and all other obligations
and liabilities due or to become due to Lender pursuant hereto, under the Note
or in accordance with any of the other Loan Documents, and all other amounts,
sums and expenses paid by or payable to Lender hereunder or pursuant to the Note
or any of the other Loan Documents.
"Indemnified Party" shall have the meaning set forth in Section 8.29.
"Independent" means, when used with respect to any Person, a Person who
(i) does not have any direct financial interest or any material indirect
financial interest in Borrower or in any Affiliate of Borrower, and (ii) is
not connected with Borrower or any Affiliate of Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, manager, creditor,
director or person performing similar functions.
"Independent Director" means a duly appointed member of the board of
directors of the relevant entity who shall not have been, at the time of such
appointment or at any time in the preceding five (5) years, (a) a direct or
indirect legal or beneficial owner in such entity or any of its affiliates,
(b) a creditor, supplier, employee, officer, director, manager or contractor
of such entity or any of its affiliates, (c) a person who controls such
entity or any of its affiliates, or (d) a member of the immediate family of a
person defined in (a), (b) or (c) above.
"Initial Basic Carrying Cost Amount" means, for Borrower and the
Facilities, the amount shown on Exhibit C.
"Initial Interest Rate" means a rate of 8.33% per annum.
"Initial Securitization Amount" means the sum of $375,000.00.
"Instruments" means all instruments, chattel paper, documents or other
writings obtained by Borrower from or in connection with the ownership or
operation of any Facility evidencing a right to the payment of Money,
including, without limitation, all notes, drafts, acceptances, documents of
title, and policies and certificates of insurance, including but not limited
to, liability, hazard, rental and credit insurance, guarantees and
securities, now or hereafter received by Borrower or in which Borrower has or
acquires an interest pertaining to the foregoing. In addition to the
foregoing, "Instruments" shall include the meaning such term has in the UCC.
"Insurance Proceeds" has the meaning provided in Section 2.12(h).
"Insurance Requirements" means all material terms of any insurance
policy required pursuant to the Loan Documents and all material regulations
and then current standards applicable to or affecting the Facility or any
part thereof or any use or condition thereof, which
13
may, at any time, be recommended in writing by the Board of Fire
Underwriters, if any, having jurisdiction over any Facility, or such other body
exercising similar functions.
"Interest Accrual Period" means each period of time running from and
including the eleventh (11th) day of a calendar month to and including the
tenth (10th) day of the following calendar month during the term of the Loan.
If the Closing Date shall occur prior to the tenth (10th) day of a calendar
month, the first Interest Accrual Period shall commence on and include the
Closing Date and end on and include the tenth (10th) day of the calendar
month in which the Closing Date occurs. If the Closing Date shall occur
after the tenth (10th) day of a calendar month, the first Interest Accrual
Period shall commence on the Closing Date and end on and include the tenth
(10th) day of the calendar month following the month in which the Closing
Date occurs. If the Closing Date shall occur on the tenth (10th) day of a
calendar month, the first Interest Accrual Period shall consist of a one (1)
day period consisting of the Closing Date.
"Interest Rate" means, as applicable, before the Optional Prepayment
Date, the Initial Interest Rate and, on and after the Optional Prepayment
Date, the Revised Interest Rate.
"Inventory" means all goods now owned or hereafter acquired by Borrower
intended for sale or lease, or to be furnished under contracts of service by
Borrower in connection with any Facility, including without limitation, all
inventories held by Borrower for sale or use at or from any Facility, and all
other such goods, wares, merchandise, and materials and supplies of every
nature owned by Borrower and all such other goods returned to or repossessed
by Borrower. In addition to the foregoing, the term "Inventory" shall
include the meaning as such term has in the UCC.
"Investor" has the meaning provided in Section 8.27.
"Issuer" means any issuer of securities issued in connection with a
Securitization.
"Land" means all of the Land defined and described in the Deeds of
Trust.
"Late Charge" means the lesser of (i) five percent (5%) of any unpaid
amount and (ii) the maximum late charge permitted to be charged under the
laws of the State of California.
"Leases" means all leases and other agreements or arrangements affecting
the use or occupancy of all or any portion of any Facility now in effect or
hereafter entered into (including, without limitation, all lettings,
subleases, licenses, concessions, tenancies and other occupancy agreements
covering or encumbering all or any portion of any Facility), together with
any guarantees, supplements, amendments, modifications, extensions and
renewals of the same, and all additional remainders, reversions, and other
rights and estates appurtenant thereto.
"Leasing Expenses" means expenses estimated in the Annual Operating
Budget to be incurred by Borrower in connection with the execution of Leases
with respect to the Facilities, including without limitation legal fees,
design costs, space planning costs, tenant improvement costs, allowances and
brokerage fees; provided, however, that Leasing Expenses shall not include
14
marketing expenses or payments made to Affiliates of Borrower (except for
reimbursement of payments made by such Affiliates to Persons who are not
Affiliates of Borrower).
"Leasing Reserve Monthly Installment" means, with respect to the
Facilities, an aggregate amount equal to Twenty-Five Thousand Dollars
($25,000.00).
"Leasing Reserve Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of Leasing Expenses.
"Legal Requirements" means all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower, the Loan Documents, any Facility or any part
thereof, or the ownership, construction, use, alteration or operation thereof
or any part thereof enacted and in force as of the relevant date, and all
Permits 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 any Facility or any part
thereof, including, without limitation, any which (i) may require repairs,
modifications, or alterations in or to any Facility or any part thereof, or
(ii) in any way limit the use and enjoyment thereof.
"Lender" has the meaning provided in the first paragraph of this
Agreement.
"Liabilities" has the meaning set forth in Section 2.14.
"Lien" means any mortgage, deed of trust, lien (statutory or other),
pledge, easement, restrictive covenant, hypothecation, assignment,
preference, priority, security interest, or any other encumbrance or charge
on or affecting any Facility or any portion thereof or any Collateral or
Borrower, or any interest therein, including, without limitation, any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement or similar instrument under the UCC or
comparable law of any other jurisdiction, domestic or foreign, and
mechanic's, materialmen's and other similar liens and encumbrances.
"Loan" has the meaning provided in the Recitals hereto.
"Loan Amount" has the meaning provided in the Recitals hereto.
"Loan Documents" means, collectively, this Agreement, the Note, the
Deeds of Trust, the Assignments of Leases, the Assignments of Agreements, the
Manager's Subordinations, the Cash Collateral Account Agreements, the
Collection Account Agreements, the Xxxxxxx Party Agreement, and all other
agreements, instruments, certificates and documents delivered by or on behalf
of Borrower or any Affiliate to evidence or secure the Loan or otherwise in
satisfaction of the requirements of this Agreement, the Deed of Trust or the
other documents listed above.
"Losses" has the meaning provided in Section 5.1(i).
15
"Management Agreement" means, with respect to any Facility, the
management agreement entered into between the applicable Manager and Borrower
pertaining to the management of such Facility and "Management Agreements"
means all such agreements, collectively.
"Manager" means the manager of a Facility acceptable to Lender in
Lender's discretion.
"Manager's Subordination" means, with respect to any Facility, the
Manager's Consent and Subordination of Management Agreement in form and
substance satisfactory to Lender in Lender's sole discretion, executed by
Manager, Borrower and Lender, as the same may thereafter from time to time be
supplemented, amended, modified or extended by one or more written agreements
supplemental thereto, and "Manager's Subordinations" means all such
agreements, collectively.
"Material Adverse Effect" means a material adverse effect upon (i) the
business or the financial position or results of operation of Borrower, (ii)
the ability of Borrower to perform, or of Lender to enforce, any of the Loan
Documents or (iii) the value of (x) the Collateral taken as a whole or (y)
any Facility.
"Material Lease" has the meaning set forth in the Deed of Trust.
"Maturity Date" means January 11, 2028 or such earlier date resulting
from acceleration of the Indebtedness by Lender.
"Maximum Amount" means the maximum rate of interest designated by
applicable laws relating to payment of interest and usury.
"Money" means all moneys, cash, rights to deposit or savings accounts,
credit card receipts, rents or other items of legal tender obtained from or
for use in connection with the ownership or operation of any Facility.
"Multiemployer Plan" means a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by Borrower
or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Operating Income" means for any period (as calculated for all
Facilities or any Facility, as applicable) the excess, if any, of Operating
Income for such period over Operating Expenses for such period.
Notwithstanding the foregoing part of this definition of "Net Operating
Income" to the contrary, if the period for which Net Operating Income is
being calculated includes periods prior to the Closing Date, Net Operating
Income shall be calculated for such period based on the applicable pro rata
portion of Base Net Operating Income.
"Note" means and refers to the promissory note, in form and substance
satisfactory to Lender in Lender's sole discretion, dated the Closing Date,
made by Borrower to Lender pursuant to this Agreement as such note may be
modified, amended, supplemented,
16
extended or consolidated in writing, and any note(s) issued in exchange therefor
or in replacement thereof.
"Officer's Certificate" means a certificate of Borrower which is signed
by the managing equity owner of Borrower.
"Operating Expense Certificate" means a certificate of Borrower in the
form attached hereto as Exhibit A.
"Operating Expense Monthly Installment" means, with respect to each
Interest Accrual Period commencing on or after the Optional Prepayment Date,
the amount shown on the Annual Operating Budget for such period.
"Operating Expense Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12
relating to the payment of operating expenses, as reasonably approved by
Lender.
"Operating Expenses" means, for any period, for Borrower, all
expenditures by Borrower as and to the extent required to be expensed under GAAP
during such period in connection with the ownership, operation, maintenance,
repair or leasing of the Facilities, including, without limitation or
duplication:
(i) expenses in connection with cleaning, repair, replacement,
painting and maintenance;
(ii) wages, benefits, payroll taxes, uniforms, insurance costs and
all other related expenses for employees of Borrower or any Affiliate
engaged in repair, operation, maintenance of the Facilities or service
to tenants of the Facilities;
(iii) any management fees and expenses;
(iv) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar
item and overtime services;
(v) the cost of cleaning supplies;
(vi) Impositions;
(vii) business interruption, liability, casualty and fidelity
insurance premiums;
(viii) legal, accounting and other professional fees and expenses
incurred in connection with the ownership, leasing or operation of the
Facilities, including, without limitation, collection costs and expenses;
17
(ix) costs and expenses of security and security systems;
(x) trash removal and exterminating costs and expenses;
(xi) advertising and marketing costs;
(xii) costs of environmental audits and monitoring, environmental,
investigation, remediation, or other response actions or any other
expenses incurred with respect to compliance with Environmental Laws; and
(xiii) all other ongoing expenses which in accordance with GAAP are
required to be or are included in Borrower's annual financial statements
as operating expenses of the Facilities.
Notwithstanding the foregoing, Operating Expenses shall not include (1)
Capital Improvement Costs, (2) any taxes imposed on Borrower's net income,
(3) depreciation or (4) Debt Service and other payments in connection with
the Indebtedness. Operating Expenses shall be calculated in accordance with
GAAP.
"Operating Income" means, for any period, for Borrower, all income of
Borrower during such period from the operation of the Facilities, including,
without limitation:
(i) all amounts payable as Rents (other than security deposits,
unless forfeited or entitled to be retained by Borrower) and all other
amounts payable under Leases or other third party agreements relating to
the ownership and operation of the Facilities;
(ii) business interruption proceeds; and
(iii) all other amounts which in accordance with GAAP are required
to be or are included in Borrower's annual financial statements as
operating income of the Facilities;
provided, however, in the event of a partial or total defeasance pursuant to
Section 2.11, then the proceeds, for any period, of the U.S. Obligations
pledged by Borrower in conjunction with such partial or total defeasance
shall be included in Operating Income for such period solely for the purpose
of calculating Debt Service Coverage Ratio for such period.
"Operating Partnership" means Xxxxxxx Pacific Operating Partnership,
L.P., a Delaware limited partnership.
"Optional Prepayment Date" means January 11, 2008.
"Other Borrowings" means, without duplication (but not including the
Indebtedness or any Transaction Costs payable in connection with the
Transactions), (i) all indebtedness of Borrower for borrowed money or for the
deferred purchase price of property or
18
services, (ii) all indebtedness of Borrower evidenced by a note, bond,
debenture or similar instrument, (iii) the face amount of all letters of
credit issued for the account of Borrower and, without duplication, all
unreimbursed amounts drawn thereunder, (iv) all indebtedness of Borrower
secured by a Lien on any property owned by Borrower whether or not such
indebtedness has been assumed, (v) all Contingent Obligations of Borrower,
and (vi) all payment obligations of Borrower under any interest rate
protection agreement (including, without limitation, any interest rate swaps,
caps, floors, collars or similar agreements) and similar agreements,
excluding unsecured trade debt incurred in the ordinary course of business up
to an aggregate amount of $250,000 relating to the ownership and operation of
the Facilities.
"Payment Date" means the eleventh (11th) day of each calendar month
during the term of the Loan, provided, however, that for purposes of making
payments hereunder, but not for purposes of calculating interest accrual
periods, if the eleventh (11th) day of a given month shall not be a Business
Day, then the Payment Date for such month shall be the next succeeding
Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA, or any successor thereto.
"PCBs" has the meaning provided in the definition of "Hazardous
Substance."
"Permits" means, with respect to any Facility, all licenses,
registrations, permits, allocations, filings, authorizations, approvals and
certificates used in connection with the ownership, operation, construction,
renovation, use or occupancy of such Facility, including, without limitation,
building permits, business licenses, state health department licenses, food
service licenses, liquor licenses, licenses to conduct business, and all such
other permits, licenses and rights, obtained from any Governmental Authority
or private Person concerning ownership, operation, construction, renovation,
use or occupancy of such Facility, the failure of which to maintain or
possess could have a Material Adverse Effect.
"Permitted Encumbrances" means, with respect to any Facility,
collectively, (i) the Lien created by the Related Deed of Trust or the other
Loan Documents, of record, (ii) all Liens and other matters disclosed in the
Title Insurance Policy concerning such Facility, or any part thereof which
have been approved by Lender in Lender's sole discretion, (iii) Liens, if
any, for Impositions imposed by any Governmental Authority not yet delinquent
or being contested in good faith and by appropriate proceedings in accordance
with the Deed of Trust, (iv) without limiting the foregoing, any and all
governmental, public utility and private restrictions, covenants,
reservations, easements, licenses or other agreements of an immaterial nature
which may be granted by Borrower after the Closing Date and which do not
materially and adversely affect (A) the ability of Borrower to pay any of its
obligations to any Person as and when due, (B) the marketability of title to
such Facility, (C) the fair market value of such Facility, or (D) the use or
operation of such Facility as of the Closing Date and thereafter.
"Permitted Investments" shall have the meaning ascribed to such term in
the Cash Collateral Account Agreement.
19
"Permitted Transfers" shall mean, provided that no Event of Default
has occurred and is continuing,
(i) Permitted Encumbrances;
(ii) all transfers of worn out or obsolete furnishings, fixtures or
equipment;
(iii) all Leases which are not Material Leases;
(iv) all Material Leases which have been approved by Lender in
writing in Lender's reasonable discretion; and
(v) Transfers of limited partnership interests in the Operating
Partnership or equity interests in the SPE Equity Owner;
provided, however, that after taking into account any
Transfers after the date hereof, whether to the proposed
transferee or otherwise, (x) the Operating Partnership shall
be the sole managing member of Borrower, (y) the SPE Equity
Owner shall be the sole general partner of the Operating
Partnership and (z) during any 24-month period, persons who
were directors of the SPE Equity Owner at the beginning of
such period and persons who were nominated to be directors of
the SPE Equity Owner by persons who were directors of the SPE
Equity Owner at the beginning of such period, continue to
constitute a majority of the Board of Directors of the SPE
Equity Owner.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated
association, or any other entity, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary
acting in such capacity on behalf of any of the foregoing.
"Plan" means an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Premium" has the meaning provided in Section 2.1.
"Principal Indebtedness" means the principal amount of the entire
Loan outstanding as the same may be increased or decreased, as a result of
prepayment or otherwise, from time to time.
"Proceeds" means all proceeds whether cash or non-cash, movable or
immovable, tangible or intangible (including Insurance Proceeds and
Condemnation Proceeds), from the Collateral, including, without limitation,
those from the sale, exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of any of the Collateral and all
income, gain, credit, distributions and similar items from or with respect to
the Collateral. In addition to the foregoing, the term "Proceeds" shall also
include the meaning as such term has in the UCC.
20
"Rating Agencies" means Fitch Investors Service, Inc., Xxxxx'x
Investors Service, Inc., Duff & Xxxxxx Credit Rating Co. and S&P or any
successor thereto, and any other nationally recognized statistical rating
organization to the extent that any of the foregoing have been or will be
engaged by Lender or its designees in connection with a Securitization (each,
individually a "Rating Agency").
"Recourse Distributions" has the meaning provided in Section 8.14.
"Related Deed of Trust" means, with respect to a particular
Facility, the Deed of Trust relating to such Facility.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment including,
without limitation, the movement of Hazardous Substances through ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata.
"Remedial Work" has the meaning provided in Section 5.1(D)(i).
"REMIC" means a real estate mortgage investment conduit as defined
under Section 860 D(a) of the Code.
"Rents" means, with respect to any Facility, all receipts, rents
(whether denoted as advance rent, minimum rent, percentage rent, additional
rent or otherwise), issues, income, royalties, profits, revenues, proceeds,
bonuses, deposits (whether denoted as security deposits or otherwise), lease
termination fees or payments, rejection damages, buy-out fees and any other
fees made or to be made in lieu of rent, any award made hereafter to Borrower
in any court proceeding involving any tenant, lessee, licensee or
concessionaire under any of the Leases of such Facility in any bankruptcy,
insolvency or reorganization proceedings in any state or federal court, and
all other payments, rights and benefits of whatever nature from time to time
due under any of the Leases of such Facility, including, without limitation,
(i) rights to payment earned under the Leases for such Facility for space in
the Improvements for the operation of ongoing businesses, such as
restaurants, news stands, xxxxxx shops, beauty shops and pharmacies, and (ii)
all other income, consideration, issues, accounts, profits or benefits of any
nature arising from the ownership, possession, use or operation of such
Facility.
"Required Base Debt Service Payment" means all of the Required Debt
Service Payment except for that portion of the Required Debt Service Payment
which consists of payments of Excess Cash Flow which may be due and payable
after the Optional Prepayment Date.
"Required Debt Service Payment" means, on any Payment Date, the Debt
Service then due and payable by Borrower.
"Revised Interest Rate" means a rate equal to five hundred (500)
basis points plus the greater of (x) the Initial Interest Rate, and (y) the
sum of the (i) the Designated Treasury Rate
21
as of the Optional Prepayment Date, and (ii) one hundred (100) basis points,
such Revised Interest Rate not to exceed the Maximum Amount.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Securitization" shall have the meaning provided in Section 2.14.
"Securitization Closing Date" means the date on which a
Securitization is effected.
"Security Agreement" has the meaning provided in Section 2.11.
"Security Deposit Account" has the meaning provided in Section 2.12.
"Single-Purpose Entity" means a corporation, limited partnership, or
limited liability company which, at all times, since its formation and
thereafter:
(i) was organized solely for the purpose of (x) owning the
Facilities or (y) acting as a member of the limited liability
company which owns the Facilities or (z) acting as the general
partner of a limited partnership which owns the Facilities;
(ii) has not and will not engage in any business unrelated to (x)
the ownership of the Facilities or (y) acting as a member of a
limited liability company which owns the Facilities or (z)
acting as a general partner of a limited partnership which
owns the Facilities;
(iii) has not and will not have any assets other than (x) those
related to the Facilities or (y) its member interest in the
limited liability company which owns the Facilities, or (z)
its general partnership interest in the limited partnership
which owns the Facilities, as applicable;
(iv) except as otherwise expressly permitted by this Agreement, has
not and will not engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation, merger,
asset sale, transfer of partnership or membership interests,
or amendment of its limited partnership agreement, articles of
incorporation, articles of organization, certificate of
formation or operating agreement (as applicable),
(v) if such entity is a limited partnership, has as its only
general partners, general partners which are Single-Purpose
Entities which are corporations;
(vi) if such entity is a corporation, at all relevant times will
have at least one Independent Director;
22
(vii) the board of directors of such entity may not take any action
requiring the unanimous affirmative vote of one hundred
percent (100%) of the members of the board of directors unless
all of the directors, including an Independent Director shall
have participated in such vote;
(viii) has not and will not fail to correct any known
misunderstanding regarding the separate identity of such
entity;
(ix) if such entity is a limited liability company, has at least
one member that is a Single-Purpose Entity which is a
corporation;
(x) without the unanimous consent of all of the partners,
directors or members, as applicable, has not and will not with
respect to itself or to any other entity in which it has a
direct or indirect legal or beneficial ownership interest (a)
file a bankruptcy, insolvency or reorganization petition or
otherwise institute insolvency proceedings or otherwise seek
any relief under any laws relating to the relief from debts or
the protection of debtors generally, (b)seek or consent to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such
entity or all or any portion of such entity's properties; (c)
make any assignment for the benefit of such entity's
creditors; or (d) take any action that might cause such entity
to become insolvent;
(xi) has maintained and will maintain its accounts, books and
records separate from any other person or entity;
(xii) has maintained and will maintain its books, records,
resolutions and agreements as official records;
(xiii) has not and will not commingle its funds or assets with those
of any other entity;
(xiv) has held and will hold its assets in its own name;
(xv) has conducted and will conduct its business in its name;
(xvi) has maintained and will maintain its financial statements,
accounting records and other entity documents separate from
any other person or entity;
(xvii) has paid and will pay its own liabilities out of its own funds
and assets;
(xviii) has observed and will observe all partnership, corporate or
limited liability company formalities as applicable;
(xix) has maintained and will maintain an arms-length relationship
with its Affiliates;
23
(xx) (a) if such entity owns the Facilities, has no indebtedness
other than the Indebtedness and unsecured trade payables in
the ordinary course of business relating to the ownership and
operation of the Facilities which (1) do not exceed, at any
time, a maximum amount of $250,000 with respect to any
Facility and (2) are paid within sixty (60) days of the date
incurred, or (b) if such entity acts as the general partner of
a limited partnership which owns the Facilities, has no
indebtedness other than unsecured trade payables in the
ordinary course of business relating to acting as general
partner of the limited partnership which owns the Facilities
which (1) do not exceed, at any time, $10,000 with respect to
any Facility and (2) are paid within sixty (60) days of the
date incurred, or (c) if such entity acts as a member of a
limited liability company which owns the Facilities, has no
indebtedness other than unsecured trade payables in the
ordinary course of business relating to acting as a member of
the limited liability company which owns the Facilities which
(1) do not exceed, at any time, $10,000 with respect to any
Facility and (2) are paid within sixty (60) days of the date
incurred;
(xxi) has not and will not assume or guarantee or become obligated
for the debts of any other entity or hold out its credit as
being available to satisfy the obligations of any other entity
except for the Indebtedness;
(xxii) will not acquire obligations or securities of its partners,
members or shareholders;
(xxiii) has allocated and will allocate fairly and reasonably shared
expenses, including, without limitation, shared office space
and uses separate stationary, invoices and checks;
(xxiv) except pursuant hereto, has not and will not pledge its assets
for the benefit of any other person or entity;
(xxv) has held and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its
own name and not as a division or part of any other person or
entity;
(xxvi) has not made and will not make loans to any person or entity;
(xxvii) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division
or part of it;
(xxviii) if such entity is a limited liability company, its articles of
organization, certificate of formation and/or operating
agreement, as applicable, shall provide that such entity will
dissolve only upon the bankruptcy of the managing member;
24
(xxix) has not entered and will not enter into or be a party to,
any transaction with its partners, members, shareholders or
its affiliates except in the ordinary course of its business
and on terms which are intrinsically fair and are no less
favorable to it than would be obtained in a comparable
arms-length transaction with an unrelated third party;
(xxx) has paid and will pay the salaries of its own employees from
its own funds;
(xxxi) as maintained and will maintain adequate capital in light of
its contemplated business operations; and
(xxxii) if such entity is a limited liability company or limited
partnership, and such entity has one or more managing members
or general partners, as applicable, then such entity's
organizational documents shall provide that such entity shall
continue (and not dissolve) for so long as a solvent managing
member or general partner, as applicable, exists.
"SPE Equity Owner" means Xxxxxxx Pacific Properties, Inc.
"SPE Equity Owner's Certificate" means the SPE Equity Owner's
Certificate in form and substance satisfactory to Lender in Lender's sole
discretion dated as of the Closing Date.
"Start-Up Day" means the "start-up day," within the meaning of
Section 860G(a)(9) of the Code, of any "real estate mortgage investment
conduit," within the meaning of Section 860D of the Code, that holds the Note.
"Sub-Account" shall have the meaning provided in Section 2.12(c).
"Survey" means, with respect to any Facility, a survey of such
Facility satisfactory to Lender, prepared by a registered Independent
surveyor reasonably satisfactory to Lender and Title Insurer, together with a
metes and bounds legal description of the land corresponding with the survey
and containing the Surveyor's Certification.
"Surveyor's Certification" means a surveyor's certification in form
and substance satisfactory to Lender in Lender's sole discretion.
"Taking" means a taking or voluntary conveyance during the term
hereof of all or part of any Facility, or any interest therein or right
accruing thereto or use thereof, as the result of or in settlement of any
condemnation or other eminent domain proceeding by any Governmental Authority
affecting such Facility or any portion thereof whether or not the same shall
have actually been commenced.
"Tax Fair Market Value" means, with respect to any Facility, the
fair market value of such Facility, and (x) shall not include the value of
any personal property or other property
25
that is not an "interest in real property" within the meaning of Treasury
Regulation Sections 1.860G-2 and 1.856-3(c), or is not "qualifying real
property" within the meaning of Treasury Regulation Section 1.593-11(b)(iv),
and (y) shall be reduced by the "adjusted issue price" (within the meaning of
Code Section 1272(a)(4)) (the "Tax Adjusted Issue Price") of any
indebtedness, other than the Loan, secured by a Lien affecting such Facility,
which Lien is prior to or on a parity with the Lien created under the Related
Deed of Trust.
"Title Instruction Letter" means an instruction letter in form and
substance satisfactory to Lender in Lender's sole discretion.
"Title Insurance Policy" means, with respect to any Facility, the
loan policy of title insurance for such Facility issued by Title Insurer with
respect to such Facility in an amount acceptable to Lender and insuring the
first priority Lien in favor of Lender created by the Related Deed of Trust
and acceptable to Lender in Lender's discretion, and "Title Insurance
Policies" means all such loan policies of title insurance collectively.
"Title Insurer" means Fidelity National Title Insurance Company and
any reinsurer reasonably required by Lender and/or any other nationally
recognized title insurance company acceptable to Lender in Lender's
reasonable discretion; provided, however, that the reinsurer of any Title
Insurance Policy may include, in amounts reasonably acceptable to Lender,
Chicago Title Insurance Company, Commonwealth Land Title Insurance Company,
First American Title Insurance Company and Xxxxxxx Title Guaranty Company.
"Transaction Costs" means all fees, costs, expenses and
disbursements paid or payable by Borrower relating to the Transactions,
including, without limitation, all appraisal fees, legal fees, accounting
fees and the costs and expenses described in Section 8.24.
"Transactions" means the transactions contemplated by the Loan
Documents.
"Transfer" means any conveyance, transfer (including, without
limitation, any transfer of any direct legal or beneficial interest in
Borrower), sale, Lease (including, without limitation, any amendment,
extension, modification, waiver or renewal thereof), or Lien, whether by law
or otherwise, of, on or affecting any Collateral of Borrower (other than a
Permitted Transfer). In addition to the foregoing, a "Transfer" shall be
deemed to have occurred if during any 24 month period, persons who were
directors of the SPE Equity Owner at the beginning of such period and persons
who were nominated to be directors of the SPE Equity Owner by persons who
were directors of the SPE Equity Owner at the beginning of such period, cease
to constitute a majority of the Board of Directors of the SPE Equity Owner.
"Trust Property" means, at any time, the real property, improvements
and other property rights and interests encumbered by a Deed of Trust.
"UCC" means, with respect to any Collateral, the Uniform Commercial
Code in effect in the jurisdiction in which the relevant Collateral is
located.
"UCC Searches" has the meaning specified in Section 3.1.
26
"Unearned Premium" has the meaning provided in Section 2.7(g).
"U.S. Obligations" means obligations or securities not subject to
prepayment call or early redemption which are direct obligations of, or
obligations fully guaranteed as to timely payment by, the United States of
America or any agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America.
"Use" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation to or from
the property of any Person of such Hazardous Substance.
"Yield Maintenance Premium" means, in the event that all or any
portion of the Note is accelerated, the amount that, when added to the amount
otherwise due as a result of such acceleration, would be sufficient to
purchase U.S. Obligations (A) having maturity dates on or prior to, but as
close as possible to, successive scheduled Payment Dates (after the date of
such acceleration of the Note) upon which Payment Dates interest and
principal payments would be required under the Note as though the Maturity
Date of the Note was the Optional Prepayment Date and (B) in amounts
sufficient to pay all scheduled principal and interest payments on the Note
as if the Maturity Date of the Note was the Optional Prepayment Date (but
without any adjustment of the monthly amortization schedule); provided,
however, that under no circumstances shall the Yield Maintenance Premium be
less than zero.
ARTICLE II
GENERAL TERMS
Section 2.1. Amount of the Loan. Lender shall lend to Borrower a
total aggregate amount equal to the Loan Amount. In addition, to induce
Borrower to agree to the Initial Interest Rate, Lender is paying to Borrower
on the date hereof an interest rate buy-up premium (the "Premium") in the
amount of Fourteen Million Nine Hundred Sixty Thousand Forty-Nine and 34/100
Dollars ($14,960,049.34). Borrower acknowledges receipt of the Loan and the
Premium, in the aggregate amount of One Hundred Fifty Million Dollars
($150,000,000.00). Lender acknowledges and agrees that Borrower shall have no
obligation to repay the Premium; provided, however, nothing set forth herein
shall impair, diminish or otherwise affect Borrower's obligation to repay the
Unearned Premium in accordance with Section 2.7(g) hereof.
Section 2.2. Use of Proceeds. Proceeds of the Loan and the
Premium shall be used to pay the acquisition costs for the Facilities to be
acquired by Borrower. Any excess will be available to Borrower and may be
used for any lawful purpose.
Section 2.3. Security for the Loan. The Note and Borrower's
obligations hereunder and under the other Loan Documents shall be secured by
the Deeds of Trust, the
27
Assignments of Leases, the Assignments of Agreements, the Manager's
Subordinations, and the security interest and Liens granted in this Agreement
and in the other Loan Documents.
Section 2.4. Borrower's Note. (a) Borrower's obligation to pay the
principal of and interest on the Loan (including Late Charges, Default Rate
interest, and the Yield Maintenance Premium, if any), shall be evidenced by
this Agreement and by the Note, duly executed and delivered by Borrower. The
Note shall be payable as to principal, interest, Late Charges, Default Rate
interest, Yield Maintenance Premium, if any, and Unearned Premium, if any, as
specified in this Agreement, with a final maturity on the Maturity Date.
Borrower shall pay all outstanding Indebtedness on the Maturity Date.
(b) Lender is hereby authorized, at its sole option, (i) to endorse
on a schedule attached to the Note (or on a continuation of such schedule
attached to the Note and made a part thereof) an appropriate notation
evidencing the date and amount of each payment of principal, interest, Late
Charges, Default Rate interest and Yield Maintenance Premium, if any, in
respect thereof, which books and records shall be made available to Borrower,
at Borrower's sole cost and expense on reasonable advance notice, for
examination at Lender's offices and/or (ii) to record the Allocated Loan
Amount in its books and records.
Section 2.5. Principal and Interest Payments.
(a) Accrual of Interest before the Optional Prepayment Date.
Before the Optional Prepayment Date, interest shall accrue on the outstanding
principal balance of the Note and all other amounts due to Lender under the
Loan Documents at the Initial Interest Rate.
(b) Accrual of Interest on or after the Optional Prepayment Date.
On and after the Optional Prepayment Date, interest shall accrue on the
outstanding principal balance of the Note and all other amounts due to Lender
under the Loan Documents at the Revised Interest Rate.
(c) Monthly Base Payments, of Principal and Interest at the Initial
Interest Rate. On each Payment Date, Borrower shall pay to Lender a monthly
constant payment as indicated on Exhibit C, which payment is based on the
Initial Interest Rate and an amortization schedule of 360 months. Each
payment required to be made by Borrower pursuant to this Section 2.5(c) is
hereinafter sometimes referred to as a "Base Payment."
(d) Payments of Excess Cash Flow. On and after the earlier to
occur of (i) the Optional Prepayment Date or (ii) at Lender's sole election,
upon the occurrence and during the continuation of an Event of Default
hereunder, any date on or after the occurrence and during the continuation of
such Event of Default, in addition to the Base Payment, Borrower shall pay to
Lender all Excess Cash Flow to be applied as described in Section 2.8.
(e) Payments of Excess of Revised Interest Rate Over Initial
Interest Rate. To the extent, for any period, that accrued interest at the
Revised Interest Rate exceeds interest required to be paid hereunder for such
period at the Initial Interest Rate (such amount, the "Accrued Interest"),
Borrower shall only be required to pay such Accrued Interest after the
28
outstanding principal balance of the Note has been paid in full. Unpaid
Accrued Interest shall accrue and compound on a monthly basis at the Revised
Interest Rate.
(f) Payment Dates. All payments required to be made pursuant to
Sections 2.5(a)-(e) above shall be made beginning on the first Payment Date
immediately after the end of the second Interest Accrual Period; provided,
however, that Borrower shall pay interest for the first Interest Accrual
Period on the Closing Date.
(g) Calculation of Interest. Interest shall accrue on the
outstanding principal balance of the Loan and all other amounts due to Lender
under the Loan Documents commencing upon the Closing Date. Interest shall
accrue on Accrued Interest commencing on the first Payment Date following the
Optional Prepayment Date. Interest shall be computed on the actual number of
days elapsed, based on a 360 day year.
(h) Default Rate Interest. If an Event of Default has occurred and
is continuing, the entire unpaid amount outstanding hereunder and under the
Note will bear interest at the Default Rate.
(i) Late Charge. If Borrower fails to make any payment of any sums
due under the Loan Documents after the same is due, Borrower shall, at
Lender's option evidenced by written notice of Lender to Borrower, pay a Late
Charge.
(j) Maturity Date. On the Maturity Date, Borrower shall pay to
Lender all amounts owing under the Loan Documents, including without
limitation, interest, principal, Late Charges, Default Rate interest, Accrued
Interest and any Yield Maintenance Premium. The Yield Maintenance Premium
shall only be due and payable on the date of acceleration of the Note.
Section 2.6. Voluntary Defeasance.
(a) Provided that no Event of Default has occurred and is then
continuing, after two years after the Start-Up Day (but only before the
Optional Prepayment Date), Borrower may voluntarily defease (A) all of the
Loan or (B) a portion of the Loan on a Facility-by-Facility basis, or (C) a
portion of the Loan on a non-Facility-by-Facility basis, but only pursuant to
Section 5.1(P); provided, that for any defeasance, Borrower must comply with
Section 2.11.
(b) In the event of any such voluntary defeasance Borrower shall
give Lender written notice of its intent to defease, which notice shall be
given at least thirty (30) days prior to the date upon which defeasance is to
be made and shall specify the Payment Date and the amount of such defeasance.
If any such notice of defeasance is given, Borrower shall be required to
defease the Loan or a portion thereof pursuant to Section 5.1(P) or Section
2.11 on the specified Payment Date (unless such notice is revoked by Borrower
prior to the date specified therein in which event Borrower shall immediately
reimburse Lender for any reasonable costs incurred by Lender in connection
with Borrower's giving of such notice and revocation).
29
(c) Any voluntary defeasance of the Loan by Borrower is required to
be made on a Payment Date.
(d) Borrower shall not be permitted at any time to defease all or
any part of the Loan except as expressly provided in this Section 2.6.
(e) BORROWER UNDERSTANDS AND ACKNOWLEDGES THAT AS A MATERIAL
INDUCEMENT TO LENDER'S AGREEMENT TO MAKE THE LOAN, BORROWER HAS AGREED, AS
SET FORTH HEREIN, THAT THE LOAN MAY NOT BE PREPAID OR DEFEASED AT ALL PRIOR
TO TWO YEARS AFTER THE START-UP DAY, AND IN CERTAIN OTHER CASES MAY ONLY BE
PREPAID OR DEFEASED WITH THE CONCURRENT PAYMENT OF CERTAIN YIELD MAINTENANCE
PREMIUMS. BORROWER HEREBY IRREVOCABLY WAIVES, DISCLAIMS AND RENOUNCES ANY AND
ALL RIGHTS IT MAY HAVE TO THE CONTRARY UNDER Section 2954.10 OF THE
CALIFORNIA CIVIL CODE OR OTHERWISE. BORROWER HEREBY AGREES THAT LENDER'S
DAMAGES, IN THE EVENT OF A PERMITTED PREPAYMENT OR DEFEASANCE HEREUNDER,
WOULD BE IMPRACTICABLE TO DETERMINE, AND THAT THE YIELD MAINTENANCE PREMIUMS
SET FORTH HEREIN ARE REASONABLE ESTIMATES THEREOF. BY INITIALING THIS
PROVISION IN THE SPACE PROVIDED BELOW, BORROWER HEREBY DECLARES THAT LENDER'S
AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH
HEREIN CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY
BORROWER, FOR THE WAIVERS AND AGREEMENTS SET FORTH ABOVE.
INITIALS: ______________
Section 2.7. Prepayment. (a) On and after the earlier to occur of
(i) the Optional Prepayment Date or (ii) at Lender's sole election, upon the
occurrence and during the continuation of an Event of Default hereunder, any
date on or after and during the continuation of such Event of Default, in
addition to all other payments required hereunder, Borrower shall pay and use
all Excess Cash Flow to prepay the Loan on each Payment Date in accordance
with Section 2.12(g) and Section 2.8 and, after payment in full of the
Principal Indebtedness (but not Accrued Interest or interest thereon) to pay
Accrued Interest and interest thereon and all other amounts then owing.
(b) If Borrower is required by Lender under the provisions of any
Deed of Trust to prepay the Loan or any portion thereof in the event of
damage, destruction or a Taking of a Facility, Borrower shall prepay the Loan
to the full extent of the Insurance Proceeds or the Condemnation Proceeds,
and there shall be no Yield Maintenance Premium or penalty assessed against
Borrower by reason thereof.
(c) On any Payment Date occurring on and after the Optional
Prepayment Date (provided no Event of Default has occurred and is
continuing), Borrower may voluntarily prepay the Loan in whole or in part,
and there shall be no Yield Maintenance Premium or penalty assessed against
Borrower by reason thereof.
30
(d) All prepayments made pursuant to this Section 2.7 shall be
applied in accordance with the provisions of Section 2.8
(e) Any prepayment of the Loan by Borrower is required to be made
on a Payment Date.
(f) Borrower shall not be permitted at any time to prepay all or
any part of the Loan except as expressly provided in this Section 2.7.
(g) Notwithstanding anything to the contrary set forth herein, if
the Loan is prepaid in whole or in part prior to the Optional Prepayment Date
in circumstances where, pursuant to the applicable provisions of the Loan
Documents, no Yield Maintenance Premium is due, then Borrower shall
nevertheless pay to Lender (in addition to the prepaid principal and accrued
interest) an amount (the "Unearned Premium") equal to the Relevant Percentage
of (i) the Hypothetical Principal minus (ii) the unpaid Principal
Indebtedness (before accounting for such prepayment). As used herein, (x)
the "Relevant Percentage" shall mean the percentage of the unpaid Principal
Indebtedness that is being so prepaid, and (y) the "Hypothetical Principal"
shall mean the principal balance that would be outstanding on the date of
such prepayment under a loan in the original principal amount of One Hundred
Fifty Million Dollars ($150,000,000.00), which is made on the date hereof,
with interest at the rate of 6.76% per annum, and is paid in 312 equal
monthly installments of principal and interest on each Payment Date
commencing February 11, 1998 (with each such monthly installment being
applied first to accrued interest, computed on the basis of the actual number
of days elapsed and a 360-day year, and then to amortization of principal).
The payment of the Unearned Premium required under this Section 2.7(g) is
intended as a refund to Lender of the unearned portion of the Premium.
(h) BORROWER UNDERSTANDS AND ACKNOWLEDGES THAT AS A MATERIAL
INDUCEMENT TO LENDER'S AGREEMENT TO MAKE THE LOAN, BORROWER HAS AGREED, AS
SET FORTH HEREIN, THAT THE LOAN MAY NOT BE PREPAID OR DEFEASED AT ALL PRIOR
TO TWO YEARS AFTER THE START-UP DAY, AND IN CERTAIN OTHER CASES MAY ONLY BE
PREPAID OR DEFEASED WITH THE CONCURRENT PAYMENT OF CERTAIN YIELD MAINTENANCE
PREMIUMS. BORROWER HEREBY IRREVOCABLY WAIVES, DISCLAIMS AND RENOUNCES ANY AND
ALL RIGHTS IT MAY HAVE TO THE CONTRARY UNDER Section 2954.10 OF THE
CALIFORNIA CIVIL CODE OR OTHERWISE. BORROWER HEREBY AGREES THAT LENDER'S
DAMAGES, IN THE EVENT OF A PERMITTED PREPAYMENT OR DEFEASANCE HEREUNDER,
WOULD BE IMPRACTICABLE TO DETERMINE, AND THAT THE YIELD MAINTENANCE PREMIUMS
SET FORTH HEREIN ARE REASONABLE ESTIMATES THEREOF. BY INITIALING THIS
PROVISION IN THE SPACE PROVIDED BELOW, BORROWER HEREBY DECLARES THAT LENDER'S
AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH
HEREIN CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY
BORROWER, FOR THE WAIVERS AND AGREEMENTS SET FORTH ABOVE.
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INITIALS: ______________
Section 2.8. Application of Payments. Except during the
continuation of an Event of Default, all proceeds of any repayment, including
prepayments, of the Loan shall be applied to pay: first, any costs and
expenses of Lender, including, without limitation, the Lender's reasonable
attorney's fees and disbursements actually arising as a result of such
repayment or reasonably expended by Lender to protect the Collateral; second,
accrued and unpaid interest at the Initial Interest Rate; third, to the
Principal Indebtedness (but not to Accrued Interest or interest thereon);
fourth, to Accrued Interest and interest accrued thereon; and fifth, any
other amounts then due and owing under the Loan Documents. After the
occurrence and during the continuation of an Event of Default, all proceeds
of repayment, including any payment or recovery on the Collateral shall,
unless otherwise provided in the Deeds of Trust, be applied in such order and
in such manner as Lender shall elect in its sole discretion.
Section 2.9. Payment of Debt Service, Method and Place of Payment.
(a) Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not
later than 12:00 noon, New York City time, on the date when due and shall be
made in lawful money of the United States of America in federal or other
immediately available funds to an account specified to Borrower by Lender in
writing, and any funds received by Lender after such time, for all purposes
hereof, shall be deemed to have been paid on the next succeeding Business Day.
(b) All payments made by Borrower hereunder or by Borrower under
the other Loan Documents, shall be made irrespective of, and without any
deduction for, any set-offs or counterclaims.
Section 2.10. Taxes. All payments made by Borrower under this
Agreement and under the other Loan Documents shall be made free and clear of,
and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority (other than taxes imposed
on the income of Lender).
Section 2.11. Defeasance Requirements. (a) Subject to Section 2.6,
the Loan may be defeased (A) in whole, or (B) in part on a
Facility-by-Facility basis, or (C) in part on a non-Facility-by-Facility
basis, but only pursuant to Section 5.1(P); provided, that Borrower: (i)
provides not less than thirty (30) days prior written notice to the Lender
specifying a Payment Date (the "Defeasance Release Date") on which the
payments provided in clauses (ii) and (iii) below are to be made and the
deposits provided in clause (iv) below are to be made, (ii) pays all interest
accrued and unpaid on the Principal Indebtedness to and including the
Defeasance Release Date, (iii) pays all other sums then due and payable under
the Loan Documents, (iv) deposits with Lender an amount equal to the
Defeasance Deposit, (v) in the case of a defeasance in part on a
Facility-by-Facility basis, provides to Lender evidence satisfactory that the
Defeasance Debt Service Coverage Ratio for all Facilities (after giving
effect to the defeasance and calculated on the basis of the prior twelve (12)
calendar months), shall be greater
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than the greater of (x) 1.50 and (y) the Debt Service Coverage Ratio
(calculated on the basis of the prior twelve (12) calendar months) for all
Facilities as of the Payment Date immediately preceding the Defeasance
Release Date, (vi) delivers to Lender (A) a security agreement, in form and
substance reasonably satisfactory to Lender, creating a first priority
perfected Lien on the deposits required pursuant to this Section and the U.S.
Obligations purchased on behalf of Borrower in accordance with this Section
(the "Security Agreement") securing Borrower's obligations under the Loan
Documents, (B) for execution by Lender, a release of each relevant Facility
from the lien of the Related Deed of Trust in a form appropriate for
recording in each jurisdiction in which the relevant Facility is located, (C)
an Officer's Certificate of Borrower certifying that the requirements set
forth in this Section have been satisfied, including, without limitation,
that no Event of Default has occurred and is continuing, (D) an opinion of
counsel from Borrower's counsel in form and substance reasonably satisfactory
to the Lender stating, among other things, (x) that, without qualification,
the U.S. Obligations have been duly and validly assigned and delivered to
Lender and Lender has a first priority perfected security interest on the
deposits required pursuant to this Section and a first priority perfected
lien on the U.S. Obligations and the proceeds thereof purchased hereunder and
(y) that the defeasance will not adversely affect the status of any REMIC
formed in connection with a Securitization, and (E) such other certificates,
documents or instruments as the Lender may reasonably request including,
without limitation, (x) written confirmation from the relevant Rating
Agencies that such defeasance will not cause any Rating Agency to withdraw,
qualify or downgrade the then applicable rating on any security issued in
connection with any Securitization and (y) a certificate from an Independent
certified public accountant certifying that the amounts of the U.S.
Obligations comply with all of the requirements of this Loan Agreement. The
U.S. Obligations shall mature on or be redeemable, or provide for payment
thereon, on or prior to the Business Day preceding the date on which payments
under the Note are due and payable and the proceeds thereof shall be payable
directly to the Cash Collateral Account. In connection with the foregoing,
Borrower appoints Lender as its agent for the purpose of applying the amounts
delivered pursuant to clause (iv) above to purchase U.S. Obligations.
Notwithstanding anything in this Agreement to the contrary, in the event the
Yield Maintenance Premium is due as a result of the acceleration of the
Indebtedness after the occurrence of an Event of Default, Lender shall have
the right to receive and collect the Yield Maintenance Premium but shall have
no obligation to purchase U.S. Obligations or otherwise comply with this
Section 2.11.
(b) Upon compliance with the requirements of this Section 2.11 in
the event of a total defeasance of the Loan, or a partial defeasance of the
Loan on a Facility-by-Facility basis, the relevant Facilities or Facility for
which such defeasance has been consummated shall be released from the Lien of
the Related Deed of Trust. In connection with a total defeasance of the
Loan, Borrower may be required by Lender to assign its obligations under the
Note, the other Loan Documents and the Security Agreements together with the
pledged U.S. Obligations to such other entity or entities established or
designated by Lender (the "Successor Trustor"). Such Successor Trustor shall
assume the obligations under the Note, the other Loan Documents and the
Security Agreements and, upon such assignment, Borrower shall be relieved of
its obligations thereunder.
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(c) Nothing in this Section 2.11 shall release Borrower from any
liability or obligation relating to any environmental matters arising under
Sections 4.1(b)(U) or 5.1(D)-(I), inclusive, hereof.
Section 2.12. Central Cash Management.
(a) Collection Accounts and Security Deposit Accounts.
(i) Borrower shall open and maintain at each Collection Account
Bank two trust accounts (each, a "Collection Account" and a
"Security Deposit Account", respectively, and collectively,
the "Collection Accounts" and the "Security Deposit
Accounts"), and the relevant Collection Account Bank shall not
commingle the amounts in either such account with any other
amounts held on behalf of Lender or any other Person.
(ii) Each Collection Account shall be assigned an identification
number by the relevant Collection Account Bank and shall be
opened and maintained in the name "Nomura Asset Capital
Corporation as Mortgagee of BPP/Golden State Acquisitions,
L.L.C." Neither Borrower nor any Manager shall have any right
of withdrawal from any Collection Account. Borrower shall
cause all tenants of each Facility to deposit all Rents, Money
or other items of Gross Revenue (other than security deposits)
directly into the applicable Collection Account. Without in
any way limiting Borrower's obligations pursuant to the
preceding sentence, if Borrower or any Manager nevertheless
receives any Rents, Money or other items of Gross Revenue
(other than security deposits), the same shall be held in
trust for the benefit of Lender, and Borrower shall, and shall
cause each Manager to, within two (2) Business Days after
receipt thereof, deposit the same in the applicable Collection
Account. Within five (5) days after the date hereof, Borrower
shall send notices (collectively, the "Tenant Notices") to
each tenant under the Leases of any Facility and other
obligors with respect to any Facility, instructing them to
make all payments of Rent and any other amounts which are
payable to Borrower under Leases or otherwise with respect to
the relevant Facility directly to the applicable Collection
Account.
(iii) Each Security Deposit Account shall be assigned an
identification number by the applicable Collection Account
Bank and shall be opened and maintained in the name "Nomura
Asset Capital Corporation as Mortgagee of BPP/Golden State
Acquisitions, L.L.C." Borrower shall cause all tenants of
each Facility to deposit all security deposits directly into
the applicable Security Deposit Account. Without in any way
limiting Borrower's obligations pursuant to the preceding
sentence, Borrower shall, and shall cause each Manager to,
deposit directly into the
34
applicable Security Deposit Account all security deposits
received by or on behalf of Borrower in violation or
contradiction of the preceding sentence within two (2)
Business Days after receipt thereof. Neither Borrower nor any
Manager shall have any right of withdrawal from any Security
Deposit Account. On written request from Borrower with
appropriate supporting materials, Lender will direct the
applicable Collection Account Bank to release funds from the
applicable Security Deposit Account to refund or apply
security deposits as required by the Leases of the relevant
Facility or by applicable Legal Requirements (and in the case
of an application of security deposits, Borrower shall
thereupon deposit the amount of the security deposit
reimbursed by the applicable tenant as a result of such
application into the applicable Collection Account). Borrower
may designate a new financial institution to serve as a
Collection Account Bank hereunder as provided in Section
2.13(i). Any breach of this Section 2.12(a) by Borrower shall
be an Event of Default.
(b) Payments. Prior to the occurrence of a Cash Management Event,
Borrower shall pay to Lender or Lender's designee or to an account identified
by Lender or Lender's designee on or prior to each Payment Date, the Required
Debt Service Payment for such Payment Date, the Basic Carrying Costs Monthly
Installment for the Interest Accrual Period immediately preceding such
Payment Date and the Capital Reserve Monthly Installment for the Interest
Accrual Period immediately preceding such Payment Date. After the occurrence
of a Cash Management Event, pursuant to each of the Collection Account
Agreements among the respective Collection Account Banks, Borrower and Lender
(each, a "Collection Account Agreement"), Borrower will authorize and direct
each Collection Account Bank to transfer on a daily basis, all funds
deposited in the Collection Account (but not the Security Deposit Account)
for each Facility to Lender or Lender's designee to be held in an Eligible
Account established by Lender or Lender's designee (the "Cash Collateral
Account"). The Cash Collateral Account shall be under the sole dominion and
control of Lender. Borrower shall have no right of withdrawal in respect of
the Cash Collateral Account. If, twelve (12) calendar months after the
occurrence of a Cash Management Event, the Debt Service Coverage Ratio
computed on the basis of the prior twelve (12) calendar months, is greater
than or equal to 1.50, then Borrower may revoke its instruction to the
Collection Account Banks regarding the transfer of funds to the Cash
Collateral Account and will resume making payments to Lender in accordance
with the first sentence of this Section 2.12(b).
(c) Establishment of Sub-Accounts. Each Cash Collateral Account
shall contain a Debt Service Payment Sub-Account, a Basic Carrying Costs
Sub-Account, a Capital Reserve Sub-Account, a Deferred Maintenance
Sub-Account, a Leasing Reserve Sub-Account, a Securitization Expense
Sub-Account and an Operating Expense Sub-Account, each of which accounts
(individually, a "Sub-Account" and collectively, the "Sub-Accounts") (i) may
be ledger or book entry accounts and need not be actual accounts and (ii)
shall be an Eligible Account to which certain funds shall be allocated and
from which disbursements shall be made pursuant to the terms of this Loan
Agreement.
35
(d) Permitted Investments. Upon the written request of Borrower,
which request may be made once per Interest Accrual Period, Lender shall
direct the Cash Collateral Account Bank to invest and reinvest any balance in
the Cash Collateral Account from time to time in Permitted Investments as
instructed by Borrower; provided, however, that (i) if Borrower fails, to so
instruct Lender, or an Event of Default shall have occurred and is
continuing, Lender may direct the Cash Collateral Account Bank to invest and
reinvest such balance in Permitted Investments as Lender shall determine in
Lender's sole discretion, (ii) the maturities of the Permitted Investments on
deposit in the Cash Collateral Account shall, to the extent such dates are
ascertainable, be selected and coordinated to become due not later than the
day before any disbursements from the Sub-Accounts must be made, (iii) all
such Permitted Investments shall be held in the name and be under the sole
dominion and control of Lender; (iv) no Permitted Investment shall be made
unless Lender shall retain a perfected first priority Lien in such Permitted
Investment securing the Indebtedness and all filings and other actions
necessary to ensure the validity, perfection, and priority of such Lien have
been taken; (v) Lender shall only be required to follow the investment
instructions which were most recently received by Lender and Borrower shall
be bound by such last received investment instructions; and (vi) any written
request from Borrower continuing investment instructions shall contain an
Officer's Certificate. from Borrower (which may be conclusively relied upon
by Lender and its agents) that any such investments constitute Permitted
Investments. It is the intention of the parties hereto that all amounts
deposited in the Cash Collateral Account (or as much thereof as Lender may
arrange to invest) shall at all times be invested in Permitted Investments.
All funds in the Cash Collateral Account that are invested in a Permitted
Investment are deemed to be held in such Cash Collateral Account for all
purposes of this Agreement and the other Loan Documents. All gain in
investments of funds in the Cash Collateral Account shall be allocated in the
same manner as any other funds in the Cash Collateral Account. Lender shall
have no liability for any loss in investments of funds in the Cash Collateral
Account that are invested in Permitted Investments (unless invested contrary
to Borrower's request other than after the occurrence of a Default or an
Event of Default) and no such loss shall affect Borrower's obligation to
fund, or liability for funding, the Cash Collateral Account and each
Sub-Account, as the case may be. Borrower and Lender agree that Borrower
shall include all such earnings and losses (other than those for Lender's
account in accordance with the immediately preceding sentence) on the Cash
Collateral Account as income of Borrower for federal and applicable state tax
purposes. Borrower shall be responsible for any and all fees, costs and
expenses associated with Permitted Investments.
(e) Interest on Accounts. All interest paid or other earnings on
the Permitted Investments made hereunder shall be deposited into the Cash
Collateral Account and shall be subject to allocation and distribution like
any other monies deposited therein.
(f) Payment of Basic Carrying Costs, Debt Service, Capital
Improvement Costs, Deferred Maintenance Costs, Leasing Expenses,
Securitization Expenses and Operating Expenses.
(i) Payment of Basic Carrying Costs. At least five (5)
Business Days prior to the due date of any Basic Carrying Cost,
and not more frequently than once each Interest Accrual Period,
Borrower shall
36
notify, Lender in writing and request that Lender pay such Basic
Carrying Cost on behalf of Borrower on or prior to the due date
thereof. Together with each such request, Borrower shall
furnish Lender with copies of bills and other documentation as
may be reasonably required by Lender to establish that such
Basic Carrying Cost is then due. Lender shall make such payments
out of the Basic Carrying Cost Sub-Account before the same shall
be delinquent to the extent that there are funds available in the
Basic Carrying Cost Sub-Account and Lender has received
appropriate documentation to establish the amount(s) due and the
due date(s) as and when provided above.
(ii) Payment of Debt Service. At or before 12:00 noon, New
York City time, on each Payment Date during the term of the Loan,
Lender shall transfer to Lender's own account from the Debt
Service Payment Sub-Account an amount equal to the Required Debt
Service Payment for the Payment Date. Borrower shall be deemed
to have timely made the Required Debt Service Payment pursuant to
Section 2.9 regardless of the time Lender makes such transfer as
long as sufficient funds are on deposit in the Debt Service
Payment Sub-Account at 12:00 noon, New York City time on the
applicable Payment Date.
(iii) Payment of Capital Improvement Costs. Not more
frequently than once each Interest Accrual Period and provided
that no Event of Default has occurred and is continuing, Borrower
may notify Lender in writing and request that Lender release to
Borrower or its designee funds out of the Capital Reserve
Sub-Account to the extent funds are available therein for payment
of Capital Improvement Costs. Together with each such request,
Borrower shall furnish Lender with copies of bills and other
documentation as may be reasonably required by Lender to
establish that such Capital Improvement Costs are reasonable,
including, but not limited to, an Officer's Certificate stating
that (i) the work relating thereto has been completed and that
such amounts are then due (or have been paid) and (ii) the
released funds shall be used solely for the purpose of payment of
such Capital Improvement Costs. Upon Lender's approval (which
shall not be unreasonably withheld), which approval, if granted
by Lender, shall be delivered within ten (10) Business Days of
Lender's receipt of such request, Lender shall release the funds
to Borrower or its designee within ten (10) days of Lender's
approval. Lender's failure to approve or disapprove such request
within such ten (10) day period shall be deemed to be the
approval of Lender.
(iv) Payment of Deferred Maintenance Costs. Not more
frequently than once each Interest Accrual Period and provided
that no Event of Default has occurred and is continuing, Borrower
may notify Lender in writing and request that Lender release to
Borrower or its
37
designee funds out of the Deferred Maintenance Sub-Account to the
extent funds are available therein for payment of Deferred
Maintenance Costs. Together with each such request, Borrower
shall furnish Lender with a certificate stating that an item of
deferred maintenance listed on Exhibit D has been completed and
stating the cost to complete such item. If Lender's approval is
granted, Lender shall release the funds to Borrower or its
designee within ten (10) days of Lender's approval. Upon
satisfactory completion of the repairs identified on Exhibit D
attached hereto, as determined by Lender in its reasonable
discretion, and provided no Event of Default has occurred and is
continuing, Lender shall release to Borrower all amounts
remaining in the Deferred Maintenance Sub-Account.
(v) Payment of Leasing Expenses. Not more frequently than
once each Interest Accrual Period and provided that no Event of
Default has occurred and is continuing, Borrower may notify
Lender in writing and request that Lender release to Borrower or
its designee funds out of the Leasing Reserve Sub-Account to the
extent funds are available therein for payment of Leasing
Expenses. Together with each such request, Borrower shall
furnish Lender with copies of bills and other documentation as
may be reasonably required by Lender to establish that such
Leasing Expenses are reasonable, and that such amounts are then
due (or have been paid). Upon Lender's approval (which shall not
be unreasonably withheld), which approval, if granted by Lender,
shall be delivered within ten (10) Business Days of Lender's
receipt of such request, Lender shall release the funds to
Borrower or its designee within ten (10) days of Lender's
approval.
(vi) Payment of Securitization Expenses. To the extent
funds are available therein to pay the amounts for which Borrower
is responsible pursuant to Section 2.14, Lender may release funds
out of the Securitization Expense Sub-Account to (a) pay such
amounts or (b) after Lender has paid all of the amounts for which
Borrower is responsible pursuant to Section 2.14, provided no
Event of Default has occurred and is continuing, to refund to
Borrower all amounts remaining in the Securitization Expense
Sub-Account.
(vii) Payment of Operating Expenses. On and after the
Optional Prepayment Date, not more frequently than once each
Interest Accrual Period and provided that no Default or Event of
Default has occurred and is continuing, Lender shall direct the
Cash Collateral Account Bank to, within five (5) Business Days of
Lender's receipt of an Operating Expense Certificate from
Borrower, such Operating Expense Certificate to be delivered by
Borrower not more frequently than once each Interest Accrual
Period, transfer funds to Borrower or its designee out of the
38
Operating Expense Sub-Account to the extent that there are funds
available therein in an amount not to exceed the amount stated in
the Operating Expense Certificate up to the Operating Expense
Monthly Installment. Together with each such Operating Expense
Certificate, Borrower shall furnish Lender with an Officer's
Certificate stating that all operating expenses from previous
periods have been paid in full and that such amounts are then due
or have been paid.
(viii) Extra Funds for Operating Expenses. On and after the
Optional Prepayment Date, not more frequently than once each
Interest Accrual Period and provided that no Default or Event of
Default has occurred and is continuing if in a given Interest
Accrual Period, the Borrower requires amounts in excess of the
Operating Expense Monthly Installment ("Extra Funds"), Borrower,
at the time it delivers the Operating Expense Certificate, may
deliver a written request to Lender for a disbursement of Extra
Funds stating the amount of such Extra Funds and the purpose for
which such amount is intended with attachments of copies of bills
and other documentation as may be required by Lender to establish
that such Operating Expenses are reasonable and that such amounts
are then due or expected to become due in that month. Within ten
(10) days after Lender's approval, which approval, if granted by
Lender (such approval not to be unreasonably withheld or
delayed), shall be delivered within ten (10) Business Days of
Lender's receipt of such request, Lender shall release the funds
to Borrower or its designee.
(ix) Reconciliation. On and after the Optional Prepayment
Date, Borrower shall furnish Lender monthly, on each Payment
Date, a budget variance report reconciling the Operating Expenses
shown on the Annual Operating Budget with requested disbursements
for payment of Operating Expenses pursuant to Section 2.12(f).
(x) Remaining Amounts. All remaining amounts shall be
remitted to Borrower for Borrower's account on each Payment Date.
(g) Monthly Funding of Sub-Accounts. During each Interest Accrual
Period and except as provided below, during the term of the Loan commencing with
the Interest Accrual Period in which the Closing Date occurs (each, the "Current
Interest Accrual Period"), Lender shall allocate all funds then on deposit
(regardless of whether such funds were transferred by any Collection Account
Bank to the Cash Collateral Account Bank or by Borrower to Lender pursuant to
Section 2.12(b)) in the Cash Collateral Account among the Sub-Accounts as
follows and in the following priority:
(i) first, to the Basic Carrying Costs Sub-Account, until
an amount equal to the Basic Carrying Costs Monthly Installment
for the Current Interest Accrual Period has been allocated to the
Basic Carrying
39
Costs Sub-Account, provided, that as of the Closing Date Borrower
shall deposit into the Cash Collateral Account for funding of the
Basic Carrying Costs Sub-Account an amount agreed to by Lender
and Borrower;
(ii) second, to the Debt Service Payment Sub-Account, until
an amount equal to the Required Base Debt Service Payment for the
Payment Date immediately after the Current Interest Accrual
Period has been allocated to the Debt Service Payment Sub-Account;
(iii) third, to the Capital Reserve Sub-Account, until an
amount equal to the Capital Reserve Monthly Installment for the
Current Interest Accrual Period has been allocated to the Capital
Reserve Sub-Account;
(iv) fourth, to the Leasing Reserve Sub-Account, until an
amount equal to the Leasing Reserve Monthly Installment has been
allocated to the Leasing Reserve Sub-Account;
(v) fifth, to the Securitization Expense Sub-Account,
provided, however, that only the Initial Securitization Expense
Amount shall be allocated to the Securitization Sub-Account;
(vi) sixth, during each of the following periods: on and
after the Optional Prepayment Date, or at Lender's sole election,
upon the occurrence and during the continuation of an Event of
Default, to the Operating Expense Sub-Account, until an amount
equal to the Operating Expense Monthly Installment for the
Current Interest Accrual Period has been allocated to the
Operating Expense Sub-Account;
(vii) seventh, during each of the following two periods: (i)
on and after the Optional Prepayment Date and (ii) at Lender's
sole election, upon the occurrence of a Default or an Event of
Default hereunder which is continuing, any amounts deposited into
or remaining in the Cash Collateral Account after (A) the minimum
amounts set forth in clauses (i), (ii), (iii), (iv), (v) and (vi)
above have been satisfied with respect to the Current Interest
Accrual Period and any periods prior thereto and (B) the funding
of additional reserves at levels determined by Borrower to be
prudent for working capital, Capital Improvement Costs and other
Borrower costs, which levels shall be satisfactory to Lender, in
Lender's sole discretion (the "Excess Cash Flow"), shall be
allocated to the Debt Service Sub-Account and be applied by
Lender on each Payment Date in accordance with Section 2.8 and
shall not be disbursed to Borrower; and further provided,
however, that if an Event of Default has occurred and is
continuing any amounts deposited into or remaining in the Cash
Collateral Account shall be for the account of Lender and may be
withdrawn by Lender to be applied in any manner as Lender may
elect in Lender's sole discretion; and
40
(vii) seventh, provided that (i) no Default or Event of
Default has occurred and is continuing and Lender has received
all financial information described in Section 5.1(Q) for the
most recent periods for which the same are due, Lender agrees
that in each Current Interest Accrual Period any amounts
deposited into or remaining in the Cash Collateral Account after
(A) the minimum amounts set forth in clauses (i), (ii), (iii),
(iv), (v), (vi) and (vii) (if applicable) above have been
satisfied with respect to the Current Interest Accrual Period and
any periods prior thereto and (B) the funding of additional
reserves at levels determined by Borrower to be prudent for
working capital, Capital Improvement Costs and other Borrower
costs, which levels shall be satisfactory to Lender, in Lender's
sole discretion, shall be disbursed by Lender on the first
Payment Date after the end of the then Current Interest Accrual
Period, at Borrower's expense, to such account that Borrower may
request in writing. Lender and its agents shall not be
responsible for monitoring Borrower's use of any funds disbursed
from the Cash Collateral Account or any of the Sub-Accounts.
If an Event of Default has occurred and is continuing or if on any
Payment Date the balance in any Sub-Account is insufficient to make the
required payment due from such Sub-Account, Lender may, in its sole
discretion, in addition to any other rights and remedies available hereunder,
withdraw funds from any other Sub-Account to pay such deficiency. In the
event that Lender elects to apply funds of any such Sub-Account to pay any
Required Base Debt Service Payment, Borrower shall, upon demand, repay to
Lender the amount of such withdrawn funds to replenish such Sub-Account, and
if Borrower shall fail to repay such amounts within three (3) Business Days
after notice of such withdrawal, an Event of Default shall exist hereunder.
Notwithstanding the foregoing, on the Closing Date Borrower shall deposit (i)
the Initial Basic Carrying Costs Amount into the Basic Carrying Costs
Sub-Account, (ii) the Deferred Maintenance Amount into the Deferred
Maintenance Sub-Account and (iii) the Initial Securitization Expense Amount
in the Securitization Expense Sub-Account.
(h) Condemnation Proceeds and Insurance Proceeds. In the event of
a Taking with respect to any Facility, Borrower shall cause all the proceeds
in respect of such Taking ("Condemnation Proceeds") to be paid to Lender who
shall, except as otherwise provided in the second succeeding sentence or in
Section 2.12(c) of the Related Deed of Trust, apply such Condemnation
Proceeds to reduce the Indebtedness in accordance with Section 2.7 and
Section 2.8. In the event of a casualty with respect to any Facility, except
as otherwise provided in the next sentence or in Section 2.5 of the Related
Deed of Trust, Borrower shall cause all Proceeds of any insurance policy
("Insurance Proceeds") to be paid to Lender who shall apply such Insurance
Proceeds to reduce the Indebtedness in accordance with Section 2.7 and
Section 2.8. All Insurance Proceeds received by Borrower or Lender in
respect of business interruption coverage and all Condemnation Proceeds
received in respect of a temporary Taking shall be maintained in the Cash
Collateral Account maintained with respect to the affected Facility, to be
applied by Lender in the same manner as Rents (other than security deposits)
received from Borrower with respect to the operation of such Facility;
provided, further, that in
41
the event that the Insurance Proceeds of any such business interruption
insurance policy or Condemnation Proceeds of such temporary Taking are paid in a
lump sum in advance, Lender shall hold such Insurance Proceeds or Condemnation
Proceeds in a segregated interest-bearing escrow account at the Cash Collateral
Account Bank, and Lender shall estimate the number of months required for
Borrower to restore the damage caused by the casualty to the Facility or that
the Facility will be affected by such temporary Taking, as the case may be,
shall divide the aggregate business interruption Insurance Proceeds or
Condemnation Proceeds in connection with such casualty or temporary Taking by
such number of months, and shall disburse from such escrow account into the Cash
Collateral Account each month during the performance of such restoration or
pendency of such temporary Taking such monthly installment of said Insurance
Proceeds or Condemnation Proceeds. Any Insurance Proceeds or Condemnation
Proceeds made available to Borrower for restoration or repair in accordance with
the Related Deed of Trust, to the extent not used by Borrower in connection
with, or to the extent they exceed the cost of, such restoration, shall be paid
to Borrower.
(i) Payment of Basic Carrying Costs. Except to the extent that
Lender is obligated to pay Basic Carrying Costs from the Basic Carrying Costs
Sub-Account pursuant to the terms of Section 2.12(f), Borrower shall pay all
Basic Carrying Costs with respect to itself and the Facilities in accordance
with the provisions of the Deeds of Trust, subject, however, to Borrower's
rights to contest payment of same in accordance with the Deeds of Trust.
Borrower's obligation to pay (or cause Lender to pay) Basic Carrying Costs
pursuant to this Agreement shall include, to the extent permitted by
applicable law, Impositions resulting from future changes in law which impose
upon Lender or any Deed of Trust Trustee an obligation to pay any property
taxes or other Impositions or which otherwise adversely affect Lender's or
the Deed of Trust Trustee's interests. (In the event such a change in law
prohibits Borrower from assuming liability for payment of any such
Imposition, the outstanding Indebtedness shall, at the sole option of Lender,
become due and payable on the date that is 120 days after such change in law
(and failure to pay such amounts on the date due shall be an Event of
Default)). Should an Event of Default have occurred and be continuing, the
proceeds on deposit in the Basic Carrying Costs Sub-Account may be applied by
Lender in any manner as Lender in its sole discretion may determine.
Section 2.13. Security Agreement. (a) Pledge of Accounts. To
secure the full and punctual payment and performance of all of the
Indebtedness, Borrower hereby sells, assigns, conveys, pledges and transfers
to Lender and grants to Lender a first and continuing security interest in
and to, the following property, whether now owned or existing or hereafter
acquired or arising and regardless of where located (collectively, the
"Account Collateral"):
(i) all of Borrower's right, title and interest in the Cash
Collateral Account (including all Sub-Accounts) and all Money and
Permitted Investments, if any, from time to time deposited or
held in the Cash Collateral Account;
(ii) all of Borrower's right, title and interest in each
Collection Account and Security Deposit Account and all Money, if
any, from time to time
42
deposited or held in any Collection Account or Security Deposit
Account; provided, however, that nothing herein is intended to
subject any Security Deposit Account to any claim of Lender in
violation of applicable Legal Requirements);
(iii) all interest, dividends, Money, Instruments and other
property from time to time received, receivable or otherwise
payable in respect of, or in exchange for, any of the foregoing;
and
(iv) to the extent not covered by clauses (i), (ii), or
(iii) above, all Proceeds and products of any or all of the
foregoing.
(b) Covenants. Borrower covenants that (i) all Rents, Money and
other items of Gross Revenue shall be deposited directly into the relevant
Collection Account or the Security Deposit Account, as applicable, in
accordance with Section 2.12(a) and (ii) so long as any portion of the
Indebtedness is outstanding, Borrower shall not open (nor permit any Manager
or any Person to open) any other account for the collection of Rents, Money
or other items of Gross Revenue, other than such replacement Collection
Accounts as may be approved by Lender in Lender's sole discretion.
(c) Instructions and Agreements. On or before the Closing Date,
Borrower will submit to each Collection Account Bank for each Facility a
Collection Account Agreement to be executed by such Collection Account Bank.
On or before the Closing Date, Borrower and the Cash Collateral Account Bank
will execute and deliver a Cash Collateral Account Agreement in form and
substance satisfactory to Lender in Lender's sole discretion (the "Cash
Collateral Account Agreement"). Borrower agrees that prior to the payment in
full of the Indebtedness, the Cash Collateral Account Agreement shall be
irrevocable by Borrower without the prior written consent of Lender.
(d) Financing Statements: Further Assurances. Borrower will
execute and deliver to Lender for filing a financing statement or statements
in connection with the Account Collateral in the form required to properly
perfect Lender's security interest in the Account Collateral to the extent
that it may be perfected by such a filing. Borrower agrees that at any time
and from time to time, at the expense of Borrower, Borrower shall promptly
execute and deliver all further instruments, and take all further action,
that Lender may request, in order to perfect and protect the pledge and
security interest granted or purported to be granted hereby, or to enable
Lender to exercise and enforce Lender's rights and remedies hereunder with
respect to, the Account Collateral.
(e) Transfers and Other Liens. Borrower agrees that it will not
sell or otherwise dispose of any of the Account Collateral other than
pursuant to the terms hereof and of the other Loan Documents, or create or
permit to exist any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Lender under this Agreement.
(f) Lender's Reasonable Care. Beyond the exercise of reasonable
care in the custody thereof, Lender shall not have any duty as to any Account
Collateral or any income
43
thereon in its possession or control or in the possession or control of any
agents for, or of Lender, or the preservation of rights against any Person or
otherwise with respect thereto. Lender shall be deemed to have exercised
reasonable care in the custody of the Account Collateral in its possession if
the Account Collateral is accorded treatment substantially equal to that
which Lender accords its own property, it being understood that Lender shall
not be liable or responsible for (i) any loss or damage to any of the Account
Collateral, or for any diminution in value thereof from a loss of, or delay
in Lender's acknowledging receipt of, any wire transfer from the Collection
Account Bank or (ii) any loss, damage or diminution in value by reason of the
act or omission of Lender, or Lender's agents, employees or bailees.
(g) Lender Appointed Attorney-In-Fact. Borrower hereby
irrevocably constitutes and appoints Lender as Borrower's true and lawful
attorney-in-fact, with full power of substitution, at any time after the
occurrence and during the continuation of an Event of Default to execute,
acknowledge and deliver any instruments and to exercise and enforce every
right, power, remedy, option and privilege of Borrower with respect to the
Account Collateral, and do in the name, place and stead of Borrower, all such
acts, things and deeds for and on behalf of and in the name of Borrower with
respect to the Account Collateral, which Borrower could or might do or which
Lender may deem necessary or desirable to more fully vest in Lender the
rights and remedies provided for herein with respect to the Account
Collateral and to accomplish the purposes of this Agreement. The foregoing
powers of attorney are irrevocable and coupled with an interest.
(h) Continuing Security Interest: Termination. This Section 2.13
shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until payment in full of
the Indebtedness. Upon payment in full of the Indebtedness, Borrower shall
be entitled to the return, at its expense, of such of the Account Collateral
as shall not have been sold or otherwise applied pursuant to the terms
hereof, and Lender shall execute such instruments and documents as may be
reasonably requested by Borrower to evidence such termination and the release
of the pledge and Lien hereof, provided, however, that Borrower shall pay on
demand all of Lender's reasonable expenses in connection therewith.
(i) Replacement of Collection Account Bank. So long as no Default
or Event of Default shall have occurred and be continuing, Borrower shall
have the right at any time to designate a successor Collection Account Bank
to hold one or more of the Collection Account or the Security Deposit Account
upon thirty (30) days prior written notice to Lender, and Lender's reasonable
approval of the successor. No such designation shall become effective until
each of Borrower and the successor collection account bank has delivered to
Lender an executed collection account agreement substantially equivalent to
the existing Collection Account Agreement and financing statements as may be
necessary or appropriate have been prepared, executed and delivered to a
filing agency.
Section 2.14. Securitization. Borrower hereby acknowledges that
Lender, its successors or assigns, may sell or securitize the Loan or
portions thereof in one or more transactions through the issuance of
securities, which may be rated by the Rating Agencies (each,
44
a "Securitization"; collectively, the "Securitizations"). Borrower agrees
that at its sole cost and expense, it shall reasonably cooperate with Lender
and use its best efforts to facilitate the consummation of each
Securitization including, but not limited to, by (a) amending or causing the
amendment of this Agreement and the other Loan Documents, and executing such
additional documents including amendments to Borrower's organizational
documents and preparing financial statements as reasonably requested by the
Rating Agencies to conform the terms of the Loan to the terms of similar
loans underlying completed or pending securitized transactions having or
seeking ratings the same as those then being sought in connection with the
relevant Securitization, provided, however, that any such amendment or
additional documents shall not change the economic terms of the Loan; (b)
promptly and reasonably providing such information as may be reasonably
requested in connection with the preparation of a private placement
memorandum or a registration statement required to privately place or
publicly distribute the securities in a manner which does not conflict with
federal or state securities laws; (c) providing in connection with each of
(i) a preliminary and a private placement memorandum or (ii) a preliminary
and final prospectus, as applicable, an indemnification certificate (x)
certifying that Borrower has carefully examined such memorandum or
prospectus, as applicable, including, without limitation, the sections
entitled "Special Considerations", "Description of the Deed of Trust Loan and
"The Underlying Trust Properties", "The Managers", "Borrower" and "Certain
Legal Aspects of the Deed of Trust Loan", and such sections (and any other
sections reasonably requested) insofar as they relate to Borrower, its
Affiliates, the Loan or the Facilities do 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, provided, however, that Borrower shall not be required
to indemnify Lender for any losses relating to untrue statements or omissions
which Borrower identified to Lender in writing at the time of Borrower's
examination of such memorandum or prospectus as applicable, and (y)
indemnifying Lender (and its officers, directors, partners, employees,
affiliates and agents and each other person, if any, controlling Lender or
any of its affiliates within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange
Act of 1934, as amended), the Issuer and the Advisor for any losses, claims,
damages, expenses or liabilities (including, without limitation, all
liabilities under all applicable federal and state securities laws)
(collectively, the "Liabilities") to which any of them may become subject (i)
insofar as the Liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact relating to
Borrower, its Affiliates, the Loan, the Facilities, the Managers or any
aspect of the subject financing or the parties directly involved therein
contained in such sections or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in
such sections or necessary in order to make the statements in such sections,
in light of the circumstances under which they were made, not misleading or
(ii) as a result of any untrue statement of material fact in any of the
financial statements of Borrower incorporated into any placement memorandum,
prospectus, registration statement or other document connected with the
issuance of securities or the failure to include in such financial statements
or in any placement memorandum, prospectus, registration statement or other
document connected with the issuance of securities any material fact relating
to Borrower, its Affiliates, the Facilities, the Loan, the Managers and any
aspect of the subject financing necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that Borrower shall have had an opportunity to review
and
45
comment upon the relevant portions of such documents; and (z) agreeing to
reimburse Lender, the Issuer and the Advisor for any legal or other expenses
reasonably incurred by Lender, the Issuer and the Advisor in connection with
investigating or defending the Liabilities; (d) causing to be rendered such
customary opinion letters as shall be reasonably requested by the Rating
Agencies for other securitizations having or seeking ratings comparable to
that then being sought for the relevant Securitization; (e) making such
representations, warranties and covenants, as may be reasonably requested by
the Rating Agencies and comparable to those required in other securitized
transactions having or seeking the same rating as is then being sought for
the Securitization; (f) providing such information regarding the Collateral
as may be reasonably requested by the Rating Agencies or otherwise required
in connection with the formation of a REMIC and (g) providing any other
information and materials required in the Securitization process. Borrower
acknowledges and agrees that Lender may, at any time on or after the Closing
Date, assign its duties, rights or obligations hereunder or under any Loan
Document in whole, or in part, to a servicer and/or a trustee in Lender's
discretion. Nothing herein shall in any way limit Lender's right to sell all
or a portion of the Loan in a transaction which is not a Securitization.
Section 2.15. Supplemental Deed of Trust Affidavits. The Liens to
be created by the Deeds of Trust are intended to encumber the respective
Facilities described therein to the full extent of Borrower's obligations
under the Loan Documents. As of the Closing Date, Borrower shall have paid
all state, county and municipal recording and all other taxes imposed upon
the execution and recordation of the Deeds of Trust.
Section 2.16. Transfer of Trust Property. Borrower acknowledges
that Lender has examined and relied on the creditworthiness and experience of
Borrower, its partners and their principals in owning and operating
properties such as the Facilities in agreeing to make the Loan, and that
Lender will continue to rely on Borrower's ownership of the Facilities as a
means of maintaining the value of the Facilities as security for repayment of
the Indebtedness. Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Facilities so as to ensure that, should Borrower
default in the repayment of the Indebtedness, Lender can recover the
Indebtedness by a sale of the Facilities. Borrower shall not, without the
prior written consent of Lender, which consent may be granted or withheld in
the sole and absolute discretion of Lender, sell, convey, alienate, mortgage,
encumber, pledge or otherwise transfer any Facility or any part thereof, or
permit any Facility or any part thereof to be sold, conveyed, mortgaged,
encumbered, pledged or otherwise transferred, except as otherwise permitted
by this Agreement.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to the Making of the Loan. (a)
As a condition precedent to the making of the Loan, Borrower shall have
satisfied the following conditions (unless waived by Lender in accordance
with Section 8.4) with respect to each Facility on or before the Closing Date:
46
(A) Loan Documents.
(i) Loan Agreement. Borrower shall have executed and delivered
this Agreement to Lender.
(ii) Note. Borrower shall have executed and delivered to Lender
the Note.
(iii) Deeds of Trust. Borrower shall have executed and delivered
to Lender the Deeds of Trust and each Deed of Trust shall have been
filed of record in the appropriate filing offices in the jurisdiction in
which the related Facility is located or irrevocably delivered to a
title agent for such recordation.
(iv) Assignments of Leases. Borrower shall have executed and
delivered to Lender the Assignments of Leases and each Assignment of
Leases shall have been filed of record in the appropriate filing offices
in the jurisdiction in which the related Facility is located or
irrevocably delivered to a title agent for such recordation.
(v) Assignments of Agreements. Borrower shall have executed and
delivered to Lender the Assignments of Agreements and each Assignment of
Agreements shall, to the extent prudent pursuant to local practice, have
been filed of record in the appropriate filing offices in the
jurisdiction in which the related Facility is located or irrevocably
delivered to a title agent for such recordation.
(vi) Financing Statements. Borrower and its partners or members
(and their shareholders), as applicable, shall have executed and
delivered to Lender all financing statements required by Lender and such
financing statements shall have been filed of record in the appropriate
filing offices in each of the appropriate jurisdictions or irrevocably
delivered to a title agent for such recordation.
(vii) Manager's Subordinations. Each Manager and Borrower shall
have executed and delivered to Lender the Manager's Subordinations.
(viii) Cash Collateral Account Agreement. Borrower and the Cash
Collateral Account Bank shall have executed and delivered the Cash
Collateral Account Agreement and shall have delivered an executed copy
of such agreement to Lender.
(ix) Collection Account Agreements. Borrower and each Collection
Account Bank shall have executed and delivered each Collection Account
Agreement and shall have delivered an executed copy of such Agreement to
Lender.
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(B) Opinions of Counsel. Lender shall have received from counsel
satisfactory to Lender, legal opinions in form and substance satisfactory to
Lender in Lender's sole discretion (including without limitation, a
bankruptcy opinion with respect to Borrower). All such legal opinions will
be addressed to Lender and the Rating Agencies, dated as of the Closing Date,
and in form and substance satisfactory to Lender, the Rating Agencies and
their counsel. Borrower hereby instructs any of the foregoing counsel, to the
extent that such counsel represents Borrower, to deliver to Lender such
opinions addressed to Lender and the Rating Agencies.
(C) Secretary's Certificate and SPE Equity Owner's Certificate. Lender
shall have received a Secretary's Certificate with respect to Borrower's
managing equity owner and an SPE Equity Owner's Certificate with respect to
Borrower.
(D) Insurance. Lender shall have received certificates of insurance
demonstrating insurance coverage in respect of each Facility of types, in
amounts, with insurers and otherwise in compliance with the terms, provisions
and conditions set forth in the Deeds of Trust. Such certificates shall
indicate that Lender is an additional insured as its interests may appear and
shall contain a loss payee endorsement in favor of Lender with respect to the
property policies required to be maintained under the Deeds of Trust. All
insurance policies required to be maintained hereunder shall be maintained
from the Closing Date throughout the term of this Agreement in the types and
amounts required under the Deeds of Trust.
(E) Lien Search Reports. Lender shall have received satisfactory
reports of UCC (collectively, the "UCC Searches"), federal tax Lien,
bankruptcy, state tax lien, judgment and pending litigation searches
conducted by a search firm reasonably acceptable to Lender. Such searches
shall have been received in relation to Borrower and each equity owner in
Borrower. Such searches shall have been conducted in each of the locations
designated by Lender in Lender's reasonable discretion and shall have been
dated not more than fifteen (15) days prior to the Closing Date.
(F) Title Insurance Policy. Lender shall have received (i) a Title
Insurance Policy or a marked up commitment (in form and substance reasonably
satisfactory to Lender in Lender's reasonable discretion) from Title Insurer
to issue the Title Insurance Policy and (ii) a fully executed copy of the
Title Instruction Letter from the Title Insurer.
(G) Environmental Matters. Lender shall have received an Environmental
Report with respect to each Facility, addressed to Lender, which
Environmental Report shall be (i) prepared by a firm approved by Lender in
Lender's sole discretion, (ii) prepared based on a scope of work determined
by Lender in Lender's sole discretion and (iii) in form and content
acceptable to Lender in Lender's sole discretion, such Environmental Report
to be conducted by an Independent environmental Engineer.
(H) Consents, Licenses, Approvals. Lender shall have received copies
of all consents, licenses and approvals, if any, required in connection with
the execution, delivery and performance by Borrower under, and the validity
and enforceability of the Loan Documents, and such consents, licenses and
approvals shall be in full force and effect.
48
(I) Additional Matters. Lender shall have received such other Permits,
certificates (including certificates of occupancy reflecting the uses of each
Facility as of the Closing Date), opinions, documents and instruments
(including without limitation, written proof from the appropriate
Governmental Authority regarding the zoning of each Facility in form and
substance satisfactory to Lender in Lender's sole discretion) relating to the
Loan as may have been requested by Lender and all other documents and all
legal matters in connection with the Loan shall be satisfactory in form and
substance to Lender. Borrower shall provide Lender with information
reasonably satisfactory to Lender regarding the Basic Carrying Costs on or
before the Closing Date.
(J) Representations and Warranties. The representations and warranties
herein and in the other Loan Documents shall be true and correct in all
material respects.
(K) Accounting and Regulatory Review. Lender shall have received an
accounting and regulatory review satisfactory to Lender in Lender's sole
discretion showing no anticipated decrease in cash flow. Such review shall
be (i) prepared by a firm approved by Lender in Lender's sole discretion,
(ii) prepared based on a scope of work determined by Lender in Lender's sole
discretion and (iii) in form and content acceptable to Lender in Lender's
sole discretion.
(L) No Injunction. No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been
issued, and no litigation shall be pending or threatened, which in the good
faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in an adverse effect upon the making or repayment of the Loan or the
consummation of the Transactions.
(M) Survey. Lender shall have received a Survey with respect to each
Facility which Survey shall be (i) prepared by a firm approved by Lender in
Lender's sole discretion, (ii) prepared based on a scope of work determined
by Lender in Lender's sole discretion and (iii) in form and content
acceptable to Lender in Lender's sole discretion.
(N) Engineering Report. Lender shall have received an Engineering
Report (which shall include, among other things, a seismic study) with
respect to each Facility prepared by an Engineer (addressed to Lender) and
which reports shall be (i) prepared by a firm approved by Lender in Lender's
sole discretion, (ii) prepared based on a scope of work determined by Lender
in Lender's sole discretion and (iii) in form and content acceptable to
Lender in Lender's sole discretion.
(O) Appraisal. Lender shall have received an Appraisal satisfactory to
Lender with respect to each Facility which shall be (i) prepared by a firm
approved by Lender in Lender's sole discretion, (ii) prepared based on a
scope of work determined by Lender in Lender's sole discretion and (iii) in
form and content acceptable to Lender in Lender's sole discretion.
(P) Security Deposits. All security deposits with respect to each
Facility on the Closing Date shall have been transferred to the relevant
Security Deposit Account, and
49
Borrower shall be in compliance with all applicable Legal Requirements
relating to such security deposits.
(Q) Service Contracts and Permits. Borrower shall have delivered to
Lender a copy of all material contracts and Permits relating to the
Facilities.
(R) Site Inspection. Unless waived by Lender in accordance with
Section 8.4, Lender shall have performed, or caused to be performed on its
behalf, an on-site due diligence review of the Facilities to be acquired with
the Loan satisfactory to Lender in Lender's sole discretion.
(S) Use. The Facilities shall be operating only as
[anchored shopping centers].
(T) Financial Information. Lender shall have received all financial
information (which financial information shall be satisfactory to Lender in
Lender's sole discretion) relating to the Facilities including, without
limitation, audited financial statements of Borrower and other financial
reports requested by Lender in Lender's sole discretion. Such financial
information shall be (i) prepared by a firm approved by Lender in Lender's
sole discretion, (ii) prepared based on a scope of work determined by Lender
in Lender's sole discretion and (iii) in form and content acceptable to
Lender in Lender's sole discretion.
(U) Management Agreement. Lender shall have received a true and
correct copy of the Management Agreement with respect to each Facility.
(V) Leases: Tenant Estoppels; Subordination, Nondisturbance and
Attornment Agreements. With respect to each Facility, Borrower shall have
delivered a true, complete and correct rent roll and a copy of each of the
Leases identified in such rent roll, and each Lease shall be satisfactory to
Lender in Lender's sole discretion. Borrower shall, among other things and
without limitation, for each Facility provide (i) evidence that each Lease is
in full force and effect and (ii) originally executed tenant estoppel
certificates and subordination, nondisturbance and attornment agreements from
tenants with leases which in the aggregate account for 100% of the total
square footage of the relevant Facility in form and substance satisfactory to
Lender in Lender's sole discretion.
(W) Subdivision. Evidence satisfactory to Lender (including title
endorsements) that the Land with respect to each Facility constitutes a
separate lot for real estate tax and assessment purposes.
(X) Transaction Costs and Fees. Borrower shall have paid or caused to
be paid all Transaction Costs.
(Y) Utilities. Evidence that all utility services required for each
Facility are available.
50
(b) Lender shall not make the Loan unless and until each of the
applicable conditions precedent set forth in Section 3.1 is satisfied and
until Borrower provides any other information reasonably required by Lender.
(c) In connection with the Loan, Borrower shall execute and/or deliver
to Lender all additions, amendments, modifications and supplements to the
items set forth in this Article III, including without limitation,
amendments, modifications and supplements to the Note, Deeds of Trust,
Assignments of Leases, and Assignments of Agreements, if reasonably requested
by Lender to effectuate the provisions hereof, and to provide Lender with the
full benefit of the security intended to be provided under the Loan
Documents. Without in any way limiting the foregoing, such additions,
modifications and supplements shall include those deemed reasonably desirable
by Lender's counsel in the jurisdiction in which a Facility is located.
(d) The making of the Loan shall constitute, without the necessity of
specifically containing a written statement to such effect, a confirmation,
representation and warranty by Borrower to Lender that all of the applicable
conditions to be satisfied in connection with the making of the Loan have
been satisfied (unless waived by Lender in accordance with Section 8.4,) and
that all of the representations and warranties of Borrower set forth in the
Loan Documents are true and correct in all material respects as of the date
of the making of the Loan.
Section 3.2. Form of Loan Documents and Related Matters. The Loan
Documents and all of the certificates, agreements, legal opinions and other
documents and papers referred to in this Article III, unless otherwise
specified, shall be delivered to Lender, and shall be reasonably satisfactory
in form and substance to Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of Borrower. (a) Closing
Date Representations and Warranties of Borrower. Borrower represents and
warrants that, as of the Closing Date:
(A) Organization. Borrower (i) is a duly organized and validly
existing Entity in good standing under the laws of the State of its
formation, (ii) has the requisite Entity power and authority to carry on its
business as now being conducted, and (iii) has the requisite Entity power to
execute and deliver, and perform its obligations under, the Loan Documents.
(B) Authorization. The execution and delivery by Borrower of the Loan
Documents, Borrower's performance of its obligations thereunder and the
creation of the security interests and Liens provided for in the Loan
Documents (i) have been duly authorized by all requisite Entity action on the
part of Borrower, (ii) will not violate any provision of any applicable Legal
Requirements, any order of any court or other Governmental Authority, any
organizational document of Borrower or any indenture or agreement or other
instrument to which Borrower is a party or by which Borrower is bound, (iii)
will not be in conflict with, result in
51
a breach of, or constitute (with due notice or lapse of time or both) a
default under, or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the property or assets of Borrower pursuant to,
any such indenture or agreement or instrument and (iv) have been duly
executed and delivered by Borrower. Other than those obtained or filed on or
prior to the Closing Date Borrower is not required to obtain any consent,
approval or authorization from, or to file any declaration or statement with,
any Governmental Authority or other agency in connection with or as a
condition to the execution, delivery or performance of the Loan Documents.
The Loan Documents to which any Manager is a party have been duly authorized,
executed and delivered by such Manager.
(C) Single-Purpose Entity.
(i) Borrower has been, and will continue to be, a duly
formed and existing Entity, and a Single-Purpose Entity. (ii)
BPP/Golden State Acquisitions, Inc., a Delaware corporation, at
all times since its formation has been, and will continue to be,
a duly formed and existing corporation in good standing, and
Borrower will take no action to cause such entity not to be a
duly formed and existing corporation in good standing.
(iii) Borrower at all times since its formation has
complied, and will continue to comply, with the provisions of all
of its organizational documents, and the laws of the state in
which Borrower was formed relating to the Entity.
(iv) All customary formalities regarding the Entity
existence of Borrower have been observed at all times since its
formation and will continue to be observed.
(v) Borrower has been at all times since its formation and
will continue to be adequately capitalized in light of the nature
of its business.
(b) Additional Closing Date Borrower Representations and
Warranties. Borrower represents and warrants that, as of the Closing Date:
(A) Litigation. Other than unlawful detainer actions instituted
in the ordinary course of the operation of a Facility and as disclosed to
Lender in writing prior to the date hereof, there are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or
other agency now pending and served or, to the knowledge of Borrower,
threatened against Borrower, the Operating Partnership, the SPE Equity Owner,
Manager, or any Facility.
(B) Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which is likely to have a Material
Adverse Effect. Borrower is not in material default in any respect in the
performance, observance or fulfillment of any of the
52
obligations, covenants or conditions contained in any material agreement or
instrument to which it is a party or by which Borrower or any Facility is
bound.
(C) No Bankruptcy Filing. Borrower is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of Borrower's
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any such petition against it.
(D) Full and Accurate Disclosure. No statement of fact made by
or on behalf of Borrower in the Loan Documents or in any other document or
certificate delivered to Lender by Borrower 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 fact
presently known to Borrower which has not been disclosed to Lender which
materially adversely affects, nor as far as Borrower can foresee, might
materially adversely affect the business, operations or condition (financial
or otherwise) of Borrower.
(E) Location of Chief Executive Offices. The location of
Borrower's principal place of business and the location of Borrower's chief
executive office is: c/x Xxxxxxx Pacific Properties, Inc., 000 Xxxx Xxx
Xxxxxx, Xxx Xxxxx, XX 00000.
(F) Compliance. Borrower, each Facility and Borrower's use
thereof and operations thereat 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, the
default or violation of which is reasonably likely to have a Material Adverse
Effect.
(G) Other Debt and Obligations. Borrower has no 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 any Facility is bound, and other than unsecured trade payables
incurred in the ordinary course of business relating to the ownership and
operation of the Facilities which do not exceed, at any time, a maximum
amount of $250,000 (with respect to each Facility) and are paid within sixty
(60) days of the date incurred, and other than obligations under the Deeds of
Trust and the other Loan Documents, and other than the Permitted
Encumbrances. Borrower has not borrowed or received other debt financing
that has not been heretofore repaid in full and Borrower has no known
material contingent liabilities.
(H) ERISA. Each Plan and, to the knowledge of Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, its terms and
the applicable provisions of ERISA, the Code and any other federal or state
law, and no event or condition has occurred as to which Borrower would be
under an obligation to furnish a report to Lender under Section 5.1(T).
(I) Solvency. Borrower (i) has not entered into this Loan
Agreement or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor, and (ii) has received reasonably equivalent value in
exchange for its obligations under the Loan Documents.
53
Giving effect to the transactions contemplated hereby, the fair saleable
value of Borrower's assets exceeds and will, immediately following the
execution and delivery of this Agreement, exceed Borrower's total
liabilities, including, without limitation, subordinated, unliquidated, or
disputed liabilities or Contingent Obligations. The fair saleable value of
Borrower's assets is and will, immediately following the execution and
delivery of this Agreement, be greater than Borrower's probable liabilities,
including the maximum amount of its Contingent Obligations or its debts as
such debts become absolute and matured. Borrower's assets do not and,
immediately following the execution and delivery of this Agreement, 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, without
limitation, Contingent Obligations and other commitments) beyond its ability
to pay such debts as they mature (taking into account the timing and amounts
to be payable on or in respect of obligations of Borrower).
(J) Not Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
(K) Enforceability. The Loan Documents are the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance
with their terms, subject to bankruptcy, insolvency and other limitations on
creditors' rights generally and to equitable principles.
(L) Investment Company Act, Public Utility Holding Company Act.
Borrower is not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended, (ii) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (iii) subject to any other federal or state law
or regulation which purports to restrict or regulate its ability to borrow
money.
(M) No Defaults. No Default or Event of Default exists under or
with respect to any Loan Document.
(N) Labor Matters. Borrower is not a party to any collective
bargaining agreements.
(O) Title to the Trust Property. Borrower owns good,
indefeasible, marketable and insurable fee simple title to each Facility free
and clear of all Liens, other than the Permitted Encumbrances applicable to
such Facility. There are no outstanding options to purchase or rights of
first refusal affecting any Facility. The Permitted Encumbrances do not and
will not materially and adversely affect (i) the ability of Borrower to pay
in full all sums due under the Note or any of its other obligations in a
timely manner or (ii) the use of any Facility for the use currently being
made thereof, the operation of any Facility as currently being operated or
the value of any Facility.
54
(P) Use of Proceeds: Margin Regulations. Borrower will use the
proceeds of the Loan for the purposes described in Section 2.2. No part of
the proceeds of the Loan will be used for the purpose of purchasing or
acquiring any "margin stock" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System or for any other purpose which
would be inconsistent with such Regulation U or any other Regulations of such
Board of Governors, or for any purposes prohibited by applicable Legal
Requirements.
(Q) Financial Information. All historical financial data
concerning Borrower and its Facility that has been delivered by Borrower to
Lender is true, complete and correct in all material respects. Since the
delivery of such data, except as otherwise disclosed in writing to Lender,
there has been no material adverse change in the financial position of
Borrower or any Facility, or in the results of operations of Borrower.
Borrower has not incurred any obligation or liability, contingent or
otherwise, not reflected in such financial data which might materially
adversely affect its business operations or any Facility.
(R) Condemnation. No Taking has been commenced or, to
Borrower's knowledge, is contemplated with respect to all or any portion of
any Facility or for the relocation of roadways providing access to any
Facility.
(S) Intentionally omitted.
(T) Utilities and Public Access. Each Facility has adequate
rights of access to public ways and are served by adequate water, sewer,
sanitary sewer and storm drain facilities as are adequate for full
utilization of such Facility for their current purposes. Except as otherwise
disclosed by the Surveys, all public utilities necessary to the continued use
and enjoyment of the Facility as presently used and enjoyed are located in
the public right-of-way abutting the premises, and all such utilities are
connected so as to serve each Facility either (i) without passing over other
property or, (ii) if such utilities pass over other property, pursuant to
valid easements. All roads necessary for the utilization of each Facility
for their current purposes have been completed and dedicated to public use
and accepted by all Governmental Authorities or are the subject of access
easements for the benefit of such Facility.
(U) Environmental Compliance. Borrower represents, warrants and
covenants, as to itself and each Facility:
(i) Borrower and each Facility are in compliance with all
applicable Environmental Laws, which compliance includes, but is
not limited to, the possession by Borrower of and compliance with
all environmental, health and safety Permits, licenses and other
governmental authorizations required in connection with the
ownership and operation of each Facility under all Environmental
Laws, except where the failure to comply with such laws is not
reasonably likely to result in a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to
Borrower's knowledge, threatened, and no penalties arising under
Environmental
55
Laws have been assessed, against Borrower, any Facility or
against any Person whose liability for any Environmental Claim
Borrower has or may have retained or assumed either contractually
or by operation of law, and no investigation or review is pending
or, to the knowledge of Borrower, threatened by any Governmental
Authority, citizens group, employee or other Person with respect
to any alleged failure by Borrower, or any Facility to have any
environmental, health or safety permit, license or other
authorization required under, or to otherwise comply with, any
Environmental Law or with respect to any alleged liability of
Borrower for any Use or Release of any Hazardous Substances or
the presence, Use, or Release of any Hazardous Substances at, on,
in, under, or from any Facility.
(iii) To the knowledge of Borrower after due inquiry,
there have been and are no past or present Releases or threats of
Release of any Hazardous Substance that are likely to form the
basis of any Environmental Claim against Borrower, any Facility
or, to Borrower's knowledge, against any Person whose liability
for any Environmental Claim Borrower has or may have retained or
assumed either contractually or by operation of law.
(iv) To the knowledge of Borrower after due inquiry and
except as disclosed in the Environmental Reports, without
limiting the generality of the foregoing, there is not present
at, on, in or under any Facility, PCB-containing equipment,
asbestos or asbestos containing materials, underground or
aboveground storage tanks or surface impoundments for Hazardous
Substances, lead in drinking water (except in concentrations that
comply with all Environmental Laws), or lead-based paint (nor
have there been any underground storage tanks present at, on, in,
or under any Facility).
(v) No Liens are presently recorded with the appropriate
land records under or pursuant to any Environmental Law with
respect to any Facility and, to Borrower's knowledge, no
Governmental Authority has been taking or is in the process of
taking any action that could subject any Facility to liens under
any Environmental Law.
(vi) There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or on
behalf of Borrower that are in the possession or control of
Borrower in relation to any Facility which have not been provided
to Lender.
(vii) No conditions exist which would require Borrower under
any Environmental Laws to place a notice on any deed to any
Facility with
56
respect to the presence, Use or Release of Hazardous Substances
at, on, in, under or from any Facility and no Facility has had
such notice in its deed.
(V) No Joint Assessment, Separate Lots. Borrower has not and
shall not suffer, permit or initiate the joint assessment of any Facility (i)
with any other real property constituting a separate tax lot, and (ii) with
any portion of such Facility 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 such Facility as a single Lien. Each Facility is comprised of one or more
parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot.
(W) Assessments. Except as disclosed in the Title Insurance
Policy, there are no pending or, to the knowledge of Borrower, proposed
special or other assessments for public improvements or otherwise affecting
any Facility, nor, to the knowledge of Borrower, are there any contemplated
improvements to any Facility that may result in such special or other
assessments.
(X) Deeds of Trust and Other Liens. Each Deed of Trust creates
a valid and enforceable first mortgage lien on the applicable Facility as
security for the repayment of the Indebtedness, subject only to the Permitted
Encumbrances applicable to such Facility. Each Collateral Security
Instrument establishes and creates a valid, subsisting and enforceable Lien
on and a security interest in, or claim to, the rights and property described
therein. All property covered by such Collateral Security Instrument is
subject to a UCC financing statement filed and/or recorded, as appropriate,
(or irrevocably delivered to an agent for such recordation or filing) in all
places necessary to perfect a valid first priority Lien with respect to the
rights and property that are the subject of such Collateral Security
Instrument to the extent governed by the UCC. All continuations and any
assignments of any such financing statements have been or will be timely
filed or refiled, as appropriate, in the appropriate recording offices.
(Y) Enforceability. The Loan Documents executed by Borrower in
connection with the Loan, including, without limitation, any Collateral
Security Instrument, are the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their terms,
subject to bankruptcy, insolvency and other limitations on creditors' rights
generally and to equitable principles. Such Loan Documents are, as of the
Closing Date, not subject to any right of rescission, set-off, counterclaim
or defense by Borrower, including the defense of usury, nor will the
operation of any of the terms of the Note, the Deeds of Trust, or such other
Loan Documents, or the exercise of any right thereunder, render the Deeds of
Trust unenforceable against Borrower, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, and Borrower has not asserted any right of rescission,
set-off, counterclaim or defense with respect thereto.
(Z) No Liabilities. Borrower has no liabilities or obligations
including without limitation Contingent Obligations, (and including, without
limitation, liabilities or obligations in tort, in contract, at law, in
equity, pursuant to a statute or regulation, or otherwise) other than those
liabilities and obligations expressly permitted by this Agreement.
57
(AA) No Prior Assignment. As of the Closing Date, (i) Lender is
the assignee of Borrower's interest under the Leases, and (ii) there are no
prior assignments of the Leases or any portion of the Rent due and payable or
to become due and payable which are presently outstanding.
(AB) Certificate of Occupancy. Borrower has obtained all Permits
necessary to use and operate the Facilities for the uses described in Section
3.1(S), and all such Permits are in full force and effect. The respective
use being made of each Facility is in conformity in all respects with the
certificates of occupancy and/or Permits for such Facility and any other
restrictions, covenants or conditions affecting such Facility.
(AC) Flood Zone. Except as shown on the Survey, no Facility is
located in a flood hazard area as defined by the Federal Insurance
Administration.
(AD) Physical Condition. Except as disclosed in the related
Engineering Reports, each Facility is free of material structural defects and
all building systems contained therein are in good working order in all
material respects subject to ordinary wear and tear.
(AE) Intellectual Property. All trademarks, trade names and
service marks that Borrower owns or has pending, or under which it is
licensed, are in good standing and uncontested. There is no right under any
trademark, trade name or service xxxx necessary to the business of Borrower
as presently conducted or as Borrower contemplates conducting its business.
Borrower has not infringed, is not infringing, and has not received notice of
infringement with respect to asserted trademarks, trade names and service
marks of others. To Borrower's knowledge, there is no infringement by others
of trademarks, trade names and service marks of Borrower.
(AF) Security Deposits. All security deposits with respect to
each Facility on the Closing Date have been transferred to the relevant
Security Deposit Account on or prior to the Closing Date, and Borrower is in
compliance with all applicable Legal Requirements relating to such security
deposits.
(AG) Conduct of Business. Borrower does not conduct its business
"also known as", "doing business as" or under any other name.
(AI) Title Insurance. Each Facility is covered by either an
American Land Title Association (ALTA) mortgagee's title insurance policy, or
a commitment to issue such a title insurance policy, insuring a valid first
lien on such Facility, which is in full force and effect and is freely
assignable to and will inure to the benefit of Lender and any successor or
assignee of Lender, including but not limited to the trustee in a
Securitization, subject only to the Permitted Encumbrances.
(AK) Tax Fair Market Value. Each Allocated Loan Amount with
respect to the relevant Facility does not exceed the Tax Fair Market Value of
such Facility. If the Note is significantly modified prior to the closing
date of a Securitization so as to result in a taxable exchange under Code
Section 1001, Borrower will, if requested by Lender, represent that each
58
Allocated Loan Amount does not exceed the Tax Fair Market Value of the
relevant Facility as of the date of such significant modification.
(AL) Leases. Except as disclosed in the tenant estoppel
certificates or in the rent roll statement delivered to Lender prior to the
Closing Date, (a) Borrower is the sole owner of the entire lessor's interest
in the Leases; (b) the Leases are valid and enforceable, subject to
bankruptcy, insolvency, moratorium and other laws limiting or affecting the
rights of creditors generally; (c) the material terms of all alterations,
modifications and amendments to the Leases are reflected in the certified
rent roll statement delivered to and approved by Lender; (d) none of the
Rents reserved in the Leases have been assigned or otherwise pledged or
hypothecated; (e) none of the Rents have been collected for more than one (1)
month in advance; (f) the premises demised under the Leases have been
completed and the tenants under the Leases have accepted the same and have
taken possession of the same on a rent-paying basis; (g) to Borrower's
knowledge, there exist no offsets or defenses to the payment of any portion
of the Rents; (h) no Lease contains an option to purchase, right of first
refusal to purchase, or any other similar provision; (i) no Person has any
possessory interest in, or right to occupy, the Facility except under and
pursuant to a Lease; (j) each Lease is subordinate to the Loan Documents,
either pursuant to its terms or a recorded subordination agreement; and (k)
no Lease has the benefit of a non-disturbance agreement that would be
considered unacceptable to prudent institutional lenders.
Section 4.2. Survival of Representations and Warranties.
Borrower agrees that (i) all of the representations and warranties of
Borrower set forth in this Agreement and in the other Loan Documents
delivered on the Closing Date are made as of the Closing Date (except as
expressly otherwise provided) and (ii) all representations and warranties
made by Borrower shall survive the delivery of the Note and continue for so
long as any amount remains owing to Lender under this Agreement, the Note or
any of the other Loan Documents; provided, however, that the representations,
warranties and covenants set forth in Section 4.1(b)(U) and Sections 5.1(D)
through 5.1(I) inclusive shall survive in perpetuity and shall not be subject
to the exculpation provisions of Section 8.14. All representations,
warranties, covenants and agreements made in this Agreement or in the other
Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or
on its behalf.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Borrower Covenants. Borrower covenants and agrees
that, from the date hereof and until payment in full of the Indebtedness:
(A) Existence; Compliance with Legal Requirements; Insurance.
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its Entity existence, rights, licenses,
Permits and franchises necessary for the conduct of its business and comply
in all respects with all applicable Legal Requirements and Insurance
59
Requirements applicable to it and any Facility. Borrower shall notify Lender
promptly of any written notice or order that Borrower receives from any
Governmental Authority relating to Borrower's failure to comply with such
applicable Legal Requirements relating to any Facility and promptly take any
and all actions necessary to bring its operations at such Facility into
compliance with such applicable Legal Requirements (and shall fully comply
with the requirements of such Legal Requirements that at any time are
applicable to its operations at any Facility) provided, that Borrower at its
expense may, after prior notice to Lender, contest by appropriate legal,
administrative or other proceedings conducted in good faith and with due
diligence, the validity or application, in whole or in part, of any such
applicable Legal Requirements as long as (i) neither the applicable
Collateral nor any part thereof or any interest therein, will be sold,
forfeited or lost if Borrower pays the amount or satisfies the condition
being contested, and Borrower would have the opportunity to do so, in the
event of Borrower's failure to prevail in the contest, (ii) Lender would not,
by virtue of such permitted contest, be exposed to any risk of any civil
liability for which Borrower has not furnished additional security as
provided in clause (iii) below, or to any risk of criminal liability, and
neither the applicable Collateral nor any interest therein would be subject
to the imposition of any lien as a result of the failure to comply with such
Legal Requirement or of such proceeding and (iii) Borrower shall have
furnished to Lender additional security in respect of the claim being
contested or the loss or damage that may result from Borrower's failure to
prevail in such contest in an amount equal to 125% of the amount of such
claim. Borrower shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property
necessary for the continued conduct of its business and keep each Facility in
good repair, working order and condition, except for reasonable wear and use,
and from time to time make, or cause to be made, all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as more
fully provided in the Deeds of Trust. Borrower shall keep each Facility
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 herein and in the Deeds of Trust.
(B) Impositions, and Other Claims. Borrower shall pay and
discharge or cause to be paid and discharged all Impositions, as well as all
lawful claims for labor, materials and supplies or otherwise, which could
become a Lien, all as more fully provided in, and subject to any rights to
contest contained in, the applicable Deed of Trust.
(C) Litigation. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened
(in writing) against Borrower which is reasonably likely to have a Material
Adverse Effect.
(D) Environmental Remediation.
(i) If any investigation, site monitoring, cleanup,
removal, abatement, restoration remedial work or other response
action of any kind or nature is required pursuant to an order or
directive of any Governmental Authority or under any applicable
Environmental Law (collectively, the "Remedial Work"), because of
or in connection with the (x) past, present or future presence,
suspected presence, Release or threatened Release of a
60
Hazardous Substance at, on, in, under or from the Facility or any
portion thereof or (y) violation of or compliance with applicable
Environmental Laws, Borrower shall promptly commence and
diligently prosecute to completion all such Remedial Work. In
all events, such Remedial Work shall be commenced within the time
period ordered or directed by such Governmental Authority or such
shorter period as may be required under any applicable
Environmental Law; provided, however, that Borrower shall not be
required to commence such Remedial Work within the above
specified time periods: (x) if prevented from doing so by any
Governmental Authority, (y) if commencing such Remedial Work
within such time periods would result in Borrower or such
Remedial Work violating any Environmental Law or (z) if Borrower,
at its expense and after prior notice to Lender, is contesting by
appropriate legal, administrative or other proceedings, conducted
in good faith and with due diligence, the need to perform
Remedial Work, as long as (1) Borrower is permitted by the
applicable Environmental Laws to delay performance of the
Remedial Work pending such proceedings, (2) no Facility nor any
part thereof or interest therein would be sold, forfeited or lost
if Borrower performs the Remedial Work being contested, and
Borrower would have the opportunity to do so, in the event of
Borrower's failure to prevail in the contest, (3) Lender would
not, by virtue of such permitted contest, be exposed to any risk
of any civil liability for which Borrower has not furnished
additional security as provided in clause (4) below, or to any
risk of criminal liability, and no Facility nor any interest
therein would be subject to the imposition of any Lien for which
Borrower has not furnished additional security as provided in
clause (4) below, as a result of the failure to perform such
Remedial Work and (4) Borrower shall have furnished to Lender
additional security in respect of the Remedial Work being
contested and the loss or damage that may result from Borrower's
failure to prevail in such contest in an amount equal to 125% of
the cost of such Remedial Work and any loss or damage that may
result from Borrower's failure to prevail in such contest.
(ii) All Remedial Work under clause (i) above shall be
performed by contractors, and under the supervision of a
consulting environmental Engineer, each approved in advance by
Lender which approval will not be unreasonably withheld or
delayed. All costs and expenses incurred in connection with such
Remedial Work shall be paid by Borrower. If Borrower does not
timely commence and diligently prosecute to completion the
Remedial Work, Lender may (but shall not be obligated to), upon
sixty (60) days prior written notice to Borrower of its intention
to do so, cause such Remedial Work to be performed. Borrower
shall pay or reimburse Lender on demand for all Advances (as
defined in the Deed of Trust) and expenses (including reasonable
attorneys' fees and disbursements) relating to or incurred by
Lender in connection with
61
monitoring, reviewing or performing any Remedial Work in
accordance herewith.
(iii) Unless otherwise required by law, Environmental
Laws or any Governmental Authority, Borrower shall not commence
any Remedial Work under clause (i) above, nor enter into any
settlement agreement, consent decree or other compromise relating
to any Hazardous Substances or Environmental Laws which is
reasonably likely to have a Material Adverse Effect.
Notwithstanding the foregoing, if the presence or threatened
presence or Release of Hazardous Substances at, on, in, under,
from or about Borrower's Facility poses an immediate threat to
the health, safety or welfare of any Person or the environment,
or is of such a nature that an immediate response is necessary,
Borrower may complete all necessary Remedial Work. In such
events, Borrower shall notify Lender as soon as practicable and,
in any event, within three Business Days, of any action taken.
(E) Environmental Matters: Inspection.
(i) Borrower shall not cause, allow or authorize a
Hazardous Substance to be present at, on, in, under or to emanate
from any Facility, or migrate from adjoining property controlled
by Borrower onto or into any Facility, except under conditions
permitted by applicable Environmental Laws and, in the event that
such Hazardous Substances are present at, on, in, under or
emanate from any Facility, or migrate onto or into any Facility,
Borrower shall cause the performance of Remedial Work, removal or
remediation of such Hazardous Substances, in accordance with this
Agreement and Environmental Laws. Borrower shall use best
efforts to prevent, and to seek the remediation of, any migration
of Hazardous Substances onto or into any Facility from any
adjoining property.
(ii) Upon prior written notice to Borrower, Lender shall
have the right at all reasonable times to enter upon and inspect
all or any portion of any Facility. If Lender has reason to
believe that Remedial Work may be required, Lender may select or
may require Borrower to select a consulting environmental
Engineer reasonably satisfactory to Lender to conduct and prepare
environmental reports assessing the environmental condition of
any Facility. Lender shall be given a reasonable opportunity to
review any reports, data and other documents or materials
reviewed or prepared by the environmental Engineer. The
inspection rights granted to Lender in this Section 5.1(E) shall
be in addition to, and not in limitation of any other inspection
rights granted to Lender in the Loan Documents, and shall
expressly include the right (if Lender suspects that Remedial
Work may be required) to conduct or require Borrower to conduct
soil
62
borings, establish ground water monitoring xxxxx and conduct
other customary environmental tests, assessments and audits.
(iii) Borrower agrees to bear and shall pay or reimburse
Lender promptly on demand for all sums advanced and expenses
incurred (including reasonable attorneys' fees and disbursements,
but excluding internal overhead, administrative and similar costs
of Lender) relating to, or incurred by Lender in connection with,
the inspections and reports described in this Section 5.1(E) in
the following situations:
(x) If Lender has grounds to believe, at the time any such
inspection is ordered, that there exists an occurrence or condition that
could lead to an Environmental Claim;
(y) If any such inspection reveals an occurrence or condition
that could lead to an Environmental Claim; or
(z) If an Event of Default with respect to the Facility exists
at the time any such inspection is ordered, and such Event of Default relates
to any representation, covenant or other obligation pertaining to Hazardous
Substances, Environmental Laws or any other environmental matter.
(F) Environmental Notices,. Borrower shall promptly provide
notice to Lender of:
(i) any Environmental Claim asserted or threatened (in
writing) by any Governmental Authority or other Person with
respect to any Hazardous Substance at, on, in, under or emanating
from any Facility, which could reasonably be expected to impair
the value of Lender's interests hereunder or have a Material
Adverse Effect;
(ii) any Environmental Claim or proceeding, investigation or
inquiry commenced or threatened in writing by any Person or
Governmental Authority, against Borrower, with respect to the
presence, suspected presence, Release or threatened Release of
Hazardous Substances from or onto, in or under any property not
owned by Borrower, including, without limitation, proceedings
under the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, 42 U.S.C. Section 9601, et seq., which
could reasonably be expected to impair the value of Lender's
security interests hereunder or have a Material Adverse Effect;
(iii) all Environmental Claims asserted or threatened
(in writing) against Borrower, against any other party occupying
any Facility or any portion thereof which become known to
Borrower, or against any Facility, which could reasonably be
expected to impair the value of Lender's security interests
hereunder or have a Material Adverse Effect;
63
(iv) the discovery by Borrower of any occurrence or
condition on any Facility or on any real property adjoining or in
the vicinity of any Facility which could reasonably be expected
to lead to an Environmental Claim against Borrower or Lender
which such Environmental Claim is reasonably likely to have a
Material Adverse Effect; and
(v) the commencement or completion of any Remedial Work.
(G) Copies of Notices. Borrower shall immediately transmit to
Lender copies of any citations, orders, notices or other written
communications received from any Person or any Governmental Authority and any
notices, reports or other written communications submitted to any
Governmental Authority with respect to the matters described in Section
5.1(F).
(H) Environmental Claims. Lender and/or, to the extent
authorized by Lender if applicable, the Deed of Trust Trustee may join and
participate in, as a party if Lender so determines, any legal or
administrative proceeding or action concerning any Facility or any portion
thereof under any Environmental Law, if, in Lender's reasonable judgment, the
interests of Lender or the Deed of Trust Trustee, will not be adequately
protected by Borrower. Borrower agrees to bear and shall pay or reimburse
Lender and the Deed of Trust Trustee on demand for all reasonable sums
advanced and reasonable expenses incurred (including reasonable attorneys'
fees and disbursements) and the Deed of Trust Trustee, incurred by Lender and
the Deed of Trust Trustee in connection with any such action or proceeding.
(I) Indemnification. Borrower agrees to indemnify,
reimburse, defend (with counsel satisfactory to Lender, at Lender's election)
and hold harmless Lender and any Deed of Trust Trustee, for, from, and
against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without
limitation, interest, penalties, consequential damages, attorneys' fees,
disbursements and expenses, and consultants' fees, disbursements and
expenses, including costs of Remedial Work (collectively, "Losses") asserted
against, resulting to, imposed on, or incurred by Lender or any Deed of Trust
Trustee, directly or indirectly, in connection with any of the following:
(i) events, circumstances, or conditions which are alleged
to, or do, form the basis for an Environmental Claim;
(ii) the presence, Use or Release of Hazardous Substances
at, on, in, under or from any Facility, which presence, Use or
Release requires or could require Remedial Work;
(iii) any Environmental Claim against Borrower, Lender,
Deed of Trust Trustee or any Person whose liability for such
Environmental Claim Borrower has or may have assumed or retained
either contractually or by operation of law; or
(iv) the breach of any representation, warranty or covenant
set forth in Section 4.1(b)(U) and Sections 5.1(D) through
5.1(I), inclusive.
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The indemnity provided in this Loan Agreement shall not be
included in any exculpation of Borrower from personal liability provided in
this Loan Agreement or in any of the other Loan Documents. Nothing in this
Section 5.1(I) shall be deemed to deprive Lender of any rights or remedies
provided to it elsewhere in this Agreement or the other Loan Documents or
otherwise available to it under law. Borrower waives and releases Lender and
any Deed of Trust Trustee from any rights or defenses Borrower may have under
common law or Environmental Laws for liability arising from or resulting from
the presence, Use or Release of Hazardous Substances except to the extent
directly and solely caused by the fraud or willful misconduct of Lender or
Deed of Trust Trustee.
(J) Access to Facilities. Borrower shall permit agents,
representatives and employees of Lender to inspect any Facility or any part
thereof at such reasonable times as may be requested by Lender upon advance
notice.
(K) Notice of Default. Borrower shall promptly, upon learning of
such occurrence, advise Lender of any material adverse change in Borrower's
condition, financial or otherwise, or of the occurrence of any Default or
Event of Default.
(L) Cooperate in Legal Proceedings. Except with respect to any
claim by Borrower against Lender, Borrower shall cooperate with Lender with
respect to any proceedings before any Governmental Authority which may in any
way affect the rights of Lender hereunder or any rights obtained by Lender
under any of the Loan Documents and, in connection therewith, not prohibit
Lender, at its election, from participating in any such proceedings.
(M) Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions required to be
observed, performed or satisfied by it, and shall pay when due all costs,
fees and expenses required to be paid by it, under the Loan Documents
executed and delivered by Borrower.
(N) Insurance Benefits. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with any Facility, and Lender shall
be reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys' fees and disbursements and the payment by Borrower of
the expense of an Appraisal on behalf of Lender in case of a fire or other
casualty affecting any Facility or any part thereof out of such Insurance
Proceeds, all as more specifically provided in the Deeds of Trust.
(O) Further Assurances. Borrower shall, at Borrower's sole cost
and expense:
(i) upon Lender's request therefor given from time to time
after the occurrence of any Event of Default pay for (a) reports
of UCC, federal tax lien, state tax lien, judgment and pending
litigation searches with respect to Borrower and (b) searches of
title to any Facility, each such search to be conducted by search
firms reasonably designated by Lender in each of the locations
reasonably designated by Lender.
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(ii) 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 pursuant to the
terms of the Loan Documents;
(iii) execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings, and do
such other acts necessary, to evidence, preserve and/or protect
the Collateral at any time securing or intended to secure the
Note, as Lender may require in Lender's discretion; and
(iv) do and execute all and such further lawful 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 require from time to
time in its discretion.
(P) Management of Trust Property. Each Facility will be managed
at all times by a Manager pursuant to a Management Agreement unless
terminated as herein provided. Any Management Agreement shall be terminated
by Borrower, at Lender's request, upon thirty (30) days prior written notice
to Borrower and the relevant Manager, (i) upon the occurrence and continuance
of an Event of Default, (ii) intentionally omitted, or (iii) in the event
that, as of the last day of a calendar quarter, the Debt Service Coverage
Ratio for any or all of the Facilities, computed on the basis of the prior
twelve (12) calendar months, is less than 1.15. Lender shall not have the
right to require Borrower to terminate a Management Agreement pursuant to
clause (iii) above if on the first Payment Date after Lender made the
determination that Lender had the right to terminate a Manager pursuant to
clause (iii) above, Borrower defeases the Loan in accordance with the terms
of Section 2.11 in an amount sufficient to cause the Debt Service Coverage
Ratio (calculated as if such amount was actually applied to reduce the
Principal Indebtedness upon which Debt Service was paid and calculated as if
the Principal Indebtedness was reamortized on a straight-line basis (as if
the reduction had occurred) over the remaining number of months until the
Maturity Date), computed on the basis of the prior twelve (12) calendar
months, to be at least equal to 1.50. If a Manager is terminated pursuant
hereto, Borrower immediately shall seek a replacement manager reasonably
acceptable to Lender in Lender's discretion, and Borrower's failure to
appoint a reasonably acceptable manager within thirty (30) days after
Lender's request of Borrower to terminate a Management Agreement shall
constitute an immediate Event of Default. Borrower may from time to time
appoint a successor manager to manage the relevant Facilities, which
successor manager shall be approved in writing by Lender in Lender's sole
discretion. Notwithstanding the foregoing, any successor manager selected
hereunder by Lender or Borrower to serve as manager (i) shall be a reputable
management company having at least seven years' experience in the management
of commercial properties with similar uses as the Facilities and in the
jurisdiction(s) in which the relevant Facility or Facilities are located and
(ii) shall not be paid management fees in excess of fees which are market
fees for comparable managers of comparable properties in the same geographic
66
area. At its option, Borrower may elect to manage any Facility; provided,
however, notwithstanding such right and the exercise of Borrower's election
to manage any Facility, at Lender's request, Borrower will be required to
appoint a manager, acceptable to Lender, to manage the Facility upon the
occurrence of an event described in clauses (i) through (iii) above;
provided, further, Lender shall not have the right to require Borrower to
appoint a manager pursuant to clause (iii) above if Borrower defeases the
Loan as described in the second sentence of this Section 5.1(P).
(Q) Financial Reporting.
(i) Borrower shall keep and maintain or shall cause to be
kept and maintained on a Fiscal Year basis, in accordance with
GAAP, books, records and accounts reflecting in reasonable detail
all of the financial affairs of Borrower and all items of income
and expense in connection with the operation of the Facilities
and in connection with any services, equipment or furnishings
provided in connection with the operation of each Facility.
Lender, at Lender's cost and expense, whether such income or
expense may be realized by Borrower or by any other Person
whatsoever, shall have the right from time to time and at all
times during normal business hours upon reasonable prior written
notice to Borrower to examine such books, records and accounts at
the office of Borrower or other Person maintaining such books,
records and accounts and to make such copies or extracts thereof
as Lender shall desire. After the occurrence of an Event of
Default, Borrower shall pay any costs and expenses incurred by
Lender to examine any and all of Borrower's books, records and
accounts as Lender shall determine in Lender's sole discretion to
be necessary or appropriate in the protection of Lender's
interest.
(ii) Borrower shall furnish to Lender annually within ninety
(90) days following the end of each Fiscal Year, a true, complete
and correct copy of Borrower's financial statement (a) be in form
and substance acceptable to Lender in Lender's sole discretion,
(b) be prepared in accordance with GAAP, (c) include, without
limitation, a statement of operations (profit and loss), a
statement of cash flows, a calculation of Net Operating Income, a
consolidated balance sheet, an aged accounts receivable report
and such other information or reports as shall be reasonably
requested by Lender or any applicable Rating Agency, (d) be
accompanied by an Officer's Certificate from a senior executive
of Borrower certifying as of the date thereof (x) that such
statement is true, correct, complete and accurate and fairly
reflects the results of operations and financial condition of
Borrower for the relevant period, and (y) notice of whether there
exists an Event of Default or Default, and if such Event of
Default or Default exists, the nature thereof the period of time
it has existed and the action then being taken to remedy same and
(e) be
67
accompanied by an opinion from an Independent certified public
accountant acceptable to Lender in Lender's sole discretion.
(iii) Borrower shall furnish to Lender annually within
forty (40) days following the end of each Fiscal Year, a true,
complete and correct copy of Borrower's unaudited financial
statement which shall (a) be in form and substance acceptable to
Lender in Lender's sole discretion, (b) be prepared in accordance
with GAAP, (c) include, without limitation, a statement of
operations (profit and loss), a statement of cash flows, a
calculation of Net Operating Income, a consolidated balance
sheet, an aged accounts receivable report and such other
information or reports as shall be reasonably requested by Lender
or any applicable Rating Agency and (d) be accompanied by an
Officer's Certificate from a senior executive of Borrower
certifying as of the date thereof (x) that such statement is
true, correct, complete and accurate and fairly reflects the
results of operations and financial condition of Borrower for the
relevant period, and (y) notice of whether there exists an Event
of Default or Default, and if such Event of Default or Default
exists, the nature thereof, the period of time it has existed and
the action then being taken to remedy same.
(iv) Borrower shall furnish to Lender within twenty-five
(25) days following the end of each calendar month, a true,
correct and complete monthly unaudited financial statement which
shall (a) be in form and substance acceptable to Lender in
Lender's sole discretion, (b) be prepared in accordance with
GAAP, (c) include, without limitation, a statement of operations
(profit and loss), a statement of cash flows, a calculation of
Net Operating Income, a consolidated balance sheet, an aged
accounts receivable report and such other information or reports
as shall be reasonably requested by Lender or any applicable
Rating Agency and (d) be accompanied by an Officer's Certificate
from a senior executive of Borrower certifying as of the date
thereof (x) that such statement is true, correct, complete and
accurate and fairly reflects the results of operations and
financial condition of Borrower for the relevant period, and (y)
notice of whether there exists an Event of Default or Default,
and if such Event of Default or Default exists, the nature
thereof, the period of time it has existed and the action then
being taken to remedy same.
(v) Borrower shall furnish to Lender, within twenty-five
(25) days following the end of each calendar month, a true,
complete and correct rent roll and occupancy report (including
statistics concerning tenant sales) and such other occupancy and
rate statistics as Lender shall request in Lender's discretion.
Each such document shall (a) be in form and substance acceptable
to Lender in Lender's sole discretion, and (b) be accompanied by
an Officer's Certificate from a senior executive of Borrower
certifying as of the date thereof (x) that such statement is true,
68
correct, complete and accurate and (y) notice of whether there
exists an Event of Default or Default, and if such Event of
Default or Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy same.
(vi) Borrower shall furnish to Lender, within ten (10)
Business Days after request, such further information with
respect to the operation of the Facility and the financial
affairs of Borrower as may be requested by Lender, including
without limitation all business plans prepared for Borrower.
(vii) Borrower shall furnish to Lender, within ten (10)
Business Days after request, such further information regarding
any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA as may be requested
by Lender.
(viii) Borrower shall, concurrently with Borrower's
delivery to Lender, provide a copy of the items required to be
delivered to Lender under this Section 5.1(Q) to the Rating
Agencies, the trustee, and any servicer and/or special servicer
that may be retained in conjunction with the Loan or any
Securitization. Borrower shall furnish to Lender written notice,
within two Business Days after receipt by Borrower, of any Rents,
Money or other items of Gross Revenue that Borrower is not
required by this Agreement to deposit in the Collection Account
or Cash Collateral Account, together with such other documents
and materials relating to such Rents, Money or other items of
Gross Revenue as Lender requests in Lender's discretion.
(ix) Borrower shall provide Lender with updated information
(satisfactory to Lender in Lender's discretion) concerning the
Basic Carrying Costs for the next succeeding Fiscal Year prior to
the termination of each Fiscal Year.
(x) Borrower shall furnish to Lender, within ten (10)
Business Days after request, such other financial information
with respect to Borrower or any Manager as Lender may reasonably
request.
(R) Conduct of Business. Borrower shall cause the operation of
each Facility to be conducted at all times in a manner consistent with at
least the level of operation of such Facility as of the Closing Date,
including, without limitation, the following:
(i) to maintain or cause to be maintained the standard of
operations at each Facility at all times at a level necessary to
insure a level of quality for each Facility consistent with
similar facilities in the same competitive market;
69
(ii) to operate or cause to be operated each Facility in a
prudent manner in compliance in all respects with applicable
Legal Requirements and Insurance Requirements relating thereto
and cause all licenses, Permits, and any other agreements
necessary for the continued use and operation of each Facility to
remain in effect; and
(iii) to maintain or cause to be maintained sufficient
Inventory and Equipment of types and quantities at each Facility
to enable Borrower or Manager to operate such Facility.
(S) Intentionally omitted.
(T) ERISA. Borrower shall deliver to Lender as soon as
possible, and in any event within ten days after Borrower knows or has reason
to believe that any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan has occurred or exists, a statement signed
by a senior financial officer of Borrower setting forth details respecting
such event or condition and the action, if any, that Borrower or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by Borrower or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a
Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including, without limitation,
the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any
Plan;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of or the appointment
of a trustee to administer, any Plan, or the receipt by Borrower
or any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default)
or the receipt by
70
Borrower or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or
has terminated under Section 4041A of ERISA,
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days;
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which
such Plan is a part if Borrower or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with the
provisions of said Sections; and
(vii) the imposition of a Lien or a security interest in
connection with a Plan.
(U) Single Purpose Entity. Borrower shall at all times be a
Single Purpose Entity.
(V) Trade Indebtedness. Borrower will pay its trade
payables, within sixty (60) days of the date incurred, unless Borrower is in
good faith contesting Borrower's obligation to pay such trade payables in a
manner satisfactory to Lender (which may include Lender's requirement that
Borrower post security with respect to the contested trade payable).
(W) Capital Improvements and Environmental Remediation.
Borrower shall, within six (6) months of the date hereof perform the repairs
and environmental remediation to the each Facility itemized on Exhibit D
hereto.
(X) Annual Operating Budgets. Borrower shall submit to
Lender Annual Operating Budgets at those times and in such form and substance
as set forth in the definition of "Annual Operating Budget" in this Agreement.
(Y) SPE Equity Owner Filings. Borrower shall deliver to
Lender within fifteen (15) days after filing with the SEC copies of any
filings made with the SEC by the SPE Equity Owner.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. Borrower Negative Covenants. Borrower covenants
and agrees that, until payment in full of the Indebtedness, it will not do,
directly or indirectly, any of the following unless Lender consents thereto
in writing:
71
(A) Liens on the Trust Property. Incur, create, assume,
become or be liable in any manner with respect to, or permit to exist, any
Lien with respect to any Facility or any portion thereof, except: (i) Liens
in favor of Lender, and (ii) the Permitted Encumbrances.
(B) Transfer. Except as expressly permitted by or
pursuant to this Agreement or the Deed of Trust, or except as otherwise
approved by Lender in writing in Lender's sole discretion, allow any Transfer
to occur, terminate or modify the Management Agreement, or enter into a
Management Agreement with respect to any Facility.
(C) Other Borrowing. Except for (i) unsecured trade
payables incurred in the ordinary course of business relating to the
ownership and operation of the Facilities which do not exceed, at any time, a
maximum amount of $250,000 (with respect to any one Facility) and are paid
within sixty (60) days of the date incurred, incur, create, assume, become or
be liable in any manner with respect to Other Borrowings.
(D) Leases. Enter into any Leases with all or any
portion of any Facility which grant the lessee thereunder any option to
purchase or right of first refusal to purchase all or any portion of such
Facility.
(E) Change In Business. Cease to be a Single-Purpose
Entity or make any material change in the scope or nature of its business
objectives, purposes or operations, or undertake or participate in activities
other than the continuance of its present business.
(F) Debt Cancellation. Cancel or otherwise forgive or
release any material claim or debt owed to Borrower by any Person, except for
adequate consideration or in the ordinary course of Borrower's business.
(G) Affiliate Transactions. Enter into, or be a party
to, any transaction with an Affiliate of Borrower, except in the ordinary
course of business and on terms which are no less favorable to Borrower or
such Affiliate than would be obtained in a comparable arm's length
transaction with an unrelated third party, and, if the amount to be paid to
the Affiliate pursuant to the transaction or series of related transactions
is greater than $50,000 (determined annually on an aggregate basis) fully
disclosed to Lender in advance.
(H) Creation of Easements. Create, or permit any
Facility or any part thereof to become subject to, any easement, license or
restrictive covenant, other than a Permitted Encumbrance.
(I) Misapplication of Funds. Distribute any Rents or
Money received from Accounts in violation of the provisions of Section 2.12.
(J) Certain Restrictions. Enter into any agreement
which expressly restricts the ability of Borrower to enter into amendments,
modifications or waivers of any of the Loan Documents.
72
(K) Issuance of Equity Interests. Issue or allow to be
created any stocks or shares or partnership or membership interests, as
applicable, or other ownership interests other than the stocks, shares,
partnership or membership interests and other ownership interests which are
outstanding or exist on the Closing Date or any security or other instrument
which by its terms is convertible into or exercisable or exchangeable for
Borrower's ownership interests in Borrower. If at any time Borrower is a
limited partnership or a limited liability company, Borrower shall not allow
to be issued or created any stock in Borrower's general partner or managing
member, as applicable, other than the stock which is outstanding or existing
on the Closing Date or any security or other instrument which by its terms is
convertible into or exercisable or exchangeable for any stock in Borrower's
general partner or managing member, as applicable.
(L) Assignment of Licenses and Permits. Assign or
transfer any of its interest in any Permits pertaining to any Facility, or
assign, transfer or remove or permit any other Person to assign, transfer or
remove any records pertaining to any Facility without Lender's prior written
consent which consent may be granted or refused in Lender's sole discretion.
(M) Place of Business. Change its chief executive
office or its principal place of business or place where its books and
records are kept without giving Lender at least thirty (30) days prior
written notice thereof and promptly providing Lender such information as
Lender may reasonably request in connection therewith.
ARTICLE VII
DEFAULTS
Section 7.1. Event of Default. The occurrence of one
or more of the following events shall be an "Event of Default" hereunder:
(i) if on any Payment Date the funds in the Debt
Service Payment Sub-Account are insufficient to pay the
Required Debt Service Payment due on such Payment Date,
unless Borrower pays the Required Debt Service Payment
due on such Payment Date;
(ii) intentionally omitted;
(iii) if Borrower falls to pay the outstanding
Indebtedness on the Maturity Date;
(iv) if on any Payment Date Borrower fails to pay
the Basic Carrying Costs Monthly Installment or the
Capital Reserve Monthly Installment due on such Payment
Date;
(v) if on the date any payment of a Basic Carrying
Cost would become delinquent, the funds in the Basic
Carrying Costs Sub-Account required to be reserved
pursuant to Section 2.12(g) together with any funds
73
in the Cash Collateral Account not allocated to another
Sub-Account are insufficient to make such payment;
(vi) the occurrence of the events identified
elsewhere in the Loan Documents as constituting an "Event
of Default" hereunder or thereunder;
(vii) a Transfer, unless the prior written
consent of Lender is obtained (which consent may be
withheld with or without cause in Lender's discretion);
(viii) if Borrower fails to pay any other amount
payable pursuant to this Agreement or any other Loan
Document;
(ix) if any representation or warranty made herein
or in any other Loan Document, or in any report,
certificate, financial statement or other Instrument,
agreement or document furnished by Borrower in connection
with this Agreement, the Note or any other Loan Document
executed and delivered by Borrower, shall be false in any
material respect as of the date such representation or
warranty was made or remade, and such falsity or
incorrectness shall not have been cured within thirty
(30) days after the date on which the Borrower has
knowledge of such falsity or incorrectness, or if the
Borrower is diligently pursuing such cure in such thirty
(30) day period and, in the Lender's judgment such
falsity or incorrectness can be cured with reasonable
diligence in an additional sixty (60) days, then such
thirty (30) day limited cure period shall be extended an
additional sixty (60) days for a total of ninety (90)
days;
(x) if Borrower, any of Borrower's partners or
members, as applicable, or the SPE Equity Owner makes an
assignment for the benefit of creditors;
(xi) if a receiver, liquidator or trustee shall be
appointed for Borrower, any of Borrower's partners or
members, as applicable, or the SPE Equity Owner or if
Borrower, any of Borrower's partners or members, as
applicable, or the SPE Equity Owner shall be adjudicated
as 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, any of Borrower's partners or
members, as applicable, or the SPE Equity Owner or if any
proceeding for the dissolution or liquidation of
Borrower, any of Borrower's partners or members, as
applicable, or the SPE Equity Owner shall be instituted;
provided, however, that if such appointment,
adjudication, petition or proceeding was involuntary and
not consented to by Borrower, any of Borrower's partners
or members, as applicable, or the SPE Equity Owner as the
case may be, upon the same not being
74
discharged, stayed or dismissed within 90 days, or if
Borrower, any of Borrower's partners or members, as
applicable, or the SPE Equity Owner shall generally not
be paying its debts as they become due;
(xii) if Borrower attempts to delegate its
obligations or ssign its rights under this Agreement, any
of the other Loan Documents or any interest herein or
therein, except as specifically permitted herein;
(xiii) if any provision of any organizational
document of Borrower is amended or modified in any
respect which may adversely affect Lender, or if Borrower
or any of its partners or members, as applicable, fails
to perform or enforce the provisions of such
organizational documents or attempts to dissolve
Borrower; or if Borrower or any of its partners or
members, as applicable, breaches any of its covenants set
forth in Sections 5.1(U), or 6.1(E);
(xiv) if Borrower fails to (A) notify Lender of
the occurrence of a Default under any of the Loan
Documents within ten (10) days of the day on which
Borrower first has knowledge of such Default or (B) give
any notice due to any Person under any Loan Document (a)
within two (2) days after such notice was due or (b) in
accordance with the applicable procedural requirements
set forth in the Loan Documents;
(xv) if Borrower shall be in default under any of
the other obligations, agreements, undertakings, terms,
covenants, provisions or conditions of this Agreement,
the Note, the Deeds of Trust or the other Loan Documents,
not otherwise referred to in this Section 7.1, for ten
(10) days after written notice to Borrower from Lender or
its successors or assigns, in the case of any default
which can be cured by the payment of a sum of money or
for thirty (30) days after written notice from Lender or
its successors or assigns, in the case of any other
default (unless otherwise provided herein or in such
other Loan Document); provided, however, that if such
non-monetary default under this subparagraph 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, but in no event shall
such period exceed ninety (90) days after the original
notice from Lender;
(xvi) if an event or condition specified in
Section 5.1(T) shall occur or exist with respect to any
Plan or Multiemployer Plan and, as a result of such event
or condition, together with all other such events or
conditions, Borrower or any ERISA Affiliate shall incur
or in the opinion
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of Lender shall be reasonably likely to incur a liability
to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute, in
the determination of Lender, a Material Adverse Effect;
(xvii) if without Lender's prior written consent
(A) any Manager resigns or is removed, (B) the management
or control of such Manager is transferred or (C) any
Management Agreement is entered into for any Facility or
(D) there is any change in or termination of any
Management Agreement for any Facility; and
(xviii) if any Xxxxxxx Party shall be in default
under any of its respective covenants, agreements or
undertakings set forth in the Xxxxxxx Party Agreement.
Section 7.2. Remedies. (a) Upon the occurrence and
during the continuation of an Event of Default, all or any one or more of the
rights, powers and other remedies available to Lender against Borrower under
this Agreement, the Note, the Deeds of Trust or any of the other Loan
Documents, or at law or in equity may be exercised by Lender at any time and
from time to time (including, without limitation, the right to accelerate and
declare the outstanding principal amount, unpaid interest, Default Rate
interest, Late Charges, Yield Maintenance Premium and any other amounts owing
by Borrower to be immediately due and payable), without notice or demand,
whether or not all or any portion of the Indebtedness 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 with respect to any Facility or all or any
portion of the Collateral. Any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singly,
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. Notwithstanding anything contained to the contrary
herein, the outstanding principal amount, unpaid interest, Default Rate
interest, Late Charges, Yield Maintenance Premium and any other amounts owing
by Borrower shall be accelerated and immediately due and payable, without any
election by Lender upon the occurrence of an Event of Default described in
Section 7.1(x) or Section 7.1(xi). Notwithstanding that this Agreement may
refer to a continuing Event of Default, and without limiting Borrower's right
to cure a Default which may, with the passage of time, become an Event of
Default, Borrower shall have no right pursuant to this Agreement to cure any
Event of Default unless this Agreement is amended by Borrower and Lender in
writing.
Section 7.3. Remedies Cumulative. 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 executed by
or with respect to Borrower, or existing at law or in equity or otherwise.
Lender's rights, powers and remedies may be pursued singly, concurrently or
otherwise, at such
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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 any Default or Event of Default shall not be construed to be a
waiver of any subsequent Default or Event of Default or to impair any remedy,
right or power consequent thereon. Any and all of Lender's rights with
respect to the Collateral shall continue unimpaired, and Borrower shall be
and remain obligated in accordance with the terms hereof, notwithstanding (i)
the release or substitution of Collateral at any time, or of any rights or
interest therein or (ii) any delay, extension of time, renewal, compromise or
other indulgence granted by Lender in the event of any Default or Event of
Default with respect to the Collateral or otherwise hereunder.
Notwithstanding any other provision of this Agreement, Lender reserves the
right to seek a deficiency judgment or preserve a deficiency claim, in
connection with the foreclosure of any Deed of Trust on a related Facility,
to the extent necessary to foreclose on other parts of the Trust Property.
Section 7.4. Lender's Right to Perform. If Borrower
fails to perform any covenant or obligation contained herein and such failure
shall continue for a period of five Business Days after Borrower's receipt of
written notice thereof without in any way limiting Section 7.1 hereof, from
Lender, Lender may, but shall have no obligation to, itself perform, or cause
performance of such covenant or obligation, and the expenses of Lender
incurred in connection therewith shall be payable by Borrower to Lender upon
demand. Notwithstanding the foregoing, Lender shall have no obligation to
send notice to Borrower of any such failure.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival. Subject to Section 4.2, this
Agreement and all covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the execution and delivery by
Borrower to Lender of the Note, and shall continue in full force and effect
so long as any portion of the Indebtedness is outstanding and unpaid.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such
party. All covenants, promises and agreements in this Agreement contained,
by or on behalf of Borrower, shall inure to the benefit of the respective
successors and assigns of Lender. Nothing in this Agreement or in any other
Loan Document, express or implied, shall give to any Person other than the
parties and the holder(s) of the Note, the Deeds of Trust and the other Loan
Documents, and their legal representatives, successors and assigns, any
benefit or any legal or equitable right, remedy or claim hereunder.
Section 8.2. 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
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arrangements or terms are satisfactory or not satisfactory shall (except as
is otherwise specifically herein provided) be in the sole discretion of
Lender.
Section 8.3. Governing Law. (a) In all respects,
including, without limitation, matters of construction, validity and
performance, this Agreement and the obligations arising hereunder shall be
governed by, and construed in accordance with, the laws of the State of
California applicable to contracts made and performed in such State and any
applicable law of the United States of America. To 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
and the Note, and this Agreement and the Note shall be governed by and
construed in accordance with the laws of the State of California.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN
ANY FEDERAL OR STATE COURT IN LOS ANGELES, CALIFORNIA OR IN ANY FEDERAL OR
STATE COURT IN THE JURISDICTION IN WHICH THE COLLATERAL IS LOCATED AND
BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE 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.
Section 8.4. Modification, Waiver in Writing. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, the Note or any other Loan Document, or consent
to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except
as otherwise expressly provided herein, no notice to or demand on Borrower
shall entitle Borrower to any other or future notice or demand in the same,
similar or other circumstances.
Section 8.5. Delay Not a Waiver. Neither any failure
nor any delay on the part of Lender in insisting upon strict performance of
any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder, or under the Note, or of any other Loan
Document, or any other instrument given as security therefor, shall operate
as or constitute a waiver thereof, nor shall a single or partial exercise
thereof preclude any other future exercise, or the exercise of any other
right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable
under this Agreement, the Note or any other Loan Document, Lender shall not
be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of
any such other amount.
Section 8.6. Notices. All notices, consents, approvals
and requests required or permitted hereunder or under any other Loan Document
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) hand delivery, with proof of attempted
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delivery, (b) certified or registered United States mail, postage prepaid,
(c) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of attempted delivery, or (d) by telecopier (with
answerback acknowledged) provided that such telecopied notice must also be
delivered by one of the means set forth in (a), (b) or (c) above, addressed
if to Lender at its address set forth on the first page hereof, and if to
Borrower at its designated address set forth on the first page hereof or at
such other address and Person as shall be designated from time to time by any
party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section 8.6. A copy of all
notices, consents, approvals and requests directed to Lender shall be
delivered concurrently to each of the following: Xxxxxxx Xxxxxxx, Esquire,
Xxxxxx, Xxxx & Xxxxxxxx, LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX
00000-0000, Telefax Number (000) 000-0000; Two World Financial Xxxxxx,
Xxxxxxxx X, Xxx Xxxx, XX 00000-0000, Attention Xxxxxx XxXxxx, Telefax Number
(000) 000-0000; and Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx, XX
00000-0000, Attention: Legal Counsel, Telefax Number (000) 000-0000. A
notice shall be deemed to have been given: (a) in the case of hand delivery,
at the time of delivery; (b) in the case of registered or certified mail,
when delivered or the first attempted delivery on a Business Day; (c) in the
case of expedited prepaid delivery upon the first attempted delivery on a
Business Day; or (d) in the case of telecopier, upon receipt of answerback
confirmation, provided that such telecopied notice was also delivered as
required in this Section 8.6. A party receiving a notice which does not
comply with the technical requirements for notice under this Section 8.6 may
elect to waive any deficiencies and treat the notice as having been properly
given.
SECTION 8.7. TRIAL BY JURY. BORROWER AND LENDER, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION,
BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE OR THE
OTHER LOAN DOCUMENTS.
Section 8.8. Headings. The Article and Section
headings in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose.
Section 8.9. Assignment. Lender shall have the right
to assign in whole or in part this Agreement and/or any of the other Loan
Documents and the obligations hereunder or thereunder to any Person and to
participate all or any portion of the Loan evidenced hereby, including
without limitation, any servicer or trustee in connection with a
Securitization. Lender shall provide Borrower with written notice of any
such assignment; provided, however, that such notice shall not be a condition
of Lender's right to assign this Agreement and/or any of the Loan Documents
and the failure to deliver such notice shall not constitute a default under
this Loan Agreement.
Section 8.10. Severability. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
79
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
Section 8.11. Preferences. Lender shall have no
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the obligations of Borrower pursuant
to this Agreement, the Note or any other Loan Document. 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 obligations of Borrower
hereunder. To the extent Borrower makes a payment or payments to Lender for
Borrower's benefit, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or part thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds
had not been received by Lender.
Section 8.12. Waiver of Notice. Borrower 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. Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement or the other
Loan Documents does not specifically and expressly provide for the giving of
notice by Lender to Borrower.
Section 8.13. Remedies of Borrower. In the event that a
claim or adjudication is made that Lender or its agents, has acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement, the Note, the Deeds of Trust 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 8.14. Exculpation. Except as otherwise set
forth in this Section 8.14 and Section 4.2 to the contrary, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in this Agreement, the Note, the Deeds of Trust or any
of the other Loan Documents executed and delivered by Borrower except that
Lender may pursue any power of sale, bring a foreclosure action, action for
specific performance, action for money judgment, or other appropriate action
or proceeding (including, without limitation, to obtain a deficiency
judgment) against Borrower or any other Person solely for the purpose of
enabling Lender to realize upon (i) the Collateral, and (ii) the Rents and
Accounts arising from any Facility to the extent (x) received by Borrower or
any Manager (or any of their affiliates), after and during the continuation
of the occurrence of an Event of Default or (y) distributed to Borrower or
any Manager, or their respective shareholders, or partners or members, as
80
applicable, or affiliates during or with respect to any period for which
Lender did not receive the full amounts it was entitled to receive as
prepayments of the Loan pursuant to Section 2.7 (all Rents and Accounts
covered by clauses (x) and (y) being hereinafter referred to as the "Recourse
Distributions") and (iii) any other collateral given to Lender under the Loan
Documents ((i), (ii), and (iii) collectively, the "Default Collateral");
provided, however, that any judgment in any such action or proceeding shall
be enforceable only to the extent of any such Default Collateral. The
provisions of this Section 8.14 shall not, however, (a) impair the validity
of the Indebtedness evidenced by the Loan Documents or in any way affect or
impair the Liens of the Deeds of Trust or any of the other Loan Documents or
the right of Lender to foreclose the Deeds of Trust following an Event of
Default; (b) impair the right of Lender to name any Person as a party
defendant in any action or suit for judicial foreclosure and sale under any
of the Deeds of Trust; (c) affect the validity or enforceability of the Note,
the Deeds of Trust or the other Loan Documents; (d) impair the right of
Lender to obtain the appointment of a receiver; (e) impair the right of
Lender to bring suit for any damages, losses, expenses, liabilities or costs
resulting from fraud, intentional misrepresentation, physical waste of all or
any portion of any Facility, or wrongful removal or disposal of all or any
portion of any Facility by any Person in connection with this Agreement, the
Note, the Deeds of Trust or the other Loan Documents; (f) impair the right of
Lender to obtain the Recourse Distributions received by any Person; (g)
impair the right of Lender to bring suit with respect to any misappropriation
of security deposits or Rents collected more than one month in advance; (h)
impair the right of Lender to obtain Insurance Proceeds or Condemnation
Proceeds due to Lender pursuant to the Deeds of Trust; (i) impair the right
of Lender to enforce the provisions of Sections 4.1(b)(U) or 5.1(D)-(I) of
this Agreement, Section 2.8 of the Deeds of Trust even after repayment in
full by Borrower of the Indebtedness; (j) prevent or in any way hinder Lender
from exercising, or constitute a defense, or counterclaim, or other basis for
relief in respect of the exercise of, any other remedy against any or all of
the Collateral securing the Note as provided in the Loan Documents; (k)
impair the right of Lender to bring suit with respect to any misapplication
of any funds; or (l) impair the right of Lender to xxx for, seek or demand a
deficiency judgment against any Person solely for the purpose of foreclosing
the Trust Property or any part thereof or realizing upon the Default
Collateral; provided, however, that any such deficiency judgment referred to
in this clause (l) shall be enforceable only to the extent of any of the
Default Collateral. The provisions of this Section 8.14 shall be
inapplicable to any Person if (i) any petition for bankruptcy, reorganization
or arrangement pursuant to federal or state law against Borrower shall be
filed by or against Borrower or consented to or acquiesced to by Borrower,
(ii) if Borrower shall institute any proceeding for the dissolution or
liquidation of Borrower, (iii) if Borrower shall make an assignment for the
benefit of creditors or (iv) if Borrower shall breach the representation and
warranty in Section 4.1(b)(Z).
Section 8.15. Exhibits Incorporated. The information
set forth on the cover, heading and recitals hereof, and the Exhibits
attached hereto, are hereby incorporated herein as a part of this Agreement
with the same effect as if set forth in the body hereof.
Section 8.16. Offsets, Counterclaims and Defenses. Any
assignee of Lender's interest in and to this Agreement, the Note, the Deeds
of Trust and the other Loan Documents shall take the same free and clear of
all offsets, counterclaims or defenses which are unrelated to
81
the Loan, this Agreement, the Note, the Deeds of Trust and the other Loan
Documents which Borrower may otherwise have against any assignor, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower
in any action or proceeding brought by any such assignee upon this Agreement,
the Note, the Deeds of Trust and other Loan Documents and any such right to
interpose or assert any such unrelated offset, counterclaim or defense in any
such action or proceeding is hereby expressly waived by Borrower.
Section 8.17. No Joint Venture or Partnership. Borrower
and Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender nor to grant Lender any interest in the Trust Property
other than that of mortgagee or lender.
Section 8.18. Waiver of Marshalling of Assets Defense.
To the fullest extent that Borrower may legally do so, Borrower waives all
rights to a marshalling of the assets of Borrower, and others with interests
in Borrower, and of the Trust Property, or to a sale in inverse order of
alienation in the event of foreclosure of the interests hereby created, 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 any Facility for the collection of the Indebtedness without any prior
or different resort for collection, or the right of Lender or Deed of Trust
Trustee to the payment of the Indebtedness in preference to every other
claimant whatsoever.
Section 8.19. Waiver of Counterclaim. Borrower hereby
waives the right to assert a counterclaim, other than compulsory
counterclaim, in any action or proceeding brought against Borrower by Lender
or Lender's agents.
Section 8.20. Conflict: Construction of Documents. In
the event of any conflict between the provisions of this Agreement and the
provisions of the Note, the Deeds of Trust or any of the other Loan
Documents, the provisions of this Agreement shall prevail. The parties
hereto acknowledge that they were represented by counsel in connection with
the negotiation and drafting of the Loan Documents and that the Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same.
Section 8.21. Brokers and Financial Advisors. Borrower
and Lender hereby represent that they have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement except Advisor. Borrower
hereby agrees to indemnify and hold Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind in any way relating
to or arising from a claim by any Person (other than Advisor), that such.
Person acted on behalf of Borrower in connection with the transactions
contemplated herein. The provisions of this Section shall survive the
expiration and termination of this Agreement and the repayment of the
Indebtedness.
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Section 8.22. Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute
one and the same instrument.
Section 8.23. Estoppel Certificates. Borrower and
Lender each hereby agree at any time and from time to time upon not less than
fifteen (15) days prior written notice by Borrower or Lender to execute,
acknowledge and deliver to the party specified in such notice, a statement,
in writing, certifying that this Agreement is unmodified and in full force
and effect (or if there have been modifications, that the same, as modified,
is in full force and effect and stating the modifications hereto), and
stating whether or not, to the knowledge of such certifying party, any
Default or Event of Default has occurred, and, if so, specifying each such
Default or Event of Default; provided, however, that it shall be a condition
precedent to Lender's obligation to deliver the statement pursuant to this
Section , that Lender shall have received, together with Borrower's request
for such statement, an Officer's Certificate stating that no Default or Event
of Default exists as of the date of such certificate (or specifying such
Default or Event of Default).
Section 8.24. Payment of Expenses. Borrower shall,
whether or not the Transactions are consummated, pay all Transaction Costs,
which shall include, without limitation, reasonable out-of-pocket fees,
costs, expenses, and disbursements of Lender and its attorneys, local
counsel, accountants and other contractors in connection with (i) the
negotiation, preparation, execution and delivery of the Loan Documents and
the documents and instruments referred to therein, (ii) the creation,
perfection or protection of Lender's liens in the Collateral (including,
without limitation, fees and expenses for title and lien searches and filing
and recording fees, intangibles taxes, personal property taxes, mortgage
recording taxes, due diligence expenses, travel expenses, accounting firm
fees, costs of the Appraisals, Environmental Reports (and an environmental
consultant), Surveys and the Engineering Reports), (iii) the negotiation,
preparation, execution and delivery of any amendment, waiver or consent
relating to any of the Loan Documents, and (iv) the preservation of rights
under and enforcement of the Loan Documents and the documents and instruments
referred to therein, including any restructuring or rescheduling of the
Indebtedness.
Section 8.25. Bankruptcy Waiver. Borrower hereby agrees
that, in consideration of the recitals and mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, in the event Borrower shall (i) file with any
bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended, (ii) be the subject of any order
for relief issued under Title 11 of the U.S. Code, as amended, (iii) file or
be the subject of any petition seeking any reorganization, arrangement
composition, readjustment, liquidation, dissolution or similar relief under
any present or law relating to bankruptcy, insolvency or other relief of
debtors, (iv) have sought or consented to or acquiesced in the appointment of
any trustee, receiver, conservator or liquidator or (v) be the subject of any
order, judgment or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency or other relief for debtors, the automatic stay
provided by the Federal Bankruptcy Code shall be
83
modified and annulled as to Lender, so as to permit Lender to exercise any
and all of its remedies, upon request of Lender made on notice to Borrower
and any other party in interest but without the need of further proof or
hearing. Neither Borrower nor any Affiliate of Borrower shall contest the
enforceability of this Section 8.25.
Section 8.26 Entire Agreement. This Agreement,
together with the Exhibits hereto and the other Loan Documents constitutes
the entire agreement among the parties hereto with respect to the subject
matter contained in this Agreement, the Exhibits hereto and the other Loan
Documents and supersedes all prior agreements, understandings and
negotiations between the parties.
Section 8.27 Dissemination of Information. If Lender
determines at any time to sell, transfer or assign the Note, this Loan
Agreement and any other Loan Document and any or all servicing rights with
respect thereto, or to grant participations therein or issue mortgage
pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement, Lender
may forward to each purchaser, transferee, assignee, servicer, participant or
investor in such securities (collectively, the "Investor") or any Rating
Agency rating such securities and each prospective Investor, all documents
and information which Lender now has or may hereafter acquire relating to the
Loan, Borrower, any guarantor, any Indemnitor and the Facility, which shall
have been furnished by Borrower, any guarantor, any Indemnitor, or any party
to any Loan Document, or otherwise furnished in connection with the Loan, as
Lender in its sole discretion determines necessary or desirable.
Section 8.28. Limitation of Interest. It is the
intention of Borrower and Lender to conform strictly to applicable usury
laws. Accordingly, if the transactions contemplated hereby would be usurious
under applicable law, then, in that event, notwithstanding anything to the
contrary in any Loan Document, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under applicable law that is
taken, reserved, contracted for, charged or received under any Loan Document
or otherwise in connection with the Loan shall under no circumstances exceed
the maximum amount of interest allowed by applicable law, and any excess
shall be credited to principal by Lender (or if the Loan shall have been paid
in full, refunded to Borrower); and (ii) in the event that maturity of the
Loan is accelerated by reason of an election by Lender resulting from any
default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never
include more than the maximum amount of interest allowed by applicable law,
and any interest in excess of the maximum amount of interest allowed by
applicable law, if any, provided for in the Loan Documents or, otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore prepaid, shall be credited to principal (or if
the principal portion of the Loan and any other amounts not constituting
interest shall have been paid in full, refunded to Borrower).
In determining whether or not the interest paid or
payable under any specific contingency exceeds the maximum amount allowed by
applicable law, Lender shall, to the maximum extent permitted under
applicable law (a) exclude voluntary prepayments and the effects thereof, and
(b) amortize, prorate, allocate and spread, in equal parts, the total amount
of
84
interest throughout the entire contemplated term of the Loan so that the
interest rate is uniform throughout the entire term of the Loan; provided,
that if the Loan is paid and performed in full prior to the end of the full
contemplated term hereof, and if the interest received for the actual period
of existence thereof exceeds the maximum amount allowed by applicable law,
Lender shall refund to Borrower the amount of such excess, and in such event,
Lender shall not be subject to any penalties provided by any laws for
contracting for, charging or receiving interest in excess of the maximum
amount allowed by applicable law.
Section 8.29. Indemnification. Subject to Section 8.14,
Borrower shall indemnify and hold Lender and each of its affiliates
(including its officers, directors, partners, employees and agents and each
other person, if any, controlling Lender or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended) (each,
including Lender, an "Indemnified Party") harmless against any and all
losses, claims, damages, costs, expenses (including the fees and
disbursements of outside counsel retained by any such person) or liabilities
in connection with, arising out of or as a result of the transactions and
matters referred to or contemplated by this Agreement, except to the extent
that it is finally judicially determined that any such loss, claim, damage,
cost, expense or liability resulted solely from the fraud or willful
misconduct of such Indemnified Party. In the event that any Indemnified
Party becomes involved in any action, proceeding or investigation in
connection with any transaction or matter referred to or contemplated in this
Agreement, Borrower shall periodically reimburse any Indemnified Party upon
demand therefor in an amount equal to its reasonable legal and other expenses
(including the costs of any investigation and preparation) incurred in
connection therewith to the extent such legal or other expenses are the
subject of indemnification hereunder.
Section 8.30. Borrower Acknowledgments. Borrower hereby
acknowledges to and agrees with Lender that (i) the scope of Lender's
business is wide and includes, but is not limited to, financing, real estate
financing, investment in real estate and other real estate transactions which
may be viewed as adverse to or competitive with the business of Borrower or
its Affiliates and (ii) Borrower has been represented by competent legal
counsel and has consulted with such counsel prior to executing this Loan
Agreement and any of the other Loan Documents.
Section 8.31. Publicity. Lender and Borrower shall have
the right, with each other's consent (not to be unreasonably withheld), to
issue press releases, advertisements and other promotional materials
describing Lender's participation in the origination of the Loan or the
Loan's inclusion in any Securitization effectuated or to be effectuated by
Lender.
Section 8.32. Cross-Collateralization. Without
limitation to any other right or remedy provided to Lender in this Agreement,
any of the other Loan Documents, or at law or in equity, Borrower
acknowledges and agrees that, to the full extent permitted under applicable
law, if an Event of Default shall occur and be continuing, (i) Lender shall
have the right to pursue all of its rights and remedies in one proceeding, or
separately and independently in separate proceedings which it, as Lender, in
its sole and absolute discretion, shall determine from time to time, (ii)
Lender is not required to either xxxxxxxx assets or sell Collateral in any
inverse order of
85
alienation, (iii) the exercise by Lender of any remedies against any
Collateral will not impede Lender from subsequently or simultaneously
exercising remedies against any other Collateral, (iv) all Liens and other
rights, remedies and privileges provided to Lender in this Agreement and in
the other Loan Documents or otherwise shall remain in full force and effect
until Lender has exhausted all of its remedies against the Collateral and all
Collateral has been foreclosed, sold and/or otherwise realized upon, and (v)
each Facility shall be security for the performance of all of Borrower's
obligations hereunder.
[signatures commence on following page]
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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.
LENDER:
NOMURA ASSET CAPITAL
CORPORATION, a Delaware corporation
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Name: Xxxxxx X. Xxxx
------------------------------
Title: Vice President
-----------------------------
[signatures continued on following page]
87
BORROWER:
BPP/GOLDEN STATE ACQUISITIONS, L.L.C.,
a Delaware limited liability company
By: XXXXXXX PACIFIC OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership, its
Managing Member
By: Xxxxxxx Pacific Properties,
Inc., a Maryland corporation,
its sole General Partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------
Title: Executive Vice President
--------------------------
88
EXHIBIT A
Operating Expense Certificate
Nomura Asset Capital Corporation
2 World Financial Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx XxXxxx
Re: Loan Agreement (the "Loan Agreement") dated as of
December 30, 1997 between BPP/Golden State
Acquisitions, L.L.C. ("Borrower") and Nomura Asset
Capital Corporation (together with its successors and
assigns "Lender")
Ladies and Gentlemen:
This certificate is delivered in accordance with Section 2.12(f) of
the Loan Agreement. All capitalized terms not defined herein shall have the
meanings ascribed to them in the Loan Agreement.
Borrower hereby certifies that the Operating Expenses for the
Interest Accrual Period from _________________ to _________________, are
_________________ Dollars ($____________) and that such Operating Expenses
are equal to or less than the Operating Expenses for such period set forth
on the Operating Budget.
BPP/GOLDEN STATE ACQUISITIONS, L.L.C.,
a Delaware limited liability company
By: XXXXXXX PACIFIC OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership,
its Managing Member
By: Xxxxxxx Pacific Properties, Inc.,
a Maryland corporation,
its sole General Partner
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT B
Allocated Loan Amounts
[see attached]
EXHIBIT C
Additional Definitions
Base Net Operating Income $21,120,552.00
Base Payment $ 1,022,114.79
Deferred Maintenance Amount $ 420,750.00
Initial Basic Carrying Costs Amount $ 1,172,409.40
EXHIBIT D
Deferred Maintenance and Environmental Remediation Exhibit
[see attached]
